<PAGE>
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 33-41034
File No. 811-6324
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No. ____ / /
Post-Effective Amendment No. 18 /X/
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 18
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: February 4, 1998
----------------
It is proposed that this filing will become effective:
____ immediately upon filing pursuant to paragraph (b)
X on February 4, 1998 pursuant to paragraph (b)
____ 60 days after filing pursuant to paragraph (a)(1)
____ on (date) pursuant to paragraph (a)(1)
____ 75 days after filing pursuant to paragraph (a)(2)
____ on (date) pursuant to paragraph (a)(2) of Rule 485
<PAGE>
Title of Securities Being Registered
------------------------------------
International Small Cap Fund A Class
International Small Cap Fund B Class
International Small Cap Fund C Class
International Small Cap Fund Institutional Class
Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class
Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class
Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class
International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class
Global Equity Fund A Class
Global Equity Fund B Class
Global Equity Fund C Class
Global Equity Fund Institutional Class
<PAGE>
--- C O N T E N T S ---
This Post-Effective Amendment No. 18 to Registration File No. 33-41034 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheets
4. Part A - Prospectuses
5. Part B - Statement of Additional Information
6. Part C - Other Information
7. Signatures
<PAGE>
CROSS-REFERENCE SHEET*
----------------------
PART A
------
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
-------- ----------- ------------
<S> <C> <C> <C>
Global Assets/Global Bond/
Emerging Markets Funds
A Classes/ Institutional
B Classes/ Classes
C Classes
1 Cover Page.................................. Cover Cover
2 Synopsis.................................... Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information............. Financial Financial
Highlights Highlights
4 General Description of Registrant .......... Investment Investment
Objectives and Objectives and
Strategies; Strategies;
Classes of Shares Classes of Shares
5 Management of the Fund ..................... Management of Management of
the Funds the Funds
6 Capital Stock and Other Securities ......... The Delaware Dividends and
Difference; Distributions;
Dividends and Taxes; Classes
Distributions; of Shares
Taxes; Classes
of Shares
7 Purchase of Securities Being Offered........ Cover; Cover;
How to Buy How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share;
Value Per Share; Management
Management of the Funds
of the Funds
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C>
8 Redemption or Repurchase............ How to Buy How to Buy
Shares; Shares;
Redemption and Redemption and
Exchange Exchange
9 Legal Proceedings................... None None
</TABLE>
* This filing relates to Class A Shares, Class B Shares, Class C Shares
and Institutional Class shares of Global Assets Series, Global Bond
Series and Emerging Markets Series, which have combined prospectuses;
Class A Shares, Class B Shares, Class C Shares and Institutional Class
shares of International Equity Series, which has its own prospectuses;
Class A Shares, Class B Shares, Class C Shares and Institutional Class
shares of Global Equity Series, which has its own prospectuses; and
Class A Shares, Class B Shares, Class C Shares and Institutional Class
shares of International Small Cap Series, which has its own prospectus.
The six Series have a common Part B and Part C.
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART A
------
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
- -------- ----------- ------------
<S> <C> <C> <C>
International Equity
Fund
A Class/ Institutional
B Class/ Class
C Class
1 Cover Page...................................................... Cover Cover
2 Synopsis........................................................ Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................................. Financial Financial
Highlights Highlights
4 General Description of Registrant .............................. Investment Investment
Objectives and Objectives and
Strategies; Strategies;
Classes of Shares Classes of Shares
5 Management of the Fund.......................................... Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities.............................. The Delaware Dividends and
Difference; Distributions;
Dividends and Taxes; Classes
Distributions; of Shares
Taxes; Classes
of Shares
7 Purchase of Securities Being Offered............................ Cover; Cover;
How to Buy How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share;
Value Per Share; Management
Management of the Fund
of the Fund
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8 Redemption or Repurchase........................................ How to Buy How to Buy
Shares; Shares;
Redemption and Redemption and
Exchange Exchange
9 Legal Proceedings............................................... None None
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART A
------
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
- -------- ----------- ------------
Global Equity Fund
<S> <C> <C> <C>
A Class/ Institutional
B Class/ Class
C Class
1 Cover Page...................................................... Cover Cover
2 Synopsis........................................................ Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................................. N/A N/A
4 General Description of Registrant............................... Investment Investment
Objectives and Objectives and
Strategies; Strategies;
Classes of Shares Classes of Shares
5 Management of the Fund.......................................... Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities.............................. The Delaware Dividends and
Difference; Distributions;
Dividends and Taxes; Classes
Distributions; of Shares
Taxes; Classes
of Shares
7 Purchase of Securities Being Offered............................ Cover; Cover;
How to Buy How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share;
Value Per Share; Management
Management of the Fund
of the Fund
8 Redemption or Repurchase........................................ How to Buy How to Buy
Shares; Shares;
Redemption and Redemption and
Exchange Exchange
9 Legal Proceedings............................................... None None
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART A
------
<TABLE>
<CAPTION>
Location in
Item No. Description Prospectuses
- -------- ----------- ------------
International Small
Cap Fund
<S> <C> <C> <C>
A Class/ Institutional
B Class/ Class
C Class
1 Cover Page...................................................... Cover Cover
2 Synopsis........................................................ Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses
3 Condensed Financial Information................................. N/A N/A
4 General Description of Registrant............................... Investment Investment
Objectives and Objectives and
Strategies; Strategies;
Classes of Shares Classes of Shares
5 Management of the Fund.......................................... Management of Management of
the Fund the Fund
6 Capital Stock and Other Securities.............................. The Delaware Dividends and
Difference; Distributions;
Dividends and Taxes; Classes
Distributions; of Shares
Taxes; Classes
of Shares
7 Purchase of Securities Being Offered............................ Cover; Cover;
How to Buy How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset
and Net Asset Value Per Share;
Value Per Share; Management
Management of the Fund
of the Fund
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
<S> <C> <C> <C>
8 Redemption or Repurchase........................................ How to Buy How to Buy
Shares; Shares;
Redemption and Redemption and
Exchange Exchange
9 Legal Proceedings............................................... None None
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART B
------
<TABLE>
<CAPTION>
Location in Statement
Item No. Description of Additional Information
- -------- ----------- -------------------------
<S> <C> <C>
10 Cover Page..................................................... Cover
11 Table of Contents.............................................. Table of Contents
12 General Information and History................................ General Information
13 Investment Objectives and Policies............................. Investment Policies and
Portfolio Techniques
14 Management of the Registrant................................... Officers and Directors
15 Control Persons and Principal Holders of Securities............ Officers and Directors
16 Investment Advisory and Other Services......................... Plans Under Rule 12b-1 for
the Fund Classes (under
Purchasing Shares); Investment
Management Agreement and Sub-
Advisory Agreement; Officers and
Directors; General Information;
Financial Statements
17 Brokerage Allocation........................................... Trading Practices and Brokerage
18 Capital Stock and Other Securities............................. Capitalization and
Noncumulative Voting
(under General Information)
19 Purchase, Redemption and Pricing of Securities
Being Offered.................................................. Purchasing Shares;
Determining Offering Price
and Net Asset Value;
Redemption and Repurchase;
Exchange Privilege
20 Tax Status..................................................... Accounting and Tax Issues
21 Underwriters................................................... Purchasing Shares
22 Calculation of Performance Data................................ Performance Information
23 Financial Statements........................................... Financial Statements
</TABLE>
<PAGE>
CROSS-REFERENCE SHEET
---------------------
PART C
------
<TABLE>
<CAPTION>
Location in
Part C
------
<S> <C> <C>
24 Financial Statements and Exhibits...................................... Item 24
25 Persons Controlled by or under Common
Control with Registrant................................................ Item 25
26 Number of Holders of Securities........................................ Item 26
27 Indemnification........................................................ Item 27
28 Business and Other Connections of Investment Adviser................... Item 28
29 Principal Underwriters................................................. Item 29
30 Location of Accounts and Records....................................... Item 30
31 Management Services.................................................... Item 31
32 Undertakings........................................................... Item 32
</TABLE>
<PAGE>
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, contact your financial
adviser or call Delaware Group at 800-523-4640.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Third Floor
80 Cheapside
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
<PAGE>
- ---------------------------------------------------------
GLOBAL BOND FUND
GLOBAL ASSETS FUND
EMERGING MARKETS FUND
- ---------------------------------------------------------
A CLASS
- ---------------------------------------------------------
B CLASS
- ---------------------------------------------------------
C CLASS
- ---------------------------------------------------------
P R O S P E C T U S
- ---------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
--------
<PAGE>
GLOBAL BOND FUND PROSPECTUS
GLOBAL ASSETS FUND FEBRUARY 4, 1998
EMERGING MARKETS FUND
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
----------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Representatives of Financial Institutions:
Nationwide 800-659-2265
This Prospectus describes shares of the Global Bond Series (the
"Global Bond Fund"), the Global Assets Series (the "Global Assets Fund") and
the Emerging Markets Series (the "Emerging Markets Fund") (individually, a
"Fund" and collectively, the "Funds") of Delaware Group Global & International
Funds, Inc. ("Global Funds, Inc."), a professionally-managed mutual fund of
the series type.
Global Bond Fund's investment objective is to achieve current
income consistent with the preservation of principal. This Fund seeks to
achieve its objective by investing primarily in fixed-income securities that
may also provide the potential for capital appreciation. Global Assets Fund's
investment objective is to achieve long-term total return. This Fund seeks to
achieve its objective by investing in securities which, in Delaware
International Advisers Ltd.'s ("Delaware International" or the "Manager")
opinion, will provide higher current income than a portfolio comprised
exclusively of equity securities, along with the potential for capital growth.
This Fund will invest in both equity and fixed-income securities. Emerging
Markets Fund's investment objective is to achieve long-term capital
appreciation. This Fund seeks to achieve its objective by investing primarily
in equity securities of issuers located or operating in emerging countries.
See Investment Objectives and Strategies.
Each Fund offers three retail classes of shares: "Class A Shares,"
"Class B Shares" and "Class C Shares" (individually, a "Class" and
collectively, the "Classes"). These alternatives permit an investor to choose
the method of purchasing shares that is most suitable for his or her needs.
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<PAGE>
This Prospectus relates only to the Classes and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Funds' Statement of Additional Information ("Part
B" of Global Funds, Inc.'s registration statement), dated February 4, 1998,
as it may be amended from time to time, contains additional information about
the Funds and has been filed with the Securities and Exchange Commission (the
"SEC"). Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above numbers. Each Fund's financial
statements appear in the Annual Report of Global Funds, Inc. for the fiscal
year ended November 30, 1997, which will accompany any response to requests
for Part B. The SEC also maintains a Web site (http://www.sec.gov) that
contains Part B, material incorporated by reference into Global Funds, Inc.'s
registration statement, and other information regarding registrants that
electronically file with the SEC.
Each Fund also offers an Institutional Class, which is available for
purchase only by certain investors. A prospectus for the Funds' Institutional
Classes can be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above numbers.
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<PAGE>
TABLE OF CONTENTS
Cover Page Classes of Shares
Synopsis How to Buy Shares
Summary of Expenses Redemption and Exchange
Financial Highlights Dividends and Distributions
Investment Objectives and Strategies Taxes
Suitability Calculation of Offering Price and
Investment Strategy Net Asset Value Per Share
Special Risk Considerations Management of the Funds
The Delaware Differences Other Investment Policies and
Plans and Services Risk Considerations
Appendix A -- Ratings
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUNDS ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SHARES OF THE FUNDS ARE NOT BANK OR CREDIT UNION DEPOSITS.
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<PAGE>
SYNOPSIS
Investment Objectives
Global Bond Fund--The investment objective of Global Bond Fund is
to achieve current income consistent with preservation of principal. This Fund
seeks to achieve its objective by investing primarily in fixed-income
securities that may also provide the potential for capital appreciation. The
Fund is a global fund. As such, at least 65% of the Fund's total assets will
be invested in fixed-income securities of issuers organized or having a
majority of their assets in or deriving a majority of their operating income
in at least three different countries, one of which may be the United States.
Global Assets Fund--The investment objective of Global Assets Fund is
to achieve long-term total return. This Fund seeks to achieve its objective by
investing in securities which, in the Manager's or Sub-Adviser's opinion, will
provide higher current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. The Fund will invest
in both equity and fixed-income securities. The Fund is a global fund. As
such, at least 65% of the Fund's total assets will be invested in securities
of issuers organized or having a majority of their assets in or deriving a
majority of their operating income in at least three different countries, one
of which may be the United States. It is anticipated that a portion of the
Fund's assets may be invested in warrants.
Emerging Markets Fund--The investment objective of Emerging Markets
Fund is to achieve long-term capital appreciation. This Fund seeks to achieve
its objective by investing primarily in equity securities of issuers located
or operating in emerging countries. The Fund is an international fund. As
such, under normal market conditions, at least 65% of the Fund's total assets
will be invested in equity securities of issuers organized or having a
majority of their assets or deriving a majority of their operating income in
at least three different countries which are considered to be emerging or
developing.
For further details, see Investment Objectives and Strategies and
Other Investment Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations-Foreign Securities Risks under
Investment Objectives and Strategies, and Other Investment Policies and Risk
Considerations.
2. Each Fund may invest a portion of its assets in the markets of
certain emerging countries. Emerging Markets Fund will invest primarily in
issuers located or operating in markets of such countries. Investments in
securities of companies in emerging markets present a greater degree of risk
than tends to be the case for foreign investments in Western Europe and other
developed markets. Among other things, economic markets and structures tend
to be less mature and diverse and
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<PAGE>
the securities markets which are subject to less government regulation or
supervision may also be smaller, less liquid and subject to greater price
volatility. There is a greater possibility of expropriation, nationalization,
confiscatory taxation, income earned or other special taxes, foreign exchange
restrictions, limitations on the repatriation of income and capital from
investments, defaults in foreign government debt, and economic, political or
social instability. In addition, in many emerging markets, there is
substantially less publicly available information about issuers and the
information that is available tends to be of a lesser quality. See Special
Risk Considerations-Emerging Markets Securities Risks under Investment
Objectives and Strategies.
3. Emerging Markets Fund may invest up to 35% of its assets in high
yield, high risk foreign fixed-income securities, including Brady Bonds, and
Global Assets Fund may invest up to 15% of its assets in high yield, high risk
U.S. fixed-income securities ("junk bonds"). Consequently, greater risks may
be involved with an investment in these Funds. See High Yield, High Risk
Securities under Investment Objectives and Strategies.
4. Global Bond Fund may invest in interest rate swaps for hedging
purposes which could subject the Fund to increased risks. Interest rate swaps
may be considered to be derivative securities. See Interest Rate Swaps under
Other Investment Policies and Risk Considerations.
5. Each Fund has the right to engage in options and futures
transactions for hedging purposes, to counterbalance portfolio volatility. In
connection with futures transactions, the Funds will maintain certain
collateral in special accounts established with futures commission merchants
or on their behalf in the care of The Chase Manhattan Bank (the "Custodian
Bank"). While the Funds do not engage in options and futures for speculative
purposes, there are risks which result from the use of these instruments, and
an investor should carefully review the descriptions of these risks in this
Prospectus. See Options and Futures Contracts and Options on Futures Contracts
under Other Investment Policies and Risk Considerations.
6. While each Fund intends to seek to qualify as a "diversified"
investment company under provisions of Subchapter M of the Internal Revenue
Code, as amended (the "Code"), none will be diversified under the Investment
Company Act of 1940, as amended (the "1940 Act"). Thus, 50% of each Fund's
total net assets will be divided among cash, cash items, U.S. government
securities, and other securities, with no more than 5% of a Fund's total net
assets invested with one issuer. However, this will not satisfy the 1940 Act
requirement that 75% of a Fund's assets be limited to not more than 5% per
issuer. A nondiversified portfolio is believed to be subject to greater risk
because adverse effects on any individual portfolio holdings may affect a
larger portion of the overall assets.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Funds, subject to
the supervision and direction of Global Funds, Inc.'s Board of Directors.
Delaware Management Company, Inc. ("Delaware," or the "Sub-Adviser") is the
investment sub-adviser for Global Assets Fund and, in that capacity, provides
investment advice on U.S. securities. Delaware Distributors, L.P. (the
"Distributor") is the national
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<PAGE>
distributor for each Fund and for all of the other mutual funds in the
Delaware Group. Delaware Service Company, Inc. (the "Transfer Agent") is the
shareholder servicing, dividend disbursing, accounting services and transfer
agent for each Fund and for all of the other mutual funds in the Delaware
Group. See Summary of Expenses and Management of the Funds for further
information regarding the Manager and the Sub-Adviser and the fees payable
under each Fund's Investment Management Agreement and the Sub-Advisory
Agreement on behalf of Global Assets Fund.
Sales Charges
The price of each of the Class A Shares includes a maximum front-end
sales charge of 4.75% of the offering price. The front-end sales charge is
reduced on certain transactions of at least $100,000 but under $1,000,000. For
purchases of $1,000,000 or more, the front-end sales charge is eliminated
(subject to a contingent deferred sales charge ("Limited CDSC") of 1% if
shares are redeemed within 12 months of purchase and a dealer commission was
paid in connection with such purchase). Class A Shares are subject to annual
12b-1 Plan expenses for the life of the investment.
The price of each of the Class B Shares is equal to the net asset
value per share. Class B Shares are subject to a contingent deferred sales
charge ("CDSC") of: (i) 4% if shares are redeemed within two years of
purchase; (ii) 3% if shares are redeemed during the third or fourth year
following purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; and (iv) 1% if shares are redeemed during the sixth year
following purchase. Class B Shares are subject to annual 12b-1 Plan expenses
for approximately eight years after purchase. See Deferred Sales Charge
Alternative - Class B Shares and Automatic Conversion of Class B Shares under
Classes of Shares.
The price of Class C Shares is equal to the net asset value per
share. Class C Shares are subject to a CDSC of 1% if shares are redeemed
within 12 months of purchase. Class C Shares are subject to annual 12b-1 Plan
expenses for the life of the investment.
See Classes of Shares and Distribution (12b-1) and Service under
Management of the Funds.
Purchase Amounts
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. An investor may exceed these maximum purchase
limitations for Class B Shares and Class C Shares by making cumulative
purchases over a period of time. An investor should keep in mind, however,
that reduced front-end sales charges apply to investments of $100,000 or more
in Class A Shares, and that 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. The minimum and maximum purchase amounts for retirement
plans may vary. See How to Buy Shares.
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<PAGE>
Redemption and Exchange
Class A Shares of each Fund may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request.
Neither the Funds nor the Distributor assesses a charge for redemptions or
exchanges of Class A Shares, except for certain redemptions of shares
purchased at net asset value, which may be subject to a Limited CDSC if a
dealer's commission was paid in connection with such purchases. See Front-End
Sales Charge Alternative - Class A Shares under Classes of Shares.
Class B Shares and Class C Shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Funds
nor the Distributor assesses any charges other than the CDSC for redemptions
or exchanges of Class B Shares or Class C Shares. There are certain
limitations on an investor's ability to exchange shares between the various
classes of shares that are offered. See Redemption and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. Global Bond Fund, Global Assets Fund and Emerging Markets Fund operate
as nondiversified funds as defined under the 1940 Act. Global Funds, Inc. was
organized as a Maryland corporation on May 30, 1991. See Shares under Management
of the Funds.
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<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A Shares, Class B Shares and Class C Shares of each Fund
follows:
<TABLE>
<CAPTION>
Global Bond Fund Global Assets Fund Emerging Markets Fund
Class A Class B Class C Class A Class B Class C Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares Shares Shares Shares Shares Shares Shares
- -------------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)............... 4.75% None None 4.75% None None 4.75% None None
Maximum Sales Charge imposed
on Reinvested Dividends (as
a percentage of offering price).. None None None None None None None None None
Maximum Contingent Deferred
Sales Charge (as a percentage
of original purchase price or
redemption proceeds,
as applicable)................... None* 4.00%* 1.00%* None* 4.00%* 1.00%* None* 4.00%* 1.00%*
Redemption Fees.................. None** None** None** None** None** None** None** None** None**
</TABLE>
* Class A purchases of $1,000,000 or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is
paid to the financial adviser through whom such purchase is effected, a
Limited CDSC of 1% will be imposed on certain redemptions within 12 months
of purchase. Additional Class A purchase options involving a CDSC may be
permitted as described in the Prospectus from time to time. Class B Shares
are subject to a CDSC of: (i) 4% if shares are redeemed within two years of
purchase; (ii) 3% if shares are redeemed during the third or fourth year
following purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter. Class C Shares are subject to a
CDSC of 1% if the shares are redeemed within 12 months of purchase. See
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value under Redemption and Exchange, and Deferred
Sales Charge Alternative - Class B Shares , Level Sales Charge Alternative
- Class C Shares and Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Classes of Shares.
** CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
-8-
<PAGE>
<TABLE>
<CAPTION>
Global Bond Fund Global Assets Fund Emerging Markets Funds
Annual Operating Expenses (as a Class A Class B Class C Class A Class B Class C Class A Class B Class C
percentage of average daily net assets) Shares Shares Shares Shares Shares Shares Shares Shares Shares
- ------------------------------------- ------ ------ ------ ------ ------ ------ ------ ------ ------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Management Fees
(after voluntary waivers)............. 0.00%+++ 0.00%+++ 0.00%+++ 0.00%+++ 0.00%+++ 0.00%+++ 0.23%+++ 0.23%+++ 0.23%+++
12b-1 Expenses
(including service fees).............. 0.30%+ 1.00%+ 1.00%+ 0.30%+ 1.00%+ 1.00%+ 0.25%+/++ 1.00%+ 1.00%+
Other Operating Expenses
(after any voluntary payments)........ 0.95%+++ 0.95%+++ 0.95%+++ 0.95%+++ 0.95%+++ 0.95%+++ 1.47%+++ 1.47%+++ 1.47%+++
Total Operating Expenses
(after voluntary waivers
and any voluntary payments)........... 1.25%+++ 1.95%+++ 1.95%+++ 1.25%+++ 1.95%+++ 1.95%+++ 1.95%+++ 2.70%+++ 2.70%+++
</TABLE>
+ Class A Shares, Class B Shares and Class C Shares are subject to separate
12b-1 Plans. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by rules of the
National Association of Securities Dealers, Inc. (the "NASD").
++ The Distributor has elected voluntarily to waive its right to receive
12b-1 Plan fees with respect to Class A Shares of Emerging Markets Fund
to the extent necessary to ensure that 12b-1 Plan expenses for such Class
do not exceed 0.25% for the period from February 1, 1998 through May 31,
1998. The Class A Shares 12b-1 Expenses set forth above have been
restated to reflect this waiver. In the absence of this waiver and during
the period from the commencement of the public offering of Class A Shares
of Emerging Markets Fund through January 31, 1998, 12b-1 Plan expenses
would have been equal to 0.30% for Class A Shares. See Distribution
(12b-1) and Service under Management of the Funds.
+++ Delaware International has elected to voluntarily waive that portion, if
any, of the annual management fees payable by a Fund and to pay a Fund's
expenses to the extent necessary to ensure that the Fund's total operating
expenses (exclusive of 12b-1 Plan Expenses, taxes, interest, brokerage
commissions and extraordinary expenses) do not exceed, on an annualized
basis, 0.95% of the average daily net assets of each Class of Global Bond
Fund and Global Assets Fund and 1.70% of the average daily net assets of
each Class of Emerging Markets Fund. Delaware International's voluntary
election to waive fees and pay expenses began upon the commencement of the
public offering of each Class of each Fund and will extend through May 31,
1998. Absent Delaware International's voluntary fee waivers and expense
payments (and the Distributor's voluntary waiver of a portion of the 12b-1
Plan Expenses for Class A Shares of Emerging Markets Fund through May 31,
1998), the Total Operating Expenses and Management Fees would have been as
follows:
-9-
<PAGE>
<TABLE>
<CAPTION>
Total Operating Expenses Management Fees
Class A Class B Class C Class A Class B Class C
------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
Global Bond Fund 2.04% 2.74% 2.74% 0.75% 0.75% 0.75%
Global Assets Fund 2.16% 2.86% 2.86% 0.75% 0.75% 0.75%
Emerging Markets Fund 3.02% 3.72% 3.72% 1.25% 1.25% 1.25%
</TABLE>
For expense information about the Funds' Institutional Classes see
the separate prospectus relating to those classes.
Investors utilizing the Delaware Group Asset Planner asset allocation
service also typically incur an annual maintenance fee of $35 per Strategy.
However, effective November 1, 1996, the annual maintenance fee is waived
until further notice. Investors who utilize the Asset Planner for an
Individual Retirement Plan ("IRA") will pay an annual IRA fee of $15 per
Social Security Number. See Delaware Group Asset Planner in Part B.
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, (2) redemption and no redemption at the end of each time
period and (3) for Class B Shares and Class C Shares, payment of a CDSC at the
time of redemption, if applicable. The following example assumes the voluntary
waiver of the management fee and/or other payments of expenses by the Manager
as discussed in this Prospectus. The example for Emerging Markets Fund A Class
also assumes the partial waiver of the 12b-1 fee by the Distributor as discussed
in this Prospectus.
<TABLE>
<CAPTION>
Global Bond Assuming Redemption Assuming No Redemption
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares $60(1) $85 $113 $191 $60 $85 $113 $191
Class B Shares $60 $91 $125 $209(2) $20 $61 $105 $209(2)
Class C Shares $30 $61 $105 $227 $20 $61 $105 $227
Global Assets Assuming Redemption Assuming No Redemption
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
Class A Shares $60(1) $85 $113 $191 $60 $85 $113 $191
Class B Shares $60 $91 $125 $209(2) $20 $61 $105 $209(2)
Class C Shares $30 $61 $105 $227 $20 $62 $105 $227
</TABLE>
-10-
<PAGE>
<TABLE>
<CAPTION>
Emerging Markets Assuming Redemption Assuming No Redemption
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
Class A Shares $66(1) $106 $148 $264 $66 $106 $148 $264
Class B Shares $67 $114 $163 $285(2) $27 $84 $143 $285(2)
Class C Shares $37 $84 $143 $303 $27 $84 $143 $303
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of Class
A Shares. Under certain circumstances, however, a Limited CDSC or
other CDSC, which has not been reflected in this calculation, may be
imposed on certain redemptions . See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange.
(2) At the end of approximately eight years after purchase, Class B
Shares of a Fund will be automatically converted into Class A Shares
of that Fund. The example above assumes conversion of Class B Shares
at the end of the eighth year. However, the conversion may occur as
late as three months after the eighth anniversary of purchase,
during which time the higher 12b-1 Plan fees payable by Class B
Shares will continue to be assessed. The ten-year expense numbers
for Class B Shares reflect the expenses of Class B Shares for years
one through eight and the expenses of Class A Shares for years nine
and ten. See Automatic Conversion of Class B Shares under Classes of
Shares for a description of the automatic conversion feature.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in any of the
Classes will bear directly or indirectly.
-11-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements
of Global Bond Fund, Global Assets Fund and Emerging Markets Fund of Delaware
Group Global & International Funds, Inc. and have been audited by Ernst &
Young LLP, independent auditors. The data should be read in conjunction with
the financial statements, related notes, and the report of Ernst & Young LLP
covering such financial information and highlights, all of which are
incorporated by reference into Part B. Further information about the Funds'
performance is contained in Delaware Group Global & International Funds,
Inc.'s Annual Report to shareholders. A copy of the Annual Report (including
the report of Ernst & Young LLP) may be obtained from Delaware Group Global &
International Funds, Inc. upon request at no charge.
- --------------------------------------------------------------------------------
-12-
<PAGE>
<TABLE>
<CAPTION>
Global Bond Fund Global Bond Fund
Class A Share Class B Shares
Period Period
12/27/94(1) 12/27/94(1)
Year Ended through Year Ended through
11/30/97 11/30/96 11/30/95 11/30/97 11/30/96 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $11.480 $11.230 $10.000 $11.490 $11.230 $10.000
Income From Investment Operations
Net Investment Income......................... 0.625(5) 0.755(5) 0.659 0.550(5) 0.679(5) 0.565
Net Gains (Losses) on Securities
(both realized and unrealized).......... (0.505) 0.730 1.171 (0.511) 0.735 1.205
Total From Investment Operations..... 0.120 1.485 1.830 0.039 1.414 1.770
Less Distributions
Dividends from Net Investment Income.......... (0.770) (0.875) (0.600) (0.699) (0.794) (0.540)
Distributions from Capital Gains.............. (0.040) (0.360) none (0.040) (0.360) none
Total Distributions.................. (0.810) (1.235) (0.600) (0.739) (1.154) (0.540)
Net Asset Value, End of Period................ $10.790 $11.480 $11.230 $10.790 $11.490 $11.230
Total Return.................................. 1.24%(3) 14.35%(3) 18.79%(3) 0.48%(4) 13.51%(4) 18.23%(4)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)..... $4,567 $3,467 $889 $1,081 $707 $115
Ratio of Expenses to Average Daily Net Assets. 1.25% 1.25% 1.25% 1.95% 1.95% 1.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............. 2.04% 5.00% 12.34% 2.74% 5.70% 13.04%
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets................ 5.76% 6.82% 7.70% 5.06% 6.12% 7.00%
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitation.. 4.97% 3.07% (3.39%) 4.27% 2.37% (4.09%)
Portfolio Turnover Rate....................... 76% 42% 98% 76% 42% 98%
Average Commission Rate Paid(6)............... N/A N/A N/A N/A N/A N/A
Global Bond Fund
Class C Shares
Period
11/29/95(2)
Year Ended through
11/30/97 11/30/96 11/30/95
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $11.440 $11.240 $11.330
Income From Investment Operations
Net Investment Income......................... 0.551(5) 0.680(5) none
Net Gains (Losses) on Securities
(both realized and unrealized).......... (0.512) 0.719 (0.036)
Total From Investment Operations..... 0.039 1.399 (0.036)
Less Distributions
Dividends from Net Investment Income.......... (0.699) (0.839) (0.054)
Distributions from Capital Gains.............. (0.040) (0.360) none
Total Distributions.................. (0.739) (1.199) (0.054)
Net Asset Value, End of Period................ $10.740 $11.440 $11.240
Total Return.................................. 0.49%(4) 13.51%(4) (2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)..... $703 $118 $5
Ratio of Expenses to Average Daily Net Assets. 1.95% 1.95% (2)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............. 2.74% 5.70% (2)
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets................ 5.06% 6.12% (2)
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitation.. 4.27% 2.37% (2)
Portfolio Turnover Rate....................... 76% 42% (2)
Average Commission Rate Paid(6)............... N/A N/A N/A
</TABLE>
____________
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Date of initial public offering. The ratios of expenses and net
investment income to average daily net assets, total return and
portfolio turnover have been omitted as management believes that such
ratios, total return and portfolio turnover for this relatively short
period are not meaningful.
(3) Does not reflect maximum sales charge that is or was in effect, nor
the 1% Limited CDSC or other CDSC that would apply in the event of
certain redemptions within 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value under Redemption and Exchange. Total
return reflects the expense limitations referenced under Summary of
Expenses and Management of the Funds.
(4) Does not include CDSC which varies from 1% - 4% depending upon the
holding period for Class B Shares and 1% for Class C Shares. Total
return reflects the expense limitations referenced under Summary of
Expenses and Management of the Funds.
(5) The years ended November 30, 1996 and 1997 net investment income per
share information was based on the average share outstanding method.
(6) Computed by dividing the amount of commission paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.
-13-
<PAGE>
GLOB-GA-CHT
<TABLE>
<CAPTION>
Global Assets Fund Global Assets Fund
Class A Shares Class B Shares
Period Period
12/27/94(1) 12/27/94(1)
Year Ended through Year Ended through
11/30/97 11/30/96 11/30/95 11/30/97 11/30/96 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $13.310 $11.900 $10.000 $13.300 $11.880 $10.000
Income From Investment Operations
Net Investment Income......................... 0.437(5) 0.493 0.301 0.342(5) 0.379 0.212
Net Gains (Losses) on Securities
(both realized and unrealized).......... 0.843 1.572 1.839 0.848 1.606 1.848
Total From Investment Operations..... 1.280 2.065 2.140 1.190 1.985 2.060
Less Distributions
Dividends from Net Investment Income.......... (0.490) (0.385) (0.240) (0.400) (0.295) (0.180)
Distributions from Capital Gains.............. (0.050) (0.270) none (0.050) (0.270) none
Total Distributions.................. (0.540) (0.655) (0.240) (0.450) (0.565) (0.180)
Net Asset Value, End of Period................ $14.050 $13.310 $11.900 $14.040 $13.300 $11.880
Total Return.................................. 9.91%(3) 18.17%(3) 21.48%(3) 9.18%(4) 17.32%(4) 20.73%(4)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)..... $6,939 $11,878 $3,122 $4,445 $4,796 $613
Ratio of Expenses to Average Daily Net Assets. 1.25% 1.25% 1.25% 1.95% 1.95% 1.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............. 2.16% 2.72% 7.55% 2.86% 3.42% 8.25%
Ratio of Net Investment Income to Average
Daily Net Assets........................ 3.20% 4.13% 4.75% 2.51% 3.43% 4.05%
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitation.. 2.29% 2.66% (1.55%) 1.60% 1.96% (2.25%)
Portfolio Turnover Rate....................... 74% 34% 57% 74% 34% 57%
Average Commission Rate Paid(6)............... $0.0276 $0.0271 N/A $0.0276 $0.0271 N/A
Global Assets Fund
Class C Shares
Period
11/29/95(2)
Year Ended through
11/30/97 11/30/96 11/30/95
<S> <C> <C> <C>
Net Asset Value, Beginning of Period.......... $13.250 $11.890 $11.940
Income From Investment Operations
Net Investment Income......................... 0.341(5) 0.446 none
Net Gains (Losses) on Securities
(both realized and unrealized).......... 0.849 1.534 (0.050)
Total From Investment Operations..... 1.190 1.980 (0.050)
Less Distributions
Dividends from Net Investment Income.......... (0.400) (0.350) none
Distributions from Capital Gains.............. (0.050) (0.270) none
Total Distributions.................. (0.450) (0.620) none
Net Asset Value, End of Period................ $13.990 $13.250 $11.890
Total Return.................................. 9.21%(4) 17.33%(4) (2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)..... $3,094 $1,185 $5
Ratio of Expenses to Average Daily Net Assets. 1.95% 1.95% (2)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............. 2.86% 3.42% (2)
Ratio of Net Investment Income to Average
Daily Net Assets........................ 2.52% 3.43% (2)
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitation.. 1.61% 1.96% (2)
Portfolio Turnover Rate....................... 74% 34% (2)
Average Commission Rate Paid(6)............... $0.0276 $0.0271 N/A
</TABLE>
(1) Date of initial public offering; ratios have been annualized but
total return has not been annualized. (2) Date of initial public
offering. The ratios of expenses and net investment income to
average daily net assets, total return and portfolio turnover have
been omitted as management believes that such ratios, total return
and portfolio turnover for this relatively short period are not
meaningful.
(3) Does not reflect maximum sales charge that is or was in effect, nor
the 1% Limited CDSC or other CDSC that would apply in the event of
certain redemptions within 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value under Redemption and Exchange. Total
return reflects the expense limitations referenced under Summary of
Expenses and Management of the Funds.
(4) Does not include CDSC which varies from 1% - 4% depending upon the
holding period for Class B Shares and 1% for Class C Shares. Total
return reflects the expense limitations referenced under Summary of
Expenses and Management of the Funds.
(5) The years ended November 30, 1997 net investment income per share
information was based on the average share outstanding method.
(6) Computed by dividing the amount of commission paid by the total
number of shares purchased and sold during the period for which
there was a commission charged.
-14-
<PAGE>
<TABLE>
<CAPTION>
Emerging Emerging
Markets Fund Markets Fund
Class A Shares Class B Shares
Period Period
Year 6/10/96(1) Year 6/10/96(1)
Ended through Ended through
11/30/97 11/30/96 11/30/97 11/30/96
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period................ $9.970 $10.000 $9.940 $10.000
Income From Investment Operations
Net Investment Income (Loss)(4)..................... 0.062 0.018 (0.020) (0.051)
Net Gains (Losses) on Securities
(both realized and unrealized)................ 0.253 (0.048) 0.265 (0.009)
Total From Investment Operations........... 0.315 (0.030) 0.245 (0.060)
Less Distributions
Dividends from Net Investment Income................ (0.010) none none none
Distributions from Capital Gains.................... (0.075) none (0.075) none
Total Distributions........................... (0.085) none (0.075) none
Net Asset Value, End of Period...................... $10.200 $9.970 $10.110 $9.940
Total Return........................................ 3.19%(2) (0.30%)(2) 2.48%(3) (0.60%)(3)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)........... $9,665 $2,518 $3,484 $282
Ratio of Expenses to Average Daily Net Assets....... 2.00% 2.00% 2.70% 2.70%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................... 3.02% 4.10% 3.72% 4.80%
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets...................... 0.52% 0.17% (0.18%) (0.53%)
Ratio of Net Investment Income (Loss) to Average Daily
Net Assets Prior to Expense Limitation........ (0.50%) (1.93%) (1.20%) (2.63%)
Portfolio Turnover Rate............................. 65% 36% 65% 36%
Average Commission Rate Paid(5)..................... $0.0038 $0.0073 $0.0038 $0.0073
</TABLE>
<TABLE>
<CAPTION>
Emerging
Markets Fund
Class C Shares
Period
Year 6/10/96(1)
Ended through
11/30/97 11/30/96
<S> <C> <C>
Net Asset Value, Beginning of Period................ $9.940 $10.000
Income From Investment Operations
Net Investment Income (Loss)(4)..................... (0.019) (0.051)
Net Gains (Losses) on Securities
(both realized and unrealized)................ 0.264 (0.009)
Total From Investment Operations........... 0.245 (0.060)
Less Distributions
Dividends from Net Investment Income................ none none
Distributions from Capital Gains.................... (0.075) none
Total Distributions........................... (0.075) none
Net Asset Value, End of Period...................... $10.110 $9.940
Total Return........................................ 2.48%(3) (0.60%)(3)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)........... $1,519 $199
Ratio of Expenses to Average Daily Net Assets....... 2.70% 2.70%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................... 3.72% 4.80%
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets...................... (0.18%) (0.53%)
Ratio of Net Investment Income (Loss) to Average
Daily Net Assets Prior to Expense Limitation.. (1.20%) (2.63%)
Portfolio Turnover Rate............................. 65% 36%
Average Commission Rate Paid(5)..................... $0.0038 $0.0073
</TABLE>
(1) Date of initial public offering; ratios have been annualized but
total return has not been annualized.
(2) Does not reflect maximum sales charge that is or was in effect, nor
the 1% Limited CDSC or other CDSC that would apply in the event of
certain redemptions within 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value under Redemption and Exchange. Total
return reflects the expense limitations referenced under Summary of
Expenses and Management of the Funds.
(3) Does not include CDSC which varies from 1% - 4% depending upon the
holding period for Class B Shares and 1% for Class C Shares. Total
return reflects the expense limitations referenced under Summary of
Expenses and Management of the Funds.
(4) The years ended November 30, 1996 and 1997 net investment income per
share information was based on the average share outstanding method.
(5) Computed by dividing the amount of commission paid by the total
number of shares purchased and sold during the period for which
there was a commission charged.
-15-
<PAGE>
INVESTMENT OBJECTIVES AND STRATEGIES
SUITABILITY
Investors considering any of the Funds within Global Funds, Inc. should
have a long-term investment time frame.
The Funds cannot assure a specific rate of return or that principal
will be protected. The value of each Fund's shares can be expected to move up
and down depending on market conditions. Consequently, appreciation may be
obtained in periods of generally rising markets, while in declining markets
the value of each Fund's shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as
well as to political, economic and social situations different from and
potentially more volatile than those in the United States. In addition, the
accounting, tax and financial reporting standards of foreign countries are
different from and may be less reliable or comprehensive than those relating
to U.S. securities issuers. See Special Risk Considerations for a complete
discussion of the risk factors affecting any international investment. For
these reasons, the Funds are not suitable for short-term investors. However,
through the cautious selection and supervision of its portfolio, the Manager
will strive to achieve each Fund's objective.
Investors for whom each Fund is suitable are as set forth below:
Global Bond Fund -- The Fund may be suitable for investors with a
long-term investment horizon (of at least three years) who are looking for
current income from a portfolio that includes both U.S. and foreign
fixed-income securities.
Global Assets Fund -- The Fund may be suitable for investors with a
long-term investment horizon (of at least three years) who are looking for
long-term total return and would like to pursue such a goal through a
portfolio that includes both fixed-income and equity securities from both the
U.S. and foreign countries. This Fund may be appropriate for investors who
would prefer to have a professional portfolio manager decide how best to
allocate holdings among foreign and U.S. securities.
Emerging Markets Fund -- The Fund may be suitable for investors who
are seeking long-term growth for that portion of an investor's assets that
have been designated for aggressive investments. The Fund will invest
primarily in the securities of emerging markets which may offer high return
potential but are potentially more risky than investments in either the U.S.
or established foreign countries due, among other things, to less
well-developed political and economic systems.
* * *
Ownership of shares of each Fund can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct
purchases of the type of securities in which the Funds invest.
-16-
<PAGE>
An investor should not consider a purchase of shares of any of the
Funds as equivalent to a complete investment program. The Delaware Group
includes a family of funds, generally available through registered investment
dealers, which may be used together to create a more complete investment
program.
INVESTMENT STRATEGY
Global Bond Fund -- The investment objective of Global Bond Fund is
to achieve current income consistent with the preservation of investors'
principal. The Fund seeks to achieve this objective by investing primarily in
fixed-income securities that may also provide the potential for capital
appreciation. The Fund is a global fund. Under normal circumstances, at least
65% of the Fund's total assets will be invested in the fixed-income securities
of issuers organized or having a majority of their assets in or deriving a
majority of their operating income in at least three different countries, one
of which may be the United States.
The fixed-income securities in which the Fund may invest include
foreign and U.S. government securities and debt obligations of foreign and
U.S. companies which are generally rated A or better by Standard & Poor's
Ratings Group ("S&P") and Baa by Moody's Investors Services, Inc. ("Moody's"),
or if unrated, are deemed to be of comparable quality by the Manager. However,
the Fund may also invest in securities of issuers in emerging markets
countries, including Brady Bonds, which tend to be of lower quality and more
speculative than securities of developed country issuers. Such securities may
be rated lower than BBB by S&P or Baa by Moody's, or if unrated, are
considered by the Manager to be of equivalent quality. See High Yield, High
Risk Securities and Special Risk Considerations - Emerging Markets Securities
Risks. Generally, the value of fixed-income securities moves inversely to the
movement of market interest rates. The value of the Fund's portfolio
securities and, thus, an investor's shares will be affected by changes in such
rates. It is anticipated that the average weighted maturity of the portfolio
will be in the five-to-ten year range. If, however, the Manager anticipates a
declining interest rate environment, the average weighted maturity may be
extended past ten years. Conversely, if the Manager anticipates a rising rate
environment, the average weighted maturity may be shortened to less than five
years.
The Fund may also invest in zero-coupon bonds and in the debt
securities of supranational entities denominated in any currency. Zero-coupon
bonds are debt obligations which do not entitle the holder to any periodic
payments of interest prior to maturity or a specified date when the securities
begin paying current interest, and therefore are issued and traded at a
discount from their face amounts or par value. See Special Risk
Considerations. A supranational entity is an entity established or financially
supported by the national governments of one or more countries to promote
reconstruction or development. Examples of supranational entities include,
among others, the International Bank for Reconstruction and Development (more
commonly known as the World Bank), the European Economic Community, the
European Coal and Steel Community, the European Investment Bank, the
Inter-Development Bank, the Export-Import Bank and the Asian Development Bank.
For increased safety, the Fund currently anticipates that a large percentage
of its assets will be invested in securities of supranational entities and in
U.S. and foreign government securities. The Fund may also invest in Depositary
Receipts.
With respect to U.S. government securities, the Fund may invest only
in securities issued or guaranteed as to the payment of principal and interest
by the U.S. government, and those of its agencies or instrumentalities which
are backed by the full faith and credit of the United States. Direct
obligations of the U.S. government which are available for purchase by the
Fund include bills, notes, bonds and other debt securities issued by the U.S.
Treasury. These obligations differ mainly in interest rates, maturities and
dates of issuance. Agencies whose obligations are backed by the full faith and
credit of the United States include the Farmers Home Administration, Federal
Financing Bank and others. With respect to securities issued by foreign
governments,
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their agencies, instrumentalities or political subdivisions, the Fund will
generally invest in such securities if they have been rated AAA or AA by S&P
or Aaa or Aa by Moody's or, if unrated, have been determined by the Manager to
be of comparable quality. However, a portion of the Fund's assets may also be
invested in such foreign governmental securities issued by emerging or
developing countries, which may be lower rated, including securities rated below
investment grade.
While the Fund may purchase securities of issuers in any foreign
country, developed and underdeveloped, or emerging market countries, it is
currently anticipated that the countries in which the Fund may invest will
include, but not be limited to, Canada, Germany, the United Kingdom, France,
the Netherlands, Belgium, Spain, Switzerland, Japan, Australia, Hong Kong and
Singapore/Malaysia, as well as Indonesia, Korea, the Philippines, Taiwan,
Thailand and South Africa. With respect to certain countries, investments by
an investment company may only be made through investments in closed-end
investment companies that in turn are authorized to invest in the securities
of such countries.
The Fund may also invest in closed-end investment companies. See
Investment Company Securities under Other Investment Policies and Risk
Considerations.
From time to time, the Fund may find opportunities to pursue its
investment objective outside of the fixed-income markets, but in no event will
such investments exceed 5% of the Fund's net assets.
Global Assets Fund -- The investment objective of Global Assets Fund
is to achieve long-term total return for investors. The Fund seeks to achieve
this objective by investing in securities which, in the Manager's or
Sub-Adviser's opinion, will provide higher current income than a portfolio
comprised exclusively of equity securities, along with the potential for
capital growth. The Fund is a global fund. Under normal circumstances, at
least 65% of the Fund's total assets will be invested in the securities of
issuers organized or having a majority of their assets in or deriving a
majority of their operating income in at least three different countries, one
of which may be the United States.
The Fund will attempt to achieve its investment objective by investing
in a broad range of equity and fixed-income securities. In selecting
securities investments for the Fund, the Manager will consider an issuer's
competitive position, cost structure and liquidity. Equity securities in which
the Fund may invest include convertible securities, common stocks, preferred
stocks and warrants issued in foreign countries or in the United States. In
selecting equity securities in which the Fund may invest, the Manager will use
a dividend discount analysis and a purchasing power parity approach.
Generally, the Fund may invest in fixed-income securities, including
both foreign and U.S. government securities and debt obligations of foreign
and U.S. companies. With respect to U.S. government securities, the Fund may
invest only in securities identified in Investment Strategy--Global Bond Fund.
With respect to corporate debt obligations, the Fund may invest in securities
which are investment grade as determined by any nationally-recognized
statistical rating organization, such as those rated BBB or better by S&P, or
Baa or better by Moody's, or if unrated, are determined to be of comparable
quality by the Manager. Debt obligations rated BBB and Baa have speculative
characteristics. The Fund may also invest up to 15% of its net assets in high
yield, high risk U.S. fixed-income securities. These securities are rated
lower than BBB by S&P and Baa by Moody's or, if unrated, are considered by the
Manager or Sub-Adviser to be of equivalent quality, and present special
investment risks. See High Yield, High Risk Securities and Special Risk
Considerations.
It is anticipated that a portion of the Fund's assets may be invested
in warrants. Warrants permit the Manager to establish an equity position in
selected securities by committing a lower proportion of the portfolio to
equities. The Manager's intention is to invest the difference between the cost
of the warrant and the
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equivalent equity security in high quality debt instruments. The Fund may, at
any given time, be fully invested in either the equity or fixed-income
markets, depending upon investment opportunities available in each.
The Fund may invest in zero-coupon bonds and in the debt securities of
supranational entities denominated in any currency. See Investment Strategy--
Global Bond Fund. The Fund may also invest in Depositary Receipts.
While the Fund may purchase securities of issuers in any foreign
country, developed and underdeveloped, or emerging market countries, it is
currently anticipated that the countries in which the Fund may invest, in
addition to the United States, will include, but not be limited to, the
nations identified in Investment Strategy-- Global Bond Fund. With respect to
certain countries in which the Fund may invest, namely Korea and Taiwan,
investments by an investment company may only be made through investments in
closed-end investment companies. See Investment Company Securities under Other
Investment Policies and Risk Considerations.
Emerging Markets Fund -- The investment objective of Emerging Markets
Fund is to achieve long-term capital appreciation. The Fund seeks to achieve
this objective by investing primarily in equity securities of issuers located
or operating in emerging countries. The Fund is an international fund. Under
normal circumstances, at least 65% of the Fund's total assets will be invested
in equity securities of issuers organized or having a majority of their assets
or deriving a majority of their operating income in at least three different
countries which are considered to be emerging or developing. The Fund will
attempt to achieve its investment objective by investing in a broad range of
equity securities, including common stocks, preferred stocks, convertible
securities and warrants issued by companies located or operating in emerging
countries.
The Fund considers an "emerging country" to be any country which is
generally recognized to be an emerging or developing country by the
international financial community, including the World Bank and the
International Finance Corporation, as well as countries that are classified by
the United Nations or otherwise regarded by their authorities as developing.
In addition, any country that is included in the IFC Free Index or MSCI EMF
Index will be considered to be an "emerging country." As of the date of this
Prospectus, there are more than 130 countries which, in the Manager's
judgment, are generally considered to be emerging or developing countries by
the international financial community, approximately 40 of which currently
have stock markets. Within this group of developing or emerging countries are
included almost every nation in the world, except the United States, Canada,
Japan, Australia, New Zealand and most nations located in Western and Northern
Europe.
Currently, investing in many emerging countries is not feasible, or
may, in the Manager's opinion, involve unacceptable political risks. The Fund
will focus its investments in those emerging countries where the Manager
considers the economies to be developing strongly and where the markets are
becoming more sophisticated. The Manager believes that investment
opportunities may result from an evolving long-term international trend
favoring more market-oriented economies, a trend that may particularly benefit
certain countries having developing markets. This trend may be facilitated by
local or international political, economic or financial developments that
could benefit the capital markets in such countries.
In considering possible emerging countries in which the Fund may
invest, the Manager will place particular emphasis on certain factors, such as
economic conditions (including growth trends, inflation rates and trade
balances), regulatory and currency controls, accounting standards and
political and social conditions. It is currently anticipated that the
countries in which the Fund may invest will include, but not be limited to,
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Argentina, Botswana, Brazil, Chile, China, Colombia, Czech Republic,
Estonia, Ghana, Greece, Hong Kong, Hungary, India, Indonesia, Ivory Coast,
Jamaica, Jordan, Kenya, Korea, Latvia, Lithuania, Malaysia, Mauritius, Mexico,
Morocco, Nigeria, Pakistan, Peru, the Philippines, Poland, Portugal, Russia,
Slovenia, South Africa, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela and
Zimbabwe. As markets in other emerging countries develop, the Manager expects
to expand and further diversify the countries in which the Fund invests.
Although not an exclusive list of criteria to be considered by the
Manager, an emerging country equity security is one issued by a company that,
in the opinion of the Manager, exhibits one or more of the following
characteristics: (i) its principal securities trading market is an emerging
country, as defined above; (ii) while traded in any market, alone or on a
consolidated basis, the company derives 50% or more of its annual revenues
from either goods produced, sales made or services performed in emerging
countries; or (iii) it is organized under the laws of, and has a principal
office in, an emerging country. Determinations as to eligibility will be made
by the Manager based on publicly available information and inquiries made of
the companies.
The Fund may invest in Depositary Receipts, and in both open-end and,
listed or unlisted, closed-end investment companies, as well as unregistered
investment companies. See Investment Company Securities under Other Investment
Policies and Risk Considerations. The Fund may also invest in convertible
preferred stocks that offer enhanced yield features, such as Preferred Equity
Redemption Cumulative Stock, and certain other non-traditional equity
securities.
The Fund may invest up to 35% of its net assets in fixed-income
securities issued by emerging country companies, and foreign governments,
their agencies, instrumentalities or political subdivisions, all of which may
be high yield, high risk fixed-income securities rated lower than BBB by S&P
and Baa by Moody's or, if unrated, are considered by the Manager to be of
equivalent quality and which present special investment risks. The Fund may
also invest in Brady Bonds and zero-coupon securities. See High Yield, High
Risk Securities and Special Risk Considerations.
For temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued
by foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities (and
which are backed by the full faith and credit of the U.S. government), or
issued by foreign or U.S. companies. For example, the Fund may invest in U.S.
fixed-income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. Any corporate debt obligations will be rated AA or
better by S&P, or Aa or better by Moody's, or if unrated, will be determined
to be of comparable quality by the Manager. The Fund may also invest in the
securities listed above pending investment of proceeds from new sales of Fund
shares and to maintain sufficient cash to meet redemption requests.
Restricted and Illiquid Securities
Each Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Funds. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. Emerging
Markets Fund may invest up to 15% of the value of its net assets in illiquid
securities, which are securities which may not be disposed of within seven
days at the price at which they are carried on the Fund's books, while Global
Assets Fund and Global Bond Fund may invest no more than 10% of their net
assets in such securities. In the event a Fund's percentage limitation is
exceeded, whether due to changes in the market
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value of the Fund's illiquid holdings or because a particular security is
deemed to have become illiquid, the Manager will take steps to remedy these
circumstances in an orderly fashion.
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High Yield, High Risk Securities
Emerging Markets Fund may invest up to 35% of its net assets, in
high yield, high risk foreign fixed-income securities, including so-called
Brady Bonds. See Foreign Government Securities Risks under Special Risk
Considerations. Global Assets Fund may invest up to 15% of its net assets in
high yield, high risk U.S. fixed-income securities (commonly known as junk
bonds). In the past, in the opinion of Delaware International and Delaware,
the high yields from these bonds have more than compensated for their higher
default rates. There can be no assurance, however, that yields will continue
to offset default rates on these bonds in the future. Delaware International
and Delaware intend to maintain an adequately diversified portfolio of these
bonds. While diversification can help to reduce the effect of an individual
default on the Funds, there can be no assurance that diversification will
protect the Funds from widespread bond defaults brought about by a sustained
economic downturn.
Medium- and low-grade bonds held by the Funds may be issued as a
consequence of corporate restructurings, such as leveraged buy-outs, mergers,
acquisitions, debt recapitalizations or similar events. Also these bonds are
often issued by smaller, less creditworthy companies or by highly leveraged
(indebted) firms, which are generally less able than more financially stable
firms to make scheduled payments of interest and principal. The risks posed by
bonds issued under such circumstances are substantial.
The economy and interest rates may affect these high yield, high risk
securities differently from other securities. Prices have been found to be
less sensitive to interest rate changes than higher rated investments, but
more sensitive to adverse economic changes or individual corporate
developments. Also, during an economic downturn or a substantial period of
rising interest rates, highly leveraged issuers may experience financial
stress which would adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals and to obtain
additional financing. Changes by recognized rating agencies in their rating of
any security and in the ability of an issuer to make payments of interest and
principal will also ordinarily have a more dramatic effect on the values of
these investments than on the values of higher-rated securities. Such changes
in value will not affect cash income derived from these securities, unless the
issuers fail to pay interest or dividends when due. Such changes will,
however, affect a Fund's net asset value per share.
* * *
Each Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940
Act, each Fund will operate as a nondiversified fund. No Fund will
concentrate its investments in any particular industry, which means that no
Fund will invest 25% or more of its total assets in any one industry.
Each Fund's investment objective, Global Funds, Inc.'s designation as
an open-end investment company, the Funds' designations as nondiversified
funds, and each of the Funds' policies concerning portfolio lending, borrowing
and concentration are "fundamental" and may not be changed unless authorized
by the vote of a majority of that Fund's outstanding voting securities. A vote
of a "majority of the outstanding voting securities" is the vote by the
holders of the lesser of a) 67% or more of a Fund's voting securities present
in person or represented by proxy if the holders of more than 50% of the
outstanding voting securities of such Fund are present or represented by
proxy; or b) more than 50% of the outstanding voting securities. Part B lists
other more specific investment restrictions of the Funds which may not be
changed without a majority shareholder
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vote. A brief discussion of those factors that materially affected each Fund's
performance during its most recently completed fiscal year appears in Global
Funds Inc.'s Annual Report.
The investment policies of the Funds not identified above as
"fundamental" may be changed by the Board of Directors of Global Funds, Inc.
without a shareholder vote. See Special Risk Considerations and Other
Investment Policies and Risk Considerations.
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SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in a Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Foreign Securities Risks. Each Fund has the right to purchase
securities in any developed, underdeveloped or emerging country. Investors
should consider carefully the substantial risks involved in investing in
securities issued by companies and governments of foreign nations. These risks
are in addition to the usual risks inherent in domestic investments. There is
the possibility of expropriation, nationalization or confiscatory taxation,
taxation of income earned in foreign nations or other taxes imposed with
respect to investments in foreign nations, foreign exchange control (which may
include suspension of the ability to transfer currency from a given country),
default in foreign government securities, political or social instability or
diplomatic developments which could affect investments in securities of
issuers in those nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about
companies in the United States. Foreign companies are not subject to uniform
accounting, auditing and financial reporting standards, and auditing practices
and requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United
States' generally accepted accounting principles. Also, for an issuer that
keeps accounting records in local currency, inflation accounting rules may
require for both tax and accounting purposes, that certain assets and
liabilities be restated on the issuer's balance sheet in order to express
items in terms of currency or constant purchasing power. Inflation accounting
may indirectly generate losses or profits. Consequently, financial data may be
materially affected by restatements for inflation and may not accurately
reflect the real condition of those issuers and securities markets.
Further, a Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on
securities transactions in foreign countries, which are sometimes fixed rather
than subject to negotiation as in the United States, are likely to be higher.
Further, the settlement period of securities transactions in foreign markets
may be longer than in domestic markets, and may be subject to administrative
uncertainties. In many foreign countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers
and listed companies than in the United States, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which a Fund may invest may also be smaller, less liquid and
subject to greater price volatility than those in the United States.
Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse
and mature, and securities markets that trade a small number of securities,
which can result in a low or nonexistent volume of trading. Prices in these
securities markets tend to be volatile and, in the past, securities in these
countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Until recently, there
has been an absence of a capital market structure or market-oriented economy
in certain emerging countries. Further, investments and opportunities for
investments by foreign investors are subject to a variety of national policies
and restrictions in many emerging countries. These restrictions may take the
form of
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prior governmental approval, limits on the amount or type of securities held
by foreigners, limits on the types of companies in which foreigners may invest
and prohibitions on foreign investments in issuers or industries deemed
sensitive to national interests. Additional restrictions may be imposed at any
time by these or other countries in which a Fund invests. Also, the
repatriation of both investment income and capital from several foreign
countries is restricted and controlled under certain regulations, including,
in some cases, the need for certain governmental consents. Although these
restrictions may in the future make it undesirable to invest in emerging
countries, the Manager does not believe that any current repatriation
restrictions would affect its decision to invest in such countries. Countries
such as those in which a Fund may invest, and in which Emerging Markets Fund
will primarily invest, have historically experienced and may continue to
experience, substantial, and in some periods extremely high rates of inflation
for many years, high interest rates, exchange rate fluctuations or currency
depreciation, large amounts of external debt, balance of payments and trade
difficulties and extreme poverty and unemployment. Other factors which may
influence the ability or willingness to service debt include, but are not
limited to, a country's cash flow situation, the availability of sufficient
foreign exchange on the date a payment is due, the relative size of its debt
service burden to the economy as a whole, its government's policy towards the
International Monetary Fund, the World Bank and other international agencies
and the political constraints to which a government debtor may be subject.
Foreign Government Securities Risks. With respect to investment in
debt issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits
and investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or
whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other
than dollars, its ability to make debt payments denominated in dollars could
be adversely affected. If a foreign government or government-related issuer
cannot generate sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from foreign
governments, commercial banks and multilateral organizations, and inflows of
foreign investment. The commitment on the part of these foreign governments,
multilateral organizations and others to make such disbursements may be
conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third
parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising
international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to
foreign exchange. Currency devaluations may affect the ability of a government
issuer to obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may
default on its obligations. If such a default occurs, a Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must,
in some cases, be pursued in the courts of the defaulting party itself, and
the ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default
under their commercial bank loan agreements.
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Among the foreign government and government related issuers in which
Emerging Markets Fund may invest are certain high-yield securities,
including so-called Brady Bonds. The issuers of the foreign government and
government-related high yield securities, including Brady Bonds, in which
Emerging Markets Fund expect to invest have in the past experienced
substantial difficulties in servicing their external debt obligations, which
have led to defaults on certain obligations and the restructuring of certain
indebtedness. Restructuring arrangements have included, among other things,
reducing and rescheduling interest and principal payments by negotiating new
or amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest
payments. Holders of certain foreign government and government-related high
yield securities may be requested to participate in the restructuring of such
obligations and to extend further loans to their issuers. There can be no
assurance that the Brady Bonds and other foreign government and
government-related high yield securities in which the Emerging Markets Fund
may invest will not be subject to similar defaults or restructuring
arrangements which may adversely affect the value of such investments.
Furthermore, certain participants in the secondary market for such debt may be
directly involved in negotiating the terms of these arrangements and may
therefore have access to information not available to other market
participants.
Brady Bonds are debt securities issued under the framework of the
Brady Plan, an initiative announced by former U.S. Treasury Secretary Nicholas
F. Brady in 1989 as a mechanism for debtor nations to restructure their
outstanding external indebtedness (generally, commercial bank debt). In
restructuring its external debt under the Brady Plan framework, a debtor
nation negotiates with its existing bank lenders as well as multilateral
institutions such as the World Bank and the International Monetary Fund. The
Brady Plan framework, as it has developed, contemplates the exchange of
commercial bank debt for new issued bonds (Brady Bonds). The investment
advisers believe that economic reforms undertaken by countries in connection
with the issuance of Brady Bonds make the debt of countries which have issued
or have announced plans to issue Brady Bonds an attractive opportunity for
investment. Investors, however, should recognize that the Brady Plan only sets
forth general guiding principles for economic reform and debt reduction,
emphasizing that solutions must be negotiated on a case-by-case basis between
debtor nations and their creditors. In addition, Brady Bonds have been issued
only recently and, accordingly, do not have a long payment history.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible
since the future value of such securities in foreign currencies will change as
a consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for a Fund
to purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than the
amount of foreign currency the Fund is obligated to deliver (and if a decision
is made to sell the security and make delivery of the foreign currency).
Conversely, it may be necessary to sell on the spot market some of the foreign
currency received upon the sale of the portfolio security if its market value
exceeds the amount of foreign currency the Fund is obligated to deliver.
Emerging Markets Fund may invest up to 35% of its net assets, in
high yield, high risk foreign fixed-income securities. Global Assets Fund may
invest up to 15% of its net assets in high yield, high risk U.S.
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fixed-income securities. These securities are rated lower than BBB by S&P and
Baa by Moody's or, if unrated, are considered by Delaware International or
Delaware, in the case of Global Assets Fund, to be of equivalent quality. See
Investment Objectives and Strategies-- Global Assets Fund and Emerging Markets
Fund and High Yield, High Risk Securities. No Fund will purchase securities
rated lower than C by S&P or Ca by Moody's, or, if unrated, considered to be of
an equivalent quality to such ratings by Delaware International or Delaware. See
Appendix A - Ratings to this Prospectus for more rating information.
Fixed-income securities of this type are considered to be of poor standing and
predominantly speculative. Such securities are subject to a substantial degree
of credit risk.
* * *
For additional information about each Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Funds' investment policies, restrictions and risk factors.
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THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
Fund Information; Literature; Price; Yield and Performance Figures
Shareholder Service Center
800-523-1918
Information on Existing Regular Investment Accounts and Retirement Plan
Accounts; Wire Investments; Wire Liquidations; Telephone Liquidations
and Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
You can call the Investor Information Center at any time for current
performance information. Current yield and total return information may also
be included in advertisements and information given to shareholders.
Yields are computed on an annual basis over a 30-day period.
Shareholder Services
During business hours, you can call the Delaware Group's Shareholder
Service Center. Our representatives can answer any questions about your
account, the Funds, various service features and other funds in the Delaware
Group.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations. Delaphone also provides
current performance information on the Funds, as well as other funds in the
Delaware Group.
Delaphone is available seven days a week, 24 hours a day.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent
following all transactions other than those involving a reinvestment of
dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling the Shareholder Service Center.
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Duplicate Confirmations
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or her.
This makes it easier for your adviser to help you manage your investments.
Tax Information
Each year, Global Funds, Inc. will mail to you information on the tax
status of your dividends and distributions.
Dividend Payments
Dividends, capital gains and other distributions, if any, are
automatically reinvested in your account, unless you elect to receive them in
cash. You may also elect to have the dividends earned in one fund
automatically invested in another Delaware Group fund with a different
investment objective, subject to certain exceptions and limitations.
For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call the
Shareholder Service Center.
MoneyLine(SM) Services
Delaware Group offers the following services for fast and convenient
transfer of funds between your personal bank account and your Delaware Group
fund account:
1. MoneyLine(SM) Direct Deposit Service
If you elect to have your dividends and distributions paid in
cash and such dividends and distributions are in an amount of $25 or more, you
may choose the MoneyLine(SM) Direct Deposit Service and have such payments
transferred from your Fund account to your predesignated bank account. See
Dividends and Distributions. In addition, you may elect to have your
Systematic Withdrawal Plan payments transferred from your Fund account to your
predesignated bank account through this service. See Systematic Withdrawal
Plans under Redemption and Exchange. This service is not available for certain
retirement plans.
2. MoneyLine(SM) On Demand
You or your investment dealer may request purchases and
redemptions of Fund shares by phone using MoneyLine(SM) On Demand. When you
authorize the Fund to accept such requests from you or your investment dealer,
funds will be withdrawn from (for share purchases) or deposited to (for share
redemptions) your predesignated bank account. Your request will be processed
the same day if you call prior to 4 p.m., Eastern time. There is a $25 minimum
and $50,000 maximum limit for MoneyLine(SM) On Demand transactions. This
service is not available for retirement plans, except for purchases of shares
by IRAs.
For each MoneyLine(SM) Service, it may take up to four business days
for the transactions to be completed. You can initiate either service by
completing an Account Services form. If your name and address are not
identical to the name and address on your Fund account, you must have your
signature guaranteed. The Funds do not charge a fee for MoneyLine(SM)
services; however, your bank may charge a fee. Please call the Shareholder
Service Center for additional information about these services.
Retirement Planning
An investment in the Funds may be a suitable investment option for
tax-deferred retirement plans. Delaware Group offers a full spectrum of
qualified and non-qualified retirement plans, including the
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<PAGE>
popular 401(k) Deferred Compensation Plan, IRA, and the new Roth IRA. Just
call the Delaware Group at 1-800-523-1918 for more information.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of a Fund with the dollar amount of new
purchases of Class A Shares of a Fund to qualify for a reduced front-end sales
charge on such purchases of Class A Shares. Under the Combined Purchases
Privilege, you may also include certain shares that you own in other funds in
the Delaware Group. See Classes of Shares.
Letter of Intention
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain
of your purchases of Delaware Group fund shares over a 13-month period. See
Classes of Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds
from a redemption of Class A Shares, within one year of the date of the
redemption, without paying a front-end sales charge. See Part B.
Exchange Privilege
The Exchange Privilege permits you to exchange all or part of your
shares into shares of other mutual funds in the Delaware Group, subject to
certain exceptions and limitations. For additional information on exchanges,
see Investing by Exchange under How to Buy Shares and Redemption and Exchange.
Wealth Builder Option
You may elect to invest in the Funds through regular liquidations of
shares in your accounts in other funds in the Delaware Group. Investments
under this feature are exchanges and are therefore subject to the same
conditions and limitations as other exchanges of Fund shares. See Additional
Methods of Adding to Your Investment - Wealth Builder Option and Investing by
Exchange under How to Buy Shares and Redemption and Exchange.
Financial Information about the Funds
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Global Funds, Inc.'s fiscal year ends
on November 30.
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<PAGE>
CLASSES OF SHARES
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
Class B Shares ("deferred sales charge alternative") or Class C Shares ("level
sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Class A Shares are subject to annual 12b-1 Plan expenses of up to a
maximum of 0.30% of average daily net assets of such shares. For the period
from February 1, 1998 through May 31, 1998, the Distributor has elected
voluntarily to waive its right to receive 12b-1 Plan fees with respect to
Class A Shares of Emerging Markets Fund to the extent necessary to ensure that
12b-1 Plan expenses for such Class do not exceed 0.25% of average daily net
assets. Certain purchases of Class A Shares qualify for reduced front-end
sales charges. See Front-End Sales Charge Alternative - Class A Shares, below.
See also Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value under Redemption and Exchange and
Distribution (12b-1) and Service under Management of the Funds.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within six years of purchase. Class B Shares are
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 such shares for approximately eight years after purchase.
Class B Shares permit all of the investor's dollars to work from the time the
investment is made. The higher 12b-1 Plan expenses paid by Class B Shares will
cause such shares to have a higher expense ratio and to pay lower dividends
than Class A Shares. At the end of approximately eight years after purchase,
Class B Shares automatically will be converted into Class A Shares and,
thereafter, for the remainder of the life of the investment, the annual 12b-1
Plan fee of up to 0.30% for Class A Shares will apply. See Automatic
Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within 12 months of purchase. Class C Shares are
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 such shares for the life of the investment. The higher
12b-1 Plan expenses paid by Class C Shares will cause such shares to have a
higher expense ratio and to pay lower dividends than Class A Shares. Unlike
Class B Shares, Class C Shares do not convert to another class.
The alternative purchase arrangements described above permit investors
to choose the method of purchasing shares that is most suitable given the
amount of their purchase, the length of time they expect to hold their shares
and other relevant circumstances. Investors should determine whether, given
their particular circumstances, it is more advantageous to purchase Class A
Shares and incur a front-end sales charge, purchase Class B Shares and have
the entire initial purchase amount invested in a Fund with their investment
being subject to a CDSC if they redeem shares within six years of purchase, or
purchase Class C Shares and have the entire initial purchase amount invested
in a Fund with their investment being subject to a CDSC if they redeem
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<PAGE>
shares within 12 months of purchase. In addition, investors should consider
the level of annual 12b-1 Plan expenses applicable to each Class. The higher
12b-1 Plan expenses on Class B Shares and Class C Shares will be offset to the
extent a return is realized on the additional money initially invested upon
the purchase of such shares. However, there can be no assurance as to the
return, if any, that will be realized on such additional money. In addition,
the effect of any return earned on such additional money will diminish over
time. In comparing Class B Shares to Class C Shares, investors should also
consider the duration of the annual 12b-1 Plan expenses to which each of the
Classes is subject and the desirability of an automatic conversion feature,
which is available only for Class B Shares.
For the distribution and related services provided to, and the
expenses borne on behalf of, the Funds, the Distributor and others will be
paid, in the case of Class A Shares, from the proceeds of the front-end
sales charge and 12b-1 Plan fees and, in the case of Class B Shares and
Class C Shares, from the proceeds of the 12b-1 Plan fees and, if applicable,
the CDSC incurred upon redemption. Financial advisers may receive different
compensation for selling Class A Shares, Class B Shares and Class C Shares.
Investors should understand that the purpose and function of the respective
12b-1 Plans and the CDSCs applicable to Class B Shares and Class C Shares are
the same as those of the 12b-1 Plan and the front-end sales charge applicable
to Class A Shares in that such fees and charges are used to finance the
distribution of the respective Classes. See Distribution (12b-1) and Service
under Management of the Funds.
Dividends, if any, paid on Class A Shares, Class B Shares and Class C
Shares, will be calculated in the same manner, at the same time and on the
same day and will be in the same amount, except that the additional amount of
12b-1 Plan expenses relating to Class B Shares and Class C Shares will be
borne exclusively by such shares. See Calculation of Offering Price and Net
Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. Global Funds, Inc. and the Distributor intend to operate in compliance
with these rules.
Front-End Sales Charge Alternative - Class A Shares
Class A Shares may be purchased at the offering price, which reflects
a maximum front-end sales charge of 4.75%. See Calculation of Offering Price
and Net Asset Value Per Share.
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<PAGE>
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following table.
Global Bond Fund A Class
Global Assets Fund A Class
Emerging Markets Fund A Class
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
Dealer's
Commission***
Front-End Sales Charge as % of as % of
Offering Offering
Amount of Purchase Price Amount Invested** Price
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Global Global Emerging
Bond Assets Markets
Fund Fund Fund
Less than $100,000 4.75% 5.00% 4.98% 5.00% 4.00%
$100,000 but under $250,000 3.75 3.89 3.91 3.92 3.00
$250,000 but under $500,000 2.50 2.59 2.56 2.55 2.00
$500,000 but under $1,000,000* 2.00 2.04 2.06 2.06 1.60
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1%
Limited CDSC may apply upon redemption of such shares.
** Based on the net asset value per share of the respective Class A Shares
as of the end of Global Funds, Inc.'s most recent fiscal year.
*** 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 charge shown above. In addition, certain dealers
who enter into an agreement to provide extra training and information
on Delaware Group products and services and who increase sales of
Delaware Group funds may receive an additional commission of up to
0.15% of the offering price. Dealers who receive 90% or more of the
sales charge may be deemed to be underwriters under the 1933 Act.
- --------------------------------------------------------------------------------
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<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers
through whom such purchases are made in accordance with the following
schedule:
Dealer's Commission
(as a 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
For accounts with assets over $1 million, the dealer commission
resets annually to the highest incremental commission rate on the anniversary
of the first purchase. In determining a financial adviser's eligibility for
the dealer's commission, purchases of Class A Shares of other Delaware Group
funds as to which a Limited CDSC applies may be aggregated with those of
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.
Redemptions of Class A Shares purchased at net asset value may result
in the imposition of a Limited CDSC if the dealer's commission described above
was paid in connection with the purchase of those shares. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of a Fund and shares of other funds in
the Delaware Group, except as noted below, you can reduce the front-end
sales charges on any additional purchases of Class A Shares. Shares of
Delaware Group Premium Fund, Inc. beneficially owned in connection with
ownership of variable insurance products may be combined with other Delaware
Group fund holdings. In addition, assets held by investment advisory clients
of the Manager or its affiliates in a stable value account may be combined
with other Delaware Group fund holdings. Shares of other funds that do not
carry a front-end sales charge or CDSC may not be included unless they were
acquired through an exchange from a Delaware Group fund that does carry a
front-end sales charge or CDSC.
This privilege permits you to combine your purchases and holdings
with those of your spouse, your children under 21 and any trust, fiduciary or
retirement account for the benefit of such family members.
-34-
<PAGE>
It also permits you to use these combinations under a Letter of
Intention. A Letter of Intention allows you to make purchases over a 13-month
period and qualify the entire purchase for a reduction in front-end sales
charges on Class A Shares.
Combined purchases of $1,000,000 or more, including certain purchases
made at net asset value pursuant to a Right of Accumulation or under a Letter
of Intention, may result in the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative Class A Shares, above.
Allied Plans
Class A Shares are available for purchase by participants in certain
401(k) Defined Contribution Plans ("Allied Plans") which are made available
under a joint venture agreement between Delaware Distributors, L.P. and
another institution through which mutual funds are marketed and which allow
investments in Class A Shares of designated Delaware Group funds ("eligible
Delaware Group fund shares"), as well as shares of designated classes of
non-Delaware Group funds ("eligible non-Delaware Group fund shares"). Class B
Shares and Class C Shares are not eligible for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Group and eligible non-Delaware Group fund shares
held by the Allied Plan may be combined with the dollar amount of new
purchases by that Allied Plan to obtain a reduced front-end sales charge on
additional purchases of eligible Delaware Group fund shares.
Participants in Allied Plans may exchange all or part of their
eligible Delaware Group fund shares for other eligible Delaware Group fund
shares or for eligible non-Delaware Group fund shares at net asset value
without payment of a front-end sales charge. However, exchanges of eligible
fund shares, both Delaware Group and non-Delaware Group, which were not
subject to a front-end sales charge, will be subject to the applicable sales
charge if exchanged for eligible Delaware Group fund shares to which a sales
charge applies. No sales charge will apply if the eligible fund shares were
previously acquired through the exchange of eligible shares on which a sales
charge was already paid or through the reinvestment of dividends. See
Investing by Exchange.
A dealer's commission may be payable on purchases of eligible
Delaware Group fund shares under an Allied Plan. In determining a financial
adviser's eligibility for a dealer's commission on net asset value purchases
of eligible Delaware Group fund shares in connection with Allied Plans, all
participant holdings in the Allied Plan will be aggregated.
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described under Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Group and non-Delaware Group fund shares. When
eligible Delaware Group fund shares are exchanged into eligible non-Delaware
Group fund shares, the Limited CDSC will be imposed at the time of the
exchange, unless the joint venture agreement specifies that the amount of the
Limited CDSC will be paid
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<PAGE>
by the financial adviser or selling dealer. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange.
Buying Class A Shares at Net Asset Value
Class A Shares of a Fund may be purchased at net asset value under
the Delaware Group Dividend Reinvestment Plan and, under certain
circumstances, the Exchange Privilege or the 12-Month Reinvestment
Privilege. See The Delaware Difference and Redemption and Exchange for
additional information.
Purchases of Class A Shares may be made at net asset value by current
and former officers, directors and employees (and members of their families)
of the Manager, any affiliate, any of the funds in the Delaware Group, certain
of their agents and registered representatives and employees of authorized
investment dealers and by employee benefit plans for such entities. Individual
purchases, including those in retirement accounts, must be for accounts in the
name of the individual or a qualifying family member.
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. Officers, directors and key employees of institutional
clients of the Manager or any of its affiliates may purchase Class A Shares at
net asset value. Moreover, purchases may be effected at net asset value for
the benefit of the clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker, dealer or
investment adviser has entered into an agreement with the Distributor
providing specifically for the purchase of Class A Shares in connection with
special investment products, such as wrap accounts or similar fee based
programs.
Purchases of Class A Shares at net asset value may also be made by
the following: institutions investing for the account of their trust customers
if they are not eligible to purchase shares of the Institutional Class of a
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 any stable
value account available to investment advisory clients of the Manager or
its affiliates, or (ii) is sponsored by an employer that has at any point
after May 1, 1997 had 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. See Group Investment Plans
for information regarding the applicability of the Limited CDSC. Investors may
be charged a fee when effecting transactions in Class A Shares through a broker
or agent that offers these special investment products.
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.
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.
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<PAGE>
A Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE
401(k), Profit Sharing, Money Purchase Pension, 401(k) Defined Contribution
Plans, and 403(b)(7) and 457 Deferred Compensation Plans) may benefit from the
reduced front-end sales charges available on Class A Shares 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 will be aggregated
to determine the applicable front-end sales charge reduction on each purchase,
both initial and subsequent, if, at the time of each such purchase, the
company notifies the Fund in which it is investing that it qualifies for the
reduction. Employees participating in such Group Investment Plans may also
combine the investments held in their plan account to determine the front-end
sales charge applicable to purchases in non-retirement Delaware Group
investment accounts if, at the time of each such purchase, they notify the
Fund in which they are investing that they are eligible to combine purchase
amounts held in their plan account.
The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid if such redemption is made pursuant to a withdrawal
of the entire plan from Delaware Group funds. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange.
For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
anticipates compensating dealers or brokers for selling Class B Shares at the
time of purchase from its own assets in an amount equal to no more than 4% of
the dollar amount purchased. In addition, 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 pay additional compensation
to dealers or brokers for selling Class B Shares at the time of purchase. As
discussed below, however, Class B Shares are subject to annual 12b-1 Plan
expenses and, if redeemed within six years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class B Shares. These
payments support the compensation paid to dealers or brokers for selling Class
B Shares. Payments to the Distributor and others under the Class B 12b-1 Plan
may be in an amount equal to no more than 1% annually. The combination of the
CDSC and the proceeds of the 12b-1 Plan fees makes it possible for a Fund to
sell Class B Shares without deducting a front-end sales charge at the time of
purchase.
Holders of Class B Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for Class B
Shares described in this Prospectus, even after the exchange. Such CDSC
schedule may be higher than the CDSC schedule for Class B Shares acquired as
a result of the exchange. See Redemption and Exchange.
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<PAGE>
Automatic Conversion of Class B Shares
Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic
conversion into Class A Shares. Conversions of Class B Shares into Class A
Shares will occur only four times in any calendar year, on the last business
day of the second full week of March, June, September and December (each, a
"Conversion Date"). If the eighth anniversary after a purchase of Class B
Shares falls on a Conversion Date, an investor's Class B Shares will be
converted on that date. If the eighth anniversary occurs between Conversion
Dates, an investor's Class B Shares will be converted on the next Conversion
Date after such anniversary. Consequently, if a shareholder's eighth
anniversary falls on the day after a Conversion Date, that shareholder will
have to hold Class B Shares for as long as three additional months after the
eighth anniversary of purchase before the shares will automatically convert
into Class A Shares.
Class B Shares of a fund acquired through a reinvestment of dividends
will convert to the corresponding Class A Shares of that fund (or, in the case
of Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant
Class) pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute tax-
free exchanges for federal income tax purposes. See Taxes.
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
anticipates compensating dealers or brokers for selling Class C Shares at the
time of purchase from its own assets in an amount equal to no more than 1% of
the dollar amount purchased. As discussed below, Class C Shares are subject
to annual 12b-1 Plan expenses and, if redeemed within 12 months of purchase, a
CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class
C Shares. Payments to the Distributor and others under the Class C 12b-1 Plan
may be in an amount equal to no more than 1% annually.
Holders of Class C Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for Class C
Shares as described in this Prospectus. See Redemption and Exchange.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares
Class B Shares redeemed within six years of purchase may be subject
to a CDSC at the rates set forth below and Class C Shares redeemed within 12
months of purchase may be subject to a CDSC of 1%. CDSCs are charged as a
percentage of the dollar amount subject to the CDSC. The charge will be
assessed on an amount equal to the lesser of the net asset value at the time
of purchase of the shares being redeemed or the net asset value of those
shares at 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 reinvestments of dividends or capital
gains distributions. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of Class B Shares or
Class C Shares of a Fund, even if those shares are later exchanged for shares
of another Delaware Group fund. In the event of an
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exchange of the shares, the "net asset value of such shares at the time of
redemption" will be the net asset value of the shares that were acquired in
the exchange.
The following table sets forth the rates of the CDSC for Class B
Shares of the Funds:
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 will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares. See Automatic Conversion of Class B Shares, above. Investors are
reminded that the Class A Shares into which Class B Shares will convert are
subject to ongoing annual 12b-1 Plan expenses of up to a maximum of 0.30% of
average daily net assets of such shares. For the period from February 1, 1998
through May 31, 1998, the Distributor has elected voluntarily to waive its
right to receive 12b-1 Plan fees with respect to Class A Shares of Emerging
Markets Fund to the extent necessary to ensure that 12b-1 Plan expenses for
such Class do not exceed 0.25% of average daily net assets.
In determining whether a CDSC applies to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are
redeemed first, followed by shares acquired through the reinvestment of
dividends or distributions, and finally by shares held longest during the
six-year period. With respect to Class C Shares, it will be assumed that
shares held for more than 12 months are redeemed first followed by shares
acquired through the reinvestment of dividends or distributions, and finally
by shares held for 12 months or less.
All investments made during a calendar month, regardless of what day
of the month the investment occurred, will age one month on the last day of
that month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and Class
C Shares. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Redemption and Exchange.
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 the 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.
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Subject to pending amendments to the NASD's Conduct Rules , in
connection with the promotion of Delaware Group fund shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from time to time,
pay or allow additional promotional incentives to dealers, which shall include
non-cash concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as part of
preapproved sales contests. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the NASD's Conduct Rules will be amended such that the
ability of the Distributor to pay non-cash compensation as described above
will be restricted in some fashion. The Distributor intends to comply with the
NASD's Conduct Rules as they may be amended.
Global Bond Fund Institutional Class, Global Assets Fund Institutional Class and
Emerging Markets Fund Institutional Class
In addition to offering Class A Shares, Class B Shares and Class C
Shares, Global Funds, Inc. also offers Global Bond Fund Institutional Class,
Global Assets Fund Institutional Class and Emerging Markets Fund
Institutional Class which are described in a separate prospectus and are
available for purchase only by certain investors. Institutional Class shares
generally are distributed directly by the Distributor and do not have a
front-end sales charge, a CDSC, or a Limited CDSC and are not subject to 12b-1
Plan distribution expenses. To obtain the prospectus that describes the
Institutional Classes, contact the Distributor by writing to the address or by
calling the telephone number listed on the back cover of this Prospectus.
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HOW TO BUY SHARES
Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. For purchases under the Uniform Gifts to
Minors Act or Uniform Transfers to Minors Act or through an Automatic
Investing Plan, there is a minimum initial purchase of $250 and a minimum
subsequent purchase of $25. Minimum purchase requirements do not apply to
retirement plans other than IRAs, for which there is a minimum initial
purchase of $250, and a minimum subsequent purchase of $25, regardless of
which Class is selected.
There is a maximum purchase limitation of $250,000 on each purchase
of Class B Shares. For Class C Shares, each purchase must be in an amount that
is less than $1,000,000. An investor may exceed these maximum purchase
limitations by making cumulative purchases over a period of time. In doing so,
an investor should keep in mind that reduced front-end sales charges are
available on investments of $100,000 or more in Class A Shares, and that Class
A Shares (i) are subject to lower annual 12b-1 Plan expenses than Class B
Shares and Class C Shares and (ii) generally are not subject to a CDSC. For
retirement plans, the maximum purchase limitations apply only to the initial
purchase of Class B Shares or Class C Shares by the plan.
Investing through Your Investment Dealer
You can make a purchase of shares of the Funds through most
investment dealers who, as part of the service they provide, must transmit
orders promptly. They may charge for this service. If you want a dealer but do
not have one, the Delaware Group can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be
completed, signed and sent with a check, payable to the specific Fund and
Class selected to Delaware Group at 1818 Market Street, Philadelphia, PA
19103.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to the specific Fund and Class selected. Your check
should be identified with your name(s) and account number. An investment slip
(similar to a deposit slip) is provided at the bottom of transaction
confirmations and dividend statements that you will receive from Global Funds,
Inc. Use of this investment slip can help expedite processing of your check
when making additional purchases. Your investment may be delayed if you send
additional purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Fund and Class in which
you are investing).
1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement account, an appropriate retirement
plan application, for the specific Fund and Class selected, to Delaware Group
at 1818 Market Street, Philadelphia, PA 19103.
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2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a retirement plan account, call
the Shareholder Service Center for special wiring instructions.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware
Group, you may write and authorize an exchange of part or all of your
investment into shares of a Fund. If you wish to open an account by exchange,
call the Shareholder Service Center for more information. All exchanges are
subject to the eligibility and minimum purchase requirements set forth in each
fund's prospectus. See Redemption and Exchange for more complete information
concerning your exchange privileges.
Holders of Class A Shares of a Fund may exchange all or part of their
shares for certain of the shares of other funds in the Delaware Group,
including other Class A Shares, but may not exchange their Class A Shares for
Class B Shares or Class C Shares of the Fund or of any other fund in the
Delaware Group. Holders of Class B Shares of a Fund are permitted to exchange
all or part of their Class B Shares only into Class B Shares of other Delaware
Group funds. Similarly, holders of Class C Shares of a Fund are permitted to
exchange all or part of their Class C Shares only into Class C Shares of other
Delaware Group funds. Class B Shares of a Fund and Class C Shares of a Fund
acquired by exchange will continue to carry the CDSC and, in the case of Class
B Shares, the automatic conversion schedule of the fund from which the
exchange is made. The holding period of Class B Shares of a Fund acquired by
exchange will be added to that of the shares that were exchanged for purposes
of determining the time of the automatic conversion into Class A Shares of
that Fund.
Permissible exchanges into Class A Shares of a Fund will be made
without a front-end sales charge, except for exchanges of shares that were not
previously subject to a front-end sales charge (unless such shares were
acquired through the reinvestment of dividends). Permissible exchanges into
Class B Shares or Class C Shares of a Fund will be made without the imposition
of a CDSC by the fund from which the exchange is being made at the time of the
exchange.
See Allied Plans under Classes of Shares for information on
exchanges by participants in an Allied Plan.
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish
to use the following services:
1. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize Global Funds,
Inc. to transfer a designated amount monthly from your checking account to
your Fund account. Many shareholders use this as an automatic savings plan.
Shareholders should allow a reasonable amount of time for initial purchases
and changes to these plans to become effective.
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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.
2. Direct Deposit
You may have your employer or bank make regular investments directly
to your account for you (for example: payroll deduction, pay by phone, annuity
payments). Each Fund also accepts preauthorized recurring government and
private payments by Electronic Fund Transfer, which avoids mail time and check
clearing holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Global Funds, Inc. has the
right to liquidate your shares to reimburse the government or transmitting
bank. If there are insufficient funds in your account, you are obligated to
reimburse the Fund.
3. MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment
dealer may call the Fund to request a transfer of funds from your
predesignated bank account to your Fund account. See MoneyLine (SM) Services
under The Delaware Difference for additional information about this service.
4. Wealth Builder Option
You can use our Wealth Builder Option to invest in a Fund through
regular liquidations of shares in your accounts in other funds in the Delaware
Group. You may also elect to invest in other mutual funds in the Delaware
Group through the Wealth Builder Option through regular liquidations of shares
in your Fund account.
Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your account
in one or more funds in the Delaware Group and invested automatically into any
other account in a Delaware Group mutual fund that you may specify. If in
connection with the election of the Wealth Builder Option, you wish to open a
new account to receive the automatic investment, such new account must meet
the minimum initial purchase requirements described in the prospectus of the
fund that you select. All investments under this option are exchanges and are
therefore subject to the same conditions and limitations as other exchanges
noted above. You can terminate your participation in Wealth Builder at any
time by giving written notice to the fund from which the exchanges are made.
See Redemption and Exchange.
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.
5. Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or
dividend income) paid to you by check or reinvested in your account. Or, you
may invest your distributions in certain other funds in the Delaware Group,
subject to the exceptions noted below as well as the eligibility and minimum
purchase requirements set forth in each fund's prospectus.
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Reinvestments of distributions into Class A Shares of a Fund or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of a Fund or of other
Delaware Group funds or into Class C Shares of a Fund or of other Delaware
Group funds are also made without any sales charge and will not be subject to
a CDSC if later redeemed. See Automatic Conversion of Class B Shares under
Classes of Shares for information concerning the automatic conversion of Class
B Shares acquired by reinvesting dividends.
Holders of Class A Shares of a Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the
Delaware Group, including the Funds. Holders of Class B Shares of a Fund may
reinvest their distributions only into Class B Shares of the funds in the
Delaware Group which offer that class of shares. Similarly, holders of Class C
Shares of a Fund may reinvest their distributions only into Class C Shares of
the funds in the Delaware Group which offer that class of shares. For more
information about reinvestments, call the Shareholder Service Center.
Capital gains and/or dividend distributions for participants in the
following retirement plans are automatically reinvested into the same Delaware
Group fund in which their investments are held: 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.
Purchase Price and Effective Date
The offering price and net asset value of Class A Shares, Class B
Shares and Class C Shares are determined as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when
the Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund in which the shares are being
purchased, its agent or designee. The effective date of a direct purchase is
the day your wire, electronic transfer or check is received, unless it is
received after the time the offering price or net asset value of shares is
determined, as noted above. Purchase orders received after such time will be
effective the next business day.
The Conditions of Your Purchase
Each Fund reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. A Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in the Delaware Group. Each Fund
reserves the right to reject purchase orders paid by third-party checks or
checks that are not drawn on a domestic branch of a United States financial
institution. If a check drawn on a foreign financial institution is accepted,
you may be subject to additional bank charges for clearance and currency
conversion.
Each Fund also reserves the right, following shareholder
notification, to charge a service fee on non-retirement accounts that, as a
result of redemption, have remained below the minimum stated account balance
for a period of three or more consecutive months. Holders of such accounts may
be notified of their
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insufficient account balance and advised that they have until the end of the
current calendar quarter to raise their balance to the stated minimum. If the
account has not reached the minimum balance requirement by that time, the Fund
will charge a $9 fee for that quarter and each subsequent calendar quarter
until the account is brought up to the minimum balance. The service fee will
be deducted from the account during the first week of each calendar quarter
for the previous quarter, and will be used to help defray the cost of
maintaining low-balance accounts. No fees will be charged without proper
notice, and no CDSC will apply to such assessments.
Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of
a CDSC or Limited CDSC if he or she redeems any portion of his or her account.
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REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways.
The exchange service is useful if your investment requirements change and you
want an easy way to invest in other equity funds, tax-advantaged funds, bond
funds or money market funds. This service is also useful if you are
anticipating a major expenditure and want to move a portion of your investment
into a fund that has the checkwriting feature. Exchanges are subject to the
requirements of each fund and all exchanges of shares constitute taxable
events. See Taxes. Further, in order for an exchange to be processed, shares
of the fund being acquired must be registered in the state where the acquiring
shareholder resides. You may want to consult your financial adviser or
investment dealer to discuss which funds in the Delaware Group will best meet
your changing objectives, and the consequences of any exchange transaction.
You may also call the Delaware Group directly for fund information.
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.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after a Fund receives your request in good order,
subject, in the case of a redemption, to any applicable CDSC or Limited CDSC.
For example, redemption or exchange requests received in good order after the
time the offering price and net asset value of shares are determined will be
processed on the next business day. See Purchase Price and Effective Date
under How to Buy Shares. A shareholder submitting a redemption request may
indicate that he or she wishes to receive redemption proceeds of a specific
dollar amount. In the case of such a request, and in the case of certain
redemptions from retirement plan accounts, a Fund will redeem the number of
shares necessary to deduct the applicable CDSC in the case of Class B Shares
and Class C Shares, and, if applicable, the Limited CDSC in the case of Class
A Shares and tender to the shareholder the requested amount, assuming the
shareholder holds enough shares in his or her account for the redemption to be
processed in this manner. Otherwise, the amount tendered to the shareholder
upon redemption will be reduced by the amount of the applicable CDSC or
Limited CDSC. Redemption proceeds will be distributed promptly, as described
below, but not later than seven days after receipt of a redemption request.
Except as noted below, for a redemption request to be in "good
order," you must provide your account number, account registration, and the
total number of shares or dollar amount of the transaction. For exchange
requests, you must also provide the name of the fund in which you want to
invest the proceeds. Exchange instructions and redemption requests must be
signed by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling the Shareholder Service Center
at 800-523-1918. Each Fund may suspend, terminate, or amend the terms of the
exchange privilege upon 60 days' written notice to shareholders.
Each Fund will process written and telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
settled. Each Fund will honor 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 purchase check has cleared, which
may take up to 15 days from the purchase date. You can avoid this potential
delay if you purchase shares by wiring Federal Funds. Each Fund
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reserves the right to reject a written or telephone redemption request or
delay payment of redemption proceeds if there has been a recent change to the
shareholder's address of record.
There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not
subject to a front-end sales charge, except for exchanges involving assets
that were previously invested in a fund with a front-end sales charge and/or
exchanges involving the reinvestment of dividends.
Holders of Class B Shares or Class C Shares that exchange their
shares ("Original Shares") for shares of other funds in the Delaware Group (in
each case, "New Shares") in a permitted exchange, will not be subject to a
CDSC that might otherwise be due upon redemption of the Original Shares.
However, such shareholders will continue to be subject to the CDSC and, in the
case of Class B Shares, the automatic conversion schedule of the Original
Shares as described in this Prospectus and any CDSC assessed upon redemption
will be charged by the fund from which the Original Shares were exchanged. In
an exchange of Class B Shares from a Fund, the Fund's CDSC schedule may be
higher than the CDSC schedule relating to the New Shares acquired as a result
of the exchange. For purposes of computing the CDSC that may be payable upon a
disposition of the New Shares, the period of time that an investor held the
Original Shares is added to the period of time that an investor held the New
Shares. With respect to Class B Shares, the automatic conversion schedule of
the Original Shares may be longer than that of the New Shares. Consequently,
an investment in New Shares by exchange may subject an investor to the higher
12b-1 fees applicable to Class B Shares of a Fund for a longer period of time
than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except
for the CDSC applicable to certain redemptions of Class B Shares and Class C
Shares and the Limited CDSC applicable to certain redemptions of Class A
Shares purchased at net asset value, there is no fee charged by the Fund or
the Distributor for redeeming or exchanging your shares, but such fees could
be charged in the future. You may have your investment dealer arrange to have
your shares redeemed or exchanged. Your investment dealer may charge for this
service.
All authorizations given by shareholders, including selection of any
of the features described below, shall continue in effect until such time as a
written revocation or modification has been received by a Fund or its agent.
Written Redemption
You can write to each Fund at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your shares. The request must be signed by all
owners of the account or your investment dealer of record. For redemptions of
more than $50,000, or when the proceeds are not sent to the shareholder(s) at
the address of record, the Funds require a signature by all owners of the
account and a signature guarantee for each owner. Each signature guarantee
must be supplied by an eligible guarantor institution. Each Fund reserves the
right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness. The Funds may require further documentation
from corporations, executors, retirement plans, administrators, trustees or
guardians.
Payment is normally mailed the next business day after receipt of
your redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good
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order. Certificates are issued for Class A Shares only if a shareholder
submits a specific request. Certificates are not issued for Class B Shares or
Class C Shares.
Written Exchange
You may also write to each Fund (at 1818 Market Street, Philadelphia,
PA 19103) to request an exchange of any or all of your shares into another
mutual fund in the Delaware Group, subject to the same conditions and
limitations as other exchanges noted above.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your Class A Shares in certificate form, you
may redeem or exchange only by written request and you must return your
certificates.
The Telephone Redemption - Check to Your Address of Record service
and the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in which you have your
account in writing that you do not wish to have such services available with
respect to your account. Each Fund reserves the right to modify, terminate or
suspend these procedures upon 60 days' written notice to shareholders. It may
be difficult to reach the Funds by telephone during periods when market or
economic conditions lead to an unusually large volume of telephone requests.
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. 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. Instructions received by
telephone are generally tape recorded, and a written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.
Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your address of record. Checks will be
payable to the shareholder(s) of record. Payment is normally mailed the next
business day after receipt of the redemption request. This service is only
available to individual, joint and individual fiduciary-type accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption proceeds. If you ask for a check, it will normally be mailed the
next business day after receipt of your redemption request to your
predesignated bank account. There are no separate fees for this redemption
method, but the mail time may delay getting funds into your bank account.
Simply call the Shareholder Service Center prior to the time the offering
price and net asset value are determined, as noted above.
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MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment
dealer may call a Fund to request a transfer of funds from your Fund account
to your predesignated bank account. See MoneyLine(SM) Services under The
Delaware Difference for additional information about this service.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into other funds in the Delaware Group under the same registration,
subject to the same conditions and limitations as other exchanges noted above.
As with the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
Systematic Withdrawal Plans
1. Regular Plans
This plan provides shareholders with a consistent monthly (or
quarterly) payment. This is particularly useful to shareholders living on
fixed incomes, since it can provide them with a stable supplemental amount.
With accounts of at least $5,000, you may elect monthly withdrawals of $25
(quarterly $75) or more. The Funds do not recommend any particular monthly
amount, as each shareholder's situation and needs vary. Payments are normally
made by check. In the alternative, you may elect to have your payments
transferred from your Fund account to your predesignated bank account through
the MoneyLine(SM) Direct Deposit Service. Your funds will normally be
credited to your bank account up to four business days after the payment date.
There are no separate fees for this redemption method. See MoneyLine(SM)
Services under The Delaware Difference for more information about this
service.
2. Retirement Plans
For shareholders eligible under the applicable retirement plan to
receive benefits in periodic payments, the Systematic Withdrawal Plan provides
you with maximum flexibility. A number of formulas are available for
calculating your withdrawals depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required. The MoneyLine(SM) Direct Deposit Service
described above is not available for certain retirement plans.
* * *
Shareholders should not purchase additional shares while
participating in a Systematic Withdrawal Plan.
Redemptions of Class A Shares via a Systematic Withdrawal Plan may be
subject to a Limited CDSC if the original purchase was made at net asset value
within the 12 months prior to the withdrawal and a dealer's commission was
paid on that purchase. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value, below.
The applicable CDSC for Class B Shares and Class C Shares redeemed
via a Systematic Withdrawal Plan will be waived if, on the date that the Plan
is established, the annual amount selected to be withdrawn is less than 12% of
the account balance. If the annual amount selected to be withdrawn exceeds 12%
of the account balance on the date that the Systematic Withdrawal Plan is
established, all redemptions under the Plan will be subject to the applicable
CDSC. Whether a waiver of the CDSC is available or not, the first shares to
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be redeemed for each Systematic Withdrawal Plan payment will be those not
subject to a CDSC because they have either satisfied the required holding
period or were acquired through the reinvestment of distributions. The 12%
annual limit will be reset on the date that any Systematic Withdrawal Plan is
modified (for example, a change in the amount selected to be withdrawn or the
frequency or date of withdrawals), based on the balance in the account on that
date. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares, below.
For more information on Systematic Withdrawal Plans, call the
Shareholder Service Center.
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value
A Limited CDSC will be imposed on certain redemptions of Class A
Shares (or shares into which such Class A Shares are exchanged) made within 12
months of purchase, if such purchases were made at net asset value and
triggered the payment by the Distributor of the dealer's commission previously
described. See Classes of Shares.
The Limited CDSC will be paid to the Distributor and will be equal to
the lesser of 1% of: (1) the net asset value at the time of purchase of the
Class A Shares being redeemed; or (2) the net asset value of such Class A
Shares at the time of redemption. For purposes of this formula, the "net asset
value at the time of purchase" will be the net asset value at purchase of the
Class A Shares even if those shares are later exchanged for shares of another
Delaware Group fund and, in the event of an exchange of Class A Shares, the
"net asset value of such shares at the time of redemption" will be the net
asset value of the shares acquired in the exchange.
Redemptions of such Class A Shares held for more than 12 months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares
into another Delaware Group fund will not trigger the imposition of the
Limited CDSC at the time of such exchange. The period a shareholder owns
shares into which Class A Shares are exchanged will count towards satisfying
the 12-month holding period. The Limited CDSC is assessed if such 12-month
period is not satisfied irrespective of whether the redemption triggering its
payment is of Class A Shares of a Fund or Class A Shares acquired in the
exchange.
In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All
investments made during a calendar month, regardless of what day of the month
the investment occurred, will age one month on the last day of that month and
each subsequent month.
Waiver of Limited Contingent Deferred Sales Charge - Class A Shares
The Limited CDSC for Class A Shares on which a dealer's commission
has been paid will be waived in the following instances: (i) redemptions that
result from a Fund's right to liquidate a shareholder's account if the
aggregate net asset value of the shares held in the account is less than the
then-effective minimum account size; (ii) distributions to participants from a
retirement plan qualified under section 401(a) or 401(k) of the Code, or due
to death of a participant in such a plan; (iii) redemptions pursuant to the
direction of a participant or beneficiary of a retirement plan qualified under
section 401(a) or 401(k) of the Code with respect to that retirement plan;
(iv) periodic distributions from an IRA, SIMPLE IRA or 403(b)(7) or 457
Deferred Compensation Plan due to death, disability, or attainment of age 59
1/2 and IRA distributions
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qualifying under Section 72(t) of the Internal Revenue Code; (v) returns of
excess contributions to an IRA; (vi) distributions by other employee benefit
plans to pay benefits; (vii) distributions described in (ii), (iv), and (vi)
above pursuant to a systematic withdrawal plan; and (viii) redemptions by
the classes of shareholders who are permitted to purchase shares at net asset
value, regardless of the size of the purchase (see Buying Class A Shares at
Net Asset Value under Classes of Shares).
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from a
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective
minimum account size; (ii) returns of excess contributions to an IRA, SIMPLE
IRA, SEP/IRA, or 403(b)(7) or 457 Deferred Compensation Plan; (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, or 403(b)(7) or 457
Deferred Compensation Plan due to death, disability, or attainment of age 59
1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; and (iv) distributions from an account if the redemption results
from the death of all registered owners of the account (in the case of
accounts established under the Uniform Gifts to Minors or Uniform Transfers to
Minors Acts or trust accounts, the waiver applies upon the death of all
beneficial owners) or a total and permanent disability (as defined in Section
72 of the Code) of all registered owners occurring after the purchase of the
shares being redeemed.
The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from a Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in
the account is less than the then-effective minimum account size; (ii) returns
of excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution Plan; (iii) periodic distributions from a 403(b)(7) or
457 Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing
Plan, Money Purchase Pension Plan, 401(k) Defined Contribution Plans upon
attainment of age 70 1/2, and IRA distributions qualifying under Section 72(t)
of the Internal Revenue Code; (iv) distributions from a 403(b)(7) or 457
Deferred Compensation Plan, Profit Sharing Plan, or 401(k) Defined
Contribution Plan, under hardship provisions of the plan; (v) distributions
from a 403(b)(7) or 457 Deferred Compensation Plan, Profit Sharing Plan,
Money Purchase Pension Plan or a 401(k) Defined Contribution Plan upon
attainment of normal retirement age under the plan or upon separation from
service; (vi) periodic distributions from an IRA or SIMPLE IRA on or after
attainment of age 59 1/2; and (vii) distributions from an account if the
redemption results from the death of all registered owners of the account (in
the case of accounts established under the Uniform Gifts to Minors or Uniform
Transfers to Minors Acts or trust accounts, the waiver applies upon the death
of all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase
of the shares being redeemed.
In addition, the CDSC will be waived on Class B Shares and Class C
Shares redeemed in accordance with a Systematic Withdrawal Plan if the annual
amount selected to be withdrawn under the Plan does not exceed 12% of the
value of the account on the date that the Systematic Withdrawal Plan was
established or modified.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on each Fund to all
shareholders of record of the Classes of that Fund at the time the offering
price of shares is determined. See Purchase Price and Effective Date under How
to Buy Shares. Thus, when redeeming shares, dividends continue to be credited
up to and including the date of redemption.
Emerging Markets Fund will normally declare and make payments from
net investment income on an annual basis, 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. Payments from net realized securities profits of a
Fund, if any, will be made in the quarter following the close of the fiscal
year. Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that a Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, a Fund may declare special year-end dividend and
capital gains distributions during October, November or December to
shareholders of record on a date in such month. Such distributions, if
received by shareholders by January 31, are deemed to have been paid by the
Funds and received by shareholders on the earlier of the date paid or December
31 of the prior year.
Each Class of a Fund will share proportionately in the investment
income and expenses of that Fund, except that the per share dividends from net
investment income on Class A Shares, Class B Shares and Class C Shares will
vary due to the expenses under the 12b-1 Plan applicable to each Class.
Generally, the dividends per share on Class B Shares and Class C Shares can be
expected to be lower than the dividends per share on Class A Shares because
the expenses under the 12b-1 Plans relating to Class B Shares and Class C
Shares will be higher than the expenses under the 12b-1 Plan relating to Class
A Shares. See Distribution (12b-1) and Service under Management of the Funds.
Both dividends and distributions, if any, are automatically
reinvested in your account at net asset value, unless you elect otherwise. See
The Delaware Difference for more information on reinvestment options. Payment
by check of cash dividends will ordinarily be mailed within three business
days after the payable date. Payments from net realized securities profits of
a Fund, if any, will be distributed annually in the quarter following the
close of the fiscal year.
Any payment by check 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 your account at the
then-current net asset value and the dividend option may be changed from cash
to reinvest. If you elect to take your dividends and distributions in cash and
such dividends and distributions are in an amount of $25 or more, you may
choose the MoneyLine(SM) Direct Deposit Service and have such payments
transferred from your Fund account to your predesignated bank account. This
service is not available for certain retirement plans. See MoneyLine(SM)
Services under The Delaware Difference for more information about this
service.
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TAXES
The tax discussion set forth below is included for general
information only. Investors should consult their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in a
Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Code. Because many of these changes are complex, and only indirectly
affect the Funds and their distributions to you, they are discussed in Part B.
Changes in the treatment of capital gains, however, are discussed in this
section.
Each Fund has qualified, and intends to continue 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 certain
other requirements relating to the sources of income and diversification of
its assets.
Each Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to those investors who
are subject to income taxes as ordinary income, whether received in cash or in
additional shares. It is expected that either none or only a nominal portion
of a Fund's dividends will be eligible for the dividends-received deductions
for corporations. The portion of dividends paid by a Fund that so qualifies
will be designated each year in a notice from such Fund to that Fund's
shareholders.
Distributions paid by a Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who
are subject to income taxes as long-term capital gains, regardless of the
length of time an investor has owned shares in that Fund. The Funds do not
seek to realize any particular amount of capital gains during a year; rather,
realized gains are a by-product of Fund management activities. Consequently,
capital gains distributions may be expected to vary considerably from year to
year. Also, for those investors subject to tax, if purchases of shares in a
Fund are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are
in the 28% or higher federal income tax brackets, these gains will be taxed at
a maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
a Fund's securities were sold and how long they were held by that Fund before
they were sold. Investors who want more information on holding periods and
other qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information
reporting at calendar year end of the amount of its capital gain distributions
which will qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November, or December to
shareholders of record in such a month, but which, for operational
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reasons, may not be paid to the shareholder until the following January, will
be treated for tax purposes as if paid by a Fund and received by the
shareholder on December 31 of the year declared.
The sale of shares of the Funds is a taxable event and may result in
a capital gain or loss to shareholders subject to tax. Capital gain or loss
may be realized from an ordinary redemption of shares or an exchange of shares
between the Funds and any other fund in the Delaware Group. Any loss incurred
on a sale or exchange of Fund shares that had been held for six months or less
will be treated as long-term capital loss to the extent of capital gains
dividends received with respect to such shares. All or a portion of the sales
charge incurred in acquiring a Fund's shares will be excluded from the federal
tax basis of any of such shares sold or exchanged within 90 days of their
purchase (for purposes of determining gain or loss upon sale of such shares)
if the sale proceeds are reinvested in such Fund or in another fund in the
Delaware Group of funds and a sales charge that would otherwise apply to the
reinvestment is reduced or eliminated. Any portion of such sales charge
excluded from the tax basis of the shares sold will be added to the tax basis
of the shares acquired in the reinvestment.
A Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total
assets of a Fund at the end of its fiscal year are invested in securities of
foreign corporations, the Fund may elect to pass-through to its shareholders a
pro-rata share of foreign income taxes paid by the Fund. If this election is
made, shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by
the Fund), and (ii) entitled to either deduct (as an itemized deduction in the
case of individuals) their share of such foreign taxes in computing their
taxable income or to claim a credit for such taxes against their U.S. income
tax, subject to certain limitations under the Code. Shareholders will be
informed by a Fund at the end of each calendar year regarding the availability
of any credits on and the amount of foreign source income to be included in
their income tax returns.
The automatic conversion of Class B Shares into Class A Shares at the
end of approximately eight years after purchase will be tax-free for federal
tax purposes. See Automatic Conversion of Class B Shares under Classes of
Shares.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes . For example,
distributions of interest income and capital gains realized from certain
types of U.S. government securities may be exempt from state personal income
taxes. Because investors' state and local taxes may be different than the
federal taxes described above, investors should consult their own tax
advisors.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the dividends and distributions paid by the Fund in which you hold
shares. Shareholders will also receive each year information as to the portion
of dividend income, if any, that is derived from U.S. government securities
that are exempt from state income tax. Of course, shareholders who are not
subject to tax on their income would not be required to pay tax on amounts
distributed to them by a Fund.
Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your
proper Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.
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See Accounting and Tax Issues and Distributions and Taxes in Part B
for additional information on tax matters relating to each Fund and its
shareholders.
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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
The net asset value ("NAV") per share is computed by adding the value
of all securities and other assets in a Fund's portfolio, deducting any
liabilities of that Fund (expenses and fees are accrued daily) and dividing by
the number of that Fund's shares outstanding. Portfolio securities for which
market quotations are available are priced at market value. Debt securities
are priced at fair value by an independent pricing service using methods
approved by Global Funds, Inc.'s Board of Directors. Short-term investments
having a maturity of less than 60 days are valued at amortized cost, which
approximates market value. All other securities are valued at their fair value
as determined in good faith and in a method approved by Global Funds, Inc.'s
Board of Directors.
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the NAV per share. The
offering price per share of Class A Shares consists of the NAV per share next
computed after the order is received, plus any applicable front-end sales
charges.
The offering price and NAV are computed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open.
A Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the
net asset value of a Fund may be significantly affected by such trading on
days when shareholders have no access to the Fund.
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 Global Bond Fund Institutional Class, Global Assets
Fund Institutional Class and Emerging Markets Fund Institutional Class will
not incur any of the expenses under Global Funds, Inc.'s 12b-1 Plans, and
Class A Shares, Class B Shares and Class C Shares of each Fund alone will bear
the 12b-1 Plan expenses payable under their respective 12b-1 Plan. Due to
the specific distribution expenses and other costs that will be allocable to
each class, the NAV of each class of a Fund will vary.
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MANAGEMENT OF THE FUNDS
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager and Sub-Adviser
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to each Fund. Delaware
International is affiliated with Delaware Management Company, Inc.
("Delaware," or "Sub-Adviser"), which manages the U.S. securities portion of
Global Assets Fund. The Manager has offices located at Third Floor, 80
Cheapside, London, England EC2V 6EE.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On November 30, 1997, Delaware and its affiliates
within the Delaware Group, including Delaware International, were managing in
the aggregate more than $39 billion in assets in various institutional or
separately managed (approximately $23,274,532,000) and investment company
(approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). Delaware International is also controlled
by DMH through several subsidiaries. On April 3, 1995, a merger between DMH
and a wholly owned subsidiary of Lincoln National Corporation ("Lincoln
National") was completed. DMH, the Manager and Delaware 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. In
connection with the merger, new Investment Management Agreements between
Global Funds, Inc., on behalf of Global Assets Fund and Global Bond Fund and
the Manager, and a new Sub-Advisory Agreement between the Manager on behalf of
Global Assets Fund and the Sub-Adviser, were executed following shareholder
approval. The Manager has also entered into Investment Management Agreements
with Global Funds, Inc. on behalf of Emerging Markets Fund.
The Manager manages each Fund's investments and for its services, the
Manager is paid an annual fee equal to 0.75% of a Fund's average daily net
assets in the case of Global Bond Fund and Global Assets Fund and 1.25% of the
average daily net assets of Emerging Markets Fund. The directors of Global
Funds, Inc. annually review fees paid to the Manager.
Delaware International has elected voluntarily to waive that portion,
if any, of the annual management fees payable by Emerging Markets Fund and
to reimburse expenses to the extent necessary to ensure that the annual Total
Operating Expenses (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, but inclusive of 12b-1 fees) of Class A Shares of
the Fund does not exceed 1.95% and each of the Class B Shares and Class C
shares of the Funds do not exceed 2.70%. This voluntary waiver, originally in
place through November 30, 1996 for Emerging Markets Fund, has been extended
through May 31, 1998.
Delaware International has elected voluntarily to waive that portion,
if any, of the annual management fees payable by Global Bond Fund and Global
Assets Fund and to reimburse expenses to the extent necessary to ensure that
the annual Total Operating Expenses (exclusive of taxes, interest, brokerage
commissions and
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extraordinary expenses, but inclusive of 12b-1 fees) of each of the Class A
Shares of these Funds do not exceed 1.25% and of each of the Class B Shares
and Class C Shares of these Funds do not exceed 1.95% through November 30,
1997. This voluntary waiver has been extended through May 31, 1998.
The investment management fees paid to Delaware International, while
higher than the advisory fees paid by other mutual funds in general, are
comparable to fees paid by other mutual funds with similar objectives and
policies.
With respect to Global Bond Fund, Global Assets Fund and Emerging
Markets Fund, the investment management fees earned for the fiscal year ended
November 30, 1997 were, respectively, 0.74%, 0.74% and 1.25% of average
daily net assets . No fees were paid for Global Bond Fund or Global Assets
Fund and 0.23% of average daily net assets of Emerging Markets Fund was paid as
a result of the voluntary waivers.
Subject to the overall supervision of the Manager, the Sub-Adviser
manages the U.S. securities portion of Global Assets Fund's portfolio and
furnishes the Manager with investment recommendations, asset allocation
advice, research and other investment services with respect to U.S.
securities. For the services provided to the Manager, the Manager pays the
Sub-Adviser a monthly fee equal to 25% of the fee paid to the Manager under
the terms of the Investment Management Agreement.
Clive A. Gillmore has primary responsibility for making day-to-day
investment decisions for Global Assets Fund and Emerging Markets Fund. He has
been the senior portfolio manager for these Funds since their inception. A
graduate of the University of Warwick and having begun his career at Legal and
General Investment Management, Mr. Gillmore joined the Delaware Group in 1990
after eight years of investment experience. His most recent position prior to
joining the Delaware Group was as a Pacific Basin equity analyst and senior
portfolio manager for Hill Samuel Investment Advisers Ltd. Mr. Gillmore
completed the London Business School Investment program.
In making investment decisions for Global Assets Fund and Emerging
Markets Fund, Mr. Gillmore regularly consults with an international equity
team of fourteen members. Mr. Gillmore also regularly consults with David G.
Tilles. Mr. Tilles, who is Chief Investment Officer for Delaware
International, is a graduate of the University of Warwick with a BS in
management sciences. Before joining the Delaware Group in 1990, he was Chief
Investment Officer of Hill Samuel Investment Advisers Ltd. He is a member of
the Institute of Investment Management & Research and the Operational Research
Society.
In addition to the above team, in making investment decisions for
Emerging Markets Fund, Mr. Gillmore consults regularly with Robert Akester and
Joshua A. Brooks. Prior to joining Delaware in 1996 as a Senior Portfolio
Manager, Mr. Akester, who began his investment career in 1969, was most
recently a Director of Hill Samuel Investment Advisers Ltd., which he joined
in 1985. His prior experience included working as a Senior Analyst and head of
the South-East Asian Research team at James Capel, and as a Fund Manager at
Prudential Assurance Co., Ltd. Mr. Akester holds a BS in Statistics and
Economics from University College, London and is an associate of the Institute
of Actuaries, with a certificate in Finance and Investment. Mr. Brooks holds
a bachelor's degree from Yale University and has undertaken graduate studies
at The London Business School. He began his investment career with the
Delaware Group in 1991. Prior to joining the emerging markets team in
London , he was based in Philadelphia with responsibilities that included
equity market analysis and liaison with Delaware International Advisers Ltd.
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George H. Burwell has responsibility for making investment decisions
for the U.S. equity portion of Global Assets Fund and has had such
responsibility for the Fund since its inception. Mr. Burwell holds a BA from
the University of Virginia. Prior to joining the Delaware Group in 1992, Mr.
Burwell was a portfolio manager for Midlantic Bank in Edison, New Jersey,
where he managed an equity mutual fund and three commingled funds. Mr. Burwell
is a CFA charterholder.
In making investment decisions for Global Assets Fund, Mr. Burwell
regularly consults with Wayne A. Stork and Richard G. Unruh, Jr. Mr. Stork is
Chairman of the Board and Director of Delaware, the Manager and Global Funds,
Inc. He is a graduate of Brown University and attended New York University's
Graduate School of Business Administration. Mr. Stork joined the Delaware
Group in 1962 and has served in various executive capacities at different
times within the Delaware organization. A graduate of Brown University, Mr.
Unruh received his MBA from the University of Pennsylvania's Wharton School
and joined the Delaware Group in 1982 after 19 years of investment management
experience with Kidder, Peabody & Co. Inc. Mr. Unruh was named an Executive
Vice President of Global Funds, Inc. in 1994. He is also a member of the Board
of Directors of Delaware and the Manager and was named an Executive Vice
President of Delaware in 1994.
Paul A. Matlack and Gerald T. Nichols have responsibility for making
investment decisions for the high-yield securities portion of Global Assets
Fund. They have had such responsibility since this Fund's inception. Mr.
Matlack is a CFA charterholder and a graduate of the University of
Pennsylvania with an MBA in Finance from George Washington University. He
began his career at Mellon Bank as a credit specialist, and later served as a
corporate loan officer for Mellon Bank and then Provident National Bank. Mr.
Nichols is a graduate of the University of Kansas, where he received a BS in
Business Administration and an MS in Finance. Prior to joining the Delaware
Group, he was a high yield credit analyst at Waddell & Reed, Inc. and
subsequently the investment officer for a private merchant banking firm. He is
a CFA charterholder.
In making investment decisions for Global Assets Fund, Mr. Matlack
and Mr. Nichols regularly consult with Paul E. Suckow. Mr. Suckow is
Delaware's Chief Investment Officer for Fixed-Income. He is a CFA
charterholder and a graduate of Bradley University with an MBA from Western
Illinois University. Mr. Suckow was a fixed-income portfolio manager at the
Delaware Group from 1981 to 1985. He returned to the Delaware Group in 1993
after eight years with Oppenheimer Management Corporation, where he served as
Executive Vice President and Director of Fixed Income.
Ian G. Sims and Christopher A. Moth have primary responsibility for
making day-to-day investment decisions for Global Bond Fund. Mr. Sims has been
the senior portfolio manager for this Fund since its inception. Mr. Sims is a
graduate of the University of Newcastle-Upon-Tyne. He joined Delaware
International in 1990 as a senior international fixed-income and currency
manager. Mr. Sims began his investment career with the Standard Life Assurance
Co., and subsequently moved to the Royal Bank of Canada Investment Management
International Company, where he was an international fixed-income manager.
Prior to joining Delaware International, he was a senior fixed-income and
currency portfolio manager with Hill Samuel Investment Advisers Ltd. Mr. Moth
became Co-Manager of this Fund in January 1997. Mr. Moth , a graduate of The
City University London, joined Delaware in 1992. He previously worked at the
Guardian Royal Exchange in an actuarial capacity where he was responsible for
technical analysis, quantitative models and projections. Mr. Moth has been
awarded the certificate in Finance and Investment from the Institute of
Actuaries in London.
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In making investment decisions for Global Bond Fund, Mr. Sims and Mr.
Moth regularly consult with Hywel Morgan. Mr. Morgan was educated at the
University of Wales and was subsequently an Economics Lecturer at Dundee
University. Prior to joining Delaware International, he was Associate Director
of the international fixed-income department and head of the credit review
committee at Hill Samuel Investment Management responsible for over $500
million in multi-currency fixed interest accounts. His prior experience
included working as an economic adviser for Credit Suisse and the Economic
Intelligence Unit. Mr. Morgan started his business career as a Corporate
Economist & Strategist at Ford of Europe and Esso Petroleum.
Portfolio Trading Practices
Each Fund normally will not invest for short-term trading purposes.
However, each Fund may sell securities without regard to the length of time
they have been held. The degree of portfolio activity will affect brokerage
costs of each Fund and may affect taxes payable by such Fund's shareholders to
the extent that net capital gains are realized. Given each Fund's investment
objective, it is anticipated that the portfolio turnover rate of each Fund
will not exceed 100%.
The Manager and the Sub-Adviser use their best efforts to obtain the
best available price and most favorable execution for portfolio transactions.
Orders may be placed with brokers or dealers who provide brokerage and
research services to the Manager and the Sub-Adviser or their advisory
clients. These services may be used by the Manager and the Sub-Adviser in
servicing any of their respective accounts. Subject to best price and
execution, the Manager and the Sub-Adviser may consider a broker/dealer's
sales of shares of funds in the Delaware Group of funds in placing portfolio
orders and may place orders with broker/dealers that have agreed to defray
certain expenses of such funds, such as custodian fees.
Performance Information
From time to time, each Fund may quote total return performance of
its Classes in advertising and other types of literature. Global Bond Fund may
also quote the yield of its Classes in advertising and sales literature.
The current yield for each Class of Global Bond Fund will be
calculated by dividing the annualized net investment income earned by the
Class during a recent 30-day period by the maximum offering price per share on
the last day of the period. The yield formula provides for semi-annual
compounding which assumes that net investment income is earned and reinvested
at a constant rate and annualized at the end of a six-month period.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value and: (i)
in the case of Class A Shares, the impact of the maximum front-end sales
charge at the beginning of each specified period; and (ii) in the case of
Class B Shares and Class C Shares, the deduction of any applicable CDSC at the
end of the relevant period. Each presentation will include the average annual
total return for one-, five- and ten-year or life-of-fund periods, as
applicable. Each Fund may also advertise aggregate and average total return
information concerning a Class over additional periods of time. In addition,
each Fund may present total return information that does not reflect the
deduction of the maximum front-end sales charge or any applicable CDSC. In
this case, such total return information would be more favorable than total
return information that includes deductions of the maximum front-end sales
charge or any applicable CDSC.
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Because securities prices fluctuate, investment results of the
Classes will fluctuate over time. Past performance is not considered a
guarantee of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for Global Bond Fund's and Global Asset Fund's shares under
separate Distribution Agreements with Global Funds, Inc. dated April 3, 1995,
as amended on November 29, 1995. Delaware Distributors L.P. serves as the
national distributor of Emerging Markets Fund's shares under a Distribution
Agreement with Global Funds, Inc.
dated May 1, 1996 .
Global Funds, Inc. has adopted a separate distribution plan under
Rule 12b-1 for each of the Class A Shares, Class B Shares and Class C Shares
of the Funds (the "Plans"). Each Plan permits a Fund to which the Plan relates
to pay the Distributor from the assets of its respective Classes a monthly fee
for the Distributor's services and expenses in distributing and promoting
sales of shares.
These expenses include, among other things, preparing and
distributing advertisements, sales literature, and prospectuses and reports
used for sales purposes, compensating sales and marketing personnel, holding
special promotions for specified periods of time and paying distribution and
maintenance fees to brokers, dealers and others. In connection with the
promotion of shares of the Classes, the Distributor may, from time to time,
pay to participate in dealer-sponsored seminars and conferences, and reimburse
dealers for expenses incurred in connection with preapproved seminars,
conferences and advertising. The Distributor may pay or allow additional
promotional incentives to dealers as part of preapproved sales contests and/or
to dealers who provide extra training and information concerning a Class and
increase sales of the Class. In addition, each Fund may make payments from the
12b-1 Plan fees of its respective Classes directly to others, such as banks,
who aid in the distribution of Class shares or provide services in respect of
such Classes, pursuant to service agreements with Global Funds, Inc.
The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of the Funds are also used to pay the Distributor for advancing
the commission costs to dealers with respect to the initial sale of such
shares.
The aggregate fees paid by a Fund from the assets of the respective
Classes to the Distributor and others under the Plans may not exceed (i) 0.30%
of Class A Shares' average daily net assets in any year, and (ii) 1% (0.25%
of which are service fees to be paid by the Fund to the Distributor, dealers
and others, for providing personal service and/or maintaining shareholder
accounts) of each Fund's Class B Shares' and Class C Shares' average daily net
assets in any year. The Funds' Class A Shares, Class B Shares and Class C
Shares will not incur any distribution expenses beyond these limits, which may
not be increased without shareholder approval. For the period from February 1,
1998 through May 31, 1998, the Distributor has elected voluntarily to waive
its right to receive 12b-1 Plan fees with respect to Class A Shares of
Emerging Markets Fund to the extent necessary to ensure that 12b-1 Plan
expenses for such Class do not exceed 0.25% of average daily net assets.
While payments pursuant to the Plans may not exceed 0.30% annually
with respect to each Fund's Class A Shares, and 1% annually with respect to
each of the Class B Shares and Class C Shares, the Plans do not limit fees
to amounts actually expended by the Distributor. It is therefore possible that
the Distributor may realize a profit in any particular year. However, the
Distributor currently expects that its distribution expenses will likely equal
or exceed payments to it under the Plans. The Distributor may, however, incur
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such additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly
fees paid to the Distributor under the Plans are subject to the review and
approval of Global Funds, Inc.'s unaffiliated directors, who may reduce the
fees or terminate the Plans at any time.
The Plans do not apply to the Institutional Class of shares of any
Fund. Those shares are not included in calculating the Plans' fees, and the
Plans are not used to assist in the distribution and marketing of the shares
of the Institutional Class of any Fund.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
under a Shareholders Services Agreement. The Transfer Agent also provides
accounting services to the Funds pursuant to the terms of a separate Fund
Accounting Agreement.
The Distributor and the Transfer Agent are also indirect, wholly
owned subsidiaries of DMH. The directors of Global Funds, Inc. annually review
the fees paid to the Distributor and the Transfer Agent.
Expenses
Each Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreements and those
borne by the Distributor under the Distribution Agreements. For the fiscal
year ended November 30, 1997, the ratios of operating expenses to average
daily net assets for Class A Shares, Class B Shares and Class C Shares of
each Fund were as follows:
Class A Share Class B Shares Class C Shares
------------- -------------- --------------
Global Bond Fund 1.25% 1.95% 1.95%
Global Assets Fund 1.25% 1.95% 1.95%
Emerging Markets Fund 2.00% 2.70% 2.70%
The ratios reflect the impact of each Class' 12b-1 Plan and the
voluntary waiver and payment of fees noted above. Effective as of February 1,
1998, the Distributor has elected voluntarily to waive its right to receive
12b-1 Plan fees with respect to Class A Shares of Emerging Markets Fund to the
extent necessary to limit such fees to no more than 0.25% through May 31, 1998.
Had such waiver been in effect during the fiscal year ended November 30, 1997,
the ratio of operating expenses to average daily net assets for Class A Shares
of Emerging Markets Fund would have been 1.95%.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a
Maryland corporation on May 30, 1991. Global Funds, Inc. currently offers six
series of shares - International Equity Series, Global Bond Series, Global
Assets Series, Emerging Markets Series, International Small Cap Series, and
Global Equity Series. Fund shares have a par value of $.01 and when issued
will be fully paid, non-assessable, fully transferable and redeemable at the
option of the holder. The shares have no preference as to conversion,
exchange, dividends, retirement or other features and have no preemptive
rights. Each Fund will vote separately on any matter which affects only that
Fund. Shares of each Fund have a priority over shares of any other fund of
Global Funds, Inc. in the assets and income of that Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the
election of directors can elect 100% of the directors if they choose to do so.
Under Maryland law, Global Funds, Inc. is not required, and does not intend,
to hold annual meetings of shareholders unless, under certain circumstances,
it is required to do so under the 1940 Act.
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Shareholders of 10% or more of Global Funds, Inc.'s outstanding shares may
request that a special meeting be called to consider the removal of a
director.
In addition to Class A Shares, Class B Shares and Class C Shares,
Global Bond Fund, Global Assets Fund and Emerging Markets Fund offer Global
Bond Fund Institutional Class, Global Assets Fund Institutional Class and
Emerging Markets Fund Institutional Class, respectively. Shares of each Class
represent proportionate interests in the assets of the respective Fund and
have the same voting and other rights and preferences as the other classes of
that Fund, except that shares of the Institutional Class of any Fund are not
subject to, and may not vote on matters affecting, the Distribution Plans
under Rule 12b-1 relating to Class A Shares, Class B Shares and Class C Shares
of that Fund. Similarly, as a general matter, the shareholders of Class A
Shares, Class B Shares and Class C Shares may vote only on matters affecting
the 12b-1 Plan that relates to the class of shares that they hold. However,
Class B Shares of a Fund may vote on any proposal to increase materially the
fees to be paid by that Fund under the 12b-1 Plan relating to Class A Shares.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Funds value their assets daily in terms of U.S. dollars,
they do not intend to convert their holdings of foreign currencies into U.S.
dollars on a daily basis. Each Fund will, however, from time to time, purchase
or sell foreign currencies and/or engage in forward foreign currency
transactions in order to expedite settlement of portfolio transactions and to
minimize currency value fluctuations. Each Fund may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
contracts to purchase or sell foreign currencies at a future date (i.e., a
"forward foreign currency" contract or "forward" contract). A forward contract
involves an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract,
agreed upon by the parties, at a price set at the time of the contract. The
Funds will convert currency on a spot basis from time to time, and investors
should be aware of the costs of currency conversion.
A Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars
or foreign currency, of the amount of foreign currency involved in the
underlying security transaction, the Fund will be able to protect itself
against a possible loss resulting from an adverse change in currency exchange
rates during the period between the date the security is purchased or sold and
the date on which payment is made or received.
When the Manager believes that the currency of a particular country
may suffer a significant decline against the U.S. dollar or against another
currency, a Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount
of foreign currency approximating the value of some or all of the Fund's
securities denominated in such foreign currency.
A Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, a Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
A Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of
foreign securities held by the Fund and against increases in the U.S. dollar
cost of such securities to be acquired. Call options on foreign currency
written by a Fund will be covered, which means that the Fund will own the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund will establish a segregated account with its
Custodian Bank consisting of cash, U.S. government
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securities or other high-grade liquid debt securities in an amount equal to
the amount the Fund will be required to pay upon exercise of the put.
As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and a Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate
movements adverse to a Fund's position, the Fund may forfeit the entire amount
of the premium plus related transaction costs. See Special Risk
Considerations.
Depositary Receipts
The Funds may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or
U.S. securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the
issuer of the underlying security and a Depositary, and "unsponsored" ADRs,
EDRs or GDRs are issued without the participation of the issuer of the
deposited security. Holders of unsponsored ADRs, EDRs or GDRs generally bear
all the costs of such facilities and the Depositary of an unsponsored ADR, EDR
or GDR facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market value of an
unsponsored ADR, EDR or GDR. ADRs may be listed on a national securities
exchange or may be traded in the over-the-counter market. EDRs and GDRs traded
in the over-the-counter market which do not have an active or substantial
secondary market will be considered illiquid and therefore will be subject to
a Portfolio's limitation with respect to such securities. ADR prices are
denominated in U.S. dollars although the underlying securities are denominated
in a foreign currency. Investments in ADRs, EDRs and GDRs involve risks
similar to those accompanying direct investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of each
Fund's limitation on investments in illiquid assets (10% for Global Bond and
Global Assets Funds, and 15% for Emerging Markets Fund). The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers, and
the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, a
Fund's holdings of illiquid securities exceed a Fund's 15%
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limitation on investments in such securities, the Manager will determine what
action to take to ensure that the Fund continues to adhere to its respective
limitation.
Portfolio Loan Transactions
Each Fund may loan up to 25% of its assets to qualified
broker/dealers or institutional investors for their use relating to short
sales or other security transactions.
The major risk to which a Fund would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of
the security goes up, and the borrower would fail to return the borrowed
security. Therefore, each Fund will only enter into loan arrangements after a
review of all pertinent facts by the Manager, subject to overall supervision
by the Board of Directors, including the creditworthiness of the borrowing
broker, dealer or institution and then only if the consideration to be
received from such loans would justify the risk. In addition, a Fund will
require borrowers to deliver collateral to the Fund before lending securities.
Creditworthiness will be monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Funds make in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of
such other investment companies. Under the 1940 Act's limitations, a Fund may
not (1) own more than 3% of the voting stock of another investment company;
(2) invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply
to the Funds' investments in unregistered investment companies.
Zero-Coupon Securities
Each Fund may also invest in zero-coupon bonds. The market prices of
zero-coupon securities are generally more volatile than the market prices of
securities that pay interest periodically and are likely to respond to changes
in interest rates to a greater degree than do non-zero-coupon securities
having similar maturities and credit quality. Current federal income tax law
requires that a holder of a taxable zero-coupon security report as income each
year the portion of the original issue discount of such security that accrues
that year, even though the holder receives no cash payments of interest during
the year. The Fund has qualified as a regulated investment company under the
Code. Accordingly, during periods when a Fund receives no interest payments on
its zero-coupon securities, it will be required, in order to maintain its
desired tax treatment, to distribute cash approximating the income
attributable to such securities. Such distribution may require the sale of
portfolio securities to meet the distribution requirements and such sales may
be subject to the risk factor discussed above.
Repurchase Agreements
Each Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help a Fund to invest cash on a
temporary basis. A Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, a
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the
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securities. To minimize this possibility, the Manager, pursuant to direction
from the Global Funds, Inc.'s Board of Directors, considers the
creditworthiness of banks and dealers when entering into repurchase
agreements.
Borrowings
Each Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Fund will not borrow money in excess
of one-third of the value of its net assets. A Fund has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank and, to the extent that such borrowing exceeds 5% of the value of the
Fund's net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, a Fund shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the U.S. Securities and Exchange Commission may prescribe by rules
and regulations, reduce the amount of its borrowings to such an extent that
the asset coverage of such borrowings shall be at least 300%. A Fund will not
pledge more than 10% of its net assets, or issue senior securities as defined
in the 1940 Act, except for notes to banks. Investment securities will not be
purchased while a Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. Each Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. A Fund may
also purchase put options on such securities and indices and enter into
related closing transactions.
A call option enables the purchaser, in return for the premium paid,
to purchase securities from the writer of the option at an agreed price up to
an agreed date. The advantage is that the purchaser may hedge against an
increase in the price of securities it ultimately wishes to buy or take
advantage of a rise in a particular index. A Fund will only purchase call
options to the extent that premiums paid on all outstanding call options do
not exceed 2% of its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. A Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal
to the difference between the closing price of the index and the exercise
price of the option.
Closing transactions essentially let a Fund offset put options or
call options prior to exercise or expiration. If a Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or
deliver a security it might want to hold.
In purchasing put and call options, the premium paid by a Fund plus
any transaction costs will reduce any benefit realized by the Fund upon
exercise of the option.
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Each Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. A Fund will only invest in
such options to the extent consistent with its 10% limitation (or, in the case
of Emerging Markets Fund , its 15% limitation) on investment in illiquid
securities. The Funds will comply with U.S. Securities and Exchange Commission
asset segregation and coverage requirements when engaging in these types of
transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts
for a Fund is to protect the Fund against the fluctuations in interest or
exchange rates which otherwise might adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities which the
Fund intends to purchase at a later date without actually buying or selling
such securities.
Each Fund may enter into contracts for the purchase or sale for
future delivery of securities or foreign currencies. A purchase of a futures
contract means the acquisition of a contractual right to obtain delivery to a
Fund of the securities or foreign currency called for by the contract at a
specified price during a specified future month. When a futures contract is
sold, a Fund incurs a contractual obligation to deliver the securities or
foreign currency underlying the contract at a specified price on a specified
date during a specified future month. To the extent that a Fund invests in
futures contracts and options thereon for other than bona fide hedging
purposes, the Fund will not enter into such transactions if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums paid
for open futures options would exceed 5% of the Fund's total assets, after
taking into account unrealized profits and unrealized losses on such contracts
it has entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5%.
A Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract, rather than actually to
purchase or sell the futures contract, at a specified exercise price at any
time during the period of the option. When a Fund enters into a futures
transaction, it must deliver to the futures commission merchant selected by
the Fund an amount referred to as "initial margin." This amount is maintained
by the futures commission merchant in an account at the Custodian Bank.
Thereafter, a "variation margin" may be paid by a Fund to, or drawn by the
Fund from, such account in accordance with controls set for such accounts,
depending upon changes in the price of the underlying securities subject to
the futures contract.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, a Fund may not achieve the anticipated
benefits of investing in futures contracts and options thereon, or may realize
a loss. To the extent that the Fund purchases an option on a futures contract
and fails to exercise the option prior to the exercise date, it will suffer a
loss of the premium paid. Further, the possible lack of a secondary market
could prevent the Fund from closing out its positions relating to futures.
Interest Rate Swaps
In order to attempt to protect Global Bond Fund's investments from
interest rate fluctuations, the Fund may engage in interest rate swaps. The
Fund intends to use interest rate swaps as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the Fund with another
party of their respective rights to receive interest, (e.g., an exchange of
fixed rate payments for floating rate payments). For example, if the Fund
holds an interest-paying security whose interest rate is reset once a year, it
may swap the right to receive interest at this fixed rate for the right to
receive interest at a rate that is reset daily.
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Such a swap position would offset changes in the value of the underlying
security because of subsequent changes in interest rates. This would protect
the Fund from a decline in the value of the underlying security due to rising
rates, but would also limit its ability to benefit from falling interest
rates.
The Fund may enter into interest rate swaps on either an asset-based
or liability-based basis, depending upon whether it is hedging its assets or
its liabilities, and will usually enter into interest rate swaps on a net
basis (i.e., the two payment streams are netted out, with the Fund receiving
or paying, as the case may be, only the net amount of the two payments).
Inasmuch as these hedging transactions are entered into for non-speculative
purposes and not for the purpose of leveraging the Fund's investments, the
Manager and the Fund believe such obligations do not constitute senior
securities and, accordingly, will not treat them as being subject to its
borrowing restrictions. The net amount of the excess, if any, of the Fund's
obligations over its entitlement with respect to each interest rate swap will
be accrued on a daily basis and an amount of cash or high-quality liquid
securities having an aggregate net asset value at least equal to the accrued
excess will be maintained in a segregated account by the Custodian Bank. If
the Fund enters into an interest rate swap on other than a net basis, the Fund
would maintain a segregated account in the full amount accrued on a daily
basis of the Fund's obligations with respect to the swap.
The use of interest rate swaps by Global Bond Fund involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Manager is incorrect in its
forecasts of market values, interest rates and other applicable factors, the
investment performance of the Fund will be less favorable than it would have
been if this investment technique were never used. Interest rate swaps do not
involve the delivery of securities or other underlying assets or principal.
Thus, if the other party to an interest rate swap defaults, the Fund's risk of
loss consists of the net amount of interest payments that the Fund is
contractually entitled to receive.
Diversification
While Global Bond Fund, Global Assets Fund and Emerging Markets
Fund each intend to seek to qualify as a "diversified" investment company
under provisions of Subchapter M of the Code, none of these Funds will be
diversified under the 1940 Act. Thus, while at least 50% of each such Fund's
total assets will be represented by cash, cash items, U.S. government
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the Fund's total assets, it will not satisfy the
1940 Act requirement in this respect, which applies that test to 75% of the
Fund's assets. A nondiversified portfolio is believed to be subject to greater
risk because adverse effects on the portfolio's security holdings may affect a
larger portion of the overall assets.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
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APPENDIX A--RATINGS
Emerging Markets Fund may invest up to 35% of its assets, in high
yield, high risk foreign fixed income securities and Global Assets Fund has
the ability to invest up to 15% of its net assets in high yield, high risk
U.S. fixed-income securities. The table set forth below shows asset
composition, based on rating categories, of such securities held by Global
Assets Fund. Certain securities may not be rated because the rating agencies
were either not asked to provide ratings (e.g., many issuers of privately
placed bonds do not seek ratings) or because the rating agencies declined to
provide a rating for some reason, such as insufficient data. The table below
shows the percentage of Global Assets Fund's high yield, high risk securities
which are not rated. The information contained in the table was prepared based
on a dollar weighted average of the Fund's portfolio composition based on
month end data for the fiscal year ended November 30, 1997. The paragraphs
following the table contain excerpts from Moody's and S&P's rating
descriptions. These credit ratings evaluate only the safety of principal and
interest and do not consider the market value risk associated with high yield
securities.
Average Weighted
Percentage of Portfolio
Rating Moody's of Global Assets Fund
-------------- -----------------------
Ba/BB 3.8%
B/B 11.2%
Not Rated/Other 0.00%
During the fiscal year ended November 30, 1997, Global Assets Fund
increased its exposure to bonds rated B from 4.10% to 11.20%. With respect to
high-yield securities, the Fund tends to emphasize B-rated bonds during
periods of economic expansion. During periods of economic slowdown, the Fund
tends to emphasize bonds rated Ba, which are generally considered to be of
higher quality but lower yielding than bonds rated B. In response to
continuing signs of economic growth during 1997, the Fund's managers increased
the Fund's holdings of B-rated bonds in an effort to increase investment
income while maintaining a prudent risk profile, consistent with their view of
economic and market conditions at that time.
General Rating Information
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to
be the best quality. They carry the smallest degree of investment risk;
Aa--judged to be of high quality by all standards; A--possess favorable
attributes and are considered "upper medium" grade obligations;
Baa--considered as medium grade obligations. Interest payments and principal
security appear adequate for the present but certain protective elements may
be lacking or may be characteristically unreliable over any great length of
time; Ba--judged to have speculative elements; their future cannot be
considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes
bonds in this class; B--generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small;
Caa--are of poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest; Ca--
represent obligations which are speculative in a high degree. Such issues are
often in default or have other
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marked shortcomings; C--the lowest rated class of bonds and issues so rated
can be regarded as having extremely poor prospects of ever attaining any real
investment standing.
Excerpts from S&P's description of its bond ratings: AAA--highest
grade obligations. They possess the ultimate degree of protection as to
principal and interest; AA--also qualify as high grade obligations, and in the
majority of instances differ from AAA issues only in a small degree; A--strong
ability to pay interest and repay principal although more susceptible to
changes in circumstances; BBB--regarded as having an adequate capacity to pay
interest and repay principal; BB, B, CCC, CC--regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions; C--reserved for income bonds on which no interest is being paid;
D--in default, and payment of interest and/or repayment of principal is in
arrears.
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For more information, call Delaware Group
at 800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Third Floor
80 Cheapside
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
<PAGE>
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GLOBAL BOND FUND INSTITUTIONAL
GLOBAL ASSETS FUND INSTITUTIONAL
EMERGING MARKETS FUND INSTITUTIONAL
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PROSPECTUS
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FEBRUARY 4, 1998
DELAWARE
GROUP
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<PAGE>
PROSPECTUS
GLOBAL BOND FUND INSTITUTIONAL FEBRUARY 4, 1998
GLOBAL ASSETS FUND INSTITUTIONAL
EMERGING MARKETS FUND INSTITUTIONAL
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1818 Market Street, Philadelphia, PA 19103
For more information about Global Bond Fund Institutional Class,
Global Assets Fund Institutional Class and Emerging Markets
Fund Institutional Class call Delaware Group at 800-828-5052
This Prospectus describes the shares of the Global Bond Series (the
"Global Bond Fund"), the Global Assets Series (the "Global Assets Fund") and the
Emerging Markets Series (the "Emerging Markets Fund") (individually, a "Fund"
and collectively, the "Funds") of Delaware Group Global & International Funds,
Inc. ("Global Funds, Inc."), a professionally-managed mutual fund of the series
type.
Global Bond Fund's investment objective is to achieve current income
consistent with the preservation of principal. This Fund seeks to achieve its
objective by investing primarily in fixed-income securities that may also
provide the potential for capital appreciation. Global Assets Fund's investment
objective is to achieve long-term total return. This Fund seeks to achieve its
objective by investing in securities which, in Delaware International Advisers
Ltd.'s ("Delaware International" or the "Manager") opinion, will provide higher
current income than a portfolio comprised exclusively of equity securities,
along with the potential for capital growth. This Fund will invest in both
equity and fixed-income securities. Emerging Markets Fund's investment objective
is to achieve long-term capital appreciation. This Fund seeks to achieve its
objective by investing primarily in equity securities of issuers located or
operating in emerging countries. See Investment Objectives and Strategies.
Each Fund offers an Institutional Class of shares (individually, a
"Class" and collectively, the "Classes"). This Prospectus relates only to the
Classes and sets forth information that you should read and consider before you
invest. Please retain it for future reference. The Funds' Statement of
Additional Information ("Part B" of Global Funds, Inc.'s registration
statement), dated February 4, 1998, as it may be amended from time to time,
contains additional information about the Funds and has been filed with the
Securities and Exchange Commission (the "SEC"). Part B is incorporated by
reference into this Prospectus and is available, without charge, by writing to
Delaware Distributors, L.P. at the above address or by calling the above number.
Each Fund's financial statements appear in the Annual Report of Global Funds,
Inc. for the fiscal year ended November 30, 1997, which will accompany any
response to requests for Part B. The SEC also maintains a Web site
(http://www.sec.gov) that contains Part B, material incorporated by reference
into Global Funds, Inc.'s registration statement, and other information
regarding registrants that electronically file with the SEC.
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Each Fund also offers Class A Shares, Class B Shares and Class C
Shares. Shares of these classes are subject to sales charges and other
expenses, which may affect their performance. A prospectus for these classes
can be obtained by writing to Delaware Distributors, L.P. at the above address
or by calling the above number.
TABLE OF CONTENTS
Cover Page How to Buy Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Financial Highlights Taxes
Investment Objectives and Strategies Calculation of Net Asset Value Per Share
Suitability Management of the Funds
Investment Strategy Other Investment Policies and Risk
Special Risk Considerations Considerations
Classes of Shares Appendix A -- Ratings
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUNDS ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SHARES OF THE FUNDS ARE NOT BANK OR CREDIT UNION DEPOSITS.
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SYNOPSIS
Investment Objectives
Global Bond Fund--The investment objective of Global Bond Fund is to
achieve current income consistent with preservation of principal. This Fund
seeks to achieve its objective by investing primarily in fixed-income securities
that may also provide the potential for capital appreciation. The Fund is a
global fund. As such, at least 65% of the Fund's total assets will be invested
in fixed-income securities of issuers organized or having a majority of their
assets in or deriving a majority of their operating income in at least three
different countries, one of which may be the United States.
Global Assets Fund--The investment objective of Global Assets Fund is
to achieve long-term total return. This Fund seeks to achieve its objective by
investing in securities which, in the Manager's or Sub-Adviser's opinion, will
provide higher current income than a portfolio comprised exclusively of equity
securities, along with the potential for capital growth. The Fund will invest
in both equity and fixed-income securities. The Fund is a global fund. As
such, at least 65% of the Fund's total assets will be invested in securities
of issuers organized or having a majority of their assets in or deriving a
majority of their operating income in at least three different countries, one
of which may be the United States. It is anticipated that a portion of the
Fund's assets may be invested in warrants.
Emerging Markets Fund--The investment objective of Emerging Markets
Fund is to achieve long-term capital appreciation. This Fund seeks to achieve
its objective by investing primarily in equity securities of issuers located
or operating in emerging countries. The Fund is an international fund. As
such, under normal market conditions, at least 65% of the Fund's total assets
will be invested in equity securities of issuers organized or having a
majority of their assets or deriving a majority of their operating income in
at least three different countries which are considered to be emerging or
developing.
For further details, see Investment Objectives and Strategies and
Other Investment Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations-Foreign Securities Risks under
Investment Objectives and Strategies and Other Investment Policies and Risk
Considerations.
2. Each Fund may invest a portion of its assets in the markets of
certain emerging countries. Emerging Markets Fund will invest primarily in
issuers located or operating in markets of such countries. Investments in
securities of companies in emerging markets present a greater degree of risk
than tends to be the case for foreign investments in Western Europe and other
developed markets.
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Among other things, economic markets and structures tend to be less mature and
diverse and the securities markets which are subject to less government
regulation or supervision may also be smaller, less liquid and subject to
greater price volatility. There is a greater possibility of expropriation,
nationalization, confiscatory taxation, income earned or other special taxes,
foreign exchange restrictions, limitations on the repatriation of income and
capital from investments, defaults in foreign government debt, and economic,
political or social instability. In addition, in many emerging markets, there
is substantially less publicly available information about issuers and the
information that is available tends to be of a lesser quality. See Special
Risk Considerations-Emerging Markets Securities Risks under Investment
Objectives and Strategies.
3. Emerging Markets Fund may invest up to 35% of its assets in high
yield, high risk foreign fixed-income securities, including Brady Bonds, and
Global Assets Fund may invest up to 15% of its assets in high yield, high risk
U.S. fixed-income securities ("junk bonds"). Consequently, greater risks may
be involved with an investment in these Funds. See High Yield, High Risk
Securities under Investment Objectives and Strategies.
4. Global Bond Fund may invest in interest rate swaps for hedging
purposes which could subject the Fund to increased risks. Interest rate swaps
may be considered to be derivative securities. See Interest Rate Swaps under
Other Investment Policies and Risk Considerations.
5. Each Fund has the right to engage in options and futures
transactions for hedging purposes, to counterbalance portfolio volatility. In
connection with futures transactions, the Funds will maintain certain
collateral in special accounts established with futures commission merchants
or on their behalf in the care of The Chase Manhattan Bank (the "Custodian
Bank"). While the Funds do not engage in options and futures for speculative
purposes, there are risks which result from the use of these instruments, and
an investor should carefully review the descriptions of these risks in this
Prospectus. See Options and Futures Contracts and Options on Futures Contracts
under Other Investment Policies and Risk Considerations.
6. While each Fund intends to seek to qualify as a "diversified"
investment company under provisions of Subchapter M of the Internal Revenue
Code, as amended (the "Code"), none will be diversified under the Investment
Company Act of 1940, as amended (the "1940 Act"). Thus, 50% of each Fund's
total net assets will be divided among cash, cash items, U.S. government
securities, and other securities, with no more than 5% of a Fund's total net
assets invested with one issuer. However, this will not satisfy the 1940 Act
requirement that 75% of a Fund's assets be limited to not more than 5% per
issuer. A nondiversified portfolio is believed to be subject to greater risk
because adverse effects on any individual portfolio holdings may affect a
larger portion of the overall assets.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Funds, subject to the
supervision and direction of Global Funds, Inc.'s Board of Directors. Delaware
Management Company, Inc. ("Delaware," or the "Sub-Adviser") is the investment
sub-adviser for Global Assets Fund and, in that capacity, provides
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investment advice on U.S. securities. Delaware Distributors, L.P. (the
"Distributor") is the national distributor for each Fund and for all of the
other mutual funds in the Delaware Group. Delaware Service Company, Inc. (the
"Transfer Agent") is the shareholder servicing, dividend disbursing, accounting
services and transfer agent for each Fund and for all of the other mutual funds
in the Delaware Group.
See Summary of Expenses and Management of the Funds for further
information regarding the Manager and the Sub-Adviser and the fees payable
under each Fund's Investment Management Agreement and the Sub-Advisory
Agreement on behalf of Global Assets Fund.
Purchase Price
Shares of each Class offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are
not subject to distribution fees under a Rule 12b-1 distribution plan. See
Classes of Shares.
Redemption and Exchange
Shares of each Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. Global Bond Fund, Global Assets Fund and Emerging Markets Fund operate
as nondiversified funds as defined under the 1940 Act. Global Funds, Inc. was
organized as a Maryland corporation on May 30, 1991. See Shares under Management
of the Funds.
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SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares of each Fund follows:
<TABLE>
<CAPTION>
Global Global Emerging
Bond Fund Assets Fund Markets Fund
Shareholder Transaction Expenses Institutional Class Institutional Class Institutional Class
- -------------------------------- ------------------- ------------------- -------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)................. None None None
Maximum Sales Charge Imposed
on Reinvested Dividends (as
a percentage of offering price).... None None None
Exchange Fees...................... None* None* None*
* Exchanges are subject to the requirements of each fund and a front-end sales charge may apply.
Annual Operating Expenses Global Global Emerging
(as a percentage of average Bond Fund Assets Fund Markets Funds
daily net assets) Institutional Class Institutional Class Institutional Class
- ----------------- ------------------- ------------------- -------------------
Management Fees
(after voluntary waivers).......... 0.00%** 0.00%** 0.23%**
12b-1 Expenses
(including service fees)........... None None None
Other Operating Expenses
(after any voluntary payments)..... 0.95%** 0.95%** 1.47%**
Total Operating Expenses (after
voluntary waivers and any voluntary
payments).......................... 0.95%** 0.95%** 1.70%**
</TABLE>
** Delaware International has elected to voluntarily waive that portion, if
any, of the annual management fees payable by a Fund and to pay a Fund's
expenses to the extent necessary to ensure that the Fund's total operating
expenses (exclusive of taxes, interest, brokerage commissions and
extraordinary expenses) do not exceed, on an annualized basis, 0.95% of the
average daily net assets of each Class of the Global Bond Fund and Global
Assets Fund and 1.70% of the average daily net assets of each Class of the
Emerging Markets Fund. Delaware International's voluntary election to waive
fees and pay expenses began upon the commencement of the public offering of
each Class of each Fund and will extend through May 31, 1998. Absent
Delaware International's voluntary fee waivers and expense payments, the
Total Operating Expenses and Management Fees would have been as follows:
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<TABLE>
<CAPTION>
Total Operating Expenses Management Fees
------------------------ ---------------
<S> <C> <C>
Global Bond Fund Institutional Class ........ 1.74% 0.75%
Global Assets Fund Institutional Class ...... 1.86% 0.75%
Emerging Markets Fund Institutional Class ... 2.72% 1.25%
</TABLE>
For expense information about each Fund's A Class, B Class and C
Class, see the separate prospectus relating to those classes.
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, and (2) redemption at the end of each time period. Global Funds,
Inc. charges no redemption fees. The following example assumes the voluntary
waiver of the management fee and/or other payments of expenses by the Manager as
discussed in this Prospectus.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Global Bond Fund 1 year 3 years 5 year 10 years
Institutional Class $10 $30 $53 $117
Global Assets Fund 1 year 3 years 5 years 10 years
Institutional Class $10 $30 $53 $117
Emerging Markets Fund 1 year 3 years 5 years 10 years
Institutional Class $17 $54 $92 $201
</TABLE>
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in any of the
Classes will bear directly or indirectly.
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FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements
of Global Bond Fund, Global Assets Fund and Emerging Markets Fund of Delaware
Group Global & International Funds, Inc. and have been audited by Ernst &
Young LLP, independent auditors. The data should be read in conjunction with
the financial statements, related notes, and the report of Ernst & Young LLP
covering such financial information and highlights, all of which are
incorporated by reference into Part B. Further information about the Funds'
performance is contained in Delaware Group Global & International Funds,
Inc.'s Annual Report to shareholders. A copy of the Annual Report (including
the report of Ernst & Young LLP) may be obtained from Delaware Group Global &
International Funds, Inc. upon request at no charge.
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<TABLE>
<CAPTION>
Global Bond Fund Global Assets Fund
Institutional Class Institutional Class
------------------- -------------------
Period Period
12/27/94(1) 12/27/94(1)
Year Ended through Year Ended through
11/30/97 11/30/96 11/30/95 11/30/97 11/30/96 11/30/95
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............. $11.520 $11.270 $10.000 $13.340 $11.930 $10.000
Income From Investment Operations
Net Investment Income............................ 0.658(4) 0.788(3) 0.782 0.478(4) 0.567 0.473
Net Gains (Losses) on Securities
both realized and unrealized).............. (0.515) 0.732 1.088 0.857 1.533 1.697
Total From Investment Operations........... 0.143 1.520 1.870 1.335 2.100 2.170
Less Distributions
Dividends From Net Investment Income............. (0.813) (0.910) (0.600) (0.525) (0.420) (0.240)
Distributions From Capital Gains................. (0.040) (0.360) none (0.050) (0.270) none
Total Distributions........................ (0.853) (1.270) (0.600) (0.575) (0.690) (0.240)
Net Asset Value, End of Period................... $10.810 $11.520 $11.270 $14.100 $13.340 $11.930
Total Return(2).................................. 1.45%(2) 14.68%(2) 19.21%(2) 10.34%(2) 18.38%(2) 21.88%(2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)........ $11,278 $6,707 $897 $2,310 $2,203 $2,191
Ratio of Expenses to Average Daily Net Assets.... 0.95% 0.95% 0.95% 0.95% 0.95% 0.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................ 1.74% 4.70% 12.04% 1.86% 2.42% 7.25%
Ratio of Net Investment Income to Average
Daily Net Assets........................... 6.06% 7.12% 8.00% 3.54% 4.43% 5.05%
Ratio of Net Investment Income (Loss) to
Average Daily Net Assets Prior to Expense
Limitation................................. 5.27% 3.37% (3.09%) 2.63% 2.96% (1.25%)
Portfolio Turnover Rate.......................... 76% 42% 98% 74% 34% 57%
Average Commission Rate Paid(5).................. N/A N/A N/A $0.0276 $0.0271 N/A
</TABLE>
<TABLE>
<CAPTION>
<PAGE>
Emerging Markets
Institutional Class
-------------------
Period
Year 6/15/96(1)
Ended through
11/30/97 11/30/96
<S> <C> <C>
Net Asset Value, Beginning of Period............. $9.990 $10.000
Income From Investment Operations
Net Investment Income............................ 0.098(4) 0.047(3)
Net Gains (Losses) on Securities
both realized and unrealized).............. 0.262 (0.057)
Total From Investment Operations........... 0.360 (0.010)
Less Distributions
Dividends From Net Investment Income............. (0.025) none
Distributions From Capital Gains................. (0.075) none
Total Distributions........................ (0.100) none
Net Asset Value, End of Period................... $10.250 $9.990
Total Return(2).................................. 3.64%(2) (0.10%)(2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)........ $1,916 $3,717
Ratio of Expenses to Average Daily Net Assets.... 1.70% 1.70%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................ 2.72% 3.80%
Ratio of Net Investment Income to Average Daily
Net Assets................................. 0.82% 0.47%
Ratio of Net Investment Income to Average Daily
Net Assets Prior to Expense Limitation..... (0.20%) (1.63%)
Portfolio Turnover Rate.......................... 65% 36%
Average Commission Rate Paid(5).................. $0.0038 $0.0073
</TABLE>
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Total return reflects the voluntary fee waiver described under Summary of
Expenses and Management of the Funds.
(3) The year ended November 30, 1996 net investment income per share information
was based on the average share outstanding method.
(4) The year ended November 30, 1997 net investment income per share information
was based on the average share outstanding method.
(5) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was
a commission charged.
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INVESTMENT OBJECTIVES AND STRATEGIES
SUITABILITY
Investors considering any of the Funds within Global Funds, Inc. should
have a long-term investment time frame.
The Funds cannot assure a specific rate of return or that principal will
be protected. The value of each Fund's shares can be expected to move up and
down depending on market conditions. Consequently, appreciation may be
obtained in periods of generally rising markets, while in declining markets
the value of each Fund's shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as
well as to political, economic and social situations different from and
potentially more volatile than those in the United States. In addition, the
accounting, tax and financial reporting standards of foreign countries are
different from and may be less reliable or comprehensive than those relating
to U.S. securities issuers. See Special Risk Considerations for a complete
discussion of the risk factors affecting any international investment. For
these reasons, the Funds are not suitable for short-term investors. However,
through the cautious selection and supervision of its portfolio, the Manager
will strive to achieve each Fund's objective.
Investors for whom each Fund is suitable are as set forth below:
Global Bond Fund -- The Fund may be suitable for investors with a
long-term investment horizon (of at least three years) who are looking for
current income from a portfolio that includes both U.S. and foreign
fixed-income securities.
Global Assets Fund -- The Fund may be suitable for investors with a
long-term investment horizon (of at least three years) who are looking for
long-term total return and would like to pursue such a goal through a
portfolio that includes both fixed-income and equity securities from both the
U.S. and foreign countries. This Fund may be appropriate for investors who
would prefer to have a professional portfolio manager decide how best to
allocate holdings among foreign and U.S. securities.
Emerging Markets Fund -- The Fund may be suitable for investors who are
seeking long-term growth for that portion of an investor's assets that have
been designated for aggressive investments. The Fund will invest primarily in
the securities of emerging markets which may offer high return potential but
are potentially more risky than investments in either the U.S. or established
foreign countries due, among other things, to less well-developed political
and economic systems.
* * *
Ownership of Fund shares can reduce the bookkeeping and administrative
inconvenience that is typically connected with direct purchases of the type of
securities in which the Funds invest.
An investor should not consider a purchase of shares of any of the Funds
as equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
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INVESTMENT STRATEGY
Global Bond Fund -- The investment objective of Global Bond Fund is to
achieve current income consistent with the preservation of investors'
principal. The Fund seeks to achieve this objective by investing primarily in
fixed-income securities that may also provide the potential for capital
appreciation. The Fund is a global fund. Under normal circumstances, at least
65% of the Fund's total assets will be invested in the fixed-income securities
of issuers organized or having a majority of their assets in or deriving a
majority of their operating income in at least three different countries, one
of which may be the United States.
The fixed-income securities in which the Fund may invest include foreign
and U.S. government securities and debt obligations of foreign and U.S.
companies which are generally rated A or better by Standard & Poor's 500 Index
("S&P") or Moody's Investors Services ("Moody's"), or if unrated, are deemed
to be of comparable quality by the Manager. However, the Fund may also invest
in securities of issuers in emerging markets countries, including Brady Bonds,
which tend to be of lower quality and more speculative than securities of
developed country issuers. Such securities may be rated lower than BBB by S&P
or Baa by Moody's, or if unrated, are considered by the Manager to be of
equivalent quality. See High Yield, High Risk Securities and Special Risk
Considerations - Emerging Markets Securities Risks. Generally, the value of
fixed-income securities moves inversely to the movement of market interest
rates. The value of the Fund's portfolio securities and, thus, an investor's
shares will be affected by changes in such rates. It is anticipated that the
average weighted maturity of the portfolio will be in the five-to-ten year
range. If, however, the Manager anticipates a declining interest rate
environment, the average weighted maturity may be extended past ten years.
Conversely, if the Manager anticipates a rising rate environment, the average
weighted maturity may be shortened to less than five years.
The Fund may also invest in zero-coupon bonds and in the debt securities
of supranational entities denominated in any currency. Zero-coupon bonds are
debt obligations which do not entitle the holder to any periodic payments of
interest prior to maturity or a specified date when the securities begin
paying current interest, and therefore are issued and traded at a discount
from their face amounts or par value. See Special Risk Considerations. A
supranational entity is an entity established or financially supported by the
national governments of one or more countries to promote reconstruction or
development. Examples of supranational entities include, among others, the
International Bank for Reconstruction and Development (more commonly known as
the World Bank), the European Economic Community, the European Coal and Steel
Community, the European Investment Bank, the Inter-Development Bank, the
Export-Import Bank and the Asian Development Bank. For increased safety, the
Fund currently anticipates that a large percentage of its assets will be
invested in securities of supranational entities and in U.S. and foreign
government securities. The Fund may also invest in Depositary Receipts.
With respect to U.S. government securities, the Fund may invest only in
securities issued or guaranteed as to the payment of principal and interest by
the U.S. government, and those of its agencies or instrumentalities which are
backed by the full faith and credit of the United States. Direct obligations
of the U.S. government which are available for purchase by the Fund include
bills, notes, bonds and other debt securities issued by the U.S. Treasury.
These obligations differ mainly in interest rates, maturities and dates of
issuance. Agencies whose obligations are backed by the full faith and credit
of the United States include the Farmers Home Administration, Federal
Financing Bank and others. With respect to securities issued by foreign
governments, their agencies, instrumentalities or political subdivisions, the
Fund will generally invest in such securities if they have been rated AAA or
AA by S&P or Aaa or Aa by Moody's or, if unrated, have been determined by the
Manager to be of comparable quality.
While the Fund may purchase securities of issuers in any foreign
country, developed and underdeveloped, or emerging market countries, it is
currently anticipated that the countries in which the Fund may invest will
include, but not be limited to, Canada, Germany, the United Kingdom, France,
the Netherlands, Belgium, Spain,
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<PAGE>
Switzerland, Japan, Australia, Hong Kong and Singapore/Malaysia, as well as
Indonesia, Korea, the Philippines, Taiwan, Thailand and South Africa. With
respect to certain countries, investments by an investment company may only be
made through investments in closed-end investment companies that in turn are
authorized to invest in the securities of such countries.
The Fund may also invest in closed-end investment companies. See
Investment Company Securities under Other Investment Policies and Risk
Considerations.
From time to time, the Fund may find opportunities to pursue its
objective outside of the fixed-income markets, but in no event will such
investments exceed 5% of the Fund's net assets.
Global Assets Fund -- The investment objective of Global Assets Fund is
to achieve long-term total return for investors. The Fund seeks to achieve
this objective by investing in securities which, in the Manager's or
Sub-Adviser's opinion, will provide higher current income than a portfolio
comprised exclusively of equity securities, along with the potential for
capital growth. The Fund is a global fund. Under normal circumstances, at
least 65% of the Fund's total assets will be invested in the securities of
issuers organized or having a majority of their assets in or deriving a
majority of their operating income in at least three different countries, one
of which may be the United States.
The Fund will attempt to achieve its investment objective by investing in
a broad range of equity and fixed-income securities. In selecting securities
investments for the Fund, the Manager will consider an issuer's competitive
position, cost structure and liquidity. Equity securities in which the Fund
may invest include convertible securities, common stocks, preferred stocks and
warrants issued in foreign countries or in the United States. In selecting
equity securities in which the Fund may invest, the Manager will use a
dividend discount analysis and a purchasing power parity approach.
Generally, the Fund may invest in fixed-income securities, including both
foreign and U.S. government securities and debt obligations of foreign and
U.S. companies. With respect to U.S. government securities, the Fund may
invest only in securities identified in Investment Strategy--Global Bond Fund.
With respect to corporate debt obligations, the Fund may invest in securities
which are investment grade as determined by any nationally-recognized
statistical rating organization, such as those rated BBB or better by S&P, or
Baa or better by Moody's, or if unrated, are determined to be of comparable
quality by the Manager. Debt obligations rated BBB and Baa have speculative
characteristics. The Fund may also invest up to 15% of its net assets in high
yield, high risk U.S. fixed-income securities. These securities are rated
lower than BBB by S&P and Baa by Moody's or, if unrated, are considered by the
Manager or Sub-Adviser to be of equivalent quality, and present special
investment risks. See High Yield, High Risk Securities and Special Risk
Considerations.
It is anticipated that a portion of the Fund's assets may be invested in
warrants. Warrants permit the Manager to establish an equity position in
selected securities by committing a lower proportion of the portfolio to
equities. The Manager's intention is to invest the difference between the cost
of the warrant and the equivalent equity security in high quality debt
instruments. The Fund may, at any given time, be fully invested in either the
equity or fixed-income markets, depending upon investment opportunities
available in each.
The Fund may invest in zero-coupon bonds and in the debt securities of
supranational entities denominated in any currency. See Investment
Strategy--Global Bond Fund. The Fund may also invest in Depositary Receipts.
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While the Fund may purchase securities of issuers in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund may invest, in addition to
the United States, will include, but not be limited to, the nations identified
in Investment Strategy-- Global Bond Fund. With respect to certain countries
in which the Fund may invest, namely Korea and Taiwan, investments by an
investment company may only be made through investments in closed-end
investment companies. See Investment Company Securities under Other Investment
Policies and Risk Considerations.
Emerging Markets Fund -- The investment objective of Emerging Markets
Fund is to achieve long-term capital appreciation. The Fund seeks to achieve
this objective by investing primarily in equity securities of issuers located
or operating in emerging countries. The Fund is an international fund. Under
normal circumstances, at least 65% of the Fund's total assets will be invested
in equity securities of issuers organized or having a majority of their assets
or deriving a majority of their operating income in at least three different
countries which are considered to be emerging or developing. The Fund will
attempt to achieve its investment objective by investing in a broad range of
equity securities, including common stocks, preferred stocks, convertible
securities and warrants issued by companies located or operating in emerging
countries.
The Fund considers an "emerging country" to be any country which is
generally recognized to be an emerging or developing country by the
international financial community, including the World Bank and the
International Finance Corporation, as well as countries that are classified by
the United Nations or otherwise regarded by their authorities as developing.
In addition, any country that is included in the IFC Free Index or MSCI EMF
Index will be considered to be an "emerging country." As of the date of this
Prospectus, there are more than 130 countries which, in the Manager's
judgment, are generally considered to be emerging or developing countries by
the international financial community, approximately 40 of which currently
have stock markets. Within this group of developing or emerging countries are
included almost every nation in the world, except the United States, Canada,
Japan, Australia, New Zealand and most nations located in Western and Northern
Europe.
Currently, investing in many emerging countries is not feasible, or may,
in the Manager's opinion, involve unacceptable political risks. The Fund will
focus its investments in those emerging countries where the Manager considers
the economies to be developing strongly and where the markets are becoming
more sophisticated. The Manager believes that investment opportunities may
result from an evolving long-term international trend favoring more
market-oriented economies, a trend that may particularly benefit certain
countries having developing markets. This trend may be facilitated by local or
international political, economic or financial developments that could benefit
the capital markets in such countries.
In considering possible emerging countries in which the Fund may invest,
the Manager will place particular emphasis on certain factors, such as
economic conditions (including growth trends, inflation rates and trade
balances), regulatory and currency controls, accounting standards and
political and social conditions. It is currently anticipated that the
countries in which the Fund may invest will include, but not be limited to,
Argentina, Botswana, Brazil, Chile, China, Colombia, Czech Republic, Estonia,
Ghana, Greece, Hong Kong, Hungary, India, Indonesia, Ivory Coast, Jamaica,
Jordan, Kenya, Korea, Latvia, Lithuania, Malaysia, Mauritius, Mexico, Morocco,
Nigeria, Pakistan, Peru, the Philippines, Poland, Portugal, Russia, Slovenia,
South Africa, Sri Lanka, Taiwan, Thailand, Turkey, Venezuela and Zimbabwe. As
markets in other emerging countries develop, the Manager expects to expand and
further diversify the countries in which the Fund invests.
Although not an exclusive list of criteria to be considered by the
Manager, an emerging country equity security is one issued by a company that,
in the opinion of the Manager, exhibits one or more of the following
characteristics: (i) its principal securities trading market is an emerging
country, as defined above; (ii) while traded in any market, alone or on a
consolidated basis, the company derives 50% or more of its annual revenues
from either goods
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produced, sales made or services performed in emerging countries; or (iii) it
is organized under the laws of, and has a principal office in, an emerging
country. Determinations as to eligibility will be made by the Manager based on
publicly available information and inquiries made of the companies.
The Fund may invest in Depositary Receipts, and in both open-end and,
listed or unlisted, closed-end investment companies, as well as unregistered
investment companies. See Investment Company Securities under Other Investment
Policies and Risk Considerations. The Fund may also invest in convertible
preferred stocks that offer enhanced yield features, such as Preferred Equity
Redemption Cumulative Stock, and certain other non-traditional equity
securities.
The Fund may invest up to 35% of its net assets in fixed-income
securities issued by emerging country companies, and foreign governments,
their agencies, instrumentalities or political subdivisions, all of which may
be high yield, high risk fixed-income securities rated lower than BBB by S&P
and Baa by Moody's or, if unrated, are considered by the Manager to be of
equivalent quality and which present special investment risks. The Fund may
also invest in Brady Bonds and zero-coupon securities. See High Yield, High
Risk Securities and Special Risk Considerations.
For temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities (and
which are backed by the full faith and credit of the U.S. government), or
issued by foreign or U.S. companies. For example, the Fund may invest in U.S.
fixed-income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. Any corporate debt obligations will be rated AA or
better by S&P, or Aa or better by Moody's, or if unrated, will be determined
to be of comparable quality by the Manager. The Fund may also invest in the
securities listed above pending investment of proceeds from new sales of Fund
shares and to maintain sufficient cash to meet redemption requests.
Restricted and Illiquid Securities
Each Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Funds. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. Emerging
Markets Fund may invest up to 15% of the value of its net assets in illiquid
securities, which are securities which may not be disposed of within seven
days at the price at which they are carried on the Fund's books, while Global
Assets Fund and Global Bond Fund may invest no more than 10% of their net
assets in such securities. In the event a Fund's percentage limitation is
exceeded, whether due to changes in the market value of the Fund's illiquid
holdings or because a particular security is deemed to have become illiquid,
the Manager will take steps to remedy these circumstances in an orderly
fashion.
High Yield, High Risk Securities
Emerging Markets Fund may invest up to 35% of its net assets, in high
yield, high risk foreign fixed-income securities, including so-called Brady
Bonds. See Foreign Government Securities Risks under Special Risk
Considerations. Global Assets Fund may invest up to 15% of its net assets in
high yield, high risk U.S. fixed-income securities (commonly known as junk
bonds). In the past, in the opinion of Delaware International and Delaware,
the high yields from these bonds have more than compensated for their higher
default rates. There can be no assurance, however, that yields will continue
to offset default rates on these bonds in the future. Delaware International
and
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Delaware intend to maintain an adequately diversified portfolio of these
bonds. While diversification can help to reduce the effect of an individual
default on the Funds, there can be no assurance that diversification will
protect the Funds from widespread bond defaults brought about by a sustained
economic downturn.
Medium- and low-grade bonds held by the Funds may be issued as a
consequence of corporate restructurings, such as leveraged buy-outs, mergers,
acquisitions, debt recapitalizations or similar events. Also these bonds are
often issued by smaller, less creditworthy companies or by highly leveraged
(indebted) firms, which are generally less able than more financially stable
firms to make scheduled payments of interest and principal. The risks posed by
bonds issued under such circumstances are substantial.
The economy and interest rates may affect these high yield, high risk
securities differently from other securities. Prices have been found to be
less sensitive to interest rate changes than higher rated investments, but
more sensitive to adverse economic changes or individual corporate
developments. Also, during an economic downturn or a substantial period of
rising interest rates, highly leveraged issuers may experience financial
stress which would adversely affect their ability to service principal and
interest payment obligations, to meet projected business goals and to obtain
additional financing. Changes by recognized rating agencies in their rating of
any security and in the ability of an issuer to make payments of interest and
principal will also ordinarily have a more dramatic effect on the values of
these investments than on the values of higher-rated securities. Such changes
in value will not affect cash income derived from these securities, unless the
issuers fail to pay interest or dividends when due. Such changes will,
however, affect a Fund's net asset value per share.
* * *
Each Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940
Act, each Fund will each operate as a nondiversified fund. No Fund will
concentrate its investments in any particular industry, which means that no
Fund will invest 25% or more of its total assets in any one industry.
Each Fund's investment objective, Global Funds, Inc.'s designation as an
open-end investment company, the Funds' designations as nondiversified funds,
and each of the Funds' policies concerning portfolio lending, borrowing and
concentration are "fundamental" and may not be changed unless authorized by
the vote of a majority of that Fund's outstanding voting securities. A vote of
a "majority of the outstanding voting securities" is the vote by the holders
of the lesser of a) 67% or more of a Fund's voting securities present in
person or represented by proxy if the holders of more than 50% of the
outstanding voting securities of such Fund are present or represented by
proxy; or b) more than 50% of the outstanding voting securities. Part B lists
other more specific investment restrictions of the Funds which may not be
changed without a majority shareholder vote. A brief discussion of those
factors that materially affected each Fund's performance during its most
recently completed fiscal year appears in Global Funds Inc.'s Annual Report.
The investment policies of the Funds not identified above as "fundamental"
may be changed by the Board of Directors of Global Funds, Inc. without a
shareholder vote. See Special Risk Considerations and Other Investment Policies
and Risk Considerations.
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<PAGE>
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in a Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Foreign Securities Risks. Each Fund has the right to purchase securities
in any developed, underdeveloped or emerging country. Investors should
consider carefully the substantial risks involved in investing in securities
issued by companies and governments of foreign nations. These risks are in
addition to the usual risks inherent in domestic investments. There is the
possibility of expropriation, nationalization or confiscatory taxation,
taxation of income earned in foreign nations or other taxes imposed with
respect to investments in foreign nations, foreign exchange control (which may
include suspension of the ability to transfer currency from a given country),
default in foreign government securities, political or social instability or
diplomatic developments which could affect investments in securities of
issuers in those nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about
companies in the United States. Foreign companies are not subject to uniform
accounting, auditing and financial reporting standards, and auditing practices
and requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United
States' generally accepted accounting principles. Also, for an issuer that
keeps accounting records in local currency, inflation accounting rules may
require for both tax and accounting purposes, that certain assets and
liabilities be restated on the issuer's balance sheet in order to express
items in terms of currency or constant purchasing power. Inflation accounting
may indirectly generate losses or profits. Consequently, financial data may be
materially affected by restatements for inflation and may not accurately
reflect the real condition of those issuers and securities markets.
Further, a Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on
securities transactions in foreign countries, which are sometimes fixed rather
than subject to negotiation as in the United States, are likely to be higher.
Further, the settlement period of securities transactions in foreign markets
may be longer than in domestic markets, and may be subject to administrative
uncertainties. In many foreign countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers
and listed companies than in the United States, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which a Fund may invest may also be smaller, less liquid and
subject to greater price volatility than those in the United States.
Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse
and mature, and securities markets that trade a small number of securities,
which can result in a low or nonexistent volume of trading. Prices in these
securities markets tend to be volatile and, in the past, securities in these
countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Until recently, there
has been an absence of a capital market structure or market-oriented economy
in certain emerging countries. Further, investments and opportunities for
investments by foreign investors are subject to a variety of national policies
and restrictions in many emerging countries. These restrictions may take the
form of prior governmental approval, limits on the amount or type of
securities held by foreigners, limits on the types of companies in which
foreigners may invest and prohibitions on foreign investments in issuers or
industries deemed sensitive to national interests.
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<PAGE>
Additional restrictions may be imposed at any time by these or other countries
in which a Fund invests. Also, the repatriation of both investment income and
capital from several foreign countries is restricted and controlled under
certain regulations, including, in some cases, the need for certain
governmental consents. Although these restrictions may in the future make it
undesirable to invest in emerging countries, the Manager does not believe that
any current repatriation restrictions would affect its decision to invest in
such countries. Countries such as those in which a Fund may invest, and in
which Emerging Markets Fund will primarily invest, have historically
experienced and may continue to experience, substantial, and in some periods
extremely high rates of inflation for many years, high interest rates,
exchange rate fluctuations or currency depreciation, large amounts of external
debt, balance of payments and trade difficulties and extreme poverty and
unemployment. Other factors which may influence the ability or willingness to
service debt include, but are not limited to, a country's cash flow situation,
the availability of sufficient foreign exchange on the date a payment is due,
the relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank
and other international agencies and the political constraints to which a
government debtor may be subject.
Foreign Government Securities Risks. With respect to investment in debt
issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits
and investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or
whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other
than dollars, its ability to make debt payments denominated in dollars could
be adversely affected. If a foreign government or government-related issuer
cannot generate sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from foreign
governments, commercial banks and multilateral organizations, and inflows of
foreign investment. The commitment on the part of these foreign governments,
multilateral organizations and others to make such disbursements may be
conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third
parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising
international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to
foreign exchange. Currency devaluations may affect the ability of a government
issuer to obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, a Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must,
in some cases, be pursued in the courts of the defaulting party itself, and
the ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default
under their commercial bank loan agreements.
Among the foreign government and government related issuers in which
Emerging Markets Fund may invest are certain high-yield securities, including
so-called Brady Bonds. The issuers of the foreign government and
government-related high yield securities, including Brady Bonds, in which
Emerging Markets Fund expects to invest have in the past experienced
substantial difficulties in servicing their external debt obligations, which
have led
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to defaults on certain obligations and the restructuring of certain
indebtedness. Restructuring arrangements have included, among other things,
reducing and rescheduling interest and principal payments by negotiating new
or amended credit agreements or converting outstanding principal and unpaid
interest to Brady Bonds, and obtaining new credit to finance interest
payments. Holders of certain foreign government and government-related high
yield securities may be requested to participate in the restructuring of such
obligations and to extend further loans to their issuers. There can be no
assurance that the Brady Bonds and other foreign government and
government-related high yield securities in which Emerging Markets Fund may
invest will not be subject to similar defaults or restructuring arrangements
which may adversely affect the value of such investments. Furthermore, certain
participants in the secondary market for such debt may be directly involved in
negotiating the terms of these arrangements and may therefore have access to
information not available to other market participants.
Brady Bonds are debt securities issued under the framework of the Brady
Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F.
Brady in 1989 as a mechanism for debtor nations to restructure their
outstanding external indebtedness (generally, commercial bank debt). In
restructuring its external debt under the Brady Plan framework, a debtor
nation negotiates with its existing bank lenders as well as multilateral
institutions such as the World Bank and the International Monetary Fund. The
Brady Plan framework, as it has developed, contemplates the exchange of
commercial bank debt for new issued bonds (Brady Bonds). The investment
advisers believe that economic reforms undertaken by countries in connection
with the issuance of Brady Bonds make the debt of countries which have issued
or have announced plans to issue Brady Bonds an attractive opportunity for
investment. Investors, however, should recognize that the Brady Plan only sets
forth general guiding principles for economic reform and debt reduction,
emphasizing that solutions must be negotiated on a case-by-case basis between
debtor nations and their creditors. In addition, Brady Bonds have been issued
only recently and, accordingly, do not have a long payment history.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible
since the future value of such securities in foreign currencies will change as
a consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities at
the expiration of the contract. Accordingly, it may be necessary for a Fund to
purchase additional foreign currency on the spot market (and bear the expense
of such purchase) if the market value of the security is less than the amount
of foreign currency the Fund is obligated to deliver (and if a decision is
made to sell the security and make delivery of the foreign currency).
Conversely, it may be necessary to sell on the spot market some of the foreign
currency received upon the sale of the portfolio security if its market value
exceeds the amount of foreign currency the Fund is obligated to deliver.
Emerging Markets Fund may invest up to 35% of its net assets, in high
yield, high risk foreign fixed-income securities. Global Assets Fund may
invest up to 15% of its net assets in high yield, high risk U.S. fixed-income
securities. These securities are rated lower than BBB by S&P and Baa by
Moody's or, if unrated, are considered by Delaware International or Delaware,
in the case of Global Assets Fund, to be of equivalent quality. See Investment
Objectives and Strategies-- Global Assets Fund and Emerging Markets Fund and
High Yield, High Risk Securities. No Fund will purchase securities rated lower
than C by S&P or Ca by Moody's, or, if unrated, considered to be of an
equivalent quality to such ratings by Delaware International or Delaware. See
Appendix A - Ratings to this
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Prospectus for more rating information. Fixed-income securities of this type
are considered to be of poor standing and predominantly speculative. Such
securities are subject to a substantial degree of credit risk.
* * *
For additional information about each Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning each Fund's investment policies, restrictions and risk factors.
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CLASSES OF SHARES
The Distributor serves as the national distributor for each Fund. Shares
of each Class may be purchased directly by contacting a Fund or its agent or
through authorized investment dealers. All purchases of shares of each Class
are made at net asset value. There is no front-end or contingent deferred
sales charge.
Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares of a Class
as part of their retirement program should contact their employer for details.
Shares of each Class are available for purchase only by: (a) retirement
plans introduced by persons not associated with brokers or dealers that are
primarily engaged in the retail securities business and rollover individual
retirement accounts from such plans; (b) tax-exempt employee benefit plans of
Delaware or its affiliates and securities dealer firms with a selling
agreement with the Distributor; (c) institutional advisory accounts of
Delaware or its affiliates and those having client relationships with Delaware
Investment Advisers, a division of Delaware 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 a 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.
Class A Shares, Class B Shares and Class C Shares
In addition to offering Global Bond Fund Institutional Class, Global
Assets Fund Institutional Class and Emerging Markets Fund Institutional Class
of shares, the respective Funds also offer: Global Bond Fund A Class, Global
Bond Fund B Class and Global Bond Fund C Class; Global Assets Fund A Class,
Global Assets Fund B Class and Global Assets Fund C Class; and Emerging
Markets Fund A Class, Emerging Markets Fund B Class and Emerging Markets Fund
C Class, which are described in a separate prospectus. Shares of such classes
may be purchased through authorized investment dealers or directly by
contacting each Fund or its Distributor. Class A Shares carry a front-end
sales charge and have annual 12b-1 expenses equal to a maximum of 0.30%. The
maximum front-end sales charge as a percentage of the offering price of Class
A Shares is 4.75% and is reduced on certain transactions of $100,000 or more.
Class B Shares and Class C Shares have no front-end sales charge but are
subject to annual 12b-1 expenses equal to a maximum of 1%. Class B Shares and
Class C Shares and certain Class A Shares may be subject to a contingent
deferred sales charge upon redemption. To obtain a prospectus relating to such
classes, contact the Distributor by writing to the address or by calling the
phone number listed on the back cover of this Prospectus.
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HOW TO BUY SHARES
Each Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Classes.
Investing Directly by Mail
1. Initial Purchases--An Investment Application or, in the case of a
retirement plan account, an appropriate retirement plan application, must be
completed, signed and sent with a check payable to the specific Fund and Class
selected, to Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to the specific Fund and Class selected. Your check
should be identified with your name(s) and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds by wire
to CoreStates Bank, N.A., ABA #031000011, account number 1412893401 (include
your name(s) and your account number for the Fund and Class in which you are
investing).
1. Initial Purchases--Before you invest, telephone the Client Services
Department to get an account number at 800-828-5052. If you do not call
first, it may delay processing your investment. In addition, you must promptly
send your Investment Application or, in the case of a retirement account, an
appropriate retirement plan application, for the specific Fund and Class
selected , to Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your
Client Services Representative by telephone at 800-828-5052 prior to sending
your wire.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group
and you qualify to purchase shares of the Classes, you may write and authorize
an exchange of part or all of your investment into a Fund. However, Class B
Shares and Class C Shares of each Fund and Class B Shares and Class C Shares
of the other funds in the Delaware Group offering such a class of shares may
not be exchanged into the Classes. If you wish to open an account by exchange,
call your Client Services Representative at 800-828-5052 for more information.
See Redemption and Exchange for more complete information concerning your
exchange privileges.
Investing through Your Investment Dealer
You can make a purchase of Fund shares through most investment dealers
who, as part of the service they provide, must transmit orders promptly to the
Fund. They may charge for this service.
Purchase Price and Effective Date
The purchase price (net asset value) of each Class is determined as of
the close of regular trading on the New York Stock Exchange (ordinarily, 4
p.m., Eastern time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer is the
date the order is received by the Fund in which the shares are being
purchased, its agent or designee. The effective date of a direct purchase is
the day your wire, electronic transfer or check is received, unless it is
received after the time the share price is determined, as noted above.
Purchase orders received after such time will be effective the next business
day.
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The Conditions of Your Purchase
Each Fund reserves the right to reject any purchase order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. A Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. Each Fund reserves the right to reject
purchases by third-party checks or checks that are not drawn on a domestic
branch of a United States financial institution. If a check drawn on a foreign
financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
Each Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of
redemptions.
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REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer
for details.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after a Fund receives your request in good order.
For example, redemption or exchange requests received in good order after the
time the net asset value of shares is determined will be processed on the next
business day. See Purchase Price and Effective Date under How to Buy Shares.
Except as otherwise noted below, for a redemption request to be in "good
order," you must provide your account number, account registration, and the
total number of shares or dollar amount of the transaction. With regard to
exchanges, you must also provide the name of the fund in which you want to
invest the proceeds. Exchange instructions and redemption requests must be
signed by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling a Fund at 800-828-5052.
Redemption proceeds will be distributed promptly, as described below, but not
later than seven days after receipt of a redemption request.
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.
Each Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. No Fund will honor redemption requests as to shares for which a check
was tendered as payment until the Fund is reasonably satisfied that the check
has cleared, which may take up to 15 days from the purchase date. You can
avoid this potential delay if you purchase shares by wiring Federal Funds.
Each Fund reserves the right to reject a written or telephone redemption
request or delay payment of redemption proceeds if there has been a recent
change to the shareholder's address of record.
Shares of a Class may be exchanged into any other Delaware Group mutual
fund provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of
the fund being acquired are in a state where that fund is registered. If
exchanges are made into other shares that are eligible for purchase only by
those permitted to purchase shares of a Class, such shares will be exchanged
at net asset value. Shares of a Class may not be exchanged into Class B Shares
or Class C Shares of the funds in the Delaware Group. Each Fund may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders.
Various redemption and exchange methods are outlined below. No fee is
charged by the Funds or the Distributor for redeeming or exchanging your
shares, although, in the case of an exchange, a sales charge may apply. You
may also have your investment dealer arrange to have your shares redeemed or
exchanged. Your investment dealer may charge for this service.
All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund to which the
authorization relates or its agent.
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Written Redemption and Exchange
You can write to a Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares or to request an exchange of any or all your
shares into another mutual fund in the Delaware Group, subject to the same
conditions and limitations as other exchanges noted above. The request must be
signed by all owners of the account or your investment dealer of record.
For redemptions of more than $50,000, or when the proceeds are not sent
to the shareholder(s) at the address of record, each Fund requires a signature
by all owners of the account and may require a signature guarantee. Each
signature guarantee must be supplied by an eligible guarantor institution.
Each Fund reserves the right to reject a signature guarantee supplied by an
eligible institution based on its creditworthiness. A Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
Payment is normally mailed the next business day after receipt of your
redemption request. Certificates are issued for shares only if you submit a
specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.
You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your shares in certificate form, you may redeem
or exchange only by written request and you must return your certificates.
The Telephone Redemption - Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in which you have your
account in writing that you do not wish to have such services available with
respect to your account. Each Fund reserves the right to modify, terminate or
suspend these procedures upon 60 days' written notice to shareholders. It may
be difficult to reach a Fund by telephone during periods when market or
economic conditions lead to an unusually large volume of telephone requests.
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. With respect to such telephone transactions, a 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. A written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.
Telephone Redemption-Check to Your Address of Record
You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your address of record. Checks will be
payable to the shareholder(s) of record. Payment is normally mailed the next
business day after receipt of the redemption request.
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Telephone Redemption-Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There
are no fees for this redemption method, but the mail time may delay getting
funds into your bank account. Simply call your Client Services Representative
prior to the time the net asset value is determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange shares into any fund
in the Delaware Group under the same registration. As with the written
exchange service, telephone exchanges are subject to the same conditions and
limitations as other exchanges noted above. Telephone exchanges may be subject
to limitations as to amounts or frequency.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on each Fund to all shareholders of
record of the Classes of that Fund at the time the offering price of shares is
determined. See Purchase Price and Effective Date under How to Buy Shares. Thus,
when redeeming shares, dividends continue to be credited up to and including the
date of redemption.
Emerging Markets Fund will normally declare and make payments from net
investment income on an annual basis 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. Payments from net realized securities profits of a
Fund, if any, will be made in the quarter following the close of the fiscal
year. Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value.
In addition to the dividends from net investment income and distributions
from realized securities profits that a Fund may declare and make, as noted
above, in order to satisfy certain distribution requirements of the Tax Reform
Act of 1986, a Fund may declare special year-end dividend and capital gains
distributions during October, November or December to shareholders of record
on a date in such month. Such distributions, if received by shareholders by
January 31, are deemed to have been paid by the Funds and received by
shareholders on the earlier of the date paid or December 31 of the prior year.
Each class of a Fund will share proportionately in the investment income
and expenses of that Fund, except that the Classes will not incur any
distribution fee under Global Funds, Inc.'s 12b-1 Plans which apply to Class A
Shares, Class B Shares and Class C Shares.
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TAXES
The tax discussion set forth below is included for general information
only. Investors should contact their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in a Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the Code.
Because many of these changes are complex, and only indirectly affect the
Funds and their distributions to you, they are discussed in Part B. Changes in
the treatment of capital gains, however, are discussed in this section.
Each Fund has qualified, and intends to continue 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 certain
other requirements relating to the source of its income and diversification of
its assets.
Each Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to those investors who are
subject to income taxes as ordinary income, whether received in cash or in
additional shares. It is expected that either none or only a nominal portion
of a Fund's dividends will be eligible for the dividends-received deductions
for corporations. The portion of dividends paid by a Fund that so qualifies
will be designated each year in a notice from the Fund to the Fund's
shareholders.
Distributions paid by a Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who
are subject to income taxes as long-term capital gains, regardless of the
length of time an investor has owned shares in that Fund. The Funds do not
seek to realize any particular amount of capital gains during a year; rather,
realized gains are a by-product of Fund management activities. Consequently,
capital gains distributions may be expected to vary considerably from year to
year. Also, for those investors subject to tax, if purchases of shares in a
Fund are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for individuals
that will be taxed at new lower tax rates. For investors who are in the 28% or
higher federal income tax brackets, these gains will be taxed at a maximum
rate of 20%. For investors who are in the 15% federal income tax bracket,
these gains will be taxed at a maximum rate of 10%. Capital gain distributions
will qualify for these new maximum tax rates, depending on when a Fund's
securities were sold and how long they were held by that Fund before they were
sold. Investors who want more information on holding periods and other
qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting at
calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record in such a month, but which, for operational reasons, may not be paid
to the shareholder until the following January, will be treated for tax
purposes as if paid by a Fund and received by the shareholder on December 31
of the year declared.
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The sale of shares of the Funds is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between the Funds and any other fund in the Delaware Group. Any loss incurred
on a sale or exchange of Fund shares that had been held for six months or less
will be treated as long-term capital loss to the extent of capital gains
dividends received with respect to such shares.
A Fund may be subject to foreign withholding taxes on income from certain
of its foreign securities. If more than 50% in value of the total assets of a
Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a
pro-rata share of foreign income taxes paid by the Fund. If this election is
made, shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by
the Fund), and (ii) entitled to either deduct (as an itemized deduction in the
case of individuals) their share of such foreign taxes in computing their
taxable income or to claim a credit for such taxes against their U.S. income
tax, subject to certain limitations under the Code. Shareholders will be
informed by a Fund at the end of each calendar year regarding the availability
of any credits on and the amount of foreign source income to be included in
their income tax returns.
In addition to the federal taxes described above, shareholders may or may
not be subject to various state and local taxes . For example, distributions
of interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisors.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the dividends and distributions paid by the Fund in which you hold
shares. Shareholders will also receive each year information as to the portion
of dividend income, if any, that is derived from U.S. government securities
that are exempt from state income tax. Of course, shareholders who are not
subject to tax on their income would not be required to pay tax on amounts
distributed to them by a Fund.
Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your
proper Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.
See Accounting and Tax Issues and Distributions and Taxes in Part B for
additional information on tax matters relating to each Fund and its
shareholders.
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CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares is the net asset value
("NAV") per share of Class shares next computed after the order is received.
The NAV is computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.
The NAV per share is computed by adding the value of all securities and
other assets in a Fund's portfolio, deducting any liabilities of that Fund
(expenses and fees are accrued daily) and dividing by the number of that
Fund's shares outstanding. Portfolio securities for which market quotations
are available are priced at market value. Debt securities are priced at fair
value by an independent pricing service using methods approved by Global
Funds, Inc.'s Board of Directors. Short-term investments having a maturity of
less than 60 days are valued at amortized cost, which approximates market
value. All other securities are valued at their fair value as determined in
good faith and in a method approved by Global Funds, Inc.'s Board of
Directors.
A Fund's portfolio securities, from time to time, may be listed primarily
on foreign exchanges which trade on days when the New York Stock Exchange is
closed (such as U.S. holidays or Saturdays). As a result, the net asset value
of a Fund may be significantly affected by such trading on days when
shareholders have no access to the Fund.
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 Classes will not incur any of the expenses under the Fund's
12b-1 Plans and Class A Shares, Class B Shares and Class C Shares of each Fund
alone will bear the 12b-1 Plan expenses payable under their respective 12b-1
Plans. Due to the specific distribution expenses and other costs that will be
allocable to each class, the net asset value of each class of a particular
Fund will vary.
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MANAGEMENT OF THE FUNDS
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager and Sub-Adviser
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to each Fund. Delaware
International is affiliated with Delaware Management Company, Inc. ("Delaware,"
or "Sub-Adviser"), which manages the U.S. securities portion of Global Assets
Fund. The Manager has offices located at Third Floor, 80 Cheapside, London,
England EC2V 6EE.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On November 30, 1997, Delaware and its affiliates
within the Delaware Group, including Delaware International, were managing in
the aggregate more than $39 billion in assets in various institutional or
separately managed (approximately $23,274,532,000) and investment company
(approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). Delaware International is also controlled by DMH
through several subsidiaries. On April 3, 1995, a merger between DMH and a
wholly owned subsidiary of Lincoln National Corporation ("Lincoln National")
was completed. DMH, the Manager and Delaware 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. In connection with
the merger, new Investment Management Agreements between Global Funds, Inc.,
on behalf of Global Assets Fund and Global Bond Fund and the Manager, and a
new Sub-Advisory Agreement between the Manager on behalf of Global Assets Fund
and the Sub-Adviser, were executed following shareholder approval. The Manager
has also entered into Investment Management Agreements with Global Funds, Inc.
on behalf of Emerging Markets Fund.
The Manager manages each Fund's investments and for its services, the
Manager is paid an annual fee equal to 0.75% of a Fund's average daily net
assets in the case of Global Bond Fund and Global Assets Fund and 1.25% of the
average daily net assets of Emerging Markets Fund. The directors of Global
Funds, Inc. annually review fees paid to the Manager.
Delaware International has elected voluntarily to waive that portion, if
any, of the annual management fees payable by Emerging Markets Fund and to pay
expenses to the extent necessary to ensure that the Total Operating Expenses
(exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) of the Institutional Class of the Fund does not exceed 1.70%. This
voluntary waiver, originally in place through November 30, 1996 for Emerging
Markets Fund, has been extended through May 31, 1998.
Delaware International has elected voluntarily to waive that portion, if
any, of the annual management fees payable by Global Bond Fund and Global
Assets Fund and to pay expenses to the extent necessary to ensure that the
annual Total Operating Expenses (exclusive of taxes, interest, brokerage
commissions and extraordinary expenses, but inclusive of 12b-1 fees) of each
of the Institutional Classes of these Funds do not exceed 0.95% through
November 30, 1997. This voluntary waiver has been extended through May 31,
1998.
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The investment management fees paid to Delaware International, while
higher than the advisory fees paid by other mutual funds in general, are
comparable to fees paid by other mutual funds with similar objectives and
policies.
With respect to Global Bond Fund, Global Assets Fund and Emerging Markets
Fund, the investment management fees earned for the fiscal year ended November
30, 1997 were 0.74%, 0.74% and 1.25% of average daily net assets and no fees
were paid for Global Bond Fund or Global Assets Fund and 0.23% of average daily
net assets of Emerging Markets Fund was paid as a result of the voluntary
waivers.
Subject to the overall supervision of the Manager, the Sub-Adviser
manages the U.S. securities portion of Global Assets Fund's portfolio and
furnishes the Manager with investment recommendations, asset allocation
advice, research and other investment services with respect to U.S.
securities. For the services provided to the Manager, the Manager pays the
Sub-Adviser a monthly fee equal to 25% of the fee paid to the Manager under
the terms of the Investment Management Agreement.
Clive A. Gillmore has primary responsibility for making day-to-day
investment decisions for Global Assets Fund and Emerging Markets Fund. He has
been the senior portfolio manager for these Funds since their inception. A
graduate of the University of Warwick and having begun his career at Legal and
General Investment Management, Mr. Gillmore joined the Delaware Group in 1990
after eight years of investment experience. His most recent position prior to
joining the Delaware Group was as a Pacific Basin equity analyst and senior
portfolio manager for Hill Samuel Investment Advisers Ltd. Mr. Gillmore
completed the London Business School Investment program.
In making investment decisions for Global Assets Fund and Emerging
Markets Fund, Mr. Gillmore regularly consults with an international equity
team of fourteen members. Mr. Gillmore also regularly consults with David G.
Tilles. Mr. Tilles, who is Chief Investment Officer for Delaware
International, is a graduate of the University of Warwick with a BS in
management sciences. Before joining the Delaware Group in 1990, he was Chief
Investment Officer of Hill Samuel Investment Advisers Ltd. He is a member of
the Institute of Investment Management & Research and the Operational Research
Society. In addition to the above team, Mr. Gillmore consults regularly with
Robert Akester and Joshua A. Brooks when making decisions for Emerging Markets
Fund. Prior to joining Delaware in 1996 as a Senior Portfolio Manager, Mr.
Akester, who began his investment career in 1969, was most recently a Director
of Hill Samuel Investment Advisers Ltd., which he joined in 1985. His prior
experience included working as a Senior Analyst and head of the South-East
Asian Research team at James Capel, and as a Fund Manager at Prudential
Assurance Co., Ltd. Mr. Akester holds a BS in Statistics and Economics from
University College, London and is an associate of the Institute of Actuaries,
with a certificate in Finance and Investment. Mr. Brooks holds a bachelor's
degree from Yale University and has undertaken graduate studies at The London
Business School. He began his investment career with the Delaware Group in
1991. Prior to joining the emerging markets team in London , he was based in
Philadelphia with responsibilities that included equity market analysis and
liaison with Delaware International Advisers Ltd.
George H. Burwell has responsibility for making investment decisions for
the U.S. equity portion of Global Assets Fund and has had such responsibility
for the Fund since its inception. Mr. Burwell holds a BA from the University of
Virginia. Prior to joining the Delaware Group in 1992, Mr. Burwell was a
portfolio manager for Midlantic Bank in Edison, New Jersey, where he managed an
equity mutual fund and three commingled funds. Mr. Burwell is a CFA
charterholder.
In making investment decisions for Global Assets Fund, Mr. Burwell
regularly consults with Wayne A. Stork and Richard G. Unruh, Jr. Mr. Stork is
Chairman of the Board and Director of Delaware, the Manager and Global Funds,
Inc. He is a graduate of Brown University and attended New York University's
Graduate School of Business Administration. Mr. Stork joined the Delaware Group
in 1962 and has served in various executive capacities at
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different times within the Delaware organization. A graduate of Brown
University, Mr. Unruh received his MBA from the University of Pennsylvania's
Wharton School and joined the Delaware Group in 1982 after 19 years of
investment management experience with Kidder, Peabody & Co. Inc. Mr. Unruh was
named an Executive Vice President of Global Funds, Inc. in 1994. He is also a
member of the Board of Directors of Delaware and the Manager and was named an
Executive Vice President of Delaware in 1994.
Paul A. Matlack and Gerald T. Nichols have responsibility for making
investment decisions for the high-yield securities portion of Global Assets
Fund. They have had such responsibility since this Fund's inception. Mr.
Matlack is a CFA charterholder and a graduate of the University of
Pennsylvania with an MBA in Finance from George Washington University. He
began his career at Mellon Bank as a credit specialist, and later served as a
corporate loan officer for Mellon Bank and then Provident National Bank. Mr.
Nichols is a graduate of the University of Kansas, where he received a BS in
Business Administration and an MS in Finance. Prior to joining the Delaware
Group, he was a high yield credit analyst at Waddell & Reed, Inc. and
subsequently the investment officer for a private merchant banking firm. He is
a CFA charterholder.
In making investment decisions for this Fund, Mr. Matlack and Mr. Nichols
regularly consult with Paul E. Suckow. Mr. Suckow is Delaware's Chief Investment
Officer for Fixed-Income. He is a CFA charterholder and a graduate of Bradley
University with an MBA from Western Illinois University. Mr. Suckow was a
fixed-income portfolio manager at the Delaware Group from 1981 to 1985. He
returned to the Delaware Group in 1993 after eight years with Oppenheimer
Management Corporation, where he served as Executive Vice President and Director
of Fixed Income.
Ian G. Sims and Christopher A. Moth have primary responsibility for making
day-to-day investment decisions for Global Bond Fund. Mr. Sims has been the
senior portfolio manager for this Fund since its inception. Mr. Sims is a
graduate of the University of Newcastle-Upon-Tyne. He joined Delaware
International in 1990 as a senior international fixed-income and currency
manager. Mr. Sims began his investment career with the Standard Life Assurance
Co., and subsequently moved to the Royal Bank of Canada Investment Management
International Company, where he was an international fixed-income manager. Prior
to joining Delaware International, he was a senior fixed-income and currency
portfolio manager with Hill Samuel Investment Advisers Ltd. Mr. Moth became
Co-Manager of this Fund in January 1997. Mr. Moth , a graduate of The City
University London, joined Delaware in 1992. He previously worked at the Guardian
Royal Exchange in an actuarial capacity where he was responsible for technical
analysis, quantitative models and projections. Mr. Moth has been awarded the
certificate in Finance & Investment from the Institute of Actuaries in London.
In making investment decisions for Global Bond Fund, Mr. Sims and Mr.
Moth regularly consult with Hywel Morgan. Mr. Morgan was educated at the
University of Wales and was subsequently an Economics Lecturer at Dundee
University. Prior to joining Delaware International, he was Associate Director
of the international fixed-income department and head of the credit review
committee at Hill Samuel Investment Management responsible for over $500
million in multi-currency fixed interest accounts. His prior experience
included working as an economic adviser for Credit Suisse and the Economic
Intelligence Unit. Mr. Morgan started his business career as a Corporate
Economist & Strategist at Ford of Europe and Esso Petroleum.
Portfolio Trading Practices
Each Fund normally will not invest for short-term trading purposes.
However, each Fund may sell securities without regard to the length of time
they have been held. The degree of portfolio activity will affect brokerage
costs of each Fund and may affect taxes payable by such Fund's shareholders to
the extent that net capital gains are
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realized. Given each Fund's investment objective, it is anticipated that the
portfolio turnover rate of each Fund will not exceed 100%.
The Manager and the Sub-Adviser use their best efforts to obtain the best
available price and most favorable execution for portfolio transactions.
Orders may be placed with brokers or dealers who provide brokerage and
research services to the Manager and the Sub-Adviser or their advisory
clients. These services may be used by the Manager and the Sub-Adviser in
servicing any of their respective accounts. Subject to best price and
execution, the Manager and the Sub-Adviser may consider a broker/dealer's
sales of shares of funds in the Delaware Group of funds in placing portfolio
orders and may place orders with broker/dealers that have agreed to defray
certain Fund expenses of such funds, such as custodian fees.
Performance Information
From time to time, each Fund may quote total return performance of its
Classes in advertising and other types of literature. Global Bond Fund may
also quote the yield of its Classes in advertising and sales literature.
The current yield for each Class of Global Bond Fund will be calculated
by dividing the annualized net investment income earned by the Class during a
recent 30-day period by the maximum offering price per share on the last day
of the period. The yield formula provides for semi-annual compounding which
assumes that net investment income is earned and reinvested at a constant rate
and annualized at the end of a six-month period.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value. Each
presentation will include the average annual total return for one-, five- and
ten-year, or life-of fund periods, as applicable. Each Fund may also advertise
aggregate and average total return information concerning a Class over
additional periods of time. In addition, each Fund may present total return
information that does not reflect the deduction of the maximum front-end sales
charge or any applicable CDSC. In this case, such total return information
would be more favorable than total return information that includes deductions
of the maximum front-end sales charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the Classes
will fluctuate over time. Past performance is not considered a guarantee of
future results.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent
following all transactions other than those involving a reinvestment of
dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling your Client Services
Representative.
Financial Information about the Funds
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Global Funds, Inc.'s fiscal year ends
on November 30.
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Distribution and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for Global Bond Fund's and Global Assets Fund's shares under
separate Distribution Agreements with Global Funds, Inc. dated April 3, 1995,
as amended on November 29, 1995. Delaware Distributors L.P. serves as the
national distributor of Emerging Markets Fund's shares under a Distribution
Agreement with Global Funds, Inc. dated May 1, 1996 .
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for each Fund
under an amended and restated agreement. The Transfer Agent also provides
accounting services to the Funds pursuant to the terms of a separate Fund
Accounting Agreement. Certain recordkeeping services and other shareholder
services that otherwise would be performed by the Transfer Agent may be
performed by certain other entities and the Transfer Agent may elect to enter
into an agreement to pay such other entities for those services. In addition,
participant account maintenance fees may be assessed for certain recordkeeping
services provided as part of retirement plan and administration service
packages. These fees are based on the number of participants in the plan and
the various services selected. Fees will be quoted upon request and are
subject to change.
The directors of Global Funds, Inc. annually review fees paid to the
Distributor and the Transfer Agent. The Distributor and the Transfer Agent are
indirect, wholly owned subsidiaries of DMH.
Expenses
Each Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreements and those
borne by the Distributor under the Distribution Agreements. For the fiscal
year ended November 30, 1997, the ratios of operating expenses to average
daily net assets for Global Bond Fund Institutional Class , Global Assets Fund
Institutional Class and Emerging Markets Fund Institutional Class were 0.95%,
0.95% and 1.70%, respectively. The ratios reflect the voluntary waiver and
payment of fees noted above.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a
Maryland corporation on May 30, 1991. Global Funds, Inc. currently offers six
series of shares - International Equity Series, Global Bond Series, Global
Assets Series, Emerging Markets Series, International Small Cap Series and
Global Equity Series. Fund shares have a par value of $.01 and when issued
will be fully paid, non-assessable, fully transferable and redeemable at the
option of the holder. The shares have no preference as to conversion,
exchange, dividends, retirement or other features and have no preemptive
rights. Each Fund will vote separately on any matter which affects only that
Fund. Shares of each Fund have a priority over shares of any other fund of
Global Funds, Inc. in the assets and income of that Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the
election of directors can elect 100% of the directors if they choose to do so.
Under Maryland law, Global Funds, Inc. is not required, and does not intend,
to hold annual meetings of shareholders unless, under certain circumstances,
it is required to do so under the 1940 Act. Shareholders of 10% or more of
Global Funds, Inc.'s outstanding shares may request that a special meeting be
called to consider the removal of a director.
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In addition to Institutional Class shares, Global Bond Fund offers
Global Bond Fund A Class, Global Bond Fund B Class and Global Bond Fund C
Class; Global Assets Fund offers Global Assets Fund A Class, Global Assets
Fund B Class and Global Assets Fund C Class and Emerging Markets Fund offers
Emerging Markets Fund A Class, Emerging Markets Fund B Class and Emerging
Markets Fund C Class. Shares of each Class represent proportionate interests
in the assets of the respective Fund and have the same voting and other rights
and preferences as the other classes of that Fund, except that shares of the
Classes are not subject to, and may not vote on matters affecting, the
Distribution Plans under Rule 12b-1 relating to Class A Shares, Class B Shares
and Class C Shares.
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<PAGE>
OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Funds value their assets daily in terms of U.S. dollars,
they do not intend to convert their holdings of foreign currencies into U.S.
dollars on a daily basis. Each Fund will, however, from time to time, purchase
or sell foreign currencies and/or engage in forward foreign currency
transactions in order to expedite settlement of portfolio transactions and to
minimize currency value fluctuations. Each Fund may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
contracts to purchase or sell foreign currencies at a future date (i.e., a
"forward foreign currency" contract or "forward" contract). A forward contract
involves an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract,
agreed upon by the parties, at a price set at the time of the contract. The
Funds will convert currency on a spot basis from time to time, and investors
should be aware of the costs of currency conversion.
A Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars
or foreign currency, of the amount of foreign currency involved in the
underlying security transaction, the Fund will be able to protect itself
against a possible loss resulting from an adverse change in currency exchange
rates during the period between the date the security is purchased or sold and
the date on which payment is made or received.
When the Manager believes that the currency of a particular country
may suffer a significant decline against the U.S. dollar or against another
currency, a Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount
of foreign currency approximating the value of some or all of the Fund's
securities denominated in such foreign currency.
A Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, a Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
A Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of
foreign securities held by the Fund and against increases in the U.S. dollar
cost of such securities to be acquired. Call options on foreign currency
written by a Fund will be covered, which means that the Fund will own the
underlying foreign currency. With respect to put options on foreign currency
written by a Fund, the Fund will establish a segregated account with its
Custodian Bank consisting of cash, U.S. government securities or other
high-grade liquid debt securities in an amount equal to the amount the Fund
will be required to pay upon exercise of the put.
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As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and a Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate
movements adverse to a Fund's position, the Fund may forfeit the entire amount
of the premium plus related transaction costs. See Special Risk
Considerations.
Depositary Receipts
The Funds may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or
U.S. securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the
issuer of the underlying security and a Depositary, and "unsponsored" ADRs,
EDRs or GDRs are issued without the participation of the issuer of the
deposited security. Holders of unsponsored ADRs, EDRs or GDRs generally bear
all the costs of such facilities and the Depositary of an unsponsored ADR, EDR
or GDR facility frequently is under no obligation to distribute shareholder
communications received from the issuer of the deposited security or to pass
through voting rights to the holders of such receipts in respect of the
deposited securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market value of an
unsponsored ADR, EDR or GDR. ADRs may be listed on a national securities
exchange or may be traded in the over-the-counter market. EDRs and GDRs traded
in the over-the-counter market which do not have an active or substantial
secondary market will be considered illiquid and therefore will be subject to
a Portfolio's limitation with respect to such securities. ADR prices are
denominated in U.S. dollars although the underlying securities are denominated
in a foreign currency. Investments in ADRs, EDRs and GDRs involve risks
similar to those accompanying direct investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of each
Fund's limitation on investments in illiquid assets (10% for Global Bond and
Global Assets Funds, and 15% for Emerging Markets Fund). The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers, and
the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, a
Fund's holdings of illiquid securities exceed a Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
Each Fund may loan up to 25% of its assets to qualified
broker/dealers or institutional investors for their use relating to short
sales or other security transactions.
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The major risk to which a Fund would be exposed on a loan transaction
is the risk that the borrower would go bankrupt at a time when the value of
the security goes up, and the borrower would fail to return the borrowed
security. Therefore, each Fund will only enter into loan arrangements after a
review of all pertinent facts by the Manager, subject to overall supervision
by the Board of Directors, including the creditworthiness of the borrowing
broker, dealer or institution and then only if the consideration to be
received from such loans would justify the risk. In addition, a Fund will
require borrowers to deliver collateral to the Fund before lending securities.
Creditworthiness will be monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Funds make in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of
such other investment companies. Under the 1940 Act's limitations, a Fund may
not (1) own more than 3% of the voting stock of another investment company;
(2) invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply
to the Funds' investments in unregistered investment companies.
Zero-Coupon Securities
Each Fund may also invest in zero-coupon bonds. The market prices of
zero-coupon securities are generally more volatile than the market prices of
securities that pay interest periodically and are likely to respond to changes
in interest rates to a greater degree than do non-zero-coupon securities
having similar maturities and credit quality. Current federal income tax law
requires that a holder of a taxable zero-coupon security report as income each
year the portion of the original issue discount of such security that accrues
that year, even though the holder receives no cash payments of interest during
the year. The Fund has qualified as a regulated investment company under the
Code. Accordingly, during periods when a Fund receives no interest payments on
its zero-coupon securities, it will be required, in order to maintain its
desired tax treatment, to distribute cash approximating the income
attributable to such securities. Such distribution may require the sale of
portfolio securities to meet the distribution requirements and such sales may
be subject to the risk factor discussed above.
Repurchase Agreements
Each Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help a Fund to invest cash on a
temporary basis. A Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, a
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
Each Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. A Fund will not borrow money in excess
of one-third of the value of its net assets. A Fund has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank
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and, to the extent that such borrowing exceeds 5% of the value of the Fund's
net assets, asset coverage of at least 300% is required. In the event that
such asset coverage shall at any time fall below 300%, a Fund shall, within
three days thereafter (not including Sunday or holidays) or such longer period
as the U.S. Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. A Fund will not
pledge more than 10% of its net assets, or issue senior securities as defined
in the 1940 Act, except for notes to banks. Investment securities will not be
purchased while a Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. Each Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. A Fund may
also purchase put options on such securities and indices and enter into
related closing transactions.
A call option enables the purchaser, in return for the premium paid,
to purchase securities from the writer of the option at an agreed price up to
an agreed date. The advantage is that the purchaser may hedge against an
increase in the price of securities it ultimately wishes to buy or take
advantage of a rise in a particular index. A Fund will only purchase call
options to the extent that premiums paid on all outstanding call options do
not exceed 2% of its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. A Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal
to the difference between the closing price of the index and the exercise
price of the option.
Closing transactions essentially let a Fund offset put options or
call options prior to exercise or expiration. If a Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or
deliver a security it might want to hold.
In purchasing put and call options, the premium paid by a Fund plus
any transaction costs will reduce any benefit realized by the Fund upon
exercise of the option.
Each Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. A Fund will only invest in
such options to the extent consistent with its 10% limitation (or, in the case
of Emerging Markets Fund, its 15% limitation) on investment in illiquid
securities. The Funds will comply with U.S. Securities and Exchange Commission
asset segregation and coverage requirements when engaging in these types of
transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts
for a Fund is to protect the Fund against the fluctuations in interest or
exchange rates which otherwise might adversely affect the value of the Fund's
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<PAGE>
portfolio securities or adversely affect the prices of securities which the
Fund intends to purchase at a later date without actually buying or selling
such securities.
Each Fund may enter into contracts for the purchase or sale for
future delivery of securities or foreign currencies. A purchase of a futures
contract means the acquisition of a contractual right to obtain delivery to a
Fund of the securities or foreign currency called for by the contract at a
specified price during a specified future month. When a futures contract is
sold, a Fund incurs a contractual obligation to deliver the securities or
foreign currency underlying the contract at a specified price on a specified
date during a specified future month. To the extent that a Fund invests in
futures contracts and options thereon for other than bona fide hedging
purposes, the Fund will not enter into such transactions if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums paid
for open futures options would exceed 5% of the Fund's total assets, after
taking into account unrealized profits and unrealized losses on such contracts
it has entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5%.
A Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract, rather than actually to
purchase or sell the futures contract, at a specified exercise price at any
time during the period of the option. When a Fund enters into a futures
transaction, it must deliver to the futures commission merchant selected by
the Fund an amount referred to as "initial margin." This amount is maintained
by the futures commission merchant in an account at the Custodian Bank.
Thereafter, a "variation margin" may be paid by a Fund to, or drawn by the
Fund from, such account in accordance with controls set for such accounts,
depending upon changes in the price of the underlying securities subject to
the futures contract.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, a Fund may not achieve the anticipated
benefits of investing in futures contracts and options thereon, or may realize
a loss. To the extent that the Fund purchases an option on a futures contract
and fails to exercise the option prior to the exercise date, it will suffer a
loss of the premium paid. Further, the possible lack of a secondary market
could prevent the Fund from closing out its positions relating to futures.
Interest Rate Swaps
In order to attempt to protect Global Bond Fund's investments from
interest rate fluctuations, the Fund may engage in interest rate swaps. The
Fund intends to use interest rate swaps as a hedge and not as a speculative
investment. Interest rate swaps involve the exchange by the Fund with another
party of their respective rights to receive interest, (e.g., an exchange of
fixed rate payments for floating rate payments). For example, if the Fund
holds an interest-paying security whose interest rate is reset once a year, it
may swap the right to receive interest at this fixed rate for the right to
receive interest at a rate that is reset daily. Such a swap position would
offset changes in the value of the underlying security because of subsequent
changes in interest rates. This would protect the Fund from a decline in the
value of the underlying security due to rising rates, but would also limit its
ability to benefit from falling interest rates.
The Fund may enter into interest rate swaps on either an asset-based
or liability-based basis, depending upon whether it is hedging its assets or
its liabilities, and will usually enter into interest rate swaps on a net
basis (i.e., the two payment streams are netted out, with the Fund receiving
or paying, as the case may be, only the net amount of the two payments).
Inasmuch as these hedging transactions are entered into for non-speculative
purposes and not for the purpose of leveraging the Fund's investments, the
Manager and the Fund believe such
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<PAGE>
obligations do not constitute senior securities and, accordingly, will not
treat them as being subject to its borrowing restrictions. The net amount of
the excess, if any, of the Fund's obligations over its entitlement with
respect to each interest rate swap will be accrued on a daily basis and an
amount of cash or high-quality liquid securities having an aggregate net asset
value at least equal to the accrued excess will be maintained in a segregated
account by the Custodian Bank. If the Fund enters into an interest rate swap
on other than a net basis, the Fund would maintain a segregated account in the
full amount accrued on a daily basis of the Fund's obligations with respect to
the swap.
The use of interest rate swaps by Global Bond Fund involves
investment techniques and risks different from those associated with ordinary
portfolio securities transactions. If the Manager is incorrect in its
forecasts of market values, interest rates and other applicable factors, the
investment performance of the Fund will be less favorable than it would have
been if this investment technique were never used. Interest rate swaps do not
involve the delivery of securities or other underlying assets or principal.
Thus, if the other party to an interest rate swap defaults, the Fund's risk of
loss consists of the net amount of interest payments that the Fund is
contractually entitled to receive.
Diversification
While Global Bond Fund, Global Assets Fund and Emerging Markets Fund
each intend to seek to qualify as a "diversified" investment company under
provisions of Subchapter M of the Code, none of these Funds will be
diversified under the 1940 Act. Thus, while at least 50% of each such Fund's
total assets will be represented by cash, cash items, U.S. government
securities and other securities limited in respect of any one issuer to an
amount not greater than 5% of the Fund's total assets, it will not satisfy the
1940 Act requirement in this respect, which applies that test to 75% of the
Fund's assets. A nondiversified portfolio is believed to be subject to greater
risk because adverse effects on the portfolio's security holdings may affect a
larger portion of the overall assets.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
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<PAGE>
APPENDIX A--RATINGS
Emerging Markets Fund may invest up to 35% of its assets, in high
yield, high risk foreign fixed income securities and Global Assets Fund has
the ability to invest up to 15% of its net assets in high yield, high risk
U.S. fixed-income securities. The table set forth below shows asset
composition, based on rating categories, of such securities held by Global
Assets Fund. Certain securities may not be rated because the rating agencies
were either not asked to provide ratings (e.g., many issuers of privately
placed bonds do not seek ratings) or because the rating agencies declined to
provide a rating for some reason, such as insufficient data. The table below
shows the percentage of Global Assets Fund's high yield, high risk securities
which are not rated. The information contained in the table was prepared based
on a dollar weighted average of the Fund's portfolio composition based on
month end data for the fiscal year ended November 30, 1997. The paragraphs
following the table contain excerpts from Moody's and S&P's rating
descriptions. These credit ratings evaluate only the safety of principal and
interest and do not consider the market value risk associated with high yield
securities.
Average Weighted
Percentage of Portfolio
Rating Moody's of Global Assets Fund
-------------- ---------------------
Ba/BB 3.8%
B/B 11.2%
Not Rated/Other 0.00%
During the fiscal year ended November 30, 1997, Global Assets Fund
increased its exposure to bonds rated B from 4.10% to 11.20%. With respect to
high-yield securities, the Fund tends to emphasize B-rated bonds during
periods of economic expansion. During periods of economic slowdown, the Fund
tends to emphasize bonds rated Ba, which are generally considered to be of
higher quality but lower yielding than bonds rated B. In response to
continuing signs of economic growth during 1997, the Fund's managers increased
the Fund's holdings of B-rated bonds in an effort to increase investment
income while maintaining a prudent risk profile, consistent with their view of
economic and market conditions at that time.
General Rating Information
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to
be the best quality. They carry the smallest degree of investment risk;
Aa--judged to be of high quality by all standards; A--possess favorable
attributes and are considered "upper medium" grade obligations;
Baa--considered as medium grade obligations. Interest payments and principal
security appear adequate for the present but certain protective elements may
be lacking or may be characteristically unreliable over any great length of
time; Ba--judged to have speculative elements; their future cannot be
considered as well assured. Often the protection of interest and principal
payments may be very moderate and thereby not well safeguarded during both
good and bad times over the future. Uncertainty of position characterizes
bonds in this class; B--generally lack characteristics of the desirable
investment. Assurance of interest and principal payments or of maintenance of
other terms of the contract over any long period of time may be small;
Caa--are of poor standing. Such issues may be in default or there may be
present elements of danger with respect to principal or interest;
Ca--represent obligations which are speculative in a high degree. Such issues
are often in default or have other marked shortcomings; C--the lowest rated
class of bonds and issues so rated can be regarded as having extremely poor
prospects of ever attaining any real investment standing.
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Excerpts from S&P's description of its bond ratings: AAA--highest
grade obligations. They possess the ultimate degree of protection as to
principal and interest; AA--also qualify as high grade obligations, and in the
majority of instances differ from AAA issues only in a small degree; A--strong
ability to pay interest and repay principal although more susceptible to
changes in circumstances; BBB--regarded as having an adequate capacity to pay
interest and repay principal; BB, B, CCC, CC--regarded, on balance, as
predominantly speculative with respect to capacity to pay interest and repay
principal in accordance with the terms of the obligation. BB indicates the
lowest degree of speculation and CC the highest degree of speculation. While
such debt will likely have some quality and protective characteristics, these
are outweighed by large uncertainties or major risk exposures to adverse
conditions; C--reserved for income bonds on which no interest is being paid;
D--in default, and payment of interest and/or repayment of principal is in
arrears.
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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, contact your financial adviser or call Delaware
Group at 800-523-4640.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Third Floor
80 Cheapside
London, England EC2V 6EE
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
<PAGE>
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INTERNATIONAL EQUITY FUND
- ---------------------------------------------------------
A CLASS
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B CLASS
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C CLASS
- ---------------------------------------------------------
P R O S P E C T U S
- ---------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
---------
<PAGE>
INTERNATIONAL EQUITY FUND PROSPECTUS
FEBRUARY 4, 1998
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
--------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Representatives of Financial Institutions:
Nationwide 800-659-2265
This Prospectus describes shares of the International Equity Series
(the "Fund" or the "International Equity Fund") of Delaware Group Global &
International Funds, Inc. ("Global Funds, Inc."), a professionally-managed
mutual fund of the series type.
International Equity Fund's investment objective is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve
its objective by investing primarily in securities that provide the potential
for capital appreciation and income. See Investment Objectives and Strategies.
The Fund offers three retail classes of shares: "Class A Shares,"
"Class B Shares" and "Class C Shares" (individually, a "Class" and
collectively, the "Classes"). These alternatives permit an investor to choose
the method of purchasing shares that is most suitable for his or her needs.
This Prospectus relates only to the Classes and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Fund's Statement of Additional Information ("Part
B" of Global Funds, Inc.'s registration statement), dated February 4, 1998, as
it may be amended from time to time, contains additional information about the
Fund and has been filed with the Securities and Exchange Commission (the
"SEC"). Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above numbers. The Fund's financial statements
appear in the Annual Report of Global Funds, Inc. for the fiscal year ended
November 30, 1997, which will accompany any response to requests for Part B.
The SEC also maintains a Web site (http://www.sec.gov) that
<PAGE>
contains Part B, material incorporated by reference into Global Funds, Inc.'s
registration statement, and other information regarding registrants that
electronically file with the SEC.
The Fund also offers International Equity Fund Institutional Class,
which is available for purchase only by certain investors. A prospectus for
International Equity Fund Institutional Class can be obtained by writing to
Delaware Distributors, L.P. at the above address or by calling the above
numbers.
TABLE OF CONTENTS
Cover Page Classes of Shares
Synopsis How to Buy Shares
Summary of Expenses Redemption and Exchange
Financial Highlights Dividends and Distributions
Investment Objective and Strategy Taxes
Suitability Calculation of Offering Price and
Investment Strategy Net Asset Value Per Share
Special Risk Considerations Management of the Fund
The Delaware Difference Other Investment Policies and
Plans and Services Risk Considerations
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SHARES OF THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
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<PAGE>
SYNOPSIS
Investment Objective
The investment objective of International Equity Fund is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve
its objective by investing primarily in equity securities that provide the
potential for capital appreciation and income. The Fund is an international
fund. As such, at least 65% of the Fund's total assets will be invested in
equity securities of issuers organized or having a majority of their assets in
or deriving a majority of their operating income in at least three different
countries outside of the United States. For further details, see Investment
Objectives and Strategies and Other Investment Policies and Risk
Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations and Other Investment Policies and
Risk Considerations.
2. The Fund has the right to engage in options and futures
transactions for hedging purposes, to counterbalance portfolio volatility. In
connection with futures transactions, the Fund will maintain certain
collateral in special accounts established with futures commission merchants
or on their behalf in the care of The Chase Manhattan Bank (the "Custodian
Bank"). While the Fund does not engage in options and futures for speculative
purposes, there are risks which result from the use of these instruments, and
an investor should carefully review the descriptions of these risks in this
Prospectus. Certain options and futures may be considered to be derivative
securities. See Options and Futures Contracts and Options on Futures Contracts
under Other Investment Policies and Risk Considerations.
3. The Fund may invest in the markets of certain emerging countries.
These markets may be subject to a greater degree of economic, political and
social instability than is the case in the United States, Western European and
other developed markets. See Special Risk Considerations.
Investment Manager, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund, subject to the
supervision and direction of Global Funds, Inc.'s Board of Directors. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the Fund
and for all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing, accounting services and transfer agent for the Fund and for all of
the other mutual funds in the Delaware Group. See Summary of Expenses and
Management of the Fund for further information regarding the Manager and the
fees payable under the Fund's Investment Management Agreement.
-3-
<PAGE>
Sales Charges
The price of Class A Shares includes a maximum front-end sales charge
of 4.75% of the offering price. The front-end sales charge is reduced on
certain transactions of at least $100,000 but under $1,000,000. For purchases
of $1,000,000 or more, the front-end sales charge is eliminated (subject to a
contingent deferred sales charge ("Limited CDSC") of 1% if shares are redeemed
within 12 months of purchase and a dealer commission was paid in connection
with such purchase). Class A Shares are subject to annual 12b-1 Plan expenses
for the life of the investment.
The price of Class B Shares is equal to the net asset value per
share. Class B Shares are subject to a CDSC of: (i) 4% if shares are redeemed
within two years of purchase; (ii) 3% if shares are redeemed during the third
or fourth year following purchase; (iii) 2% if shares are redeemed during the
fifth year following purchase; and (iv) 1% if shares are redeemed during the
sixth year following purchase. Class B Shares are subject to annual 12b-1 Plan
expenses for approximately eight years after purchase. See Deferred Sales
Charge Alternative - Class B Shares and Automatic Conversion of Class B Shares
under Classes of Shares.
The price of Class C Shares is equal to the net asset value per
share. Class C Shares are subject to a CDSC of 1% if shares are redeemed
within 12 months of purchase. Class C Shares are subject to annual 12b-1 Plan
expenses for the life of the investment.
See Classes of Shares and Distribution (12b-1) and Service under
Management of the Fund.
Purchase Amounts
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. An investor may exceed these maximum purchase
limitations for Class B Shares and Class C Shares by making cumulative
purchases over a period of time. An investor should keep in mind, however,
that reduced front-end sales charges apply to investments of $100,000 or more
in Class A Shares, and that 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. The minimum and maximum purchase amounts for retirement
plans may vary. See How to Buy Shares.
Redemption and Exchange
Class A Shares of the Fund may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request.
Neither the Fund nor the Distributor assesses a charge for redemptions or
exchanges of Class A Shares, except for certain redemptions of shares
purchased at net asset value, which may be subject to a Limited CDSC if a
dealer's commission was paid in connection with such purchases. See Front-End
Sales Charge Alternative - Class A Shares under Classes of Shares.
-4-
<PAGE>
Class B Shares and Class C Shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Fund
nor the Distributor assesses any charges other than the CDSC for redemptions
or exchanges of Class B Shares or Class C Shares. There are certain
limitations on an investor's ability to exchange shares between the various
classes of shares that are offered. See Redemption and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company and International Equity Fund operates as a diversified fund as defined
under the Investment Company Act of 1940 (the "1940 Act"). Global Funds, Inc.
was organized as a Maryland corporation on May 30, 1991. See Shares under
Management of the Fund.
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A Shares, Class B Shares and Class C Shares of the Fund
follows:
<TABLE>
<CAPTION>
International Equity Fund
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................ 4.75% None None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)........................... None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable)............................ None* 4.00%* 1.00%*
Redemption Fees................................................ None** None** None**
</TABLE>
* Class A purchases of $1,000,000 or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is
paid to the financial adviser through whom such purchase is effected, a
Limited CDSC of 1% will be imposed on certain redemptions within 12 months
of purchase. Additional Class A purchase options involving the imposition
of a CDSC may be permitted as described in the Prospectus from time to
time. Class B Shares are subject to a CDSC of: (i) 4% if shares are
redeemed within two years of purchase; (ii) 3% if shares are redeemed
during the third or fourth year following purchase; (iii) 2% if shares are
redeemed during the fifth year following purchase; (iv) 1% if shares are
redeemed during the sixth year following purchase; and (v) 0% thereafter.
Class C Shares
-5-
<PAGE>
are subject to a CDSC of 1% if the shares are redeemed within 12 months of
purchase. See Contingent Deferred Sales Charge for Certain Redemptions of
Class A Shares Purchased at Net Asset Value under Redemption and Exchange,
and Deferred Sales Charge Alternative Class B Shares , Level Sales Charge
Alternative -Class C Shares and Contingent Deferred Sales Charge - Class B
Shares and Class C Shares under Classes of Shares.
** CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
-6-
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund
Annual Operating Expenses (as a Class A Class B Class C
percentage of average daily net assets) Shares Shares Shares
- --------------------------------------- ------ ------ ------
<S> <C> <C> <C>
Management Fees (after voluntary waiver)....................... 0.74%++ 0.74%++ 0.74%++
12b-1 Expenses (including service fees)........................ 0.30%+ 1.00%+ 1.00%+
Other Operating Expenses ...................................... 0.66%++ 0.66%++ 0.66%++
Total Operating Expenses (after voluntary waivers) 1.70%++ 2.40%++ 2.40%++
</TABLE>
+ Class A Shares, Class B Shares and Class C Shares are subject to separate
12b-1 Plans. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by rules of the
National Association of Securities Dealers, Inc. (the "NASD"). See
Distribution (12b-1) and Service under Management of the Fund.
++ Delaware International has elected voluntarily to waive that portion, if
any, of the annual management fees payable by the Fund and to pay the
Fund's expenses to the extent necessary to ensure that the Total Operating
Expenses (after voluntary waivers and payments) of each Class of the Fund
does not exceed 1.55% (in all cases, exclusive of 12b-1 Plan fees, taxes,
interest, brokerage commissions and extraordinary expenses) through May 31,
1998. Absent the voluntary fee waiver and payments, the Total Operating
Expenses would have been 1.71% for Class A Shares and 2.41% for Class B
Shares and Class C Shares, reflecting Management Fees of 0.75% for the
fiscal year ended November 30, 1997.
For expense information about International Equity Fund Institutional
Class see the separate prospectus relating to that class.
Investors utilizing the Delaware Group Asset Planner asset allocation
service also typically incur an annual maintenance fee of $35 per Strategy.
However, effective November 1, 1996, the annual maintenance fee is waived
until further notice. Investors who utilize the Asset Planner for an
Individual Retirement Plan ("IRA") will pay an annual IRA fee of $15 per
Social Security Number. See Delaware Group Asset Planner in Part B.
-7-
<PAGE>
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, (2) redemption and no redemption at the end of each time
period and (3) for Class B Shares and Class C Shares, payment of a CDSC at the
time of redemption, if applicable. The following example assumes the voluntary
waiver of the management fee and/or other payment of expenses by the Manager
as discussed in this Prospectus.
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares $64(1) $99 $135 $239 $64 $99 $135 $239
Class B Shares $64 $105 $148 $256(2) $24 $75 $128 $256(2)
Class C Shares $34 $75 $128 $274 $24 $75 $128 $274
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC or other CDSC,
which has not been reflected in this calculation, may be imposed on certain
redemptions. See Contingent Deferred Sales Charge for Certain Redemptions
of Class A Shares Purchased at Net Asset Value under Redemption and
Exchange.
(2) At the end of approximately eight years after purchase, Class B Shares of
the Fund will be automatically converted into Class A Shares of the Fund.
The example above assumes conversion of Class B Shares at the end of the
eighth year. However, the conversion may occur as late as three months
after the eighth anniversary of purchase, during which time the higher
12b-1 Plan fees payable by Class B Shares will continue to be assessed. The
ten year expense numbers for Class B Shares reflect the expenses of Class B
Shares for years one through eight and the expenses of Class A Shares for
years nine and ten. See Automatic Conversion of Class B Shares under
Classes of Shares for a description of the automatic conversion feature.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in any of the
Classes will bear directly or indirectly.
-8-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
International Equity Fund of Delaware Group Global & International Funds, Inc.
and have been audited by Ernst & Young LLP, independent auditors. The data
should be read in conjunction with the financial statements, related notes, and
the report of Ernst & Young LLP covering such financial information and
highlights, all of which are incorporated by reference into Part B. Further
information about the Fund's performance is contained in the Fund's Annual
Report to shareholders. A copy of Delaware Group Global & International Fund,
Inc.'s Annual Report (including the report of Ernst & Young LLP) may be obtained
from Delaware Group Global & International Funds, Inc. upon request at no
charge.
- --------------------------------------------------------------------------------
-9-
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund
Class A Shares
Year Ended
11/30/97 11/30/96 11/30/95 11/30/94 11/30/93
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period......................... $14.640 $12.190 $11.920 $11.250 $9.590
Income From Investment Operations
Net Investment Income....................................... 0.220(4) 0.490(4) 0.297 0.140 0.499
Net Gains (Losses) on Securities
(both realized and unrealized)........................... 0.245 2.385 0.628 0.895 1.636
Total From Investment Operations...................... 0.465 2.875 0.925 1.035 2.135
Less Distributions
Dividends from Net Investment Income......................... (0.435) (0.280) (0.185) (0.225) (0.475)
Distributions from Capital Gains............................. (0.020) (0.145) (0.470) (0.140) none
Total Distributions................................... (0.455) (0.425) (0.655) (0.365) (0.475)
Net Asset Value, End of Period............................... $14.650 $14.640 $12.190 $11.920 $11.250
Total Return(2).............................................. 3.27%(3) 24.22%(3) 8.17% 9.23%(3) 23.08%(3)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted).................... $112,425 $89,177 $62,251 $53,736 $31,673
Ratio of Expenses to Average Daily Net Assets................ 1.70% 1.85% 2.07% 1.56% 1.25%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation.............................. 1.71% 1.95% 2.07% 1.82% 2.16%
Ratio of Net Investment Income to Average Daily Net Assets... 1.46% 3.70% 2.57% 1.22% 3.91%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation.............................. 1.45% 3.60% 2.57% 0.96% 3.00%
Portfolio Turnover Rate...................................... 8% 9% 21% 27% 24%
Average Commission Rate Paid(5).............................. $0.0198 $0.0243 N/A N/A N/A
</TABLE>
<TABLE>
<CAPTION>
International Equity Fund
Class A Shares
Period
10/31/91(1)
through
11/30/92 11/30/91
<S> <C> <C>
Net Asset Value, Beginning of Period......................... $9.650 $10.000
Income From Investment Operations
Net Investment Income....................................... 0.162 (0.004)
Net Gains (Losses) on Securities
(both realized and unrealized)........................... (0.172) (0.346)
Total From Investment Operations...................... (0.010) (0.350)
Less Distributions
Dividends from Net Investment Income......................... (0.050) none
Distributions from Capital Gains............................. none none
Total Distributions................................... (0.050) none
Net Asset Value, End of Period............................... $9.590 $9.650
Total Return(2).............................................. (0.15%)(3) (3.50%)(3)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted).................... $4,604 $723
Ratio of Expenses to Average Daily Net Assets................ 1.25% (1)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation.............................. 5.67% (1)
Ratio of Net Investment Income to Average Daily Net Assets... 2.44% (1)
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation.............................. (2.00%) (1)
Portfolio Turnover Rate...................................... 12% (1)
Average Commission Rate Paid(5).............................. N/A N/A
</TABLE>
<PAGE>
(1) Date of initial public offering; total return has been annualized. The
ratios of expenses and net investment income to average daily net assets
and portfolio turnover have been omitted as management believes such ratios
for this relatively short period are not meaningful.
(2) Does not reflect maximum sales charge that is or was in effect, nor the 1%
Limited CDSC that would apply in the event of certain redemptions within 12
months of purchase. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption
and Exchange.
(3) Total return reflects the expense limitations referenced under Summary of
Expenses and Management of the Fund.
(4) The years ended November 30, 1996 and 1997 net investment income per share
information was based on the average share outstanding method.
(5) Computed by dividing the amount of commission paid by the total number of
shares purchased and sold during the period for which there was a
commission charged.
-10-
<PAGE>
<TABLE>
<CAPTION>
International Equity Fund
Class B Shares
Period
9/6/94(1)
Year Ended through
11/30/97 11/30/96 11/30/95 11/30/94
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period........... $14.560 $12.130 $11.900 $12.860
Income From Investment Operations
Net Investment Income.......................... 0.114(5) 0.398(5) 0.278 0.036
Net Gains (Losses) on Securities
(both realized and unrealized)............. 0.246 2.377 0.567 (0.966)
Total From Investment Operations........ 0.360 2.775 0.845 (0.930)
Less Distributions
Dividends from Net Investment Income........... (0.340) (0.200) (0.145) (0.030)
Distributions from Capital Gains............... (0.020) (0.145) (0.470) none
Total Distributions..................... (0.360) (0.345) (0.615) (0.030)
Net Asset Value, End of Period................. $14.560 $14.560 $12.130 $11.900
Total Return(3)................................ 2.54%(4) 23.38%(4) 7.46% (7.24%)(4)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)...... $31,914 $10,878 $3,471 $624
Ratio of Expenses to Average Daily
Net Assets ................................ 2.40% 2.55% 2.77% 2.26%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................ 2.41% 2.65% 2.77% 2.52%
Ratio of Net Investment Income to
Average Daily Net Assets................... 0.76% 3.00% 1.87% 0.52%
Ratio of Net Investment Income to Average
Daily Net Assets Prior to Expense Limitation 0.75% 2.90% 1.87% 0.26%
Portfolio Turnover Rate........................ 8% 9% 21% 27%
Average Commission Rate Paid(6)................ $0.0198 $0.0243 N/A N/A
</TABLE>
<TABLE>
<CAPTION>
International Equity Fund
Class C Shares
Period
11/29/95(2)
Year Ended through
11/30/97 11/30/96 11/30/95
<S> <C> <C> <C>
Net Asset Value, Beginning of Period........... $14.540 $12.190 $12.240
Income From Investment Operations
Net Investment Income.......................... 0.114(5) 0.400(5) none
Net Gains (Losses) on Securities
(both realized and unrealized)............. 0.246 2.375 (0.050)
Total From Investment Operations........ 0.360 2.775 (0.050)
Less Distributions
Dividends from Net Investment Income........... (0.340) (0.280) none
Distributions from Capital Gains............... (0.020) (0.145) none
Total Distributions..................... (0.360) (0.425) none
Net Asset Value, End of Period................. $14.540 $14.540 $12.190
Total Return(3)................................ 2.54%(4) 23.39%(4) (2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)...... $11,811 $1,909 $5
Ratio of Expenses to Average Daily
Net Assets ................................ 2.40% 2.55% (2)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................ 2.41% 2.65% (2)
Ratio of Net Investment Income to
Average Daily Net Assets................... 0.76% 3.00% (2)
Ratio of Net Investment Income to Average
Daily Net Assets Prior to Expense Limitation 0.75% 2.90% (2)
Portfolio Turnover Rate........................ 8% 9% (2)
Average Commission Rate Paid(6)................ $0.0198 $0.0243 N/A
</TABLE>
<PAGE>
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.
(2) Date of initial public offering. The ratios of expenses and net investment
income to average daily net assets, total return and portfolio turnover
have been omitted as management believes that such ratios, total return and
portfolio turnover for this relatively short period are not meaningful.
(3) Does not include contingent deferred sales charge which varies from 1% - 4%
depending upon the holding period for Class B Shares and 1% for Class C
Shares.
(4) Total return reflects the expense limitations referenced under Summary of
Expenses and Management of the Fund.
(5) The years ended November 30, 1996 and 1997 net investment income per share
information was based on the average share outstanding method.
(6) Computed by dividing the amount of commission paid by the total number of
shares purchased and sold during the period for which there was a
commission charged.
-11-
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGY
SUITABILITY
Investors considering an investment in International Equity Fund should
have a long-term investment time frame.
The Fund cannot assure a specific rate of return or that principal will
be protected. The value of the Fund's shares can be expected to move up and
down depending on market conditions. Consequently, appreciation may be
obtained in periods of generally rising markets, while in declining markets
the value of the Fund's shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as
well as to political, economic and social situations different from and
potentially more volatile than those in the United States. In addition, the
accounting, tax and financial reporting standards of foreign countries are
different from and may be less reliable or comprehensive than those relating
to U.S. securities issuers. See Special Risk Considerations for a complete
discussion of the risk factors affecting any international investment. For
these reasons, the Fund is not suitable for short-term investors. However,
through the cautious selection and supervision of its portfolio, the Manager
will strive to achieve the Fund's objective.
The Fund may be suitable for investors with a long-term investment
horizon (at least three years) who are looking for long-term growth potential
from a portfolio of international securities.
* * *
Ownership of shares of the Fund can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities in which the Fund invests.
An investor should not consider a purchase of shares of the Fund as
equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
The investment objective of International Equity Fund is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve
this objective by investing primarily in securities that provide the potential
for capital appreciation and income. The Fund is an international fund. Under
normal circumstances, at least 65% of the Fund's total assets will be invested
in the securities of issuers organized or having a majority of their assets in
or deriving a majority of their operating income in at least three different
countries outside of the United States. The Fund will attempt to achieve its
investment objective by investing in a broad range of equity securities
including common stocks, preferred stocks, convertible securities and
warrants. The Fund may also invest in sponsored or unsponsored American
Depositary Receipts, European Depositary Receipts or
-12-
<PAGE>
Global Depositary Receipts ("Depositary Receipts").
The Manager will employ a dividend discount analysis across country
boundaries and will also use a purchasing power parity approach to identifying
currencies and markets that are overvalued or undervalued relative to the U.S.
dollar. With a dividend discount analysis, the Manager looks at future
anticipated dividends and discounts the value of those dividends back to what
they would be worth if they were being paid today. The Manager uses this
technique to attempt to compare the value of different investments. With a
purchasing power parity approach, the Manager attempts to identify the amount
of goods and services that a dollar will buy in the United States and compare
that to the amount of a foreign currency required to buy the same amount of
goods and services in another country. Eventually, currencies should trade at
levels that should make it possible for the dollar to buy the same amount of
goods and services overseas as in the United States. When the dollar buys
less, the foreign currency may be considered to be overvalued. When the dollar
buys more, the currency may be considered to be undervalued.
While the Fund may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund may invest will include, but
not be limited to, Canada, Germany, the United Kingdom, France, the
Netherlands, Belgium, Spain, Switzerland, Japan, Australia, Hong Kong and
Singapore/Malaysia. In certain countries, investments may only be made by
purchasing shares of closed-end investment companies that in turn are
authorized to invest in the securities of such countries. See Investment
Company Securities under Other Investment Policies and Risk Considerations.
For temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities and which
are backed by the full faith and credit of the U.S. government, or issued by
foreign or U.S. companies. For example, the Fund may invest in U.S.
fixed-income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. Any corporate debt obligations will be rated AA or
better by Standard & Poor's Ratings Group ("S&P"), or Aa or better by Moody's
Investors Service, Inc. ("Moody's"), or if unrated, will be determined to be
of comparable quality by the Manager. The Fund may also invest in the
securities listed above pending investment of proceeds from new sales of Fund
shares and to maintain sufficient cash to meet redemption requests.
The Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940
Act, the Fund will operate as a diversified fund. The Fund will not
concentrate its investments in any particular industry, which means that the
Fund will not invest 25% or more of its total assets in any one industry.
-13-
<PAGE>
The Fund's investment objective, Global Funds, Inc.'s designation as an
open-end investment company, the Fund's designation as a diversified fund and
the Fund's policies concerning portfolio lending, borrowing and concentration
are "fundamental" may not be changed unless authorized by the vote of a
majority of the Fund's outstanding voting securities. A vote of a "majority of
the outstanding voting securities" is the vote by the holders of the lesser of
a) 67% or more of the Fund's voting securities present in person or
represented by proxy if the holders of more than 50% of the outstanding voting
securities of the Fund are present or represented by proxy; or b) more than
50% of the outstanding voting securities. Part B lists other more specific
investment restrictions of the Fund which may not be changed without a
majority shareholder vote.
The investment policies of the Fund not identified above as
"fundamental" may be changed by the Board of Directors of Global Funds, Inc.
without a shareholder vote. See Special Risk Considerations and Other Investment
Policies and Risk Considerations.
A brief discussion of those factors that materially affected the
Fund's performance during its most recently completed fiscal year appears in
Global Funds, Inc.'s Annual Report.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the
Fund, nor can there be any assurance that the Fund's investment objective will
be attained.
Foreign Securities Risks. The Fund has the right to purchase securities
in any developed, underdeveloped, or emerging country. Investors should
consider carefully the substantial risks involved in investing in securities
issued by companies and governments of foreign nations. These risks are in
addition to the usual risks inherent in domestic investments. There is the
possibility of expropriation, nationalization or confiscatory taxation,
taxation of income earned in foreign nations or other taxes imposed with
respect to investments in foreign nations, foreign exchange control (which may
include suspension of the ability to transfer currency from a given country),
default in foreign government securities, political or social instability, or
diplomatic developments which could affect investments in securities of
issuers in those nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about
companies in the United States. Foreign companies are not subject to uniform
accounting, auditing and financial reporting standards, and auditing practices
and requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United
States' generally accepted accounting principles. Also, for an issuer that
keeps accounting records in local currency, inflation accounting rules may
require for both tax and accounting purposes, that certain assets and
liabilities be restated on the issuer's balance sheet in order to express
items in terms of currency or constant
-14-
<PAGE>
purchasing power. Inflation accounting may indirectly generate losses or
profits. Consequently, financial data may be materially affected by
restatements for inflation and may not accurately reflect the real condition
of those issuers and securities markets.
Further, the Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on
securities transactions in foreign countries, which are sometimes fixed rather
than subject to negotiation as in the United States, are likely to be higher.
Further, the settlement period of securities transactions in foreign markets
may be longer than in domestic markets, and may be subject to administrative
uncertainties. In many foreign countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers
and listed companies than in the United States, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which the Fund may invest may also be smaller, less liquid
and subject to greater price volatility than those in the United States.
Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse
and mature, and securities markets that trade a small number of securities,
which can result in a low or nonexistent volume of trading. Prices in these
securities markets tend to be volatile and, in the past, securities in these
countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Until recently, there
has been an absence of a capital market structure or market-oriented economy
in certain emerging countries. Further, investments and opportunities for
investments by foreign investors are subject to a variety of national policies
and restrictions in many emerging countries. These restrictions may take the
form of prior governmental approval, limits on the amount or type of
securities held by foreigners, limits on the types of companies in which
foreigners may invest and prohibitions on foreign investments in issuers or
industries deemed sensitive to national interests. Additional restrictions may
be imposed at any time by these or other countries in which the Fund invests.
Also, the repatriation of both investment income and capital from several
foreign countries is restricted and controlled under certain regulations,
including, in some cases, the need for certain governmental consents. Although
these restrictions may in the future make it undesirable to invest in emerging
countries, the Manager does not believe that any current repatriation
restrictions would affect its decision to invest in such countries. Countries
such as those in which the Fund may invest have historically experienced and
may continue to experience, substantial, and in some periods extremely high
rates of inflation for many years, high interest rates, exchange rate
fluctuations or currency depreciation, large amounts of external debt, balance
of payments and trade difficulties and extreme poverty and unemployment. Other
factors which may influence the ability or willingness to service debt
include, but are not limited to, a country's cash flow situation, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank
and other international agencies and the political constraints to which a
government debtor may be subject.
-15-
<PAGE>
Foreign Government Securities Risks. With respect to investment in debt
issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits
and investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or
whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other
than dollars, its ability to make debt payments denominated in dollars could
be adversely affected. If a foreign government or government-related issuer
cannot generate sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from foreign
governments, commercial banks and multilateral organizations, and inflows of
foreign investment. The commitment on the part of these foreign governments,
multilateral organizations and others to make such disbursements may be
conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third
parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising
international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to
foreign exchange. Currency devaluations may affect the ability of a government
issuer to obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, the Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must,
in some cases, be pursued in the courts of the defaulting party itself, and
the ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default
under their commercial bank loan agreements.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible
since the future value of such securities in foreign currencies will change as
a consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for the
Fund to purchase additional foreign currency on the spot market (and bear the
expense of such purchase) if the market value of the security is less than the
-16-
<PAGE>
amount of foreign currency the Fund is obligated to deliver (and if a decision
is made to sell the security and make delivery of the foreign currency).
Conversely, it may be necessary to sell on the spot market some of the foreign
currency received upon the sale of the portfolio security if its market value
exceeds the amount of foreign currency the Fund is obligated to deliver.
* * *
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities,
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Fund's investment policies, restrictions and risk factors.
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<PAGE>
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with
superior information and quality service on your investments in the Delaware
Group of funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
Fund Information; Literature; Price; Yield and Performance Figures
Shareholder Service Center
800-523-1918
Information on Existing Regular Investment Accounts and Retirement
Plan Accounts; Wire Investments; Wire Liquidations; Telephone
Liquidations and Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
You can call the Investor Information Center at any time for current
performance information.
Shareholder Services
During business hours, you can call the Delaware Group's Shareholder
Service Center. Our representatives can answer any questions about your
account, the Fund, various service features and other funds in the Delaware
Group.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations. Delaphone also provides
current performance information on the Fund, as well as other funds in the
Delaware Group. Delaphone is available seven days a week, 24 hours a day.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent
following all transactions other than those involving a reinvestment of
dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling the Shareholder Service Center.
-18-
<PAGE>
Duplicate Confirmations
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or her.
This makes it easier for your adviser to help you manage your investments.
Tax Information
Each year, Global Funds, Inc. will mail to you information on the tax
status of your dividends and distributions.
Dividend Payments
Dividends, capital gains and other distributions, if any, are
automatically reinvested in your account, unless you elect to receive them in
cash. You may also elect to have the dividends earned in one fund
automatically invested in another Delaware Group fund with a different
investment objective, subject to certain exceptions and limitations.
For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call the
Shareholder Service Center.
MoneyLine(SM) Services
Delaware Group offers the following services for fast and convenient
transfer of funds between your personal bank account and your Delaware Group
fund account:
1. MoneyLine(SM) Direct Deposit Service
If you elect to have your dividends and distributions paid in cash
and such dividends and distributions are in an amount of $25 or more, you may
choose the MoneyLine(SM) Direct Deposit Service and have such payments
transferred from your Fund account to your predesignated bank account. See
Dividends and Distributions. In addition, you may elect to have your
Systematic Withdrawal Plan payments transferred from your Fund account to your
predesignated bank account through this service. See Systematic Withdrawal
Plans under Redemption and Exchange. This service is not available for certain
retirement plans.
2. MoneyLine(SM) On Demand
You or your investment dealer may request purchases and redemptions
of Fund shares by phone using MoneyLine(SM) On Demand. When you authorize the
Fund to accept such requests from you or your investment dealer, funds will be
withdrawn from (for share purchases) or deposited to (for share redemptions)
your predesignated bank account. Your request will be processed the same day
if you call prior to 4 p.m., Eastern time. There is a $25 minimum and $50,000
maximum limit for MoneyLine(SM) On Demand transactions. This service is not
available for retirement plans, except for purchases of shares by IRAs.
For each MoneyLine(SM) Service, it may take up to four business days
for the transactions to be completed. You can initiate either service by
completing an Account Services form. If your name and address are not
identical to the name and address on your Fund account, you must have your
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<PAGE>
signature guaranteed. The Fund does not charge a fee for MoneyLine(SM)
services; however, your bank may charge a fee. Please call the Shareholder
Service Center for additional information about these services.
Retirement Planning
An investment in the Fund may be a suitable investment option for
tax-deferred retirement plans. Delaware Group offers a full spectrum of
qualified and non-qualified retirement plans, including the popular 401(k)
deferred compensation plan, IRA, and the new Roth IRA. Just call the Delaware
Group at 1-800-523-1918 for more information.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of the Fund with the dollar amount of new
purchases of Class A Shares of the Fund to qualify for a reduced front-end
sales charge on such purchases of Class A Shares. Under the Combined Purchases
Privilege, you may also include certain shares that you own in other funds in
the Delaware Group. See Classes of Shares.
Letter of Intention
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain
of your purchases of Delaware Group fund shares over a 13-month period. See
Classes of Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds
from a redemption of Class A Shares, within one year of the date of the
redemption, without paying a front-end sales charge.
See Part B.
Exchange Privilege
The Exchange Privilege permits you to exchange all or part of your
shares into shares of other mutual funds in the Delaware Group, subject to
certain exceptions and limitations. For additional information on exchanges,
see Investing by Exchange under How to Buy Shares and Redemption and Exchange.
Wealth Builder Option
You may elect to invest in the Fund through regular liquidations of
shares in your accounts in other funds in the Delaware Group. Investments
under this feature are exchanges and are therefore subject to the same
conditions and limitations as other exchanges of Fund shares. See Additional
Methods of Adding to Your Investment - Wealth Builder Option and Investing by
Exchange under How to Buy Shares and Redemption and Exchange.
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<PAGE>
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Fund's investments and performance. Global Funds, Inc.'s fiscal year ends on
November 30.
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<PAGE>
CLASSES OF SHARES
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
Class B Shares ("deferred sales charge alternative") or Class C Shares ("level
sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Class A Shares are subject to annual 12b-1 Plan expenses of up to a
maximum of 0.30% of average daily net assets of such shares. Certain purchases
of Class A Shares qualify for reduced front-end sales charges. See Front-End
Sales Charge Alternative - Class A Shares, below. See also Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange and Distribution (12b-1) and Service under
Management of the Fund.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within six years of purchase. Class B Shares are
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 such shares for approximately eight years after purchase.
Class B Shares permit all of the investor's dollars to work from the time the
investment is made. The higher 12b-1 Plan expenses paid by Class B Shares will
cause such shares to have a higher expense ratio and to pay lower dividends
than Class A Shares. At the end of approximately eight years after purchase,
Class B Shares automatically will be converted into Class A Shares and,
thereafter, for the remainder of the life of the investment, the annual 12b-1
Plan fee of up to 0.30% for the Class A Shares will apply. See Automatic
Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end sales
charge when they are purchased, but are subject to a contingent deferred sales
charge if they are redeemed within 12 months of purchase. Class C Shares are
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 such shares for the life of the investment. The higher
12b-1 Plan expenses paid by Class C Shares will cause such shares to have a
higher expense ratio and to pay lower dividends than Class A Shares. Unlike
Class B Shares, Class C Shares do not convert to another class.
The alternative purchase arrangements described above permit investors
to choose the method of purchasing shares that is most suitable given the
amount of their purchase, the length of time they expect to hold their shares
and other relevant circumstances. Investors should determine whether,
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<PAGE>
given their particular circumstances, it is more advantageous to purchase
Class A Shares and incur a front-end sales charge, purchase Class B Shares and
have the entire initial purchase amount invested in the Fund with their
investment being subject to a CDSC if they redeem shares within six years of
purchase, or purchase Class C Shares and have the entire initial purchase
amount invested in the Fund with their investment being subject to a CDSC if
they redeem shares within 12 months of purchase. In addition, investors should
consider the level of annual 12b-1 Plan expenses applicable to each Class. The
higher 12b-1 Plan expenses on Class B Shares and Class C Shares will be offset
to the extent a return is realized on the additional money initially invested
upon the purchase of such shares. However, there can be no assurance as to the
return, if any, that will be realized on such additional money. In addition,
the effect of any return earned on such additional money will diminish over
time. In comparing Class B Shares to Class C Shares, investors should also
consider the duration of the annual 12b-1 Plan expenses to which each of the
Classes is subject and the desirability of an automatic conversion feature,
which is available only for Class B Shares.
For the distribution and related services provided to, and the expenses
borne on behalf of, the Fund, the Distributor and others will be paid, in the
case of Class A Shares, from the proceeds of the front-end sales charge and
12b-1 Plan fees and, in the case of Class B Shares and Class C Shares, from
the proceeds of the 12b-1 Plan fees and, if applicable, the CDSC incurred upon
redemption. Financial advisers may receive different compensation for selling
Class A Shares, Class B Shares and Class C Shares. Investors should understand
that the purpose and function of the respective 12b-1 Plans and the CDSCs
applicable to Class B Shares and Class C Shares are the same as those of the
12b-1 Plan and the front-end sales charge applicable to Class A Shares in that
such fees and charges are used to finance the distribution of the respective
Classes. See Distribution (12b-1) and Service under Management of the Fund.
Dividends, if any, paid on Class A Shares, Class B Shares and Class C
Shares will be calculated in the same manner, at the same time, on the same
day and will be in the same amount, except that the additional amount of 12b-1
Plan expenses relating to Class B Shares and Class C Shares will be borne
exclusively by such shares. See Calculation of Offering Price and Net Asset
Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. Global Funds, Inc. and the Distributor intend to operate in compliance
with these rules.
Front-End Sales Charge Alternative - Class A Shares
Class A Shares may be purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.
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<PAGE>
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following table.
<TABLE>
<CAPTION>
International Equity Fund A Class
- -------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Commission***
as % of
Amount of Purchase Offering Amount Offering
Price Invested** Price
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 4.75% 4.98% 4.00%
$100,000 but under $250,000 3.75 3.89 3.00
$250,000 but under $500,000 2.50 2.59 2.00
$500,000 but under $1,000,000* 2.00 2.05 1.60
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1% Limited
CDSC may apply upon redemption of such shares.
** Based on the net asset value per share of the Class A Shares as of the end
of Global Funds, Inc.'s most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous 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 charge shown above. In addition, certain dealers who
enter into an agreement to provide extra training and information on
Delaware Group products and services and who increase sales of Delaware
Group funds may receive an additional commission of up to 0.15% of the
offering price. Dealers who receive 90% or more of the sales charge may
be deemed to be underwriters under the Securities Act of 1933 (the "1933
Act").
- -------------------------------------------------------------------------------
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<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers
through whom such purchases are made in accordance with the following
schedule:
Dealer's Commission
(as a 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
For accounts with assets over $1 million, the dealer commission
resets annually to the highest incremental commission rate on the anniversary
of the first purchase. In determining a financial adviser's eligibility for
the dealer's commission, purchases of Class A Shares of other Delaware Group
funds as to which a Limited CDSC applies may be aggregated with those of Class
A Shares of the 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.
Redemptions of Class A Shares purchased at net asset value may result
in the imposition of a Limited CDSC if the dealer's commission described above
was paid in connection with the purchase of those shares. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at
Net Asset Value under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of the Fund and shares of other funds in
the Delaware Group, except as noted below, you can reduce the front-end sales
charges on any additional purchases of Class A Shares. Shares of Delaware
Group Premium Fund, Inc. beneficially owned in connection with ownership of
variable insurance products may be combined with other Delaware Group fund
holdings. In addition, assets held by investment advisory clients of the
Manager or its affiliates in any stable value account may be combined with
other Delaware Group fund holdings. Shares of other funds that do not carry a
front-end sales charge or CDSC may not be included unless they were acquired
through an exchange from a Delaware Group fund that does carry a front-end
sales charge or CDSC.
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<PAGE>
This privilege permits you to combine your purchases and holdings
with those of your spouse, your children under 21 and any trust, fiduciary or
retirement account for the benefit of such family members.
It also permits you to use these combinations under a Letter of
Intention. A Letter of Intention allows you to make purchases over a 13-month
period and qualify the entire purchase for a reduction in front-end sales
charges on Class A Shares.
Combined purchases of $1,000,000 or more, including certain purchases
made at net asset value pursuant to a Right of Accumulation or under a Letter
of Intention, may result in the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative - Class A Shares, above.
Allied Plans
Class A Shares are available for purchase by participants in certain
401(k) Defined Contribution Plans ("Allied Plans") which are made available
under a joint venture agreement between the Distributor and another
institution through which mutual funds are marketed and which allow
investments in Class A Shares of designated Delaware Group funds ("eligible
Delaware Group fund shares"), as well as shares of designated classes of
non-Delaware Group funds ("eligible non-Delaware Group fund shares"). Class B
Shares and Class C Shares are not eligible for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Group and eligible non-Delaware Group fund shares
held by the Allied Plan may be combined with the dollar amount of new
purchases by that Allied Plan to obtain a reduced front-end sales charge on
additional purchases of eligible Delaware Group fund shares.
Participants in Allied Plans may exchange all or part of their
eligible Delaware Group fund shares for other eligible Delaware Group fund
shares or for eligible non-Delaware Group fund shares at net asset value
without payment of a front-end sales charge. However, exchanges of eligible
fund shares, both Delaware Group and non-Delaware Group, which were not
subject to a front-end sales charge, will be subject to the applicable sales
charge if exchanged for eligible Delaware Group fund shares to which a sales
charge applies. No sales charge will apply if the eligible fund shares were
previously acquired through the exchange of eligible shares on which a sales
charge was already paid or through the reinvestment of dividends. See
Investing by Exchange.
A dealer's commission may be payable on purchases of eligible
Delaware Group fund shares under an Allied Plan. In determining a financial
adviser's eligibility for a dealer's commission on net asset value purchases
of eligible Delaware Group fund shares in connection with Allied Plans, all
participant holdings in the Allied Plan will be aggregated.
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<PAGE>
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described under Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Group and non-Delaware Group fund shares. When
eligible Delaware Group fund shares are exchanged into eligible non-Delaware
Group fund shares, the Limited CDSC will be imposed at the time of the
exchange, unless the joint venture agreement specifies that the amount of the
Limited CDSC will be paid by the financial adviser or selling dealer. See
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value under Redemption and Exchange.
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<PAGE>
Buying Class A Shares at Net Asset Value
Class A Shares of the Fund may be purchased at net asset value under
the Delaware Group Dividend Reinvestment Plan and, under certain
circumstances, the Exchange Privilege or the 12-Month Reinvestment Privilege.
See The Delaware Difference and Redemption and Exchange for additional
information.
Purchases of Class A Shares may be made at net asset value by current
and former officers, directors and employees (and members of their families)
of the Manager, any affiliate, any of the funds in the Delaware Group, certain
of their agents and registered representatives and employees of authorized
investment dealers and by employee benefit plans for such entities. Individual
purchases, including those in retirement accounts, must be for accounts in the
name of the individual or a qualifying family member.
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. Officers, directors and key employees of institutional
clients of the Manager or any of its affiliates may purchase Class A Shares at
net asset value. Moreover, purchases may be effected at net asset value for
the benefit of the clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker, dealer or
investment adviser has entered into an agreement with the Distributor
providing specifically for the purchase of Class A Shares in connection with
special investment products, such as wrap accounts or similar fee based
programs.
Purchases of Class A Shares at net asset value may also be made by
the following: institutions investing for the account of their trust customers
if 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 any stable value
account available to investment advisory clients of the Manager or its
affiliates, or (ii) is sponsored by an employer that has at any point after
May 1, 1997 had 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. See Group Investment Plans for
information regarding the applicability of the Limited CDSC. Investors may be
charged a fee when effecting transactions in Class A Shares through a broker or
agent that offers these special investment products.
Purchases of Class A Shares 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.
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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 Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE
401(k), Profit Sharing, Money Purchase Pension, 401(k) Defined Contribution
Plans and 403(b)(7) and 457 Deferred Compensation Plans) may benefit from the
reduced front-end sales charges available on Class A Shares 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 will be aggregated
to determine the applicable front-end sales charge reduction on each purchase,
both initial and subsequent, if, at the time of each such purchase, the
company notifies the Fund in which it is investing that it qualifies for the
reduction. Employees participating in such Group Investment Plans may also
combine the investments held in their plan account to determine the front-end
sales charge applicable to purchases in non-retirement Delaware Group
investment accounts if, at the time of each such purchase, they notify the
Fund in which they are investing that they are eligible to combine purchase
amounts held in their plan account.
The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid if such redemption is made pursuant to a withdrawal
of the entire plan from Delaware Group funds. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange.
For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
anticipates compensating dealers or brokers for selling Class B Shares at the
time of purchase from its own assets in an amount equal to no more than 4% of
the dollar amount
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purchased. In addition, 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 pay additional compensation to dealers or
brokers for selling Class B Shares at the time of purchase. As discussed
below, however, Class B Shares are subject to annual 12b-1 Plan expenses and,
if redeemed within six years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class B Shares. These
payments support the compensation paid to dealers or brokers for selling Class
B Shares. Payments to the Distributor and others under the Class B 12b-1 Plan
may be in an amount equal to no more than 1% annually. The combination of the
CDSC and the proceeds of the 12b-1 Plan fees makes it possible for the Fund to
sell Class B Shares without deducting a front-end sales charge at the time of
purchase.
Holders of Class B Shares who exercise the exchange privilege
described below will continue to be subject to the CDSC schedule for Class B
Shares described in this Prospectus, even after the exchange. Such CDSC
schedule may be higher than the CDSC schedule for Class B Shares acquired as a
result of the exchange. See Redemption and Exchange.
Automatic Conversion of Class B Shares
Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic
conversion into Class A Shares. Conversions of Class B Shares into Class A
Shares will occur only four times in any calendar year, on the last business
day of the second full week of March, June, September and December (each, a
"Conversion Date"). If the eighth anniversary after a purchase of Class B
Shares falls on a Conversion Date, an investor's Class B Shares will be
converted on that date. If the eighth anniversary occurs between Conversion
Dates, an investor's Class B Shares will be converted on the next Conversion
Date after such anniversary. Consequently, if a shareholder's eighth
anniversary falls on the day after a Conversion Date, that shareholder will
have to hold Class B Shares for as long as three additional months after the
eighth anniversary of purchase before the shares will automatically convert
into Class A Shares.
Class B Shares of a fund acquired through a reinvestment of dividends
will convert to the corresponding Class A Shares of that fund (or, in the case
of Delaware Group Cash Reserve, Inc., Delaware Cash Reserve Consultant Class)
pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without a
front-end sales charge and, as a result, the full amount of the investor's
purchase payment will be invested in Fund shares. The Distributor currently
anticipates compensating dealers or brokers for selling Class C Shares at the
time
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of purchase from its own assets in an amount equal to no more than 1% of the
dollar amount purchased. As discussed below, Class C Shares are subject to
annual 12b-1 Plan expenses and, if redeemed within 12 months of purchase, a
CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class
C Shares. Payments to the Distributor and others under the Class C 12b-1 Plan
may be in an amount equal to no more than 1% annually.
Holders of Class C Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class C Shares as
described in this Prospectus. See Redemption and Exchange.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares
Class B Shares redeemed within six years of purchase may be subject
to a CDSC at the rates set forth below and Class C Shares redeemed within 12
months of purchase may be subject to a CDSC of 1%. CDSCs are charged as a
percentage of the dollar amount subject to the CDSC. The charge will be
assessed on an amount equal to the lesser of the net asset value at the time
of purchase of the shares being redeemed or the net asset value of those
shares at 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 reinvestments of dividends or capital
gains distributions. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of Class B Shares or
Class C Shares of the Fund, even if those shares are later exchanged for
shares of another Delaware Group fund. In the event of an exchange of the
shares, the "net asset value of such shares at the time of redemption" will be
the net asset value of the shares that were acquired in the exchange.
The following table sets forth the rates of the CDSC for Class B
Shares of the 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
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During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares. See Automatic Conversion of Class B Shares, above. Investors are
reminded that Class A Shares into which Class B Shares will convert are
subject to ongoing annual 12b-1 Plan expenses of up to a maximum of 0.30% of
average daily net assets of such shares.
In determining whether a CDSC applies to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are
redeemed first, followed by shares acquired through the reinvestment of
dividends or distributions, and finally by shares held longest during the
six-year period. With respect to Class C Shares, it will be assumed that
shares held for more than 12 months are redeemed first followed by shares
acquired through the reinvestment of dividends or distributions, and finally
by shares held for 12 months or less.
All investments made during a calendar month, regardless of what day
of the month the investment occurred, will age one month on the last day of
that month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and Class
C Shares. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Redemption and Exchange.
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 the 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.
Subject to pending amendments to the NASD's Conduct Rules, in
connection with the promotion of Delaware Group fund shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from time to time,
pay or allow additional promotional incentives to dealers, which shall include
non-cash concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as part of
preapproved sales contests. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the NASD's Conduct Rules will be amended such that the ability
of the Distributor to pay non-cash compensation as described above will be
restricted in some fashion. The Distributor intends to comply with the NASD's
Conduct Rules as they may be amended.
International Equity Fund Institutional Class
In addition to offering Class A Shares, Class B Shares and Class C
Shares, the Fund also offers International Equity Fund Institutional Class,
which is described in a separate prospectus and is
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available for purchase only by certain investors. International Equity Fund
Institutional Class Shares generally are distributed directly by the
Distributor and do not have a front-end sales charge, a CDSC or a Limited CDSC
and are not subject to 12b-1 Plan distribution expenses. To obtain the
prospectus that describes International Equity Fund Institutional Class,
contact the Distributor by writing to the address or by calling the telephone
number listed on the back cover of this Prospectus.
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HOW TO BUY SHARES
Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. For purchases under the Uniform Gifts to
Minors Act or Uniform Transfers to Minors Act or through an Automatic
Investing Plan, there is a minimum initial purchase of $250 and a minimum
subsequent purchase of $25. Minimum purchase requirements do not apply to
retirement plans other than IRAs, for which there is a minimum initial
purchase of $250, and a minimum subsequent purchase of $25, regardless of
which Class is selected.
There is a maximum purchase limitation of $250,000 on each purchase
of Class B Shares. For Class C Shares, each purchase must be in an amount that
is less than $1,000,000. An investor may exceed these maximum purchase
limitations by making cumulative purchases over a period of time. In doing so,
an investor should keep in mind that reduced front-end sales charges are
available on investments of $100,000 or more in Class A Shares, and that Class
A Shares (i) are subject to lower annual 12b-1 Plan expenses than Class B
Shares and Class C Shares and (ii) generally are not subject to a CDSC. For
retirement plans, the maximum purchase limitations apply only to the initial
purchase of Class B Shares or Class C Shares by the plan.
Investing through Your Investment Dealer
You can make a purchase of shares of the Fund through most investment
dealers who, as part of the service they provide, must transmit orders
promptly. They may charge for this service. If you want a dealer but do not
have one, the Delaware Group can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be
completed, signed and sent with a check, payable to International Equity Fund
A Class, International Equity Fund B Class, or International Equity Fund C
Class, to Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to the specific Fund and Class selected. Your check
should be identified with your name(s) and account number. An investment slip
(similar to a deposit slip) is provided at the bottom of transaction
confirmations and dividend statements that you will receive from Global Funds,
Inc. Use of this investment slip can help expedite processing of your check
when making additional purchases. Your investment may be delayed if you send
additional purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Class in which you are
investing).
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<PAGE>
1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement account, an appropriate retirement
plan application, for the specific Fund and Class selected, to Delaware Group
at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a retirement plan account, call
the Shareholder Service Center for special wiring instructions.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware
Group, you may write and authorize an exchange of part or all of your
investment into shares of the Fund. If you wish to open an account by
exchange, call the Shareholder Service Center for more information. All
exchanges are subject to the eligibility and minimum purchase requirements set
forth in each fund's prospectus. See Redemption and Exchange for more complete
information concerning your exchange privileges.
Holders of Class A Shares of the Fund may exchange all or part of
their shares for certain of the shares of other funds in the Delaware Group,
including other Class A Shares, but may not exchange their Class A Shares for
Class B Shares or Class C Shares of the Fund or of any other fund in the
Delaware Group. Holders of Class B Shares of the Fund are permitted to
exchange all or part of their Class B Shares only into Class B Shares of other
Delaware Group funds. Similarly, holders of Class C Shares of the Fund are
permitted to exchange all or part of their Class C Shares only into Class C
Shares of other Delaware Group funds. Class B Shares of the Fund and Class C
Shares of the Fund acquired by exchange will continue to carry the CDSC and,
in the case of Class B Shares, the automatic conversion schedule of the fund
from which the exchange is made. The holding period of Class B Shares of the
Fund acquired by exchange will be added to that of the shares that were
exchanged for purposes of determining the time of the automatic conversion
into Class A Shares of the Fund.
Permissible exchanges into Class A Shares of the Fund will be made
without a front-end sales charge, except for exchanges of shares that were not
previously subject to a front-end sales charge (unless such shares were
acquired through the reinvestment of dividends). Permissible exchanges into
Class B Shares or Class C Shares of the Fund will be made without the
imposition of a CDSC by the fund from which the exchange is being made at the
time of the exchange.
See Allied Plans under Classes of Shares for information on exchanges
by participants in an Allied Plan.
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Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish
to use the following services:
1. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize Global Funds,
Inc. to transfer a designated amount monthly from your checking account to
your Fund account. Many shareholders use this as an automatic savings plan.
Shareholders should allow a reasonable amount of time for initial purchases
and changes to these plans to become effective.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, 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.
2. Direct Deposit
You may have your employer or bank make regular investments directly
to your account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and
private payments by Electronic Fund Transfer, which avoids mail time and check
clearing holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Global Funds, Inc. has the
right to liquidate your shares to reimburse the government or transmitting
bank. If there are insufficient funds in your account, you are obligated to
reimburse the Fund.
3. MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment
dealer may call the Fund to request a transfer of funds from your
predesignated bank account to your Fund account. See MoneyLine(SM) Services
under The Delaware Difference for additional information about this service.
4. Wealth Builder Option
You can use our Wealth Builder Option to invest in the Fund through
regular liquidations of shares in your accounts in other funds in the Delaware
Group. You may also elect to invest in other mutual funds in the Delaware
Group through the Wealth Builder Option through regular liquidations of shares
in your Fund account.
Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your account
in one or more funds in the Delaware Group and
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invested automatically into any other account in a Delaware Group mutual fund
that you may specify. If in connection with the election of the Wealth Builder
Option, you wish to open a new account to receive the automatic investment,
such new account must meet the minimum initial purchase requirements described
in the prospectus of the fund that you select. All investments under this
option are exchanges and are therefore subject to the same conditions and
limitations as other exchanges noted above. You can terminate your
participation in Wealth Builder at any time by giving written notice to the
fund from which the exchanges are made. See Redemption and Exchange.
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.
5. Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or
dividend income) paid to you by check or reinvested in your account. Or, you
may invest your distributions in certain other funds in the Delaware Group,
subject to the exceptions noted below as well as the eligibility and minimum
purchase requirements set forth in each fund's prospectus.
Reinvestments of distributions into Class A Shares of the Fund or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of the Fund or of other
Delaware Group funds or into Class C Shares of the Fund or of other Delaware
Group funds are also made without any sales charge and will not be subject to
a CDSC if later redeemed. See Automatic Conversion of Class B Shares under
Classes of Shares for information concerning the automatic conversion of Class
B Shares acquired by reinvesting dividends.
Holders of Class A Shares of the Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the
Delaware Group, including the Fund. Holders of Class B Shares of the Fund may
reinvest their distributions only into Class B Shares of the funds in the
Delaware Group which offer that class of shares. Similarly, holders of Class C
Shares of the Fund may reinvest their distributions only into Class C Shares
of the funds in the Delaware Group which offer that class of shares. For more
information about reinvestments, call the Shareholder Service Center.
Capital gains and/or dividend distributions for participants in the
following retirement plans are automatically reinvested into the same Delaware
Group fund in which their investments are held: 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.
Purchase Price and Effective Date
The offering price and net asset value of Class A Shares, Class B
Shares and Class C Shares are determined as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when
the Exchange is open.
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The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund, its agent or designee. The
effective date of a direct purchase is the day your wire, electronic transfer
or check is received, unless it is received after the time the offering price
or net asset value of shares is determined, as noted above. Purchase orders
received after such time will be effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. The Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in the Delaware Group. The Fund
reserves the right to reject purchase orders paid by third-party checks or
checks that are not drawn on a domestic branch of a United States financial
institution. If a check drawn on a foreign financial institution is accepted,
you may be subject to additional bank charges for clearance and currency
conversion.
The Fund also reserves the right, following shareholder notification,
to charge a service fee on non-retirement accounts that, as a result of
redemption, have remained below the minimum stated account balance for a
period of three or more consecutive months. Holders of such accounts may be
notified of their insufficient account balance and advised that they have
until the end of the current calendar quarter to raise their balance to the
stated minimum. If the account has not reached the minimum balance requirement
by that time, the Fund will charge a $9 fee for that quarter and each
subsequent calendar quarter until the account is brought up to the minimum
balance. The service fee will be deducted from the account during the first
week of each calendar quarter for the previous quarter, and will be used to
help defray the cost of maintaining low-balance accounts. No fees will be
charged without proper notice, and no CDSC will apply to such assessments.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of
a CDSC or Limited CDSC if he or she redeems any portion of his or her account.
REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways.
The exchange service is useful if your investment requirements change and you
want an easy way to invest in other equity funds, tax-advantaged funds, bond
funds or money market funds. This service is also useful if you are
anticipating a major expenditure and want to move a portion of your investment
into a fund that has the checkwriting feature. Exchanges are subject to the
requirements of each fund and all exchanges of shares constitute taxable
events. See Taxes. Further, in order for an exchange to be processed, shares
of the fund being acquired must be registered in the state where the acquiring
shareholder resides. You may want to consult your financial adviser or
investment dealer to discuss which funds in the Delaware Group will best meet
your changing objectives, and the consequences of any exchange transaction.
You may also call the Delaware Group directly for fund information.
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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.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after the Fund receives your request in good
order, subject, in the case of a redemption, to any applicable CDSC or Limited
CDSC. For example, redemption or exchange requests received in good order
after the time the offering price and net asset value of shares are determined
will be processed on the next business day. See Purchase Price and Effective
Date under How to Buy Shares. A shareholder submitting a redemption request
may indicate that he or she wishes to receive redemption proceeds of a
specific dollar amount. In the case of such a request, and in the case of
certain redemptions from retirement plan accounts, the Fund will redeem the
number of shares necessary to deduct the applicable CDSC in the case of Class
B Shares and Class C Shares, and, if applicable, the Limited CDSC in the case
of Class A Shares and tender to the shareholder the requested amount, assuming
the shareholder holds enough shares in his or her account for the redemption
to be processed in this manner. Otherwise, the amount tendered to the
shareholder upon redemption will be reduced by the amount of the applicable
CDSC or Limited CDSC. Redemption proceeds will be distributed promptly, as
described below, but not later than seven days after receipt of a redemption
request.
Except as noted below, for a redemption request to be in "good
order," you must provide your account number, account registration, and the
total number of shares or dollar amount of the transaction. For exchange
requests, you must also provide the name of the fund in which you want to
invest the proceeds. Exchange instructions and redemption requests must be
signed by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling the Shareholder Service Center
at 800-523-1918. The Fund may suspend, terminate, or amend the terms of the
exchange privilege upon 60 days' written notice to shareholders.
The Fund will process written and telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a
check was tendered as payment, but the Fund will not mail or wire the proceeds
until it is reasonably satisfied that the purchase check has cleared, which
may take up to 15 days from the purchase date. You can avoid this potential
delay if you purchase shares by wiring Federal Funds. The Fund reserves the
right to reject a written or telephone redemption request or delay payment of
redemption proceeds if there has been a recent change to the shareholder's
address of record.
There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not
subject to a front-end sales charge, except for exchanges involving assets
that were previously invested in a fund with a front-end sales charge and/or
exchanges involving the reinvestment of dividends.
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Holders of Class B Shares or Class C Shares that exchange their
shares ("Original Shares") for shares of other funds in the Delaware Group (in
each case, "New Shares") in a permitted exchange, will not be subject to a
CDSC that might otherwise be due upon redemption of the Original Shares.
However, such shareholders will continue to be subject to the CDSC and, in the
case of Class B Shares, the automatic conversion schedule of the Original
Shares as described in this Prospectus and any CDSC assessed upon redemption
will be charged by the fund from which the Original Shares were exchanged. In
an exchange of Class B Shares from the Fund, the Fund's CDSC schedule may be
higher than the CDSC schedule relating to the New Shares acquired as a result
of the exchange. For purposes of computing the CDSC that may be payable upon a
disposition of the New Shares, the period of time that an investor held the
Original Shares is added to the period of time that an investor held the New
Shares. With respect to Class B Shares, the automatic conversion schedule of
the Original Shares may be longer than that of the New Shares. Consequently,
an investment in New Shares by exchange may subject an investor to the higher
12b-1 fees applicable to Class B Shares of the Fund for a longer period of
time than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except
for the CDSC applicable to certain redemptions of Class B Shares and Class C
Shares and the Limited CDSC applicable to certain redemptions of Class A
Shares purchased at net asset value, there is no fee charged by the Fund or
the Distributor for redeeming or exchanging your shares, but such fees could
be charged in the future. You may have your investment dealer arrange to have
your shares redeemed or exchanged. Your investment dealer may charge for this
service.
All authorizations given by shareholders, including selection of any
of the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your shares. The request must be signed by all
owners of the account or your investment dealer of record. For redemptions of
more than $50,000, or when the proceeds are not sent to the shareholder(s) at
the address of record, the Fund requires a signature by all owners of the
account and a signature guarantee for each owner. Each signature guarantee
must be supplied by an eligible guarantor institution. The Fund reserves the
right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness. The Fund may require further documentation from
corporations, executors, retirement plans, administrators, trustees or
guardians.
Payment is normally mailed the next business day after receipt of
your redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good order.
Certificates are issued for Class A Shares only if a shareholder submits a
specific request. Certificates are not issued for Class B Shares or Class C
Shares.
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Written Exchange
You may also write to the Fund (at 1818 Market Street, Philadelphia,
PA 19103) to request an exchange of any or all of your shares into another
mutual fund in the Delaware Group, subject to the same conditions and
limitations as other exchanges noted above.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your Class A Shares in certificate form, you
may redeem or exchange only by written request and you must return your
certificates.
The Telephone Redemption - Check to Your Address of Record service
and the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in which you have your
account in writing that you do not wish to have such services available with
respect to your account. The Fund reserves the right to modify, terminate or
suspend these procedures upon 60 days' written notice to shareholders. It may
be difficult to reach the Fund by telephone during periods when market or
economic conditions lead to an unusually large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the 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. Instructions received by
telephone are generally tape recorded, and a written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.
Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your address of record. Checks will be
payable to the shareholder(s) of record. Payment is normally mailed the next
business day after receipt of the redemption request. This service is only
available to individual, joint and individual fiduciary-type accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be
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deducted from your redemption proceeds. If you ask for a check, it will
normally be mailed the next business day after receipt of your redemption
request to your predesignated bank account. There are no separate fees for
this redemption method, but the mail time may delay getting funds into your
bank account. Simply call the Shareholder Service Center prior to the time the
offering price and net asset value are determined, as noted above.
MoneyLine(SM) On Demand
Through the MoneyLine(SM) On Demand service, you or your investment
dealer may call the Fund to request a transfer of funds from your Fund account
to your predesignated bank account. See MoneyLine(SM) Services under The
Delaware Difference for additional information about this service.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into other funds in the Delaware Group under the same registration,
subject to the same conditions and limitations as other exchanges noted above.
As with the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
Systematic Withdrawal Plans
1. Regular Plans
This plan provides shareholders with a consistent monthly (or
quarterly) payment. This is particularly useful to shareholders living on
fixed incomes, since it can provide them with a stable supplemental amount.
With accounts of at least $5,000, you may elect monthly withdrawals of $25
(quarterly $75) or more. The Fund does not recommend any particular monthly
amount, as each shareholder's situation and needs vary. Payments are normally
made by check. In the alternative, you may elect to have your payments
transferred from your Fund account to your predesignated bank account through
the MoneyLine(SM) Direct Deposit Service. Your funds will normally be
credited to your bank account up to four business days after the payment date.
There are no separate fees for this redemption method. See MoneyLine(SM)
Direct Deposit Services under The Delaware Difference for more information
about this service.
2. Retirement Plans
For shareholders eligible under the applicable retirement plan to
receive benefits in periodic payments, the Systematic Withdrawal Plan provides
you with maximum flexibility. A number of formulas are available for
calculating your withdrawals depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required. The MoneyLine(SM) Direct Deposit Service
described above is not available for certain retirement plans.
* * *
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Shareholders should not purchase additional shares while
participating in a Systematic Withdrawal Plan.
Redemptions of Class A Shares via a Systematic Withdrawal Plan may be
subject to a Limited CDSC if the original purchase was made at net asset value
within the 12 months prior to the withdrawal and a dealer's commission was
paid on that purchase. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value, below.
The applicable CDSC for Class B Shares and Class C Shares redeemed
via a Systematic Withdrawal Plan will be waived if, on the date that the Plan
is established, the annual amount selected to be withdrawn is less than 12% of
the account balance. If the annual amount selected to be withdrawn exceeds 12%
of the account balance on the date that the Systematic Withdrawal Plan is
established, all redemptions under the Plan will be subject to the applicable
CDSC. Whether a waiver of the CDSC is available or not, the first shares to be
redeemed for each Systematic Withdrawal Plan payment will be those not subject
to a CDSC because they have either satisfied the required holding period or
were acquired through the reinvestment of distributions. The 12% annual limit
will be reset on the date that any Systematic Withdrawal Plan is modified (for
example, a change in the amount selected to be withdrawn or the frequency or
date of withdrawals), based on the balance in the account on that date. See
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C
Shares, below.
For more information on Systematic Withdrawal Plans, call the
Shareholder Service Center.
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value
A Limited CDSC will be imposed on certain redemptions of Class A
Shares (or shares into which such Class A Shares are exchanged) made within 12
months of purchase, if such purchases were made at net asset value and
triggered the payment by the Distributor of the dealer's commission previously
described. See Classes of Shares.
The Limited CDSC will be paid to the Distributor and will be equal to
the lesser of 1% of: (1) the net asset value at the time of purchase of the
Class A Shares being redeemed; or (2) the net asset value of such Class A
Shares at the time of redemption. For purposes of this formula, the "net asset
value at the time of purchase" will be the net asset value at purchase of the
Class A Shares even if those shares are later exchanged for shares of another
Delaware Group fund and, in the event of an exchange of Class A Shares, the
"net asset value of such shares at the time of redemption" will be the net
asset value of the shares acquired in the exchange.
Redemptions of such Class A Shares held for more than 12 months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares
into another Delaware Group fund will not trigger the imposition of the
Limited CDSC at the time of such exchange. The period a shareholder owns
shares into which Class A Shares are exchanged will count towards satisfying
the 12-month holding period. The Limited CDSC is assessed if such 12-month
period is not satisfied irrespective of
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whether the redemption triggering its payment is of Class A Shares of the Fund
or Class A Shares acquired in the exchange.
In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All
investments made during a calendar month, regardless of what day of the month
the investment occurred, will age one month on the last day of that month and
each subsequent month.
Waiver of Limited Contingent Deferred Sales Charge - Class A Shares
The Limited CDSC for Class A Shares on which a dealer's commission
has been paid will be waived in the following instances: (i) redemptions that
result from the Fund's right to liquidate a shareholder's account if the
aggregate net asset value of the shares held in the account is less than the
then-effective minimum account size; (ii) distributions to participants from a
retirement plan qualified under section 401(a) or 401(k) of the Internal
Revenue Code of 1986, as amended (the "Code"), or due to death of a
participant in such a plan; (iii) redemptions pursuant to the direction of a
participant or beneficiary of a retirement plan qualified under section 401(a)
or 401(k) of the Code with respect to that retirement plan; (iv) periodic
distributions from an IRA, SIMPLE IRA or 403(b)(7) or 457 Deferred
Compensation Plan due to death, disability, or attainment of age 59 1/2 and
IRA distributions qualifying under Section 72(t) of the Internal Revenue Code;
(v) returns of excess contributions to an IRA; (vi) distributions by other
employee benefit plans to pay benefits; (vii) distributions described in (ii),
(iv), and (vi) above pursuant to a systematic withdrawal plan; and (viii)
redemptions by the classes of shareholders who are permitted to purchase
shares at net asset value, regardless of the size of the purchase (see Buying
Class A Shares at Net Asset Value under Classes of Shares).
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA, SIMPLE IRA,
SEP/IRA, or 403(b)(7) or 457 Deferred Compensation Plan; (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, or 403(b)(7) or 457
Deferred Compensation Plan due to death, disability, or attainment of age 59
1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; and (iv) distributions from an account if the redemption results
from the death of all registered owners of the account (in the case of accounts
established under the Uniform Gifts to Minors or Uniform Transfers to Minors
Acts or trust accounts, the waiver applies upon the death of all beneficial
owners) or a total and permanent disability (as defined in Section 72 of the
Code) of all registered owners occurring after the purchase of the shares being
redeemed.
The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in
the account is less than the then-effective minimum account size; (ii)
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returns of excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457
Deferred Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan,
or 401(k) Defined Contribution Plan; (iii) periodic distributions from a
403(b)(7) or 457 Deferred Compensation Plan upon attainment of age 59 1/2,
Profit Sharing Plan, Money Purchase Pension Plan, 401(k) Defined Contribution
Plans upon attainment of age 70 1/2, and IRA distributions qualifying under
Section 72(t) of the Internal Revenue Code; (iv) distributions from a
403(b)(7) or 457 Deferred Compensation Plan, Profit Sharing Plan, or 401(k)
Defined Contribution Plan, under hardship provisions of the plan; (v)
distributions from a 403(b)(7) or 457 Deferred Compensation Plan, Profit
Sharing Plan, Money Purchase Pension Plan or a 401(k) Defined Contribution
Plan upon attainment of normal retirement age under the plan or upon
separation from service; (vi) periodic distributions from an IRA or SIMPLE IRA
on or after attainment of age 59 1/2; and (vii) distributions from an account
if the redemption results from the death of all registered owners of the
account (in the case of accounts established under the Uniform Gifts to Minors
or Uniform Transfers to Minors Acts or trust accounts, the waiver applies upon
the death of all beneficial owners) or a total and permanent disability (as
defined in Section 72 of the Code) of all registered owners occurring after
the purchase of the shares being redeemed.
In addition, the CDSC will be waived on Class B Shares and Class C
Shares redeemed in accordance with a Systematic Withdrawal Plan if the annual
amount selected to be withdrawn under the Plan does not exceed 12% of the
value of the account on the date that the Systematic Withdrawal Plan was
established or modified.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on the Fund to all
shareholders of record of the Classes of that Fund at the time the offering
price of shares is determined. See Purchase Price and Effective Date under How
to Buy Shares. Thus, when redeeming shares, dividends continue to be credited
up to and including the date of redemption. The Fund will normally declare and
make payments from net investment income on a quarterly basis.
In addition to the dividends from net investment income and
distributions from realized securities profits that the Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, the Fund may declare special year-end dividend and
capital gains distributions during October, November or December to
shareholders of record on a date in such month. Such distributions, if
received by shareholders by January 31, are deemed to have been paid by the
Fund and received by shareholders on the earlier of the date paid or December
31 of the prior year.
Each Class of the Fund will share proportionately in the investment
income and expenses of the Fund, except that the per share dividends from net
investment income on Class A Shares, Class B Shares and Class C Shares will
vary due to the expenses under the 12b-1 Plan applicable to each Class.
Generally, the dividends per share on Class B Shares and Class C Shares can be
expected to be lower than the dividends per share on Class A Shares because
the expenses under the 12b-1 Plans relating to Class B Shares and Class C
Shares will be higher than the expenses under the 12b-1 Plan relating to Class
A Shares. See Distribution (12b-1) and Service under Management of the Fund.
Both dividends and distributions, if any, are automatically
reinvested in your account at net asset value, unless you elect otherwise. See
The Delaware Difference for more information on reinvestment options. Payment
by check of cash dividends will ordinarily be mailed within three business
days after the payable date. Payments from net realized securities profits of
the Fund, if any, will be distributed annually in the quarter following the
close of the fiscal year.
Any payment by check 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 your account at the
then-current net asset value and the dividend option may be changed from cash
to reinvest. If you elect to take your dividends and distributions in cash and
such dividends and distributions are in an amount of $25 or more, you may
choose the MoneyLine(SM) Direct Deposit Service and have such payments
transferred from your Fund account to your predesignated bank account. This
service is not available for certain retirement plans. See MoneyLine(SM)
Services under The Delaware Difference for more information about this
service.
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TAXES
The tax discussion set forth below is included for general
information only. Investors should consult their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in the
Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Code. Because many of these changes are complex, and only indirectly
affect the Fund and its distributions to you, they are discussed in Part B.
Changes in the treatment of capital gains, however, are discussed in this
section.
The Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, the 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 certain
other requirements relating to the sources of its income and diversification
of its assets.
The Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to those investors who
are subject to income taxes as ordinary income, whether received in cash or in
additional shares. It is expected that either none or only a nominal portion
of the Fund's dividends will be eligible for the dividends-received deductions
for corporations. The portion of dividends paid by the Fund that so qualifies
will be designated each year in a notice from the Fund to the Fund's
shareholders.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who
are subject to income taxes as long-term capital gains, regardless of the
length of time an investor has owned shares in the Fund. The Fund does not
seek to realize any particular amount of capital gains during a year; rather,
realized gains are a by-product of Fund management activities. Consequently,
capital gains distributions may be expected to vary considerably from year to
year. Also, for those investors subject to tax, if purchases of shares in the
Fund are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
the Fund's securities were sold and how long they were held by the Fund before
they were sold. Investors
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who want more information on holding periods and other qualifying rules
relating to these new rates should review the expanded discussion in Part B,
or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November, or December to
shareholders of record in such a month, but which, for operational reasons,
may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the
shareholder on December 31 of the year declared.
The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between the Fund and any other fund in the Delaware Group. Any loss incurred
on a sale or exchange of Fund shares that had been held for six months or less
will be treated as long-term capital loss to the extent of capital gains
dividends received with respect to such shares. All or a portion of the sales
charge incurred in acquiring the Fund's shares will be excluded from the
federal tax basis of any of such shares sold or exchanged within 90 days of
their purchase (for purposes of determining gain or loss upon sale of such
shares) if the sale proceeds are reinvested in the Fund or in another fund in
the Delaware Group of funds and a sales charge that would otherwise apply to
the reinvestment is reduced or eliminated. Any portion of such sales charge
excluded from the tax basis of the shares sold will be added to the tax basis
of the shares acquired in the reinvestment.
The Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total
assets of the Fund at the end of its fiscal year are invested in securities of
foreign corporations, the Fund may elect to pass-through to its shareholders a
pro-rata share of foreign income taxes paid by the Fund. If this election is
made, shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by
the Fund), and (ii) entitled to either deduct (as an itemized deduction in the
case of individuals) their share of such foreign taxes in computing their
taxable income or to claim a credit for such taxes against their U.S. income
tax, subject to certain limitations under the Code. Shareholders will be
informed by the Fund at the end of each calendar year regarding the
availability of any credits on and the amount of foreign source income to be
included in their income tax returns.
The automatic conversion of Class B Shares into Class A Shares at the
end of approximately eight years after purchase will be tax-free for federal
tax purposes. See Automatic Conversion of Class B Shares under Classes of
Shares.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. For example,
distributions of interest income and capital gains realized from certain types
of U.S. government securities may be exempt from state personal income
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taxes. Because investors' state and local taxes may be different than the
federal taxes described above, investors should consult their own tax
advisors.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the dividends and distributions paid by the Fund. Shareholders will
also receive each year information as to the portion of dividend income, if
any, that is derived from U.S. government securities that are exempt from
state income tax. Of course, shareholders who are not subject to tax on their
income would not be required to pay tax on amounts distributed to them by the
Fund.
Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your
proper Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.
See Accounting and Tax Issues and Distributions and Taxes in Part B
for additional information on tax matters relating to the Fund and its
shareholders.
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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
The net asset value ("NAV") per share is computed by adding the value
of all securities and other assets in the Fund's portfolio, deducting any
liabilities of the Fund (expenses and fees are accrued daily) and dividing by
the number of the Fund's shares outstanding. Portfolio securities for which
market quotations are available are priced at market value. Debt securities
are priced at fair value by an independent pricing service using methods
approved by Global Funds, Inc.'s Board of Directors. Short-term investments
having a maturity of less than 60 days are valued at amortized cost, which
approximates market value. All other securities are valued at their fair value
as determined in good faith and in a method approved by Global Funds, Inc.'s
Board of Directors.
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the NAV per share. The
offering price per share of Class A Shares consists of the NAV per share next
computed after the order is received, plus any applicable front-end sales
charges.
The offering price and NAV are computed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open.
The Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the net
asset value of the Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by the Fund will be
borne on a pro-rata basis by each outstanding share of a class, based on each
class' percentage in the Fund represented by the value of shares of such
classes, except that International Equity Fund Institutional Class, will not
incur any of the expenses under Global Funds, Inc.'s 12b-1 Plans, and Class A
Shares, Class B Shares and Class C Shares of the Fund alone will bear the
12b-1 Plan expenses payable under their respective 12b-1 Plan. Due to the
specific distribution expenses and other costs that will be allocable to each
class, the NAV of each class of the Fund will vary.
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MANAGEMENT OF THE FUND
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund. Delaware
International is affiliated with Delaware Management Company, Inc. ("Delaware").
The Manager has offices located at Third Floor, 80 Cheapside, London, England
EC2V 6EE.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On November 30, 1997, Delaware and its affiliates
within the Delaware Group, including Delaware International, were managing in
the aggregate more than $39 billion in assets in various institutional or
separately managed (approximately $23,274,532,000) and investment company
(approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). Delaware International is also controlled
by DMH through several subsidiaries. On April 3, 1995, a merger between DMH
and a wholly owned subsidiary of Lincoln National Corporation ("Lincoln
National") was completed. DMH, Delaware and the Manager 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. In
connection with the merger, a new Investment Management Agreement between
Global Funds, Inc., on behalf of International Equity Fund, and the Manager,
was executed following shareholder approval.
The Manager manages the Fund's investments and for its services, the
Manager is paid an annual fee equal to 0.75% of the Fund's average daily net
assets, less a proportionate share of all directors' fees paid to the
unaffiliated directors by the Fund. The directors of Global Funds, Inc.
annually review fees paid to the Manager.
Beginning December 1, 1995, Delaware International elected
voluntarily to waive that portion, if any, of the annual management fees
payable by International Equity Fund and to pay expenses to the extent
necessary to ensure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, but inclusive of
12b-1 expenses) of Class A Shares of the Fund did not exceed 1.85% and each of
the Class B Shares and Class C Shares of the Fund did not exceed 2.55% through
November 30, 1996. This voluntary waiver has been extended through May 31,
1998. 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 pay expenses to the extent
necessary to ensure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions, extraordinary expenses and 12b-1 expenses) of
Class A Shares
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of this Fund did not exceed 1.50%. Through November 30, 1994, this waiver and
payment noted above also applied to Class B Shares of this Fund. Prior to June
1, 1994, a waiver and payment commitment was in place to ensure expenses of
Class A Shares of International Equity Fund did not exceed 1.25% (exclusive of
taxes, interest brokerage commissions and extraordinary expenses, but
inclusive of 12b-1 fees).
The investment management fees payable to Delaware International by
the Fund, while higher than the advisory fees paid by other mutual funds in
general, are comparable to fees paid by other mutual funds with similar
objectives and policies.
The investment management fees earned for the fiscal year ended
November 30, 1997 were 0.75% of average daily net assets, and 0.74% was paid
by International Equity Fund as a result of the voluntary waiver described
above.
Clive A. Gillmore and Nigel A. May have primary responsibility for
making day-to-day investment decisions for the Fund. Mr. Gillmore has been the
senior portfolio manager for the Fund since its inception, and Mr. May joined
Mr. Gillmore as Co-Manager of the Fund on December 22, 1997. A graduate of the
University of Warwick and having begun his career at Legal and General
Investment Management, Mr. Gillmore joined the Delaware Group in 1990 after
eight years of investment experience. His most recent position prior to
joining the Delaware Group was as a Pacific Basin equity analyst and senior
portfolio manager for Hill Samuel Investment Advisers Ltd. Mr. Gillmore
completed the London Business School Investment program. Mr. May is a graduate
of Sidney Sussex College, Cambridge. He joined Delaware International Advisers
Ltd. in 1991, assuming portfolio-management responsibilities and sharing
analytical responsibilities for continental Europe. He previously had been
with Hill Samuel Investment Management Group for five years.
In making investment decisions for the Fund, Mr. Gillmore and Mr. May
regularly consult with an international equity team of fourteen members. Mr.
Gillmore and Mr. May also regularly consult with David G. Tilles. Mr. Tilles,
who is Chief Investment Officer for Delaware International, is a graduate of the
University of Warwick with a BS in management sciences. Before joining the
Delaware Group in 1990, he was Chief Investment Officer of Hill Samuel
Investment Advisers Ltd. He is a member of the Institute of Investment
Management & Research and the Operational Research Society.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time
they have been held. The degree of portfolio activity will affect brokerage
costs of the Fund and may affect taxes payable by the Fund's shareholders to
the extent that net capital gains are realized. Given the Fund's investment
objective, it is anticipated that the portfolio turnover rate of the Fund will
not exceed 100%.
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The Manager uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or its advisory clients. These services may be used by the Manager in
servicing any of its respective accounts. Subject to best price and execution,
the Manager may consider a broker/dealer's sales of shares of funds in the
Delaware Group of funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of its
Classes in advertising and other types of literature. Total return will be
based on a hypothetical $1,000 investment, reflecting the reinvestment of all
distributions at net asset value and: (i) in the case of Class A Shares, the
impact of the maximum front-end sales charge at the beginning of each
specified period; and (ii) in the case of Class B Shares and Class C Shares,
the deduction of any applicable CDSC at the end of the relevant period. Each
presentation will include the average annual total return for one-, five- and
ten-year or life-of-fund periods, as applicable. The Fund may also advertise
aggregate and average total return information concerning a Class over
additional periods of time. In addition, the Fund may present total return
information that does not reflect the deduction of the maximum front-end sales
charge or any applicable CDSC. In this case, such total return information
would be more favorable than total return information that includes deductions
of the maximum front-end sales charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the
Classes will fluctuate over time. Past performance is not considered a
guarantee of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for the Fund under a Distribution Agreement with Global Funds,
Inc. dated April 3, 1995, as amended on November 29, 1995.
Global Funds, Inc. has adopted a separate distribution plan under
Rule 12b-1 for each of the Class A Shares, Class B Shares and Class C Shares
of the Fund (the "Plans"). Each Plan permits the Fund to pay the Distributor
from the assets of its respective Classes a monthly fee for the Distributor's
services and expenses in distributing and promoting sales of shares.
These expenses include, among other things, preparing and
distributing advertisements, sales literature, and prospectuses and reports
used for sales purposes, compensating sales and marketing personnel, holding
special promotions for specified periods of time and paying distribution and
maintenance fees to brokers, dealers and others. In connection with the
promotion of shares of the Classes, the Distributor may, from time to time,
pay to participate in dealer-sponsored seminars and conferences, and reimburse
dealers for expenses incurred in connection with preapproved seminars,
conferences and advertising. The Distributor may pay or allow additional
promotional incentives to dealers as part of preapproved sales contests and/or
to dealers who provide extra training and information concerning a Class and
increase sales of the Class. In addition, the Fund may make
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payments from the 12b-1 Plan fees of its respective Classes directly to
others, such as banks, who aid in the distribution of Class shares or provide
services in respect of such Classes, pursuant to service agreements with
Global Funds, Inc.
The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of the Fund are also used to pay the Distributor for advancing
the commission costs to dealers with respect to the initial sale of such
shares.
The aggregate fees paid by the Fund from the assets of the respective
Classes to the Distributor and others under the Plans may not exceed (i) 0.30%
of Class A Shares' average daily net assets in any year, and (ii) 1% (0.25% of
which are service fees to be paid by the Fund to the Distributor, dealers and
others, for providing personal service and/or maintaining shareholder
accounts) of the Fund's Class B Shares' and Class C Shares' average daily net
assets in any year. The Fund's Class A Shares, Class B Shares and Class C
Shares will not incur any distribution expenses beyond these limits, which may
not be increased without shareholder approval.
While payments pursuant to the Plans may not exceed 0.30% annually
with respect to Class A Shares, and 1% annually with respect to each of the
Class B Shares and Class C Shares, the Plans do not limit fees to amounts
actually expended by the Distributor. It is therefore possible that the
Distributor may realize a profit in any particular year. However, the
Distributor currently expects that its distribution expenses will likely equal
or exceed payments to it under the Plans. The Distributor may, however, incur
such additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly
fees paid to the Distributor under the Plans are subject to the review and
approval of Global Funds, Inc.'s unaffiliated directors, who may reduce the
fees or terminate the Plans at any time.
The Plans do not apply to International Equity Fund Institutional
Class of shares of the Fund. Those shares are not included in calculating the
Plans' fees, and the Plans are not used to assist in the distribution and
marketing of the shares of International Equity Fund Institutional Class.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund
under an amended and restated agreement. The Transfer Agent also provides
accounting services to the Fund pursuant to the terms of a separate Fund
Accounting Agreement.
The directors of Global Funds, Inc. annually review fees paid to the
Distributor and the Transfer Agent. The Distributor and the Transfer Agent are
also indirect, wholly owned subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. For the fiscal year ended
November 30, 1997, the ratio of operating
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expenses to average daily net assets for Class A Shares, Class B Shares and
Class C Shares of International Equity Fund were 1.70%, 2.40% and 2.40%,
respectively. The ratios reflect the impact of each Class' 12b-1 Plan and the
voluntary waiver and payment of fees noted above.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a
Maryland corporation on May 30, 1991. Global Funds, Inc. currently offers six
series of shares - International Equity Series, International Small Cap
Series, Global Bond Series, Global Assets Series, Emerging Markets Series and
Global Equity Series. Fund shares have a par value of $.01 and when issued
will be fully paid, non-assessable, fully transferable and redeemable at the
option of the holder. The shares have no preference as to conversion,
exchange, dividends, retirement or other features and have no preemptive
rights. The Fund will vote separately on any matter which affects only that
Fund. Shares of the Fund have a priority over shares of any other fund of
Global Funds, Inc. in the assets and income of that Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the
election of directors can elect 100% of the directors if they choose to do so.
Under Maryland law, Global Funds, Inc. is not required, and does not intend,
to hold annual meetings of shareholders unless, under certain circumstances,
it is required to do so under the 1940 Act. Shareholders of 10% or more of
Global Funds, Inc.'s outstanding shares may request that a special meeting be
called to consider the removal of a director.
In addition to Class A Shares, Class B Shares and Class C Shares,
International Equity Fund offers International Equity Fund Institutional
Class. Shares of each Class represent proportionate interests in the assets of
the Fund and have the same voting and other rights and preferences as the
other classes of the Fund, except that shares of International Equity Fund
Institutional Class, are not subject to, and may not vote on matters
affecting, the Distribution Plans under Rule 12b-1 relating to Class A Shares,
Class B Shares and Class C Shares. Similarly, as a general matter, the
shareholders of Class A Shares, Class B Shares and Class C Shares may vote
only on matters affecting the 12b-1 Plan that relates to the class of shares
that they hold. However, Class B Shares of the Fund may vote on any proposal
to increase materially the fees to be paid by the Fund under the 12b-1 Plan
relating to Class A Shares.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund will, however, from time to time, purchase
or sell foreign currencies and/or engage in forward foreign currency
transactions in order to expedite settlement of portfolio transactions and to
minimize currency value fluctuations. The Fund may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
contracts to purchase or sell foreign currencies at a future date (i.e., a
"forward foreign currency" contract or "forward" contract). A forward contract
involves an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract,
agreed upon by the parties, at a price set at the time of the contract. The
Fund will convert currency on a spot basis from time to time, and investors
should be aware of the costs of currency conversion.
The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars
or foreign currency, of the amount of foreign currency involved in the
underlying security transaction, the Fund will be able to protect itself
against a possible loss resulting from an adverse change in currency exchange
rates during the period between the date the security is purchased or sold and
the date on which payment is made or received.
When the Manager believes that the currency of a particular country
may suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount
of foreign currency approximating the value of some or all of the Fund's
securities denominated in such foreign currency.
The Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against
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declines in the U.S. dollar cost of foreign securities held by the Fund and
against increases in the U.S. dollar cost of such securities to be acquired.
Call options on foreign currency written by the Fund will be covered, which
means that the Fund will own the underlying foreign currency. With respect to
put options on foreign currency written by the Fund, the Fund will establish a
segregated account with its Custodian Bank consisting of cash, U.S. government
securities or other high-grade liquid debt securities in an amount equal to
the amount the Fund will be required to pay upon exercise of the put.
As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate
movements adverse to the Fund's position, the Fund may forfeit the entire
amount of the premium plus related transaction costs. See Special Risk
Considerations.
Restricted and Illiquid Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the 1933 Act. Rule 144A permits many privately placed and
legally restricted securities to be freely traded among certain institutional
buyers, such as the Fund. See Rule 144A Securities, below. The Fund may invest
no more than 10% of the value of its net assets in illiquid securities. In the
event this percentage limitation is exceeded, whether due to changes in the
market value of the Fund's illiquid holdings or because a particular security
is deemed to have become illiquid, the Manager will take steps to remedy these
circumstances in an orderly fashion.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of the
Fund's 10% limitation on investments in illiquid assets. The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers, and
the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 10% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
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Portfolio Loan Transactions
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.
The major risk to which the 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, and the borrower would fail to return the
borrowed security. Therefore, the Fund will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to
be received from such loans would justify the risk. In addition, the Fund will
require borrowers to deliver collateral to the Fund before lending securities.
Creditworthiness will be monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Fund makes in closed-end investment
companies will be limited by the 1940 Act, and would involve an indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. Under the 1940 Act's limitations, the Fund may not (1)
own more than 3% of the voting stock of another investment company; (2) invest
more than 5% of the Fund's total assets in the shares of any one investment
company; nor (3) invest more than 10% of the Fund's total assets in shares of
other investment companies.
Repurchase Agreements
The Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help the Fund to invest cash on a
temporary basis. The Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, the
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in
excess of one-third of the value of its net assets. The Fund has no intention
of increasing its net income through borrowing. Any borrowing will be done
from a bank and, to the extent that such borrowing exceeds 5% of the value of
the Fund's net assets, asset coverage of at least 300% is required. In the
event that such asset coverage shall at any time fall below 300%, the Fund
shall, within three days thereafter (not including Sunday or holidays) or such
longer period as the U.S. Securities and Exchange
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Commission may prescribe by rules and regulations, reduce the amount of its
borrowings to such an extent that the asset coverage of such borrowings shall
be at least 300%. The Fund will not pledge more than 10% of its net assets, or
issue senior securities as defined in the 1940 Act, except for notes to banks.
Investment securities will not be purchased while the Fund has an outstanding
borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. The Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. The Fund
may also purchase put options on such securities and indices and enter into
related closing transactions.
A call option enables the purchaser, in return for the premium paid,
to purchase securities from the writer of the option at an agreed price up to
an agreed date. The advantage is that the purchaser may hedge against an
increase in the price of securities it ultimately wishes to buy or take
advantage of a rise in a particular index. The Fund will only purchase call
options to the extent that premiums paid on all outstanding call options do
not exceed 2% of its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal
to the difference between the closing price of the index and the exercise
price of the option.
Closing transactions essentially let the Fund offset put options or
call options prior to exercise or expiration. If the Fund cannot effect
closing transactions, it may have to hold a security it would otherwise sell
or deliver a security it might want to hold.
In purchasing put and call options, the premium paid by the Fund plus
any transaction costs will reduce any benefit realized by the Fund upon
exercise of the option.
The Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Fund will only invest in
such options to the extent consistent with its 10% limitation on investment in
illiquid securities. The Fund will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
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Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts
for the Fund is to protect the Fund against the fluctuations in interest or
exchange rates which otherwise might adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities which the
Fund intends to purchase at a later date without actually buying or selling
such securities.
The Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. A purchase of a futures contract
means the acquisition of a contractual right to obtain delivery to the Fund of
the securities or foreign currency called for by the contract at a specified
price during a specified future month. When a futures contract is sold, the
Fund incurs a contractual obligation to deliver the securities or foreign
currency underlying the contract at a specified price on a specified date
during a specified future month. To the extent that the Fund invests in
futures contracts and options thereon for other than bona fide hedging
purposes, the Fund will not enter into such transactions if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums paid
for open futures options would exceed 5% of the Fund's total assets, after
taking into account unrealized profits and unrealized losses on such contracts
it has entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5%.
The Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract, rather than actually to
purchase or sell the futures contract, at a specified exercise price at any
time during the period of the option. When the Fund enters into a futures
transaction, it must deliver to the futures commission merchant selected by
the Fund an amount referred to as "initial margin." This amount is maintained
by the futures commission merchant in an account at the Custodian Bank.
Thereafter, a "variation margin" may be paid by the 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.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, the Fund may not achieve the anticipated
benefits of investing in futures contracts and options thereon, or may realize
a loss. To the extent that the Fund purchases an option on a futures contract
and fails to exercise the option prior to the exercise date, it will suffer a
loss of the premium paid. Further, the possible lack of a secondary market
could prevent the Fund from closing out its positions relating to futures.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
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PROSPECTUS
INTERNATIONAL EQUITY FUND INSTITUTIONAL FEBRUARY 4, 1998
----------------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For more information about
International Equity Fund Institutional Class
call Delaware at 800-828-5052
This Prospectus describes the shares of the International Equity Series
(the "Fund" or the "International Equity Fund") of Delaware Group Global &
International Funds, Inc. ("Global Funds, Inc."), a professionally-managed
mutual fund of the series type.
International Equity Fund's investment objective is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve
its objective by investing primarily in securities that provide the potential
for capital appreciation and income. See Investment Objectives and Strategy.
The Fund offers International Equity Fund Institutional Class of
shares (the "Class"). This Prospectus relates only to the Class and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Fund's Statement of Additional Information ("Part
B" of Global Funds, Inc.'s registration statement), dated February 4, 1998, as
it may be amended from time to time, contains additional information about the
Fund and has been filed with the Securities and Exchange Commission (the
"SEC"). Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, L.P. at the
above address or by calling the above number. The Fund's financial statements
appear in the Annual Report of Global Funds, Inc. for the fiscal year ended
November 30, 1997, which will accompany any response to requests for Part B.
The SEC also maintains a Web site (http://www.sec.gov) that contains Part B,
material incorporated by reference into Global Funds, Inc.'s registration
statements, and other information regarding registrants that electronically
file with the SEC.
The Fund also offers Class A Shares, Class B Shares and Class C
Shares. Shares of these classes are subject to sales charges and other
expenses, which may affect their performance. A prospectus for these classes
can be obtained by writing to Delaware Distributors, L.P. at the above address
or by calling the above number.
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TABLE OF CONTENTS
Cover Page How to Buy Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Financial Highlights Taxes
Investment Objective and Strategy Calculation of Net Asset Value Per Share
Suitability Management of the Fund
Investment Strategy Other Investment Policies and Risk
Special Risk Considerations Considerations
Classes of Shares
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE
INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED.
SHARES OF THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
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SYNOPSIS
Investment Objective
The investment objective of International Equity Fund is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve
its objective by investing primarily in equity securities that provide the
potential for capital appreciation and income. The Fund is an international
fund. As such, at least 65% of the Fund's total assets will be invested in
equity securities of issuers organized or having a majority of their assets in
or deriving a majority of their operating income in at least three different
countries outside of the United States.
For further details, see Investment Objectives and Strategy and Other
Investment Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations and Other Investment Policies and
Risk Considerations.
2. The Fund has the right to engage in options and futures
transactions for hedging purposes, to counterbalance portfolio volatility. In
connection with futures transactions, the Fund will maintain certain
collateral in special accounts established with futures commission merchants
or on their behalf in the care of The Chase Manhattan Bank (the "Custodian
Bank"). While the Fund does not engage in options and futures for speculative
purposes, there are risks which result from the use of these instruments, and
an investor should carefully review the descriptions of these risks in this
Prospectus. Certain options and futures may be considered to be derivative
securities. See Options and Futures Contracts and Options on Futures Contracts
under Other Investment Policies and Risk Considerations.
3. The Fund may invest in the markets of certain emerging countries.
These markets may be subject to a greater degree of economic, political and
social instability than is the case in the United States, Western European and
other developed markets. See Special Risk Considerations.
Investment Manager, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund, subject to the
supervision and direction of Global Funds, Inc.'s Board of Directors. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the Fund
and for all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing, accounting services and transfer agent for the Fund and for all of
the other mutual funds in the Delaware Group.
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See Summary of Expenses and Management of the Fund for further
information regarding the Manager and the fees payable under the Fund's
Investment Management Agreement.
Purchase Price
Shares offered by this Prospectus are available at net asset value,
without a front-end or contingent deferred sales charge, and are not subject
to distribution fees under a Rule 12b-1 Distribution Plan. See Classes of
Shares.
Redemption and Exchange
Shares of the Fund are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company and International Equity Fund operates as a diversified fund as defined
under the Investment Company Act of 1940 (the "1940 Act"). Global Funds, Inc.
was organized as a Maryland corporation on May 30, 1991. See Shares under
Management of the Fund.
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SUMMARY OF EXPENSES
International Equity Fund
Shareholder Transaction Expenses Institutional Class
- --------------------------------------------------------------------------------
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)................................... None
Maximum Sales Charge Imposed
on Reinvested Dividends (as
a percentage of offering price)...................... None
Exchange Fees........................................ None*
* Exchanges are subject to the requirements of each fund and a front-end sales
charge may apply.
Annual Operating Expenses (as a International Equity Fund
percentage of average daily net assets) Institutional Class
- --------------------------------------------------------------------------------
Management Fees
(after voluntary waiver)............................. 0.74%**
12b-1 Expenses....................................... None
Other Operating Expenses ............................ 0.66%**
Total Operating Expenses
(after voluntary waivers)....................... 1.40%**
** Delaware International has elected voluntarily to waive that portion, if
any, of the annual management fees payable by the Fund and to pay the Fund's
expenses to the extent necessary to ensure that the Total Operating Expenses
(after voluntary waivers and payments) of International Equity Fund
Institutional Class does not exceed 1.55% on an annualized basis (exclusive
of taxes, interest, brokerage commissions and extraordinary expenses)
through May 31, 1998. Total Operating Expenses assume that the voluntary
waiver has been in effect. Absent the voluntary fee waiver and payments,
Total Operating Expenses (as a percentage of average daily net assets) for
the fiscal year ended November 30, 1997 were 1.41%, reflecting Management
Fees of 0.75%.
For expense information about the Fund's A Class, B Class and C
Class, see the separate prospectus relating to those classes.
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The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return and (2) redemption at the end of each time period. Global
Funds, Inc. charges no redemption fees. The following example assumes the
voluntary waiver of the management fee and/or other payment of expenses by the
Manager as discussed in this Prospectus.
International Equity 1 year 3 years 5 years 10 years
Fund Institutional Class $14 $44 $77 $168
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in the Class
will bear directly or indirectly.
-6-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements
of International Equity Fund of Delaware Group Global & International Funds,
Inc. and have been audited by Ernst & Young LLP, independent auditors. The
data should be read in conjunction with the financial statements, related
notes, and the report of Ernst & Young LLP covering such financial information
and highlights, all of which are incorporated by reference into Part B.
Further information about the Fund's performance is contained in the Fund's
Annual Report to shareholders. A copy of Delaware Group Global & International
Fund, Inc's Annual Report (including the report of Ernst & Young LLP) may be
obtained from Delaware Group Global & International Funds, Inc. upon request
at no charge.
- --------------------------------------------------------------------------------
-7-
<PAGE>
International Equity Fund
Institutional Class
-------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Year Ended
---------------------------
11/30/97(1) 11/30/96(1) 11/30/95(1) 11/30/94(1) 11/30/93(1)
---------- ---------- ---------- ---------- ----------
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period............ $14.710 $12.240 $11.970 $11.290 $9.590
Income From Investment Operations
Net Investment Income (Loss).................... 0.267(6) 0.530(6) 0.323 0.166 0.594
Net Gains (Losses) on Securities
(both realized and unrealized)............ 0.238 2.405 0.637 0.899 1.581
Total From Investment Operations................ 0.505 2.935 0.960 1.065 2.175
Less Distributions
Dividends From Net Investment Income............ (0.475) (0.320) (0.220) (0.245) (0.475)
Distributions From Capital Gains................ (0.020) (0.145) (0.470) (0.140) none
Total Distributions....................... (0.495) (0.465) (0.690) (0.385) (0.475)
Net Asset Value, End of Period.................. $14.720 $14.710 $12.240 $11.970 $11.290
- ------------------
Total Return.................................... 3.55%(4) 24.68%(4) 8.46% 9.47%(4) 23.52%(4)
- -------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)....... $71,177 $34,194 $11,660 $7,613 $3,959
Ratio of Expenses to Average Daily
Net Assets................................ 1.40% 1.55% 1.77% 1.26% 0.95%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............... 1.41% 1.65% 1.77% 1.52% 1.86%
Ratio of Net Investment Income to
Average Daily Net Assets............. 1.76% 4.00% 2.87% 1.52% 4.21%
Ratio of Net Investment Income (Loss) to Average
Daily Net Assets Prior to
Expense Limitation........................ 1.75% 3.90% 2.87% 1.26% 3.30%
Portfolio Turnover Rate......................... 8% 9% 21% 27% 24%
Average Commission Rate Paid(7)................. $0.0198 $0.0243 N/A N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Period Period
11/9/92(1) Year 10/31/91(2)(3)
through Ended through
11/30/92 11/30/92(2) 11/30/91
--------- ---------- -------------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period............ $9.520 $9.650 $10.000
Income From Investment Operations
Net Investment Income (Loss).................... 0.021 0.162 (0.004)
Net Gains (Losses) on Securities
(both realized and unrealized)............ 0.049 (0.172) (0.346)
Total From Investment Operations................ 0.070 (0.010) (0.350)
Less Distributions
Dividends From Net Investment Income............ none (0.050) none
Distributions From Capital Gains................ none none none
Total Distributions....................... none (0.050) none
Net Asset Value, End of Period.................. $9.590 $9.590 $9.650
Total Return.................................... (0.15%)(4) (0.15%)(4)(5) (3.50%)(4)(5)
- -------------------------------------------
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)....... $1,120 $4,604 $723
Ratio of Expenses to Average Daily
Net Assets................................ 0.95% 1.25% (3)
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation............... 5.37% 5.67% (3)
Ratio of Net Investment Income to
Average Daily Net Assets............. 2.74% 2.44% (3)
Ratio of Net Investment Income (Loss) to Average
Daily Net Assets Prior to
Expense Limitation........................ (1.70%) 2.00% (3)
Portfolio Turnover Rate......................... 12% 12% (3)
Average Commission Rate Paid(7)................. N/A N/A N/A
</TABLE>
- ---------------
(1) The per share data are derived from International Equity Fund Institutional
Class (formerly known as International Equity Fund (Institutional) class)
which commenced operations on November 9, 1992. Ratios for the period
November 9, 1992 through November 30, 1992 have been annualized and the
total return reflects the performance of International Equity Fund A Class
from December 1, 1991 to November 8, 1992 and the performance of
International Equity Fund Institutional Class from November 9, 1992 to
November 30, 1992.
(2) The per share data for International Equity Fund Institutional Class are
derived from International Equity Fund A Class (formerly known as
International Equity Fund class) and reflect the impact of Rule 12b-1
distribution expenses paid by International Equity Fund A Class.
International Equity Fund Institutional Class shares are not subject to Rule
12b-1 distribution expenses and, beginning November 9, 1992, the per share
data do not reflect the deduction of such expenses. Total return has been
annualized for the period ended November 30, 1991.
(3) Date of initial public offering of International Equity Fund A Class. The
ratios of expenses and net investment income to average daily net assets and
portfolio turnover have been omitted as management believes such ratios for
this relatively short period are not meaningful.
(4) Total return reflects the voluntary fee waiver described under Summary of
Expenses and Management of the Fund.
(5) Does not reflect maximum front-end sales charge that is or was in effect nor
the 1% Limited CDSC that would apply in the event of certain redemptions
within 12 months of purchase.
(6) The years ended November 30, 1996 and 1997
net investment income per share information was based on the average share
outstanding method.
(7) Computed by dividing the total amount of commissions
paid by the total number of shares purchased and sold during the period for
which there was a commission charged.
-8-
<PAGE>
(GLOB-IE-I)
INVESTMENT OBJECTIVE AND STRATEGY
SUITABILITY
Investors considering an investment in International Equity Fund
should have a long-term investment time frame.
The Fund cannot assure a specific rate of return or that principal
will be protected. The value of the Fund's shares can be expected to move up
and down depending on market conditions. Consequently, appreciation may be
obtained in periods of generally rising markets, while in declining markets
the value of the Fund's shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as
well as to political, economic and social situations different from and
potentially more volatile than those in the United States. In addition, the
accounting, tax and financial reporting standards of foreign countries are
different from and may be less reliable or comprehensive than those relating
to U.S. securities issuers. See Special Risk Considerations for a complete
discussion of the risk factors affecting any international investment. For
these reasons, the Fund is not suitable for short-term investors. However,
through the cautious selection and supervision of its portfolio, the Manager
will strive to achieve the Fund's objective.
The Fund may be suitable for investors with a long-term investment
horizon (at least three years) who are looking for long- term growth potential
from a portfolio of international securities.
* * *
Ownership of Fund shares can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities in which the Fund invests.
An investor should not consider a purchase of shares of the Fund
as equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
The investment objective of International Equity Fund is to achieve
long-term growth without undue risk to principal. The Fund seeks to achieve
this objective by investing primarily in securities that provide the potential
for capital appreciation and income. The Fund is an international fund. Under
normal circumstances, at least 65% of the Fund's total assets will be invested
in the securities of issuers organized or having a majority of their assets in
or deriving a majority of their operating income in at least three different
countries outside of the United States. The Fund will attempt to achieve its
investment objective by investing in a broad range of equity securities
including common stocks, preferred stocks, convertible securities and
warrants. The Fund may also invest in sponsored or unsponsored American
Depositary Receipts, European Depositary Receipts or Global Depositary
Receipts ("Depositary Receipts").
The Manager will employ a dividend discount analysis across country
boundaries and will also use a purchasing power parity approach to identifying
currencies and markets that are
-9-
<PAGE>
(GLOB-IE-I)
overvalued or undervalued relative to the U.S. dollar. With a dividend
discount analysis, the Manager looks at future anticipated dividends and
discounts the value of those dividends back to what they would be worth if
they were being paid today. The Manager uses this technique to attempt to
compare the value of different investments. With a purchasing power parity
approach, the Manager attempts to identify the amount of goods and services
that a dollar will buy in the United States and compare that to the amount of
a foreign currency required to buy the same amount of goods and services in
another country. Eventually, currencies should trade at levels that should
make it possible for the dollar to buy the same amount of goods and services
overseas as in the United States. When the dollar buys less, the foreign
currency may be considered to be overvalued. When the dollar buys more, the
currency may be considered to be undervalued.
While the Fund may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund may invest will include, but
not be limited to, Canada, Germany, the United Kingdom, France, the
Netherlands, Belgium, Spain, Switzerland, Japan, Australia, Hong Kong and
Singapore/Malaysia. In certain countries, investments may only be made by
purchasing shares of closed-end investment companies that in turn are
authorized to invest in the securities of such countries. See Investment
Company Securities under Other Investment Policies and Risk Considerations.
For temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities and which
are backed by the full faith and credit of the U.S. government, or issued by
foreign or U.S. companies. For example, the Fund may invest in U.S.
fixed-income markets when the Manager believes that the global equity markets
are excessively volatile or overvalued so that the Fund's objective cannot be
achieved in such markets. Any corporate debt obligations will be rated AA or
better by Standard & Poor's Ratings Group ("S&P"), or Aa or better by Moody's
Investors Service, Inc. ("Moody's"), or if unrated, will be determined to be
of comparable quality by the Manager. The Fund may also invest in the
securities listed above pending investment of proceeds from new sales of Fund
shares and to maintain sufficient cash to meet redemption requests.
The Fund may invest in securities issued in any currency and may
hold foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940
Act, the Fund will operate as a diversified fund. The Fund will not
concentrate its investments in any particular industry, which means that the
Fund will not invest 25% or more of its total assets in any one industry.
The Fund's investment objective, Global Funds, Inc.'s designation
as an open-end investment company, the Fund's designation as a diversified
fund, and the Fund's policies concerning portfolio lending, borrowing and
concentration are not "fundamental" may not be changed unless authorized by
the vote of a majority of the Fund's outstanding voting securities. A vote of
a "majority of the outstanding voting securities" is the vote by the holders
of the lesser of a) 67% or more of the Fund's voting securities present in
person or represented by proxy if the holders of more than 50% of the
outstanding voting securities of the Fund are present or represented by proxy;
or b) more than 50% of the outstanding voting securities. Part B lists other
more specific investment restrictions of the Fund which may not be changed
without a majority shareholder vote.
-10-
<PAGE>
(GLOB-IE-I)
The investment policies of the Fund not identified above as
"fundamental" and may be changed by the Board of Directors of Global Funds, Inc.
without a shareholder vote. See Special Risk Considerations and Other Investment
Policies and Risk Considerations.
A brief discussion of those factors that materially affected the
Fund's performance during its most recently completed fiscal year appears in
Global Fund, Inc.'s Annual Report.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk
and there can be no guarantee against loss resulting from an investment in the
Fund, nor can there be any assurance that the Fund's investment objective will
be attained.
Foreign Securities Risks. The Fund has the right to purchase
securities in any developed, underdeveloped or emerging country. Investors
should consider carefully the substantial risks involved in investing in
securities issued by companies and governments of foreign nations. These risks
are in addition to the usual risks inherent in domestic investments. There is
the possibility of expropriation, nationalization or confiscatory taxation,
taxation of income earned in foreign nations or other taxes imposed with
respect to investments in foreign nations, foreign exchange control (which may
include suspension of the ability to transfer currency from a given country),
default in foreign government securities, political or social instability, or
diplomatic developments which could affect investments in securities of
issuers in those nations.
In addition, in many countries, there is substantially less
publicly available information about issuers than is available in reports
about companies in the United States. Foreign companies are not subject to
uniform accounting, auditing and financial reporting standards, and auditing
practices and requirements may not be comparable to those applicable to United
States companies. In particular, the assets and profits appearing on the
financial statements of a developing or emerging country issuer may not
reflect its financial position or results of operations in the way they would
be reflected had the financial statements been prepared in accordance with the
United States' generally accepted accounting principles. Also, for an issuer
that keeps accounting records in local currency, inflation accounting rules
may require for both tax and accounting purposes, that certain assets and
liabilities be restated on the issuer's balance sheet in order to express
items in terms of currency or constant purchasing power. Inflation accounting
may indirectly generate losses or profits. Consequently, financial data may be
materially affected by restatements for inflation and may not accurately
reflect the real condition of those issuers and securities markets.
Further, the Fund may encounter difficulty or be unable to pursue
legal remedies and obtain judgments in foreign courts. Commission rates on
securities transactions in foreign countries, which are sometimes fixed rather
than subject to negotiation as in the United States, are likely to be higher.
Further, the settlement period of securities transactions in foreign markets
may be longer than in domestic markets, and may be subject to administrative
uncertainties. In many foreign countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers
and listed companies than in the United States, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which the Fund may invest may also be smaller, less liquid
and subject to greater price volatility than those in the United States.
-11-
<PAGE>
(GLOB-IE-I)
Emerging Markets Securities Risks. Compared to the United States
and other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse
and mature, and securities markets that trade a small number of securities,
which can result in a low or nonexistent volume of trading. Prices in these
securities markets tend to be volatile and, in the past, securities in these
countries have offered greater potential for gain (as well as loss) than
securities of companies located in developed countries. Until recently, there
has been an absence of a capital market structure or market-oriented economy
in certain emerging countries. Further, investments and opportunities for
investments by foreign investors are subject to a variety of national policies
and restrictions in many emerging countries. These restrictions may take the
form of prior governmental approval, limits on the amount or type of
securities held by foreigners, limits on the types of companies in which
foreigners may invest and prohibitions on foreign investments in issuers or
industries deemed sensitive to national interests. Additional restrictions may
be imposed at any time by these or other countries in which the Fund invests.
Also, the repatriation of both investment income and capital from several
foreign countries is restricted and controlled under certain regulations,
including, in some cases, the need for certain governmental consents. Although
these restrictions may in the future make it undesirable to invest in emerging
countries, the Manager does not believe that any current repatriation
restrictions would affect its decision to invest in such countries. Countries
such as those in which the Fund may invest have historically experienced and
may continue to experience, substantial, and in some periods extremely high
rates of inflation for many years, high interest rates, exchange rate
fluctuations or currency depreciation, large amounts of external debt, balance
of payments and trade difficulties and extreme poverty and unemployment. Other
factors which may influence the ability or willingness to service debt
include, but are not limited to, a country's cash flow situation, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank
and other international agencies and the political constraints to which a
government debtor may be subject.
Foreign Government Securities Risks. With respect to investment in
debt issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits
and investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or
whose economy depends on certain strategic imports could be vulnerable to
fluctuations in international prices of these commodities or imports. To the
extent that a country receives payment for its exports in currencies other
than dollars, its ability to make debt payments denominated in dollars could
be adversely affected. If a foreign government or government-related issuer
cannot generate sufficient earnings from foreign trade to service its external
debt, it may need to depend on continuing loans and aid from foreign
governments, commercial banks and multilateral organizations, and inflows of
foreign investment. The commitment on the part of these foreign governments,
multilateral organizations and others to make such disbursements may be
conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third
parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising
international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external
-12-
<PAGE>
(GLOB-IE-I)
debt will also depend on the level of the relevant government's international
currency reserves and its access to foreign exchange. Currency devaluations
may affect the ability of a government issuer to obtain sufficient foreign
exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may
default on its obligations. If such a default occurs, the Fund may have
limited effective legal recourse against the issuer and/or guarantor. Remedies
must, in some cases, be pursued in the courts of the defaulting party itself,
and the ability of the holder of foreign government and government-related
debt securities to obtain recourse may be subject to the political climate in
the relevant country. In addition, no assurance can be given that the holders
of commercial bank debt will not contest payments to the holders of other
foreign government and government-related debt obligations in the event of
default under their commercial bank loan agreements.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible
since the future value of such securities in foreign currencies will change as
a consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio
securities at the expiration of the contract. Accordingly, it may be necessary
for the Fund to purchase additional foreign currency on the spot market (and
bear the expense of such purchase) if the market value of the security is less
than the amount of foreign currency the Fund is obligated to deliver (and if a
decision is made to sell the security and make delivery of the foreign
currency). Conversely, it may be necessary to sell on the spot market some of
the foreign currency received upon the sale of the portfolio security if its
market value exceeds the amount of foreign currency the Fund is obligated to
deliver.
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities,
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Fund's investment policies, restrictions and risk factors.
-13-
<PAGE>
(GLOB-IE-I)
CLASSES OF SHARES
The Distributor serves as the national distributor for the Fund.
Shares of the Class may be purchased directly by contacting the Fund or its
agent or through authorized investment dealers. All purchases of shares of the
Class are made at net asset value. There is no front-end or contingent
deferred sales charge.
Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares of the Class
as part of their retirement program should contact their employer for details.
Shares of the Class are available for purchase only by: (a)
retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b) tax-exempt employee
benefit plans of Delaware or its affiliates and securities dealer firms with a
selling agreement with the Distributor; (c) institutional advisory accounts of
Delaware or its affiliates and those having client relationships with Delaware
Investment Advisers, a division of Delaware 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.
Class A Shares, Class B Shares and Class C Shares
In addition to offering International Equity Fund Institutional
Class of shares, International Equity Fund also offers International Equity
Fund A Class, International Equity Fund B Class and International Equity Fund
C Class, which are described in a separate prospectus. Shares of such classes
may be purchased through authorized investment dealers or directly by
contacting the Fund or its Distributor. Class A Shares carry a front-end sales
charge and have annual 12b-1 expenses equal to a maximum of 0.30%. The maximum
front-end sales charge as a percentage of the offering price of Class A Shares
is 4.75% and is reduced on certain transactions of $100,000 or more. Class B
Shares and Class C Shares have no front-end sales charge but are subject to
annual 12b-1 expenses equal to a maximum of 1%. Class B Shares and Class C
Shares and certain Class A Shares may be subject to a contingent deferred
sales charge upon redemption. To obtain a prospectus relating to such classes,
contact the Distributor by writing to the address or by calling the phone
number listed on the back cover of this Prospectus.
-14-
<PAGE>
(GLOB-IE-I)
HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by exchange and
by arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Class.
Investing Directly by Mail
1. Initial Purchases--An Investment Application or, in the case of a
retirement plan account, an appropriate retirement plan application, must be
completed, signed and sent with a check payable to the specific Fund and Class
selected, to Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to the specific Fund and Class selected. Your check
should be identified with your name(s) and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds
by wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Fund and Class in which
you are investing).
1. Initial Purchases--Before you invest, telephone the Client Services
Department to get an account number at 800-828-5052. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application or, in the case of a retirement plan account, an
appropriate retirement plan application, for the Fund and Class, to Delaware
Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your
Client Services Representative by telephone at 800-828-5052 prior to sending
your wire.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware
Group and you qualify to purchase shares of the Class, you may write and
authorize an exchange of part or all of your investment into the Fund.
However, Class B Shares and Class C Shares of each Fund and Class B Shares and
Class C Shares of the other funds in the Delaware Group offering such a class
of shares may not be exchanged into the Class. If you wish to open an account
by exchange, call your Client Services Representative at 800- 828-5052 for
more information. See Redemption and Exchange for more complete information
concerning your exchange privileges.
Investing through Your Investment Dealer
You can make a purchase of Fund shares through most investment
dealers who, as part of the service they provide, must transmit orders
promptly to the Fund. They may charge for this service.
Purchase Price and Effective Date
The purchase price (net asset value) of the Class is determined as
of the close of regular trading on the New York Stock Exchange (ordinarily, 4
p.m., Eastern time) on days when the Exchange is open.
-15-
<PAGE>
(GLOB-IE-I)
The effective date of a purchase made through an investment dealer
is the date the order is received by the Fund, its agent or designee. The
effective date of a direct purchase is the day your wire, electronic transfer
or check is received, unless it is received after the time the share price is
determined, as noted above. Purchase orders received after such time will be
effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a
purchase is canceled because your check is returned unpaid, you are
responsible for any loss incurred. The Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in the Delaware Group. The Fund
reserves the right to reject purchases by third-party checks or checks that
are not drawn on a domestic branch of a United States financial institution.
If a check drawn on a foreign financial institution is accepted, you may be
subject to additional bank charges for clearance and currency conversion.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of
redemptions.
-16-
<PAGE>
(GLOB-IE-I)
REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer for
details.
Your shares will be redeemed or exchanged at a price based on the
net asset value next determined after the Fund receives your request in good
order. For example, redemption or exchange requests received in good order
after the time the net asset value of shares is determined will be processed
on the next business day. See Purchase Price and Effective Date under How to
Buy Shares. Except as otherwise noted below, for a redemption request to be in
"good order," you must provide your account number, account registration, and
the total number of shares or dollar amount of the transaction. With regard to
exchanges, you must also provide the name of the fund in which you want to
invest the proceeds. Exchange instructions and redemption requests must be
signed by the record owner(s) exactly as the shares are registered. You may
request a redemption or an exchange by calling the Fund at 800-828-5052.
Redemption proceeds will be distributed promptly, as described below, but not
later than seven days after receipt of a redemption request.
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.
The Fund will process written and telephone redemption requests to
the extent that the purchase orders for the shares being redeemed have already
settled. The Fund will not honor redemption requests as to shares for which a
check was tendered as payment until the Fund is reasonably satisfied that the
check has cleared, which may take up to 15 days from the purchase date. You
can avoid this potential delay if you purchase shares by wiring Federal Funds.
The Fund reserves the right to reject a written or telephone redemption
request or delay payment of redemption proceeds if there has been a recent
change to the shareholder's address of record.
Shares of the Class may be exchanged into any other Delaware Group
mutual fund provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of
the fund being acquired are in a state where that fund is registered. If
exchanges are made into other shares that are eligible for purchase only by
those permitted to purchase shares of the Class, such shares will be exchanged
at net asset value. Shares of the Class may not be exchanged into Class B
Shares or Class C Shares of the funds in the Delaware Group. The Fund may
suspend, terminate or amend the terms of the exchange privilege upon 60 days'
written notice to shareholders.
Various redemption and exchange methods are outlined below. No fee
is charged by the Fund or the Distributor for redeeming or exchanging your
shares, although, in the case of an exchange, a sales charge may apply. You
may also have your investment dealer arrange to have your shares redeemed or
exchanged. Your investment dealer may charge for this service.
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All authorizations given by shareholders, including selection of
any of the features described below, shall continue in effect until such time
as a written revocation or modification has been received by the Fund to which
the authorization relates or its agent.
Written Redemption and Exchange
You can write to the Fund at 1818 Market Street, Philadelphia, PA
19103 to redeem some or all of your shares or to request an exchange of any or
all your shares into another mutual fund in the Delaware Group, subject to the
same conditions and limitations as other exchanges noted above. The request
must be signed by all owners of the account or your investment dealer of
record.
For redemptions of more than $50,000, or when the proceeds are not
sent to the shareholder(s) at the address of record, the Fund requires a
signature by all owners of the account and may require a signature guarantee.
Each signature guarantee must be supplied by an eligible guarantor
institution. The Fund reserves the right to reject a signature guarantee
supplied by an eligible institution based on its creditworthiness. The Fund
may require further documentation from corporations, executors, retirement
plans, administrators, trustees, or guardians.
Payment is normally mailed the next business day after receipt of
your redemption request. Certificates are issued for shares only if you submit
a specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.
You also may submit your written request for redemption or exchange
by facsimile transmission at the following number: 215-255-8864.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and
exchange methods, you must have the Transfer Agent hold your shares (without
charge) for you. If you choose to have your shares in certificate form, you
may redeem or exchange only by written request and you must return your
certificates.
The Telephone Redemption - Check to Your Address of Record service
and the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone
are genuine (including verification of a form of personal identification) as,
if it does not, the Fund or the Transfer Agent may be liable for any losses
due to unauthorized or fraudulent transactions. A written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.
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Telephone Redemption-Check to Your Address of Record
You or your investment dealer of record can have redemption
proceeds of $50,000 or less mailed to you at your address of record. Checks
will be payable to the shareholder(s) of record. Payment is normally mailed
the next business day after receipt of the redemption request.
Telephone Redemption-Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There
are no fees for this redemption method, but the mail time may delay getting
funds into your bank account. Simply call your Client Services Representative
prior to the time the net asset value is determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange shares into
any fund in the Delaware Group under the same registration. As with the
written exchange service, telephone exchanges are subject to the same
conditions and limitations as other exchanges noted above. Telephone exchanges
may be subject to limitations as to amounts or frequency.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on the Fund to all
shareholders of record of the Class of that Fund at the time the offering
price of shares is determined. See Purchase Price and Effective Date under How
to Buy Shares. Thus, when redeeming shares, dividends continue to be credited
up to and including the date of redemption. The Fund will normally declare and
make payments from net investment income on a quarterly basis. Both dividends
and distributions, if any, are automatically reinvested in your account at net
asset value.
The Class will share proportionately in the investment income and
expenses of the Fund, except that the Class will not incur any distribution
fee under Global Funds, Inc.'s 12b-1 Plans which apply to Class A Shares,
Class B Shares and Class C Shares.
In addition to the dividends from net investment income and
distributions from realized securities profits that the Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, the Fund may declare special year-end dividend and
capital gains distributions during October, November or December to
shareholders of record on a date in such month. Such distributions, if
received by shareholders by January 31, are deemed to have been paid by the
Fund and received by shareholders on the earlier of the date paid or December
31 of the prior year.
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TAXES
The tax discussion set forth below is included for general
information only. Investors should contact their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in the
Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in
the Internal Revenue Code (the "Code"). Because many of these changes are
complex, and only indirectly affect the Fund and its distributions to you,
they are discussed in Part B. Changes in the treatment of capital gains,
however, are discussed in this section.
The Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, the 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 certain
other requirements relating to the sources of its income and diversification
of its assets.
The Fund intends to distribute substantially all of its net
investment income and net capital gains, if any. Dividends from net investment
income or net short-term capital gains will be taxable to those investors who
are subject to income taxes as ordinary income, whether received in cash or in
additional shares. It is expected that either none or only a nominal portion
of the Fund's dividends will be eligible for the dividends-received deductions
for corporations. The portion of dividends paid by the Fund that so qualifies
will be designated each year in a notice from the Fund to the Fund's
shareholders.
Distributions paid by the Fund from long-term capital gains,
whether received in cash or in additional shares, are taxable to those
investors who are subject to income taxes as long-term capital gains,
regardless of the length of time an investor has owned shares in the Fund. The
Fund does not seek to realize any particular amount of capital gains during a
year; rather, realized gains are a by-product of Fund management activities.
Consequently, capital gains distributions may be expected to vary considerably
from year to year. Also, for those investors subject to tax, if purchases of
shares in the Fund are made shortly before the record date for a dividend or
capital gains distribution, a portion of the investment will be returned as a
taxable distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act
of 1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are
in the 28% or higher federal income tax brackets, these gains will be taxed at
a maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
the Fund's securities were sold and how long they were held by the Fund before
they were sold. Investors who want more information on holding periods and
other qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information
reporting at calendar year end of the amount of its capital gain distributions
which will qualify for these maximum federal tax rates.
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Although dividends generally will be treated as distributed when
paid, dividends which are declared in October, November, or December to
shareholders of record in such a month, but which, for operational reasons,
may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the
shareholder on December 31 of the year declared.
The sale of shares of the Fund is a taxable event and may result in
a capital gain or loss to shareholders subject to tax. Capital gain or loss
may be realized from an ordinary redemption of shares or an exchange of shares
between the Fund and any other fund in the Delaware Group. Any loss incurred
on a sale or exchange of Fund shares that had been held for six months or less
will be treated as long-term capital loss to the extent of capital gains
dividends received with respect to such shares.
The Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total
assets of the Fund at the end of its fiscal year are invested in securities of
foreign corporations, the Fund may elect to pass-through to its shareholders a
pro-rata share of foreign income taxes paid by the Fund. If this election is
made, shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by
the Fund), and (ii) entitled to either deduct (as an itemized deduction in the
case of individuals) their share of such foreign taxes in computing their
taxable income or to claim a credit for such taxes against their U.S. income
tax, subject to certain limitations under the Code. Shareholders will be
informed by the Fund at the end of each calendar year regarding the
availability of any credits on and the amount of foreign source income to be
included in their income tax returns.
In addition to the federal taxes described above, shareholders may
or may not be subject to various state and local taxes. For example,
distributions of interest income and capital gains realized from certain types
of U.S. government securities may be exempt from state personal income taxes.
Because investors' state and local taxes may be different than the federal
taxes described above, investors should consult their own tax advisors.
Each year, Global Funds, Inc. will mail to you information on the
tax status of the dividends and distributions paid by the Fund. Shareholders
will also receive each year information as to the portion of dividend income,
if any, that is derived from U.S. government securities that are exempt from
state income tax. Of course, shareholders who are not subject to tax on their
income would not be required to pay tax on amounts distributed to them by the
Fund.
Global Funds, Inc. is required to withhold 31% of taxable
dividends, capital gains distributions, and redemptions paid to shareholders
who have not complied with IRS taxpayer identification regulations. You may
avoid this withholding requirement by certifying on your Investment
Application your proper Taxpayer Identification Number and by certifying that
you are not subject to backup withholding.
See Accounting and Tax Issues in Part B for additional information
on tax matters relating to the Fund and its shareholders.
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CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares is the net asset
value ("NAV") per share of Class shares next computed after the order is
received. The NAV is computed as of the close of regular trading on the New
York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the
Exchange is open.
The NAV per share is computed by adding the value of all securities
and other assets in the Fund's portfolio, deducting any liabilities of the
Fund (expenses and fees are accrued daily) and dividing by the number of the
Fund's shares outstanding. Portfolio securities for which market quotations
are available are priced at market value. Debt securities are priced at fair
value by an independent pricing service using methods approved by Global
Funds, Inc.'s Board of Directors. Short-term investments having a maturity of
less than 60 days are valued at amortized cost, which approximates market
value. All other securities are valued at their fair value as determined in
good faith and in a method approved by Global Funds, Inc.'s Board of
Directors.
The Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the net
asset value of the Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by the Fund will be
borne on a pro-rata basis by each outstanding share of a class, based on each
class' percentage in the Fund represented by the value of shares of such
classes, except that the Class will not incur any of the expenses under the
Fund's 12b-1 Plans and Class A Shares, Class B Shares and Class C Shares of
the Fund alone will bear the 12b-1 Plan expenses payable under their
respective 12b-1 Plans. Due to the specific distribution expenses and other
costs that will be allocable to each class, the net asset value of each class
of the Fund will vary.
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MANAGEMENT OF THE FUND
Directors
The business and affairs of Global Funds, Inc. are managed under
the direction of its Board of Directors. Part B contains additional
information regarding Global Funds, Inc.'s directors and officers.
Investment Manager
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund. Delaware
International is affiliated with Delaware Management Company, Inc. ("Delaware").
The Manager has offices located at Third Floor, 80 Cheapside, London, England
EC2V 6EE.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On November 30, 1997, Delaware and its affiliates
within the Delaware Group, including Delaware International, were managing in
the aggregate more than $39 billion in assets in various institutional or
separately managed (approximately $23,274,532,000) and investment company
(approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc. ("DMH"). Delaware International is also controlled
by DMH through several subsidiaries. On April 3, 1995, a merger between DMH
and a wholly owned subsidiary of Lincoln National Corporation ("Lincoln
National") was completed. DMH, Delaware and the Manager 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. In
connection with the merger, a new Investment Management Agreement between
Global Funds, Inc., on behalf of International Equity Fund, and the Manager,
was executed following shareholder approval.
The Manager manages the Fund's investments and for its services,
the Manager is paid an annual fee equal to 0.75% of the Fund's average daily
net assets, less a proportionate share of all directors' fees paid to the
unaffiliated directors by the Fund. The directors of Global Funds, Inc.
annually review fees paid to the Manager.
Beginning December 1, 1995, Delaware International elected
voluntarily to waive that portion, if any, of the annual management fees
payable by International Equity Fund and to pay expenses to the extent
necessary to ensure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses) of the Class did
not exceed 1.55% through November 30, 1996. This voluntary waiver has been
extended through May 31, 1998. 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 pay
expenses to the extent necessary to ensure that the Total Operating Expenses
(exclusive of taxes, interest, brokerage commission and extraordinary
expenses) of the Class did not exceed 1.50%. Prior to June 1, 1994, a waiver
and payment commitment was in place to ensure expenses of the Class did not
exceed 0.95% (exclusive of taxes, interest brokerage commissions and
extraordinary expenses).
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The investment management fees payable to Delaware International by
the Fund, while higher than the advisory fees paid by other mutual funds in
general, are comparable to fees paid by other mutual funds with similar
objectives and policies.
The investment management fees earned for the fiscal year ended
November 30, 1997 were 0.75% of average daily net assets, and 0.74% was paid
by International Equity Fund as a result of the voluntary waiver described
above.
Clive A. Gillmore and Nigel A. May have primary responsibility for
making day-to-day investment decisions for the Fund. Mr. Gillmore has been the
senior portfolio manager for the Fund since its inception, and Mr. May joined
Mr. Gillmore as Co-Manager of the Fund on December 22, 1997. A graduate of the
University of Warwick and having begun his career at Legal and General
Investment Management, Mr. Gillmore joined the Delaware Group in 1990 after
eight years of investment experience. His most recent position prior to
joining the Delaware Group was as a Pacific Basin equity analyst and senior
portfolio manager for Hill Samuel Investment Advisers Ltd. Mr. Gillmore
completed the London Business School Investment program. Mr. May is a graduate
of Sidney Sussex College, Cambridge. He joined Delaware International Advisers
Ltd. in 1991, assuming portfolio-management responsibilities and sharing
analytical responsibilities for continental Europe. He previously had been
with Hill Samuel Investment Management Group for five years.
In making investment decisions for the Fund, Mr. Gillmore and Mr. May
regularly consult with an international equity team of fourteen members. Mr.
Gillmore and Mr. May also regularly consult with David G. Tilles. Mr. Tilles,
who is Chief Investment Officer for Delaware International, is a graduate of the
University of Warwick with a BS in management sciences. Before joining the
Delaware Group in 1990, he was Chief Investment Officer of Hill Samuel
Investment Advisers Ltd. He is a member of the Institute of Investment
Management & Research and the Operational Research Society.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time
they have been held. The degree of portfolio activity will affect brokerage
costs of the Fund and may affect taxes payable by the Fund's shareholders to
the extent that net capital gains are realized. Given the Fund's investment
objective, it is anticipated that the portfolio turnover rate of the Fund will
not exceed 100%.
The Manager uses its best efforts to obtain the best available
price and most favorable execution for portfolio transactions. Orders may be
placed with brokers or dealers who provide brokerage and research services to
the Manager or its advisory clients. These services may be used by the Manager
in servicing any of its respective accounts. Subject to best price and
execution, the Manager may consider a broker/dealer's sales of shares of funds
in the Delaware Group of funds in placing portfolio orders and may place
orders with broker/dealers that have agreed to defray certain expenses of such
funds, such as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of
the Class in advertising and other types of literature. Total return will be
based on a hypothetical $1,000 investment, reflecting the reinvestment of all
distributions at net asset value. Each presentation will include the average
annual total
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return for one-, five- and ten-year, or life -of-fund periods, as applicable.
The Fund may also advertise aggregate and average total return information
concerning the Class over additional periods of time.
Because securities prices fluctuate, investment results of the
Class will fluctuate over time. Past performance is not considered a guarantee
of future results.
Statements and Confirmations
You will receive quarterly statements of your account summarizing
all transactions during the period. A confirmation statement will be sent
following all transactions other than those involving a reinvestment of
dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling your Client Services
Representative.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Fund's investments and performance. Global Funds, Inc.'s fiscal year ends on
November 30.
Distribution and Service
The Distributor, Delaware Distributors, L.P., serves as the
national distributor of the Fund's shares, under a Distribution Agreement with
Global Funds, Inc. dated April 3, 1995, as amended on November 29, 1995. The
Distributor bears all of the costs of promotion and distribution.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund
under an amended and restated agreement. The Transfer Agent also provides
accounting services to the Fund pursuant to the terms of a separate Fund
Accounting Agreement. Certain recordkeeping services and other shareholder
services that otherwise would be performed by the Transfer Agent may be
performed by certain other entities and the Transfer Agent may elect to enter
into an agreement to pay such other entities for those services. In addition,
participant account maintenance fees may be assessed for certain recordkeeping
services provided as part of retirement plan and administration service
packages. These fees are based on the number of participants in the plan and
the various services selected. Fees will be quoted upon request and are
subject to change.
The directors of Global Funds, Inc. annually review fees paid to the
Distributor and the Transfer Agent. The Distributor and the Transfer Agent are
indirect, wholly owned subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than
those borne by the Manager under the Investment Management Agreement and those
borne by the Distributor under the Distribution Agreement. For the fiscal year
ended November 30, 1997, the ratio of operating expenses to average daily net
assets for the Class was 1.40%. The ratio reflects the impact of the voluntary
waiver and payment of fees noted above.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a Maryland
corporation on May 30, 1991. Global Funds, Inc. currently offers six series of
shares - International Equity Series, Global Bond Series, Global Assets
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Series, Emerging Markets Series, International Small Cap Series and Global
Equity Series. Fund shares have a par value of $.01 and when issued will be
fully paid, non-assessable, fully transferable and redeemable at the option of
the holder. The shares have no preference as to conversion, exchange,
dividends, retirement or other features and have no preemptive rights. The
Fund will vote separately on any matter which affects only the Fund. Shares of
the Fund have a priority over shares of any other fund of Global Funds, Inc.
in the assets and income of the Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the
election of directors can elect 100% of the directors if they choose to do so.
Under Maryland law, Global Funds, Inc. is not required, and does not intend,
to hold annual meetings of shareholders unless, under certain circumstances,
it is required to do so under the 1940 Act. Shareholders of 10% or more of
Global Funds, Inc.'s outstanding shares may request that a special meeting be
called to consider the removal of a director.
In addition to Institutional Class shares, International Equity Fund
offers International Equity Fund A Class, International Equity Fund B Class
and International Equity Fund C Class. Shares of each class represent
proportionate interests in the assets of the Fund and have the same voting and
other rights and preferences as the other classes of the Fund, except that
shares of the Class are not subject to, and may not vote on matters affecting,
the Distribution Plans under Rule 12b-1 relating to Class A Shares, Class B
Shares and Class C Shares.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars,
it does not intend to convert its holdings of foreign currencies into U.S.
dollars on a daily basis. The Fund will, however, from time to time, purchase
or sell foreign currencies and/or engage in forward foreign currency
transactions in order to expedite settlement of portfolio transactions and to
minimize currency value fluctuations. The Fund may conduct its foreign
currency exchange transactions on a spot (i.e., cash) basis at the spot rate
prevailing in the foreign currency exchange market or through entering into
contracts to purchase or sell foreign currencies at a future date (i.e., a
"forward foreign currency" contract or "forward" contract). A forward contract
involves an obligation to purchase or sell a specific currency at a future
date, which may be any fixed number of days from the date of the contract,
agreed upon by the parties, at a price set at the time of the contract. The
Fund will convert currency on a spot basis from time to time, and investors
should be aware of the costs of currency conversion.
The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars
or foreign currency, of the amount of foreign currency involved in the
underlying security transaction, the Fund will be able to protect itself
against a possible loss resulting from an adverse change in currency exchange
rates during the period between the date the security is purchased or sold and
the date on which payment is made or received.
When the Manager believes that the currency of a particular country
may suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount
of foreign currency approximating the value of some or all of the Fund's
securities denominated in such foreign currency.
The Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of
foreign securities held by the Fund and against increases in the U.S. dollar
cost of such securities to be acquired. Call options on foreign currency
written by the Fund will be covered, which means that the Fund will own the
underlying foreign currency. With respect to put options on foreign currency
written by the Fund, the Fund will establish a segregated account with
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its Custodian Bank consisting of cash, U.S. government securities or other
high-grade liquid debt securities in an amount equal to the amount the Fund
will be required to pay upon exercise of the put.
As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate
movements adverse to the Fund's position, the Fund may forfeit the entire
amount of the premium plus related transaction costs. See Special Risk
Considerations.
Restricted and Illiquid Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Fund. See Rule 144A
Securities, below. The Fund may invest no more than 10% of the value of its
net assets in illiquid securities. In the event this percentage limitation is
exceeded, whether due to changes in the market value of the Fund's illiquid
holdings or because a particular security is deemed to have become illiquid,
the Manager will take steps to remedy these circumstances in an orderly
fashion.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of the
Fund's 10% limitation on investments in illiquid assets. The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers, and
the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 10% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
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.
The major risk to which the 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, and the borrower would fail to return the
borrowed security. Therefore, the Fund will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by
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<PAGE>
(GLOB-IE-I)
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. In addition, the Fund will
require borrowers to deliver collateral to the Fund before lending securities.
Creditworthiness will be monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Fund makes in closed-end investment
companies will be limited by the 1940 Act, and would involve an indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. Under the 1940 Act's limitations, the Fund may not (1)
own more than 3% of the voting stock of another investment company; (2) invest
more than 5% of the Fund's total assets in the shares of any one investment
company; nor (3) invest more than 10% of the Fund's total assets in shares of
other investment companies.
Repurchase Agreements
The Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help the Fund to invest cash on a
temporary basis. The Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, the
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in
excess of one-third of the value of its net assets. The Fund has no intention
of increasing its net income through borrowing. Any borrowing will be done
from a bank and, to the extent that such borrowing exceeds 5% of the value of
the Fund's net assets, asset coverage of at least 300% is required. In the
event that such asset coverage shall at any time fall below 300%, the Fund
shall, within three days thereafter (not including Sunday or holidays) or such
longer period as the U.S. Securities and Exchange Commission may prescribe by
rules and regulations, reduce the amount of its borrowings to such an extent
that the asset coverage of such borrowings shall be at least 300%. The Fund
will not pledge more than 10% of its net assets, or issue senior securities as
defined in the 1940 Act, except for notes to banks. Investment securities will
not be purchased while the Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. The Fund may purchase call options on foreign or U.S.
securities and indices and enter into related closing transactions. The Fund
may also purchase put options on such securities and indices and enter into
related closing transactions.
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<PAGE>
(GLOB-IE-I)
A call option enables the purchaser, in return for the premium paid,
to purchase securities from the writer of the option at an agreed price up to
an agreed date. The advantage is that the purchaser may hedge against an
increase in the price of securities it ultimately wishes to buy or take
advantage of a rise in a particular index. The Fund will only purchase call
options to the extent that premiums paid on all outstanding call options do
not exceed 2% of its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal
to the difference between the closing price of the index and the exercise
price of the option.
Closing transactions essentially let the Fund offset put options or
call options prior to exercise or expiration. If the Fund cannot effect
closing transactions, it may have to hold a security it would otherwise sell
or deliver a security it might want to hold.
In purchasing put and call options, the premium paid by the Fund plus
any transaction costs will reduce any benefit realized by the Fund upon
exercise of the option.
The Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Fund will only invest in
such options to the extent consistent with its 10% limitation on investment in
illiquid securities. The Fund will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts
for the Fund is to protect the Fund against the fluctuations in interest or
exchange rates which otherwise might adversely affect the value of the Fund's
portfolio securities or adversely affect the prices of securities which the
Fund intends to purchase at a later date without actually buying or selling
such securities.
The Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. A purchase of a futures contract
means the acquisition of a contractual right to obtain delivery to the Fund of
the securities or foreign currency called for by the contract at a specified
price during a specified future month. When a futures contract is sold, the
Fund incurs a contractual obligation to deliver the securities or foreign
currency underlying the contract at a specified price on a specified date
during a specified future month. To the extent that the Fund invests in
futures contracts and options thereon for other than bona fide hedging
purposes, the Fund will not enter into such transactions if, immediately
thereafter, the sum of the amount of initial margin deposits and premiums paid
for open futures options would exceed 5% of the Fund's total assets, after
taking into account unrealized profits and unrealized losses on such contracts
it has entered into; provided, however, that, in the case of an option that is
in-the-money at the time of purchase, the in-the-money amount may be excluded
in calculating the 5%.
-31-
<PAGE>
(GLOB-IE-I)
The Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium
paid, to assume a position in a futures contract, rather than actually to
purchase or sell the futures contract, at a specified exercise price at any
time during the period of the option. When the Fund enters into a futures
transaction, it must deliver to the futures commission merchant selected by
the Fund an amount referred to as "initial margin." This amount is maintained
by the futures commission merchant in an account at the Custodian Bank.
Thereafter, a "variation margin" may be paid by the 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.
To the extent that interest or exchange rates or securities prices
move in an unexpected direction, the Fund may not achieve the anticipated
benefits of investing in futures contracts and options thereon, or may realize
a loss. To the extent that the Fund purchases an option on a futures contract
and fails to exercise the option prior to the exercise date, it will suffer a
loss of the premium paid. Further, the possible lack of a secondary market
could prevent the Fund from closing out its positions relating to futures.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
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<PAGE>
(GLOB-IE-I)
For more information, call Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Third Floor
80 Cheapside
London, England EC2V 6EE
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
- -----------------------------------------------------------------------
INTERNATIONAL EQUITY FUND
INSTITUTIONAL
- -----------------------------------------------------------------------
P R O S P E C T U S
- -----------------------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
--------
<PAGE>
PROSPECTUS
A CLASS SHARES FEBRUARY 4, 1998
B CLASS SHARES
C CLASS SHARES
---------------------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance:
Nationwide 800-523-4640
Information on Existing Accounts:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7565
Representatives of Financial Institutions:
Nationwide 800-659-2265
This Prospectus describes shares of the Global Equity Series ("Global
Equity Fund" or the "Fund") of Delaware Group Global & International Funds, Inc.
("Global Funds, Inc."), a professionally-managed mutual fund of the series type.
Global Equity Fund's investment objective is to achieve long-term
growth without undue risk to principal. The Fund seeks to achieve this objective
by investing in global securities that provide the potential for capital
appreciation and income.
The Fund offers three retail classes of shares: "Class A Shares,"
"Class B Shares" and "Class C Shares" (individually, a "Class" and collectively,
the "Classes").
This Prospectus relates only to the Classes and sets forth information
that you should read and consider before you invest. Please retain it for future
reference. The Fund's Statement of Additional Information ("Part B" of Global
Funds, Inc.'s registration statement), dated February 4, 1998, as it may be
amended from time to time, contains additional information about the Fund and
has been filed with the Securities and Exchange Commission (the "SEC"). Part B
is incorporated by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address or by
calling the above telephone numbers. The SEC also maintains a Web site
(http://www.sec.gov) that contains Part B, material incorporated by reference
into Global Funds, Inc.'s registration statement, and other information
regarding registrants that electronically file with the SEC.
-1-
<PAGE>
The Fund also offers Global Equity Fund Institutional Class, which is
available for purchase only by certain investors. A prospectus for Global Equity
Fund Institutional Class can be obtained by writing to Delaware Distributors,
L.P. at the above address or by calling the above numbers.
TABLE OF CONTENTS
Cover Page How to Buy Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Financial Highlights Taxes
Investment Objective and Policies Calculation of Offering Price and
Suitability Net Asset Value Per Share
Investment Strategy Management of the Fund
Special Risk Considerations Other Investment Policies and
The Delaware Difference Risk Considerations
Plans and Services
Classes of Shares
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF
THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
-2-
<PAGE>
SYNOPSIS
Investment Objective
The investment objective of the Fund is to achieve long-term growth
without undue risk to principal. The Fund seeks to achieve this objective by
investing in global equity securities that provide the potential for capital
appreciation and income. The Fund is a global fund. As such, at least 65% of the
Fund's total assets will be invested in equity securities of issuers organized
or having a majority of their assets in or deriving a majority of their income
in at least three different countries, one of which may be the United States.
For further details, see Investment Objective and Policies and Other Investment
Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations and Other Investment Policies and
Risk Considerations.
2. The Fund may invest in the markets of certain emerging countries.
These markets may be subject to a greater degree of economic, political and
social instability than is the case in the United States, Western European and
other developed markets. See Special Risk Considerations.
3. The Fund has the right to engage in options and futures transactions
for hedging purposes, to counterbalance portfolio volatility. In connection with
futures transactions, the Fund will maintain certain collateral in special
accounts established with futures commission merchants directly or for their
benefit in the care of The Chase Manhattan Bank (the "Custodian Bank"). While
the Fund does not engage in options and futures for speculative purposes, there
are risks which result from the use of these instruments, and an investor should
carefully review the descriptions of these risks in this Prospectus. See Options
and Futures Contracts and Options on Futures Contracts under Other Investment
Policies and Risk Considerations.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund, subject to the
supervision and direction of Global Funds, Inc.'s Board of Directors. Delaware
Management Company, Inc. ("Delaware" or the "Sub-Adviser") is the investment
sub-adviser for the Fund and, in that capacity, provides investment advice
relating to U.S. securities. Delaware Distributors, L.P. (the "Distributor") is
the national distributor for the Fund and for all of the other mutual funds in
the Delaware Group. Delaware Service Company, Inc. (the "Transfer Agent") is the
shareholder servicing, dividend disbursing, accounting services and transfer
agent for the Fund and for all of the other mutual funds in the Delaware Group.
See Summary of Expenses and Management of the Fund for further information
regarding the Manager and the Sub- Adviser and the fees payable under the Fund's
Investment Management Agreement and the Sub-Advisory Agreement on behalf of the
Fund.
Sales Charges
The price of Class A Shares includes a maximum front-end sales charge
of 4.75% of the offering price. The front-end sales charge is reduced on certain
transactions of at least $100,000 but under $1,000,000. For
-3-
<PAGE>
purchases of $1,000,000 or more, the front-end sales charge is eliminated
(subject to a contingent deferred sales charge ("Limited CDSC") of 1% if shares
are redeemed within 12 months of purchase and a dealer commission was paid in
connection with such purchase). Class A Shares are subject to annual 12b-1 Plan
expenses for the life of the investment.
The price of Class B Shares is equal to the net asset value per share.
Class B Shares are subject to a contingent deferred sales charge ("CDSC") of:
(i) 4% if shares are redeemed within two years of purchase; (ii) 3% if shares
are redeemed during the third or fourth year following purchase; (iii) 2% if
shares are redeemed during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following purchase. Class B Shares are
subject to annual 12b-1 Plan expenses for approximately eight years after
purchase. See Deferred Sales Charge Alternative - Class B Shares and Automatic
Conversion of Class B Shares under Classes of Shares.
The price of Class C Shares is equal to the net asset value per share.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within 12
months of purchase. Class C Shares are subject to annual 12b-1 Plan expenses for
the life of the investment.
See Classes of Shares and Distribution (12b-1) and Service under
Management of the Fund.
Purchase Amounts
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. An investor may exceed these maximum purchase
limitations for Class B Shares and Class C Shares by making cumulative purchases
over a period of time. An investor should keep in mind, however, that reduced
front-end sales charges apply to investments of $100,000 or more in Class A
Shares, and that 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.
The minimum and maximum purchase amounts for retirement plans may vary. See How
to Buy Shares.
Redemption and Exchange
Class A Shares of the Fund may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request.
Neither the Fund nor the Distributor assesses a charge for redemptions or
exchanges of Class A Shares, except for certain redemptions of shares purchased
at net asset value, which may be subject to a Limited CDSC if a dealer's
commission was paid in connection with such purchases. See Front-End Sales
Charge Alternative - Class A Shares under Classes of Shares.
Class B Shares and Class C Shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Fund
nor the Distributor assesses any charges other than the CDSC for redemptions or
exchanges of Class B Shares or Class C Shares. There are certain limitations on
an investor's ability to exchange shares between the various classes of shares
that are offered. See Redemption and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. Global Equity Fund operates as a diversified fund as defined under the
Investment Company Act of 1940 (the "1940 Act"). Global Funds, Inc. was
organized as a Maryland corporation on May 30, 1991. See Shares under Management
of the Fund.
-4-
<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A Shares, Class B Shares and Class C Shares follows:
<TABLE>
<CAPTION>
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)........................................ 4.75% None None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)............................. None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable)......................... None* 4.00%* 1.00%*
Redemption Fees.............................................. None** None** None**
</TABLE>
* Class A purchases of $1,000,000 or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is
paid to the financial adviser through whom such purchase is effected, a
CDSC of 1% will be imposed on certain redemptions within 12 months of
purchase ("Limited CDSC"). Additional Class A purchase options involving
the imposition of a CDSC may be permitted as described in the Prospectus
from time to time. Class B Shares are subject to a CDSC of: (i) 4% if
shares are redeemed within two years of purchase; (ii) 3% if shares are
redeemed during the third or fourth year following purchase; (iii) 2% if
shares are redeemed during the fifth year following purchase; (iv) 1% if
shares are redeemed during the sixth year following purchase; and (v) 0%
thereafter. Class C Shares are subject to a CDSC of 1% if the shares are
redeemed within 12 months of purchase. See Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange, and Deferred Sales Charge Alternative -
Class B Shares , Level Sales Charge Alternative - Class C Shares and
Contingent Deferred Sales Charge - Class B Shares and Class C Shares under
Classes of Shares.
** CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire.
-5-
<PAGE>
<TABLE>
<CAPTION>
Annual Operating Expenses Class A Class B Class C
(as a percentage of average daily net assets) Shares Shares Shares
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees (after voluntary waivers)..................... 0.00% 0.00% 0.00%
12b-1 Expenses (including service fees)
(after voluntary waivers)..................................... 0.00%+/++ 0.00%+/++ 0.00%+/++
Other Operating Expenses
(after voluntary payments).................................... 0.80%++ 0.80%++ 0.80%++
----- ----- -----
Total Operating Expenses
(after voluntary waivers and payments)................... 0.80%++ 0.80%++ 0.80%++
===== ===== =====
</TABLE>
+ Class A Shares, Class B Shares and Class C Shares are subject to separate
12b-1 Plans. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by rules of the
National Association of Securities Dealers, Inc. (the "NASD"). The
Distributor has elected voluntarily to waive its right to receive 12b-1
Plan fees (including service fees) from the commencement of the public
offering of the Classes through June 30, 1998. In the absence of those
waivers, 12b-1 Plan expenses would equal 0.30% for Class A Shares and
1.00% for each of the Class B Shares and Class C Shares. See Distribution
(12b-1) and Service under Management of the Fund.
++ Because the Fund did not commence operations until July 21, 1997, "Total
Operating Expenses" and "Other Operating Expenses" each Class of the Fund
are based on estimated amounts the Fund expects to pay during the current
fiscal year . The Manager has elected voluntarily to waive that portion, if
any, of the annual management fees payable by the Fund and to pay certain
expenses of the Fund to the extent necessary to ensure that the Fund's
total operating expenses (exclusive of 12b-1 Plan fees, taxes, interest,
brokerage commissions and extraordinary expenses) do not exceed , on an
annualized basis, 0.80% of the average daily net assets of the Fund. The
Manager's voluntary fee waivers and expense payments began upon the
commencement of the public offering of the Classes and will extend through
June 30, 1998. Absent the Manager's voluntary fee waiver and expense
payments (and the Distributor's voluntary waiver of the 12b-1 Plan fees for
each class) it is estimated that during the current fiscal year, the Total
Operating Expenses, as a percentage of average daily net assets, would be
2.16%, 2.86% and 2.86%, respectively, for Class A Shares, Class B Shares
and Class C Shares, reflecting management fees of 0.80%.
For expense information about Global Equity Fund Institutional Class of
shares, see the separate prospectus relating to that class.
Investors utilizing the Delaware Group Asset Planner asset allocation
service also typically incur an annual maintenance fee of $35 per Strategy.
However, effective November 1, 1996, the annual maintenance fee is waived until
further notice. Investors who utilize the Asset Planner for an Individual
Retirement Plan ("IRA") will pay an annual IRA fee of $15 per Social Security
Number. See Delaware Group Asset Planner in Part B.
-6-
<PAGE>
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, (2) redemption and no redemption at the end of each time period
and (3) for Class B Shares and Class C Shares, payment of a CDSC at the time of
redemption, if applicable. The following example assumes the voluntary waiver of
the management fee and/or other payments of expenses by the Manager and of the
12b-1 Plan fees by the Distributor as discussed in this Prospectus.
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
1 year 3 years 1 year 3 years
------ ------- ------ -------
<S> <C> <C> <C> <C>
Class A Shares $55(1) $72 $55 $72
Class B Shares(2) $48 $56 $8 $26
Class C Shares $18 $26 $8 $26
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC or other CDSC,
which has not been reflected in this calculation, may be imposed on certain
redemptions . See Contingent Deferred Sales Charge for Certain Redemptions
of Class A Shares Purchased at Net Asset Value under Redemption and
Exchange.
(2) At the end of approximately eight years after purchase, Class B Shares will
be automatically converted into Class A Shares. The example above does not
assume conversion of Class B Shares since it reflects figures only for one
and three years. See Automatic Conversion of Class B Shares under Classes
of Shares for a description of the automatic conversion feature.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in each Class will
bear directly or indirectly.
-7-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
Global Equity Fund of Delaware Group Global & International Funds, Inc. and have
been audited by Ernst & Young LLP, independent auditors. The data should be read
in conjunction with the financial statements, related notes, and the report of
Ernst & Young LLP covering such financial information and highlights, all of
which are incorporated by reference into Part B. Further information about the
Fund's performance is contained in Delaware Group Global & International Funds,
Inc.'s Annual Report to shareholders. A copy of the Annual Report (including the
report of Ernst & Young LLP) may be obtained from Delaware Group Global &
International Funds, Inc. upon request at no charge.
- --------------------------------------------------------------------------------
-8-
<PAGE>
Global Equity Fund A Class
Period
7/21/97(1)
through
11/30/97
Net Asset Value, Beginning of Period..................... $8.500
Income From Investment Operations
Net Investment Income.................................... 0.056(4)
Net Gain (Loss) on Securities
(both realized and unrealized)..................... (0.326)
Total From Investment Operations................ (0.270)
Less Dividends and Distributions
Dividends from Net Investment Income..................... none
Distributions from Capital Gains......................... none
Total Dividends and Distributions............... none
Net Asset Value, End of Period........................... $8.230
Total Return............................................. (3.18%)(2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)................ $6
Ratio of Expenses to Average Daily Net Assets............ 0.80%
Ratio of Expenses to Average Daily Net Assets
Prior to Voluntary Waivers and Payments of Expenses
by the Manager and Voluntary Waiver of 12b-1 Plan
Expenses by the Distributor........................... 2.16%
Ratio of Net Investment Income to Daily Net Assets....... 1.86%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Voluntary Waivers and Payments of Expenses by
the Manager and Voluntary Waiver of 12b-1 Plan
Expenses by the Distributor........................ 0.50%
Portfolio Turnover Rate.................................. 25%
Average Commission Rate Paid (3)......................... $0.0260
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized. Total return for this short of a time
period may not be representative of longer term results.
(2) Does not reflect maximum sales charge that is or was in effect, nor the 1%
Limited CDSC or other CDSC that would apply in the event of certain
redemptions within 12 months of purchase. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange. Total return reflects the voluntary
waivers and payments of expenses by the Manager and voluntary waiver of
12b-1 Plan expenses by the Distributor referenced under Summary of Expenses
and Management of the Fund.
(3) Computed by dividing the amount of commission paid by the total number of
shares purchased and sold during the period for which there was a
commission charged.
(4) The period ended November 30, 1997 net investment income per share
information was based on the average share outstanding method.
-9-
<PAGE>
INVESTMENT OBJECTIVE AND POLICIES
SUITABILITY
Investors considering an investment in Global Equity Fund should have a
long-term investment time frame.
The Fund cannot assure a specific rate of return or that principal will
be protected. The value of the Fund's shares can be expected to move up and down
depending on market conditions. Consequently, appreciation may be obtained in
periods of generally rising markets, while in declining markets the value of the
Fund's shares may decline.
Investments in foreign securities whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as well
as to political, economic and social situations different from and potentially
more volatile than those in the United States. In addition, the accounting, tax
and financial reporting standards of foreign countries are different from and
may be less reliable or comprehensive than those relating to U.S. securities
issuers. See Special Risk Considerations for a complete discussion of the risk
factors affecting any international investment. For these reasons, the Fund is
not suitable for short-term investors. However, through the cautious selection
and supervision of its portfolio, the Manager and Sub-Adviser will strive to
achieve the Fund's objective.
The Fund may be suitable for investors with a long-term investment
horizon (at least three years) who are looking for long-term growth potential
from a portfolio of international securities.
* * *
Ownership of Fund shares can reduce the bookkeeping and administrative
inconvenience that is typically connected with direct purchases of the types of
securities in which the Fund invests.
Investors should not consider a purchase of shares of the Fund as
equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
The investment objective of Global Equity Fund is to achieve long-term
growth without undue risk to principal. The Fund seeks to achieve this objective
by investing in global equity securities that provide the potential for capital
appreciation and income. The Fund is a global fund. Under normal circumstances,
at least 65% of the Fund's total assets will be invested in equity securities of
issuers organized or having a majority of their assets in or deriving a majority
of their operating income in at least three different countries, one of which
may be the United States. The Fund will invest in a broad range of equity
securities including common stocks, preferred stocks, convertible securities and
warrants. The Fund may also invest in sponsored or unsponsored American
Depositary Receipts, European Depositary Receipts or Global Depositary Receipts
("Depositary Receipts"), which are receipts typically issued by a bank or trust
company evidencing ownership of underlying securities issued by a foreign
company.
The Fund will attempt to achieve its investment objective by investing
in securities traded in equity markets and currencies that the Manager and
Sub-Adviser believe offer the best relative value within the global investment
universe. A dividend discount model will be employed to assess value across
country boundaries. When using a dividend discount analysis to value individual
equity markets, the Manager and Sub-Adviser will look at future anticipated
dividends and discount the value of those dividends back to what they would be
worth if they were being
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<PAGE>
paid today. The Manager and Sub-Adviser will use this technique to attempt to
compare the value of different investments.
In a global portfolio, currency return is also an integral component of
an investment's total return. The Manager will use a purchasing power parity
approach to access the value of individual currencies. Purchasing power parity
attempts to identify the amounts of goods and services that a dollar will buy in
the United States and compare that to the amount of a foreign currency required
to buy the same amount of goods and services in another country. Eventually,
currencies should trade at levels that would make it possible for the dollar to
buy the same amount of goods and services overseas as in the United States. When
the dollar buys less, the foreign currency may be considered to be overvalued.
When the dollar buys more, the currency may be considered to be undervalued.
Simultaneous with identifying the most attractive equity markets and
currencies, the Manager will attempt to purchase undervalued securities.
Individual equity securities around the world will be selected on the basis of
an analysis of the issuing company's operations, financial statements and each
company's current valuation. In the selection process, the Manager and
Sub-Adviser will place special emphasis on present dividend yield and
expectations for dividend growth.
The Fund may purchase securities in any foreign country, developed and
underdeveloped, or emerging market countries. With respect to certain countries,
investments by an investment company may only be made through investments in
closed-end investment companies that in turn are authorized to invest in the
securities of such countries. See Investment Company Securities under Other
Investment Policies and Risk Considerations.
The Fund may also seek to achieve growth through investment of up to
35% of its assets in income producing debt securities such as U.S. or foreign
government or corporate bonds. In addition, for temporary defensive purposes,
the Fund may invest all or a substantial portion of its assets in high quality
debt instruments issued by foreign governments, their agencies,
instrumentalities or political subdivisions, the U.S. government, its agencies
or instrumentalities (and which are backed by the full faith and credit of the
U.S. government), or issued by foreign or U.S. companies. For example, the Fund
may invest in U.S. fixed-income markets when the Manager believes that the
global equity markets are excessively volatile or overvalued so that the Fund's
objective cannot be achieved in such markets. Any corporate debt obligations
will be rated AA or better by Standard & Poor's Ratings Group ("S&P"), Aa or
better by Moody's Investors Service, Inc. ("Moody's"), or have an equivalent
rating from another nationally recognized statistical rating organization, or if
unrated, will be determined to be of comparable quality by the Manager. The Fund
may also invest in the securities listed above pending investment of proceeds
from new sales of Fund shares and to maintain sufficient cash to meet redemption
requests.
Restricted and Illiquid Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Fund. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. The Fund may
invest up to 15% of the value of its net assets in illiquid securities which are
securities which may not be disposed of within seven days at the price at which
they are carried on the Fund's books. In the event this percentage limitation is
exceeded, whether due to changes in the market value of the Fund's illiquid
holdings or because a particular security is deemed to have become illiquid, the
Manager will take steps to remedy these circumstances in an orderly fashion.
* * *
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The Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940 Act,
the Fund will operate as a diversified fund. The Fund will not concentrate its
investments in any particular industry, which means that the Fund will not
invest 25% or more of its total assets in any one industry.
The Fund's investment objective, Global Funds, Inc.'s designation as an
open-end investment company, the Fund's designation as a diversified fund, and
the Fund's policies concerning portfolio lending, borrowing and concentration
may not be changed unless authorized by the vote of a majority of the Fund's
outstanding voting securities. A vote of a "majority of the outstanding voting
securities" is the vote by the holders of the lesser of a) 67% or more of the
Fund's voting securities present in person or represented by proxy if the
holders of more than 50% of the outstanding voting securities of the Fund are
present or represented by proxy; or b) more than 50% of the outstanding voting
securities. Part B lists other more specific investment restrictions of the Fund
which may not be changed without a majority shareholder vote.
The remaining investment policies of the Fund not identified above are
not fundamental and may be changed by the Board of Directors of Global Funds,
Inc. without a shareholder vote. See Special Risk Considerations and Other
Investment Policies and Risk Considerations.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Foreign Securities Risk. The Fund has the right to purchase securities
in any developed, underdeveloped, or emerging country. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations. These risks are in addition to the
usual risks inherent in domestic investments. There is the possibility of
expropriation, nationalization or confiscatory taxation, taxation of income
earned in foreign nations or other taxes imposed with respect to investments in
foreign nations, foreign exchange control (which may include suspension of the
ability to transfer currency from a given country), default in foreign
government securities, political or social instability, or diplomatic
developments which could affect investments in securities of issuers in those
nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about companies
in the United States. Foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United States'
generally accepted accounting principles. Also, for an issuer that keeps
accounting records in local currency, inflation accounting rules may require for
both tax and accounting purposes, that certain assets and liabilities be
restated on the issuer's balance sheet in order to express items in terms of
currency or constant purchasing power. Inflation accounting may indirectly
generate losses or profits. Consequently, financial data may be materially
affected by restatements for inflation and may not accurately reflect the real
condition of those issuers and securities markets.
Further, the Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on securities
transactions in foreign countries, which are sometimes fixed rather
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<PAGE>
than subject to negotiation as in the United States, are likely to be higher.
Further, the settlement period of securities transactions in foreign markets may
be longer than in domestic markets, and may be subject to administrative
uncertainties. In many foreign countries, there is less government supervision
and regulation of business and industry practices, stock exchanges, brokers and
listed companies than in the United States, and capital requirements for
brokerage firms are generally lower. The foreign securities markets of many of
the countries in which the Fund may invest may also be smaller, less liquid and
subject to greater price volatility than those in the United States.
Emerging Markets Securities Risk. Compared to the United States and
other developed countries, in addition to the risks described above, emerging
countries may have volatile social conditions, relatively unstable governments
and political systems, economies based on only a few industries and economic
structures that are less diverse and mature, and securities markets that trade a
small number of securities, which can result in a low or nonexistent volume of
trading. Prices in these securities markets tend to be volatile and, in the
past, securities in these countries have offered greater potential for gain (as
well as loss) than securities of companies located in developed countries. Until
recently, there has been an absence of a capital market structure or
market-oriented economy in certain emerging countries. Further, investments and
opportunities for investments by foreign investors are subject to a variety of
national policies and restrictions in many emerging countries. These
restrictions may take the form of prior governmental approval, limits on the
amount or type of securities held by foreigners, limits on the types of
companies in which foreigners may invest and prohibitions on foreign investments
in issuers or industries deemed sensitive to national interests. Additional
restrictions may be imposed at any time by these or other countries in which the
Fund invests. Also, the repatriation of both investment income and capital from
several foreign countries is restricted and controlled under certain
regulations, including, in some cases, the need for certain governmental
consents. Although these restrictions may in the future make it undesirable to
invest in emerging countries, the Manager does not believe that any current
repatriation restrictions would affect its decision to invest in such countries.
Countries such as those in which the Fund may invest have historically
experienced and may continue to experience, substantial, and in some periods
extremely high rates of inflation for many years, high interest rates, exchange
rate fluctuations or currency depreciation, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment.
Other factors which may influence the ability or willingness to service debt
include, but are not limited to, a country's cash flow situation, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank and
other international agencies and the political constraints to which a government
debtor may be subject.
With respect to investments in debt issues of foreign governments, the
ability of a foreign government or government-related issuer to make timely and
ultimate payments on its external debt obligations will also be strongly
influenced by the issuer's balance of payments, including export performance,
its access to international credits and investments, fluctuations in interest
rates and the extent of its foreign reserves. A country whose exports are
concentrated in a few commodities or whose economy depends on certain strategic
imports could be vulnerable to fluctuations in international prices of these
commodities or imports. To the extent that a country receives payment for its
exports in currencies other than dollars, its ability to make debt payments
denominated in dollars could be adversely affected. If a foreign government or
government-related issuer cannot generate sufficient earnings from foreign trade
to service its external debt, it may need to depend on continuing loans and aid
from foreign governments, commercial banks and multilateral organizations, and
inflows of foreign investment. The commitment on the part of these foreign
governments, multilateral organizations and others to make such disbursements
may be conditioned on the government's implementation of economic reforms and/or
economic performance and the timely service of its obligations. Failure to
implement such reforms, achieve such levels of economic performance or repay
principal or interest when due may curtail the willingness of such third parties
to lend funds, which may further impair the issuer's ability or willingness to
service its debts in a timely manner. The cost of servicing external debt will
also generally be adversely affected by rising international interest rates
because
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<PAGE>
many external debt obligations bear interest at rates which are adjusted based
upon international interest rates. The ability to service external debt will
also depend on the level of the relevant government's international currency
reserves and its access to foreign exchange. Currency devaluations may affect
the ability of a government issuer to obtain sufficient foreign exchange to
service its external debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, the Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible since
the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for the Fund
to purchase additional foreign currency on the spot market (and bear the expense
of such purchase) if the market value of the security is less than the amount of
foreign currency the Fund is obligated to deliver (and if a decision is made to
sell the security and make delivery of the foreign currency). Conversely, it may
be necessary to sell on the spot market some of the foreign currency received
upon the sale of the portfolio security if its market value exceeds the amount
of foreign currency the Fund is obligated to deliver.
* * *
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Fund's investment policies, restrictions and risk factors.
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<PAGE>
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
Fund Information; Literature; Price; Yield and Performance Figures
Shareholder Service Center
800-523-1918
Information on Existing Regular Investment Accounts and Retirement
Plan Accounts; Wire Investments; Wire Liquidations; Telephone
Liquidations and Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
You can call the Investor Information Center at any time for current
performance information. Total return information may also be included in
advertisements and information given to shareholders.
Shareholder Services
During business hours, you can call the Delaware Group's Shareholder
Service Center. Our representatives can answer any questions about your account,
the Fund, various service features and other funds in the Delaware Group.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations. Delaphone also provides
current performance information on the Fund, as well as other funds in the
Delaware Group. Delaphone is available seven days a week, 24 hours a day.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of dividends. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling the Shareholder Service Center.
Duplicate Confirmations
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or her.
This makes it easier for your adviser to help you manage your investments.
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<PAGE>
Tax Information
Each year, Global Funds, Inc. will mail to you information on the tax
status of your dividends and distributions.
Dividend Payments
Dividends, capital gains and other distributions, if any, are
automatically reinvested in your account. You may, however, elect to have the
dividends earned in one fund automatically invested in another Delaware Group
fund with a different investment objective, subject to certain exceptions and
limitations.
For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call the
Shareholder Service Center.
Retirement Planning
An investment in the Fund may be a suitable investment option for
tax-deferred retirement plans. Delaware Group offers a full spectrum of
qualified and non-qualified retirement plans, including the popular 401(k)
deferred compensation plan, IRA, and the new Roth IRA. Just call the Delaware
Group at 1-800- 523-1918 for more information.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of the Fund with the dollar amount of new
purchases of Class A Shares of the Fund to qualify for a reduced front-end sales
charge on such purchases of Class A Shares. Under the Combined Purchases
Privilege, you may also include certain shares that you own in other funds in
the Delaware Group. See Classes of Shares.
Letter of Intention
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain of
your purchases of Delaware Group fund shares over a 13-month period. See Classes
of Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds
from a redemption of Class A Shares, within one year of the date of the
redemption, without paying a front-end sales charge. See Part B.
Exchange Privilege
The Exchange Privilege permits you to exchange all or part of your
shares into shares of other funds in the Delaware Group, subject to certain
exceptions and limitations. For additional information on exchanges, see
Investing by Exchange under How to Buy Shares and, Redemption and Exchange.
Wealth Builder Option
You may elect to invest in the Fund through regular liquidations of
shares in your accounts in other funds in the Delaware Group. Investments under
this feature are exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Fund shares. See Additional Methods of Adding
to Your Investment - Wealth Builder Option and Investing by Exchange under How
to Buy Shares, and Redemption and Exchange.
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<PAGE>
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
each Fund's investments and performance. Global Funds, Inc.'s fiscal year ends
on November 30.
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<PAGE>
CLASSES OF SHARES
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
Class B Shares ("deferred sales charge alternative") or Class C Shares ("level
sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Absent any applicable fee waiver, Class A Shares are subject to annual
12b-1 Plan expenses of up to a maximum of 0.30% of average daily net assets of
such shares. Certain purchases of Class A Shares qualify for reduced front-end
sales charges. See Front-End Sales Charge Alternative - Class A Shares, below.
See also Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value under Redemption and Exchange and
Distribution (12b-1) and Service under Management of the Fund.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end sales charge
when they are purchased, but are subject to a CDSC if they are redeemed within
six years of purchase. Absent any applicable fee waiver, Class B Shares are
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 such shares for approximately eight years after purchase. Class B
Shares permit all of the investor's dollars to work from the time the investment
is made. If no waiver of 12b-1 fees is in effect, the higher 12b-1 Plan expenses
paid by Class B Shares will cause such shares to have a higher expense ratio and
to pay lower dividends than Class A Shares. At the end of approximately eight
years after purchase, Class B Shares automatically will be converted into Class
A Shares and, thereafter, for the remainder of the life of the investment, the
annual 12b-1 Plan fee of up to 0.30% for Class A Shares will apply. See
Automatic Conversion of Class B Shares, below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end sales charge
when they are purchased, but are subject to a CDSC if they are redeemed within
12 months of purchase. Absent any applicable fee waiver, Class C Shares are
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 such shares for the life of the investment. If no waiver of 12b-1 fees
is in effect, the higher 12b-1 Plan expenses paid by Class C Shares will cause
such shares to have a higher expense ratio and to pay lower dividends than Class
A Shares. Unlike Class B Shares, Class C Shares do not convert to another class.
The alternative purchase arrangements described above permit investors
to choose the method of purchasing shares that is most suitable given the amount
of their purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether, given their
particular circumstances, it is more advantageous to purchase Class A Shares and
incur a front-end sales charge, purchase Class B Shares and have the entire
initial purchase amount invested in the Fund with their investment being subject
to a CDSC if they redeem shares within six years of purchase, or purchase Class
C Shares and have the entire initial purchase amount invested in the Fund with
their investment being subject to a CDSC if they redeem shares within 12 months
of purchase. In addition, investors should consider the level of annual 12b-1
Plan expenses applicable to each Class. If no waiver of 12b-1 fees is in effect,
the higher 12b-1 Plan expenses on Class B Shares and Class C Shares will be
offset to the extent a return is realized on the additional money initially
invested upon the purchase of such shares. However, there can be no assurance as
to the return, if any, that will be realized on such additional
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money. In addition, the effect of any return earned on such additional money
will diminish over time. In comparing Class B Shares to Class C Shares,
investors should also consider the duration of the annual 12b-1 Plan expenses to
which each of the Classes is subject and the desirability of an automatic
conversion feature, which is available only for Class B Shares.
For the distribution and related services provided to, and the expenses
borne on behalf of, the Fund, absent any applicable fee waiver, the Distributor
and others will be paid, in the case of Class A Shares, from the proceeds of the
front-end sales charge and 12b-1 Plan fees and, in the case of Class B Shares
and Class C Shares, from the proceeds of the 12b-1 Plan fees and, if applicable,
the CDSC incurred upon redemption. Financial advisers may receive different
compensation for selling Class A Shares, Class B Shares and Class C Shares.
Investors should understand that the purpose and function of the respective
12b-1 Plans and the CDSCs applicable to Class B Shares and Class C Shares are
the same as those of the 12b-1 Plan and the front-end sales charge applicable to
Class A Shares in that such fees and charges are used to finance the
distribution of the respective Classes. See Distribution (12b-1) and Service
under Management of the Fund.
Dividends, if any, paid on Class A Shares, Class B Shares and Class C
Shares will be calculated in the same manner, at the same time and on the same
day and will be in the same amount, except that, when assessed, the additional
amount of 12b-1 Plan expenses relating to Class B Shares and Class C Shares will
be borne exclusively by such shares. See Calculation of Offering Price and Net
Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. Global Funds, Inc. and the Distributor intend to operate in compliance
with these rules.
Front-End Sales Charge Alternative - Class A Shares
Class A Shares may be purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.
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<PAGE>
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following table.
<TABLE>
Global Equity Fund A Class
- -------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % ofCommission***
Offering Amount as % of
Amount of Purchase Price Invested** Offering Price
- --------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 4.75% 4.98% 4.00%
$100,000 but under $250,000 3.75 3.89 3.00
$250,000 but under $500,000 2.50 2.55 2.00
$500,000 but under $1,000,000* 2.00 2.07 1.60
* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1%
Limited CDSC may apply upon redemption of such shares.
** Based upon the net asset value per share of Class A Shares as of the
end of Global Funds, Inc.'s most recent fiscal year.
*** Financial institutions or their affiliated brokers may receive an
agency transaction fee in the percentages set forth above.
</TABLE>
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify
for the reduced front-end sales charge on the basis of previous or
current purchases. The reduced front-end sales charge will be granted
upon confirmation of the shareholder's holdings by the Fund. Such
reduced front-end sales charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during
which the Distributor may reallow to dealers up to the full amount of
the front-end sales charge shown above. In addition, certain dealers
who enter into an agreement to provide extra training and information
on Delaware Group products and services and who increase sales of
Delaware Group funds may receive an additional commission of up to
0.15% of the offering price. Dealers who receive 90% or more of the
sales charge may be deemed to be underwriters under the 1933 Act.
- --------------------------------------------------------------------------------
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For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers through
whom such purchases are made in accordance with the following schedule:
Dealer's Commission
(as a 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
For accounts with assets over $1 million, the dealer commission resets
annually to the highest incremental commission rate on the anniversary of the
first purchase. In determining a financial adviser's eligibility for the
dealer's commission, purchases of Class A Shares of other Delaware Group funds
as to which a Limited CDSC applies may be aggregated with those of Class A
Shares of the 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.
Redemptions of Class A Shares purchased at net asset value may result
in the imposition of a Limited CDSC if the dealer's commission described above
was paid in connection with the purchase of those shares. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of the Fund and shares of other funds in
the Delaware Group, except as noted below, you can reduce the front-end sales
charges on any additional purchases of Class A Shares. Shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products may be combined with other Delaware Group fund holdings. In
addition, assets held by investment advisory clients of the Manager or its
affiliates in a stable value account may be combined with other Delaware Group
fund holdings. Shares of other funds that do not carry a front-end sales charge
or CDSC may not be included unless they were acquired through an exchange from a
Delaware Group fund that does carry a front-end sales charge or CDSC.
This privilege permits you to combine your purchases and holdings with
those of your spouse, your children under 21 and any trust, fiduciary or
retirement account for the benefit of such family members.
It also permits you to use these combinations under a Letter of
Intention. A Letter of Intention allows you to make purchases over a 13-month
period and qualify the entire purchase for a reduction in front-end sales
charges on Class A Shares.
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Combined purchases of $1,000,000 or more, including certain purchases
made at net asset value pursuant to a Right of Accumulation or under a Letter of
Intention, may result in the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative -Class A Shares, above.
Allied Plans
Class A Shares are available for purchase by participants in certain
401(k) Defined Contribution Plans ("Allied Plans") which are made available
under a joint venture agreement between the Distributor and another institution
through which mutual funds are marketed and which allow investments in Class A
Shares of designated Delaware Group funds ("eligible Delaware Group fund
shares"), as well as shares of designated classes of non-Delaware Group funds
("eligible non-Delaware Group fund shares"). Class B Shares and Class C Shares
are not eligible for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Group and eligible non-Delaware Group fund shares
held by the Allied Plan may be combined with the dollar amount of new purchases
by that Allied Plan to obtain a reduced front-end sales charge on additional
purchases of eligible Delaware Group fund shares.
Participants in Allied Plans may exchange all or part of their eligible
Delaware Group fund shares for other eligible Delaware Group fund shares or for
eligible non-Delaware Group fund shares at net asset value without payment of a
front-end sales charge. However, exchanges of eligible fund shares, both
Delaware Group and non-Delaware Group, which were not subject to a front-end
sales charge, will be subject to the applicable sales charge if exchanged for
eligible Delaware Group fund shares to which a sales charge applies. No sales
charge will apply if the eligible fund shares were previously acquired through
the exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.
A dealer's commission may be payable on purchases of eligible Delaware
Group fund shares under an Allied Plan. In determining a financial adviser's
eligibility for a dealer's commission on net asset value purchases of eligible
Delaware Group fund shares in connection with Allied Plans, all participant
holdings in the Allied Plan will be aggregated.
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described under Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Group and non-Delaware Group fund shares. When
eligible Delaware Group fund shares are exchanged into eligible non-Delaware
Group fund shares, the Limited CDSC will be imposed at the time of the exchange,
unless the joint venture agreement specifies that the amount of the Limited CDSC
will be paid by the financial adviser or selling dealer. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.
Buying Class A Shares at Net Asset Value
Class A Shares of the Fund may be purchased at net asset value under
the Delaware Group Dividend Reinvestment Plan and, under certain circumstances,
the Exchange Privilege or the 12-Month Reinvestment Privilege. See The Delaware
Difference and Redemption and Exchange for additional information.
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Purchases of Class A Shares may be made at net asset value by current
and former officers, directors and employees (and members of their families) of
the Manager, any affiliate, any of the funds in the Delaware Group, certain of
their agents and registered representatives and employees of authorized
investment dealers and by employee benefit plans for such entities. Individual
purchases, including those in retirement accounts, must be for accounts in the
name of the individual or a qualifying family member.
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. Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with special investment products, such as wrap
accounts or similar fee based programs.
Purchases of Class A Shares at net asset value may also be made by the
following: institutions investing for the account of their trust customers if
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 any stable value account available to
investment advisory clients of the Manager or its affiliates, or (ii) is
sponsored by an employer that has at any point after May 1, 1997 had 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. See Group Investment Plans for information regarding the applicability of
the Limited CDSC.
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 Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
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Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE
401(k), Profit Sharing, Money Purchase Pension, 401(k) Defined Contribution
Plans, and 403(b)(7) and 457 Deferred Compensation Plans) may benefit from the
reduced front-end sales charges available on Class A Shares 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 will be aggregated to
determine the applicable front-end sales charge reduction on each purchase, both
initial and subsequent, if, at the time of each such purchase, the company
notifies the Fund that it qualifies for the reduction. Employees participating
in such Group Investment Plans may also combine the investments held in their
plan account to determine the front-end sales charge applicable to purchases in
non-retirement Delaware Group investment accounts if, at the time of each such
purchase, they notify the Fund that they are eligible to combine purchase
amounts held in their plan account.
The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid if such redemption is made pursuant to a withdrawal of
the entire plan from Delaware Group funds. See Contingent Deferred Sales Charge
for Certain Redemption of Class A Shares Purchased at Net Asset Value under
Redemptions and Exchange.
For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class B Shares at the time of
purchase from its own assets in an amount equal to no more than 4% of the dollar
amount purchased. In addition, 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 pay additional compensation to dealers or
brokers for selling Class B Shares at the time of purchase. As discussed below,
however, absent any applicable fee waiver, Class B Shares are subject to annual
12b-1 Plan expenses and, if redeemed within six years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid
to the Distributor and others for providing distribution and related services,
and bearing related expenses, in connection with the sale of Class B Shares.
These payments support the compensation paid to dealers or brokers for selling
Class B Shares. Payments to the Distributor and others under the Class B 12b-1
Plan may be in an amount equal to no more than 1% annually. The combination of
the CDSC and the proceeds of the 12b-1 Plan fees makes it possible for the Fund
to sell Class B Shares without deducting a front-end sales charge at the time of
purchase.
Holders of Class B Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class B Shares
described in this Prospectus, even after the exchange. Such CDSC schedule may be
higher than the CDSC schedule for Class B Shares acquired as a result of the
exchange. See Redemption and Exchange.
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Automatic Conversion of Class B Shares
Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic
conversion into Class A Shares. Conversions of Class B Shares into Class A
Shares will occur only four times in any calendar year, on the last business day
of the second full week of March, June, September and December (each, a
"Conversion Date"). If the eighth anniversary after a purchase of Class B Shares
falls on a Conversion Date, an investor's Class B Shares will be converted on
that date. If the eighth anniversary occurs between Conversion Dates, an
investor's Class B Shares will be converted on the next Conversion Date after
such anniversary. Consequently, if a shareholder's eighth anniversary falls on
the day after a Conversion Date, that shareholder will have to hold Class B
Shares for as long as three additional months after the eighth anniversary of
purchase before the shares will automatically convert into Class A Shares.
Class B Shares of a fund acquired through a reinvestment of dividends
will convert to the corresponding Class A Shares of that fund (or, in the case
of Delaware Group Cash Reserve, Inc., Delaware Cash Reserve Consultant Class)
pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class C Shares at the time of
purchase from its own assets in an amount equal to no more than 1% of the dollar
amount purchased. As discussed below, absent any applicable fee waiver, Class C
Shares are subject to annual 12b-1 Plan expenses and, if redeemed within 12
months of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid
to the Distributor and others for providing distribution and related services,
and bearing related expenses, in connection with the sale of Class C Shares.
These payments support the compensation paid to dealers or brokers for selling
Class C Shares. Payments to the Distributor and others under the Class C 12b-1
Plan may be in an amount equal to no more than 1% annually.
Holders of Class C Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class C Shares as
described in this Prospectus. See Redemption and Exchange.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares Class B
Shares redeemed within six years of purchase may be subject to
a CDSC at the rates set forth below and Class C Shares redeemed within 12 months
of purchase may be subject to a CDSC of 1%. CDSCs are charged as a percentage of
the dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the net asset value at the time of purchase of the shares
being redeemed or the net asset value of those shares at 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 reinvestments of dividends or capital gains distributions. For purposes
of this formula, the "net asset value at the time of purchase" will be the net
asset value at purchase of Class B Shares or Class C Shares of the Fund, even if
those shares are later exchanged for shares of another Delaware Group fund. In
the event of an exchange of the shares, the "net asset value of such shares at
the time of redemption" will be the net asset value of the shares that were
acquired in the exchange.
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The following table sets forth the rates of the CDSC for the Class B
Shares of the 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 will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares, absent any applicable fee waiver. See Automatic Conversion of Class B
Shares, above. Investors are reminded that the Class A Shares into which Class B
Shares will convert are subject to ongoing annual 12b-1 Plan expenses of up to a
maximum of 0.30% of average daily net assets of such shares.
In determining whether a CDSC applies to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are redeemed
first, followed by shares acquired through the reinvestment of dividends or
distributions, and finally by shares held longest during the six-year period.
With respect to Class C Shares, it will be assumed that shares held for more
than 12 months are redeemed first followed by shares acquired through the
reinvestment of dividends or distributions, and finally by shares held for 12
months or less.
All investments made during a calendar month, regardless of what day of
the month the investment occurred, will age one month on the last day of that
month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and Class C
Shares. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Redemption and Exchange.
Other Payments to Dealers -- Class A Shares, Class B Shares and Class C Shares
From time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Classes exceed certain
limits, as set by the Distributor, may receive from the Distributor an
additional payment of up to 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.
Subject to pending amendments to the NASD's Conduct Rules , in
connection with the promotion of Delaware Group fund shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from time to time,
pay or allow additional promotional incentives to dealers, which shall include
non-cash concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as part of
preapproved sales contests. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the
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NASD's Conduct Rules will be amended such that the ability of the Distributor to
pay non-cash compensation as described above will be restricted in some fashion.
The Distributor intends to comply with the NASD's Conduct Rules as they may be
amended.
Global Equity Fund Institutional Class
In addition to offering Class A Shares, Class B Shares and Class C
Shares, the Fund also offers Global Equity Fund Institutional Class, which is
described in a separate prospectus and is available for purchase only by certain
investors. Global Equity Fund Institutional Class shares generally are
distributed directly by the Distributor and do not have a front-end sales
charge, a CDSC or a Limited CDSC, and are not subject to 12b-1 Plan distribution
expenses. To obtain the prospectus that describes Global Equity Fund
Institutional Class, contact the Distributor by writing to the address or by
calling the telephone number listed on page 1 of this Prospectus.
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HOW TO BUY SHARES
Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. For purchases under the Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act or through an Automatic Investing Plan,
there is a minimum initial purchase of $250 and a minimum subsequent purchase of
$25. Minimum purchase requirements do not apply to retirement plans other than
IRAs, for which there is a minimum initial purchase of $250, and a minimum
subsequent purchase of $25, regardless of which Class is selected.
There is a maximum purchase limitation of $250,000 on each purchase of
Class B Shares. For Class C Shares, each purchase must be in an amount that is
less than $1,000,000. An investor may exceed these maximum purchase limitations
by making cumulative purchases over a period of time. In doing so, an investor
should keep in mind that reduced front-end sales charges are available on
investments of $100,000 or more in Class A Shares, and that Class A Shares (i)
are subject to lower annual 12b-1 Plan expenses than Class B Shares and Class C
Shares and (ii) generally are not subject to a CDSC. For retirement plans, the
maximum purchase limitations apply only to the initial purchase of Class B
Shares or Class C Shares by the plan.
Investing through Your Investment Dealer
You can make a purchase of shares of the Fund through most investment
dealers who, as part of the service they provide, must transmit orders promptly.
They may charge for this service. If you want a dealer but do not have one, the
Delaware Group can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application or, in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to Global Equity Fund A Class, Global Equity Fund
B Class or Global Equity Fund C Class, to Delaware Group at 1818 Market Street,
Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to the specific Fund and Class selected. Your check should be
identified with your name(s) and account number. An investment slip (similar to
a deposit slip) is provided at the bottom of transaction confirmations and
dividend statements that you will receive from Global Funds, Inc. Use of this
investment slip can help expedite processing of your check when making
additional purchases. Your investment may be delayed if you send additional
purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Fund and Class in which
you are investing).
1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement account, an appropriate retirement
plan application, for the specific Fund and Class selected, to Delaware Group at
1818 Market Street, Philadelphia, PA 19103.
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2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a retirement plan account, call the
Shareholder Service Center for special wiring instructions.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group,
you may write and authorize an exchange of part or all of your investment into
shares of the Fund. If you wish to open an account by exchange, call the
Shareholder Service Center for more information. All exchanges are subject to
the eligibility and minimum purchase requirements set forth in each fund's
prospectus. See Redemption and Exchange for more complete information concerning
your exchange privileges.
Holders of Class A Shares may exchange all or part of their shares for
certain of the shares of other funds in the Delaware Group, including other
Class A Shares, but may not exchange their Class A Shares for Class B Shares or
Class C Shares of the Fund or of any other fund in the Delaware Group. Holders
of Class B Shares of the Fund are permitted to exchange all or part of their
Class B Shares only into Class B Shares of other Delaware Group funds.
Similarly, holders of Class C Shares of the Fund are permitted to exchange all
or part of their Class C Shares only into Class C Shares of other Delaware Group
funds. Class B Shares of the Fund and Class C Shares of the Fund acquired by
exchange will continue to carry the CDSC and, in the case of Class B Shares, the
automatic conversion schedule of the fund from which the exchange is made. The
holding period of Class B Shares of the Fund acquired by exchange will be added
to that of the shares that were exchanged for purposes of determining the time
of the automatic conversion into Class A Shares of the Fund.
Permissible exchanges into Class A Shares of the Fund will be made
without a front-end sales charge, except for exchanges of shares that were not
previously subject to a front-end sales charge (unless such shares were acquired
through the reinvestment of dividends). Permissible exchanges into Class B
Shares or Class C Shares of the Fund will be made without the imposition of a
CDSC by the fund from which the exchange is being made at the time of the
exchange.
See Allied Plans under Classes of Shares for information on exchanges
by participants in an Allied Plan.
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish to
use the following services:
1. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize Global Funds,
Inc. to transfer a designated amount monthly from your checking account to your
Fund account. Many shareholders use this as an automatic savings plan.
Shareholders should allow a reasonable amount of time for initial purchases and
changes to these plans to become effective.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, 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.
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<PAGE>
2. Direct Deposit
You may have your employer or bank make regular investments directly to
your Fund account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad Retirement
benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Global Funds, Inc. has the
right to liquidate your shares to reimburse the government or transmitting bank.
If there are insufficient funds in your account, you are obligated to reimburse
the Fund.
3. Wealth Builder Option
You can use our Wealth Builder Option to invest in the Fund through
regular liquidations of shares in your accounts in other funds in the Delaware
Group. You may also elect to invest in other mutual funds in the Delaware Group
through the Wealth Builder Option through regular liquidations of shares in your
Fund account.
Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your account in
one or more funds in the Delaware Group and invested automatically into any
other account in a Delaware Group mutual fund that you may specify. If in
connection with the election of the Wealth Builder Option, you wish to open a
new account to receive the automatic investment, such new account must meet the
minimum initial purchase requirements described in the prospectus of the fund
that you select. All investments under this option are exchanges and are
therefore subject to the same conditions and limitations as other exchanges
noted above. You can terminate your participation in Wealth Builder at any time
by giving written notice to the fund from which the exchanges are made. See
Redemption and Exchange.
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.
4. Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or dividend
income) invested in your Fund account or invested in certain other funds in the
Delaware Group, subject to the exceptions noted below as well as the eligibility
and minimum purchase requirements set forth in each fund's prospectus.
Reinvestments of distributions into Class A Shares of the Fund or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of the Fund or of other
Delaware Group funds or into Class C Shares of the Fund or of other Delaware
Group funds are also made without any sales charge and will not be subject to a
CDSC if later redeemed. See Automatic Conversion of Class B Shares under Classes
of Shares for information concerning the automatic conversion of Class B Shares
acquired by reinvesting dividends.
Holders of Class A Shares of the Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the Delaware
Group, including the Fund. Holders of Class B Shares of the Fund may reinvest
their distributions only into Class B Shares of the funds in the Delaware Group
which offer that class of shares. Similarly, holders of Class C Shares of the
Fund may reinvest their distributions only into Class C Shares of the funds in
the Delaware Group which offer that class of shares. For more information about
reinvestments, call the Shareholder Service Center.
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<PAGE>
Capital gains and/or dividend distributions for participants in the
following retirement plans are automatically reinvested into the same Delaware
Group fund in which their investments are held: 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.
Purchase Price and Effective Date
The offering price and net asset value of Class A Shares, Class B
Shares and Class C Shares are determined as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the
Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund, its agent or designee. The effective
date of a direct purchase is the day your wire, electronic transfer or check is
received, unless it is received after the time the offering price or net asset
value of shares is determined, as noted above. Purchase orders received after
such time will be effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
The Fund also reserves the right, following shareholder notification,
to charge a service fee on non- retirement accounts that, as a result of
redemption, have remained below the minimum stated account balance for a period
of three or more consecutive months. Holders of such accounts may be notified of
their insufficient account balance and advised that they have until the end of
the current calendar quarter to raise their balance to the stated minimum. If
the account has not reached the minimum balance requirement by that time, the
Fund will charge a $9 fee for that quarter and each subsequent calendar quarter
until the account is brought up to the minimum balance. The service fee will be
deducted from the account during the first week of each calendar quarter for the
previous quarter, and will be used to help defray the cost of maintaining
low-balance accounts. No fees will be charged without proper notice, and no CDSC
will apply to such assessments.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of a
CDSC or Limited CDSC if he or she redeems any portion of his or her account.
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REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways.
The exchange service is useful if your investment requirements change and you
want an easy way to invest in other equity funds, bond funds, tax-advantaged
funds or money market funds. This service is also useful if you are anticipating
a major expenditure and want to move a portion of your investment into a fund
that has the checkwriting feature. Exchanges are subject to the requirements of
each fund and all exchanges of shares constitute taxable events. See Taxes.
Further, in order for an exchange to be processed, shares of the fund being
acquired must be registered in the state where the acquiring shareholder
resides. You may want to consult your financial adviser or investment dealer to
discuss which funds in the Delaware Group will best meet your changing
objectives, and the consequences of any exchange transaction. You may also call
the Delaware Group directly for fund information.
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.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after the Fund receives your request in good order,
subject, in the case of a redemption, to any applicable CDSC or Limited CDSC.
For example, redemption or exchange requests received in good order after the
time the offering price and net asset value of shares are determined will be
processed on the next business day. See Purchase Price and Effective Date under
How to Buy Shares. A shareholder submitting a redemption request may indicate
that he or she wishes to receive redemption proceeds of a specific dollar
amount. In the case of such a request, and in the case of certain redemptions
from retirement plan accounts, the Fund will redeem the number of shares
necessary to deduct the applicable CDSC in the case of Class B Shares and Class
C Shares, and, if applicable, the Limited CDSC in the case of Class A Shares and
tender to the shareholder the requested amount, assuming the shareholder holds
enough shares in his or her account for the redemption to be processed in this
manner. Otherwise, the amount tendered to the shareholder upon redemption will
be reduced by the amount of the applicable CDSC or Limited CDSC. Redemption
proceeds will be distributed promptly, as described below, but not later than
seven days after receipt of a redemption request.
Except as noted below, for a redemption request to be in "good order,"
you must provide your account number, account registration, and the total number
of shares or dollar amount of the transaction. For exchange requests, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Shareholder Service Center at 800-523-1918. The Fund
may suspend, terminate, or amend the terms of the exchange privilege upon 60
days' written notice to shareholders.
The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the check has cleared, which may take up to 15
days from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if there
has been a recent change to the shareholder's address of record.
There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not
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subject to a front-end sales charge, except for exchanges involving assets that
were previously invested in a fund with a front-end sales charge and/or
exchanges involving the reinvestment of dividends.
Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for shares of other funds in the Delaware Group (in each
case, "New Shares") in a permitted exchange, will not be subject to a CDSC that
might otherwise be due upon redemption of the Original Shares. However, such
shareholders will continue to be subject to the CDSC and, in the case of Class B
Shares, the automatic conversion schedule of the Original Shares as described in
this Prospectus and any CDSC assessed upon redemption will be charged by the
fund from which the Original Shares were exchanged. In an exchange of Class B
Shares from the Fund, the Fund's CDSC schedule may be higher than the CDSC
schedule relating to the New Shares acquired as a result of the exchange. For
purposes of computing the CDSC that may be payable upon a disposition of the New
Shares, the period of time that an investor held the Original Shares is added to
the period of time that an investor held the New Shares. With respect to Class B
Shares, the automatic conversion schedule of the Original Shares may be longer
than that of the New Shares. Consequently, an investment in New Shares by
exchange may subject an investor, absent any applicable fee waiver, to the
higher 12b-1 fees applicable to Class B Shares of the Fund for a longer period
of time than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except for
the CDSC applicable to certain redemptions of Class B Shares and Class C Shares
and the Limited CDSC applicable to certain redemptions of Class A Shares
purchased at net asset value, there is no fee charged by the Fund or the
Distributor for redeeming or exchanging your shares, but such fees could be
charged in the future. You may have your investment dealer arrange to have your
shares redeemed or exchanged. Your investment dealer may charge for this
service.
All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your shares. The request must be signed by all owners
of the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.
Payment is normally mailed the next business day after receipt of your
redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good order.
Certificates are issued for Class A Shares only if a shareholder submits a
specific request. Certificates are not issued for Class B Shares or Class C
Shares.
Written Exchange
You may also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your shares into another mutual
fund in the Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.
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Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your Class A Shares in certificate form, you may
redeem or exchange only by written request and you must return your
certificate(s).
The Telephone Redemption--Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an unusually
large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.
Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day after receipt of the redemption request. This service is only available to
individual, joint and individual fiduciary- type accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption proceeds. If you ask for a check, it will normally be mailed the next
business day after receipt of your redemption request to your predesignated bank
account. There are no separate fees for this redemption method, but the mail
time may delay getting funds into your bank account. Simply call the Shareholder
Service Center prior to the time the offering price and net asset value are
determined, as noted above.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into other funds in the Delaware Group under the same registration,
subject to the same conditions and limitations as other exchanges noted above.
As with the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
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Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value
A Limited CDSC will be imposed on certain redemptions of Class A Shares
(or shares into which such Class A Shares are exchanged) made within 12 months
of purchase, if such purchases were made at net asset value and triggered the
payment by the Distributor of the dealer's commission previously described. See
Classes of Shares.
The Limited CDSC will be paid to the Distributor and will be equal to
the lesser of 1% of: (1) the net asset value at the time of purchase of the
Class A Shares being redeemed; or (2) the net asset value of such Class A Shares
at the time of redemption. For purposes of this formula, the "net asset value at
the time of purchase" will be the net asset value at purchase of the Class A
Shares even if those shares are later exchanged for shares of another Delaware
Group fund and, in the event of an exchange of Class A Shares, the "net asset
value of such shares at the time of redemption" will be the net asset value of
the shares acquired in the exchange.
Redemptions of such Class A Shares held for more than 12 months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares into
another Delaware Group fund will not trigger the imposition of the Limited CDSC
at the time of such exchange. The period a shareholder owns shares into which
Class A Shares are exchanged will count towards satisfying the 12-month holding
period. The Limited CDSC is assessed if such 12-month period is not satisfied
irrespective of whether the redemption triggering its payment is of Class A
Shares of the Fund or Class A Shares acquired in the exchange.
In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of what day of the month the investment
occurred, will age one month on the last day of that month and each subsequent
month.
Waiver of Limited Contingent Deferred Sales Charge - Class A Shares
The Limited CDSC for Class A Shares on which a dealer's commission has
been paid will be waived in the following instances: (i) redemptions that result
from the Fund's right to liquidate a shareholder's account if the aggregate net
asset value of the shares held in the account is less than the then-effective
minimum account size; (ii) distributions to participants from a retirement plan
qualified under section 401(a) or 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code"), or due to death of a participant in such a plan; (iii)
redemptions pursuant to the direction of a participant or beneficiary of a
retirement plan qualified under section 401(a) or 401(k) of the Code with
respect to that retirement plan; (iv) periodic distributions from an IRA, SIMPLE
IRA or 403(b)(7) or 457 Deferred Compensation Plan due to death, disability, or
attainment of age 59 1/2 and IRA distributions qualifying under Section 72(t) of
the Code; (v) returns of excess contributions to an IRA; (vi) distributions by
other employee benefit plans to pay benefits; and (vii) redemptions by the
classes of shareholders who are permitted to purchase shares at net asset value,
regardless of the size of the purchase (see Buying Class A Shares at Net Asset
Value under Classes of Shares).
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA, SIMPLE IRA,
SEP/IRA, or 403(b)(7) or 457 Deferred Compensation Plans; (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, or 403(b)(7) or 457
Deferred Compensation Plan due to death, disability, or attainment of age 59
1/2, and IRA distributions qualifying under
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Section 72(t) of the Code; and (iv) distributions from an account if the
redemption results from the death of all registered owners of the account (in
the case of accounts established under the Uniform Gifts to Minors or Uniform
Transfers to Minors Acts or trust accounts, the waiver applies upon the death of
all beneficial owners) or a total and permanent disability (as defined in
Section 72 of the Code) of all registered owners occurring after the purchase of
the shares being redeemed.
The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in the
account is less than the then-effective minimum account size; (ii) returns of
excess contributions to an IRA, SIMPLE IRA, or 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution Plan; (iii) periodic distributions from a 403(b)(7) or 457
Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing Plan,
Money Purchase Pension Plan, 401(k) Defined Contribution Plans upon attainment
of age 70 1/2, and IRA distributions qualifying under Section 72(t) of the Code;
(iv) distributions from a 403(b)(7) or 457 Deferred Compensation Plan, Profit
Sharing Plan, or 401(k) Defined Contribution Plan, under hardship provisions of
the plan; (v) distributions from a 403(b)(7) or 457 Deferred Compensation Plan,
Profit Sharing Plan, Money Purchase Pension Plan, or a 401(k) Defined
Contribution Plan upon attainment of normal retirement age under the plan or
upon separation from service; (vi) periodic distributions from an IRA or SIMPLE
IRA on or after attainment of age 59 1/2; and (vii) distributions from an
account if the redemption results from the death of all registered owners of the
account (in the case of accounts established under the Uniform Gifts to Minors
or Uniform Transfers to Minors Acts or trust accounts, the waiver applies upon
the death of all beneficial owners) or a total and permanent disability (as
defined in Section 72 of the Code) of all registered owners occurring after the
purchase of the shares being redeemed.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on to all shareholders of record
of each Class of the Fund at the time the offering price of shares is
determined. See Purchase Price and Effective Date under How to Buy Shares. Thus,
when redeeming shares, dividends continue to be credited up to and including the
date of redemption.
Global Equity Fund will normally declare and make payments from net
investment income on an annual basis. Both dividends and distributions, if any,
are automatically reinvested in your account at net asset value. See The
Delaware Difference for more information on reinvestment options.
In addition to the dividends from net investment income and
distributions from realized securities profits that the Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, the Fund may declare special year-end dividend and
capital gains distributions during October, November or December to shareholders
of record on a date in such month. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by the Fund and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
Each class of the Fund will share proportionately in the investment
income and expenses of the Fund, except that, absent any applicable fee waiver,
the per share dividends from net investment income on Class A Shares, Class B
Shares and Class C Shares will vary due to the expenses under the 12b-1 Plan
applicable to each Class. Generally, when a 12b-1 Plan fee waiver is not in
effect, the dividends per share on Class B Shares and Class C Shares can be
expected to be lower than the dividends per share on Class A Shares because the
expenses under the 12b-1 Plans relating to Class B Shares and Class C Shares
will be higher than the expenses under the 12b-1 Plan relating to Class A
Shares. See Distribution (12b-1) and Service under Management of the Fund.
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TAXES
The tax discussion set forth below is included for general information
only. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Code. Because many of these changes are complex, and only indirectly affect the
Fund and its distributions to you, they are discussed in Part B. Changes in the
treatment of capital gains, however, are discussed in this section.
The Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of the Code. As such, the 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 certain
other requirements relating to the sources of its income and diversification of
its assets.
The Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to those investors who are subject
to income taxes as ordinary income, whether received in cash or in additional
shares. It is expected that either none or only a nominal portion of the Fund's
dividends will be eligible for the dividends-received deductions for
corporations. The portion of dividends paid by the Fund that so qualifies will
be designated each year in a notice from the Fund to the Fund's shareholders.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the length of
time an investor has owned shares in the Fund. The Fund does not seek to realize
any particular amount of capital gains during a year; rather, realized gains are
a by-product of Fund management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in the Fund are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief
Act of 1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
the Fund's securities were sold and how long they were held by the Fund before
they were sold. Investors who want more information on holding periods and other
qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record in such a month, but which, for operational reasons, may not be paid
to the shareholder until the following January, will be treated for tax purposes
as if paid by the Fund and received by the shareholder on December 31 of the
year declared.
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The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund and any other fund in the Delaware Group. Any loss incurred on a sale
or exchange of Fund shares that had been held for six months or less will be
treated as long-term capital loss to the extent of capital gains dividends
received with respect to such shares. All or a portion of the sales charge
incurred in acquiring a Fund's shares will be excluded from the federal tax
basis of any of such shares sold or exchanged within 90 days of their purchase
(for purposes of determining gain or loss upon sale of such shares) if the sale
proceeds are reinvested in such Fund or in another fund in the Delaware Group of
funds and a sales charge that would otherwise apply to the reinvestment is
reduced or eliminated. Any portion of such sales charge excluded from the tax
basis of the shares sold will be added to the tax basis of the shares acquired
in the reinvestment.
The Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total assets
of the Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. If this election is made,
shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by the
Fund), and (ii) entitled to either deduct (as an itemized deduction in the case
of individuals) their share of such foreign taxes in computing their taxable
income or to claim a credit for such taxes against their U.S. income tax,
subject to certain limitations under the Code. Shareholders will be informed by
a Fund at the end of each calendar year regarding the availability of any
credits on and the amount of foreign source income to be included in their
income tax returns.
The automatic conversion of Class B Shares into Class A Shares at the
end of approximately eight years after purchase will be tax-free for federal tax
purposes. See Automatic Conversion of Class B Shares under Classes of Shares.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes . For example, distributions
of interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisors.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the dividends and distributions paid by the Fund. Shareholders will
also receive each year information as to the portion of dividend income, if any,
that is derived from U.S. government securities that are exempt from state
income tax. Of course, shareholders who are not subject to tax on their income
would not be required to pay tax on amounts distributed to them by the Fund.
Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
See Accounting and Tax Issues and Distributions and Taxes in Part B for
additional information on tax matters relating to the Fund and its shareholders.
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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
The net asset value ("NAV") per share is computed by adding the value
of all securities and other assets in the Fund's portfolio, deducting any
liabilities of the Fund (expenses and fees are accrued daily) and dividing by
the number of Fund shares outstanding. Portfolio securities for which market
quotations are available are priced at market value. Debt securities are priced
at fair value by an independent pricing service using methods approved by Global
Funds, Inc.'s Board of Directors. Short-term investments having a maturity of
less than 60 days are valued at amortized cost, which approximates market value.
All other securities are valued at their fair value as determined in good faith
and in a method approved by Global Funds, Inc.'s Board of Directors.
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the NAV per share. The
offering price per share of Class A Shares consists of the NAV per share next
computed after the order is received, plus any applicable front-end sales
charges.
The offering price and NAV are computed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open.
The Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the net
asset value of the Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that Global Equity Fund Institutional Class will not incur any of the
expenses under Global Funds, Inc.'s 12b-1 Plans, and Class A Shares, Class B
Shares and Class C Shares of the Fund alone will bear the 12b-1 Plan expenses
payable under their respective 12b-1 Plan. Due to the specific distribution
expenses and other costs that will be allocable to each class, the NAV of each
class of the Fund will vary.
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MANAGEMENT OF THE FUND
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager and Sub-Adviser
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund. Delaware
International is affiliated with Delaware Management Company, Inc. ("Delaware"
or the "Sub-Adviser") which manages the U.S. securities portion of the Fund. The
Manager has offices located at Third Floor, 80 Cheapside, London, England EC2V
6EE.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On November 30, 1997, Delaware and its affiliates
within the Delaware Group, including Delaware International, were managing in
the aggregate more than $39 billion in assets in various institutional or
separately managed (approximately $23,274,532,000) and investment company
(approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). Delaware International is also controlled by DMH through
several subsidiaries. On April 3, 1995, a merger between DMH and a wholly owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, the Manager and the Sub-Adviser are now 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.
Under the Investment Management Agreement between the Manager and
Global Funds, Inc. on behalf of Global Equity Fund, the Manager is entitled to
an annual fee equal to 0.80% of the Fund's average daily net assets. The
directors of Global Funds, Inc. annually review fees paid to the Manager.
As noted below, the Distributor has temporarily elected to voluntarily
waive its right to receive 12b-1 fees from the Fund. Delaware International has
also elected voluntarily to waive that portion, if any, of the annual management
fees payable by Global Equity Fund and to pay expenses of the Fund to the extent
necessary to ensure that the Total Operating Expenses (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses and 12b-1 Plan
expenses) of Class A Shares, Class B Shares and Class C Shares do not exceed
0.80% through June 30, 1998.
Subject to the overall supervision of the Manager, the Sub-Adviser
manages the U.S. securities portion of Global Equity Fund's portfolio and
furnishes the Manager with investment recommendations, asset allocation advice,
research and other investment services with respect to U.S. securities. For the
services provided to the Manager, the Manager pays the Sub-Adviser a monthly fee
equal to 50% of the fee paid to the Manager under the terms of the Investment
Management Agreement.
Elizabeth A. Desmond has primary responsibility for making day-to-day
investment decisions for the Fund and has had such responsibility since its
inception. Ms. Desmond is a graduate of Wellesley College and the masters
program in East Asian studies at Stanford University. After working for the
Japanese government for two years, she began her investment career as a Pacific
Basin investment manager with Shearson Lehman Global Asset Management. Prior to
joining Delaware in the Spring of 1991, she was a Pacific Basin equity analyst
and senior portfolio manager at Hill Samuel Investment Advisers Ltd. Ms. Desmond
is a CFA charterholder.
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Robert L.Arnold, Vice President/Portfolio Manager for the Fund, has
responsibility for making investment decisions for the U.S. equity portion of
Global Equity Fund and has had such responsibility for the Fund since its
inception. Prior to this at the Delaware Group, he was a financial analyst
focusing on the financial services industry including banks, thrifts, insurance
companies and consumer finance companies. Mr. Arnold holds a BS from Carnegie
Mellon University and earned an MBA from the University of Chicago. He began his
investment career as a management consultant with Arthur Young in Philadelphia.
Prior to joining Delaware Group in March 1992, Mr. Arnold was a planning analyst
with Chemical Bank in New York.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time they
have been held. The degree of portfolio activity will affect brokerage costs of
the Fund and may affect taxes payable by the Fund's shareholders to the extent
that net capital gains are realized. Given the Fund's investment objective, it
is anticipated that the portfolio turnover rate of the Fund will not exceed
100%.
The Manager and the Sub-Adviser use their best efforts to obtain the
best available price and most favorable execution for portfolio transactions.
Orders may be placed with brokers or dealers who provide brokerage and research
services to the Manager or the Sub-Adviser or their advisory clients. These
services may be used by the Manager and the Sub-Adviser in servicing any of
their respective accounts. Subject to best price and execution, the Manager and
the Sub-Adviser may consider a broker/dealer's sales of shares of funds in the
Delaware Group of funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of its
Classes in advertising and other types of literature. Total return will be based
on a hypothetical $1,000 investment, reflecting the reinvestment of all
distributions at net asset value and: (i) in the case of Class A Shares, the
impact of the maximum front-end sales charge at the beginning of each specified
period; and (ii) in the case of Class B Shares and Class C Shares, the deduction
of any applicable CDSC at the end of the relevant period. Each presentation will
include the average annual total return for one-, five- and ten-year or
life-of-fund periods, as applicable. Each Fund may also advertise aggregate and
average total return information concerning a Class over additional periods of
time. In addition, the Fund may present total return information that does not
reflect the deduction of the maximum front-end sales charge or any applicable
CDSC. In this case, such total return information would be more favorable than
total return information that includes deductions of the maximum front-end sales
charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the Classes
will fluctuate over time. Past performance is not considered a guarantee of
future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor of the Fund's shares under a Distribution Agreement with Global
Funds, Inc. dated as of July 21, 1997.
Global Funds, Inc. has adopted a separate distribution plan under Rule
12b-1 for each of the Class A Shares, Class B Shares and Class C Shares of the
Fund (the "Plans"). The Plans permit the Fund to pay the Distributor from the
assets of the respective Classes a monthly fee for services and expenses in
distributing and promoting sales of shares.
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These expenses include, among other things, preparing and distributing
advertisements, sales literature, and prospectuses and reports used for sales
purposes, compensating sales and marketing personnel, holding special promotions
for specified periods of time and paying distribution and maintenance fees to
brokers, dealers and others. In connection with the promotion of shares of the
Classes, the Distributor may, from time to time, pay to participate in
dealer-sponsored seminars and conferences and reimburse dealers for expenses
incurred in connection with preapproved seminars, conferences, and advertising.
The Distributor may pay or allow additional promotional incentives to dealers as
part of preapproved sales contests and/or to dealers who provide extra training
and information concerning a Class and increase sales of the Class. In addition,
the Fund may make payments from the 12b-1 Plan fees of its respective Classes
directly to others, such as banks, who aid in the distribution of Class shares
or provide services in respect of a Class, pursuant to service agreements with
Global Funds, Inc. The Distributor has elected voluntarily to waive its right to
receive 12b-1 fees (including service fees) from the commencement of the public
offering of the Classes through June 30, 1998.
The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of the Fund are also used to pay the Distributor for advancing
the commission costs to dealers with respect to the initial sale of such shares.
Absent any applicable fee waiver, the aggregate fees paid by the Fund
from the assets of the respective Classes to the Distributor and others under
the Plans may not exceed (i) 0.30% of Class A Shares' average daily net assets
in any year, and (ii) 1% (0.25% of which are service fees to be paid by the Fund
to the Distributor, dealers and others for providing personal service and/or
maintaining shareholder accounts) of each of the Class B Shares' and Class C
Shares' average daily net assets in any year. The Fund's Class A Shares, Class B
Shares and Class C Shares will not incur any distribution expenses beyond these
limits, which may not be increased without shareholder approval.
While payments, if any, pursuant to the Plans may not exceed 0.30%
annually with respect to Class A Shares, and 1% annually with respect to each of
the Class B Shares and Class C Shares, the Plans do not limit fees to amounts
actually expended by the Distributor. It is therefore possible that the
Distributor may realize a profit in any particular year. However, the
Distributor currently expects that distribution expenses will likely equal or
exceed payments under the Plans. The Distributor may, however, incur such
additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly fees
paid to the Distributor under the Plans are subject to the review and approval
of Global Funds, Inc.'s unaffiliated directors, who may reduce the fees or
terminate the Plans at any time.
The Plans do not apply to shares of Global Equity Fund Institutional
Class. Those 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
Global Equity Fund Institutional Class.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund
pursuant to an amended and restated agreement. The Transfer Agent also provides
accounting services to the Fund pursuant to the terms of a separate Fund
Accounting Agreement.
The Distributor and the Transfer Agent are also indirect, wholly owned
subsidiaries of DMH. The directors of Global Funds, Inc. annually review fees
paid to the Distributor and the Transfer Agent.
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Expenses
The Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreements. The Fund's expenses
include its 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.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a Maryland
corporation on May 30, 1991. Global Funds, Inc. currently offers six series of
shares - International Equity Series, Global Bond Series, Global Assets Series,
Emerging Markets Series, International Trend Series and Global Equity Series.
Fund shares have a par value of $.01 and when issued will be fully paid,
non-assessable, fully transferable and redeemable at the option of the holder.
The shares have no preference as to conversion, exchange, dividends, retirement
or other features and have no preemptive rights. Each Fund will vote separately
on any matter which affects only that Fund. Shares of each Fund have a priority
over shares of any other fund of Global Funds, Inc. in the assets and income of
that Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the election
of directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Global Funds, Inc. is not required, and does not intend, to hold
annual meetings of shareholders unless, under certain circumstances, it is
required to do so under the 1940 Act. Shareholders of 10% or more of Global
Funds, Inc.'s outstanding shares may request that a special meeting be called to
consider the removal of a director.
In addition to Class A Shares, Class B Shares and Class C Shares,
Global Equity Fund offers Global Equity Fund Institutional Class. Shares of each
Class represent proportionate interests in the assets of the Fund and have the
same voting and other rights and preferences as the other classes of the Fund,
except that shares of Global Equity Fund Institutional Class are not subject to,
and may not vote on matters affecting, the Distribution Plans under Rule 12b-1
relating to Class A Shares, Class B Shares and Class C Shares. Similarly, as a
general matter, the shareholders of Class A Shares, Class B Shares and Class C
Shares may vote only on matters affecting the 12b-1 Plan that relates to the
Class of shares that they hold. However, Class B Shares of the Fund may vote on
any proposal to increase materially the fees to be paid by the Fund under the
12b-1 Plan relating to Class A Shares.
Lincoln National Corporation Employees' Retirement Trust (the "Trust")
made an investment in the Fund, and as of December 31, 1997, the Trust holds 99%
of the outstanding shares of the Fund. Subject to certain limited exceptions,
there is no limitation on the Trust's ability to redeem its shares of the Fund
and it may elect to do so at any time.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will, however, from time to time, purchase or sell
foreign currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to minimize currency
value fluctuations. The Fund may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market or through entering into contracts to purchase
or sell foreign currencies at a future date (i.e., a "forward foreign currency"
contract or "forward" contract). A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract, agreed upon by the parties, at a
price set at the time of the contract. The Fund will convert currency on a spot
basis from time to time, and investors should be aware of the costs of currency
conversion.
The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, the Fund will be able to protect itself against a possible
loss resulting from an adverse change in currency exchange rates during the
period between the date the security is purchased or sold and the date on which
payment is made or received.
When the Manager believes that the currency of a particular country may
suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Fund's securities
denominated in such foreign currency.
The Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of foreign
securities held by the Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by the
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by the Fund,
the Fund will establish a segregated account with its Custodian Bank consisting
of cash, U.S. government securities or other high-grade liquid debt securities
in an amount equal to the amount the Fund will be required to pay upon exercise
of the put.
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As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate movements
adverse to the Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs. See Special Risk Considerations.
Depositary Receipts
The Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or U.S.
securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the issuer of
the underlying security and a Depositary, and "unsponsored" ADRs, EDRs or GDRs
are issued without the participation of the issuer of the deposited security.
Holders of unsponsored ADRs, EDRs or GDRs generally bear all the costs of such
facilities and the Depositary of an unsponsored ADR, EDR or GDR facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR, EDR or GDR.
ADRs may be listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs and GDRs traded in the over-the-counter market
which do not have an active or substantial secondary market will be considered
illiquid and therefore will be subject to a Portfolio's limitation with respect
to such securities. ADR prices are denominated in U.S. dollars although the
underlying securities are denominated in a foreign currency. Investments in
ADRs, EDRs and GDRs involve risks similar to those accompanying direct
investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of the
Fund's 15% limitation on investments in illiquid assets. The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
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.
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The major risk to which the 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, and the borrower would fail to return the borrowed security.
Therefore, the Fund will only enter into loan arrangements after a review of all
pertinent facts by the Manager, subject to overall supervision by the Board of
Directors, including the creditworthiness of the borrowing broker, dealer or
institution and then only if the consideration to be received from such loans
would justify the risk. In addition, the Fund will require borrowers to deliver
collateral to the Fund before lending securities. Creditworthiness will be
monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Fund makes in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies. Under the 1940 Act's limitations, the Fund may not
(1) own more than 3% of the voting stock of another investment company; (2)
invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply to
the Fund's investments in unregistered investment companies.
Repurchase Agreements
The Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help the Fund to invest cash on a
temporary basis. The Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, the
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in excess
of one-third of the value of its net assets. The Fund has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank and, to the extent that such borrowing exceeds 5% of the value of the
Fund's net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, the Fund shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the U.S. Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. The Fund will not
pledge more than 10% of its net assets, or issue senior securities as defined in
the 1940 Act, except for notes to banks. Investment securities will not be
purchased while the Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. The Fund may purchase call options on foreign or U.S. securities
and indices and enter into related closing transactions. The Fund may also
purchase put options on such securities and indices and enter into related
closing transactions.
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A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or take advantage of a
rise in a particular index. The Fund will only purchase call options to the
extent that premiums paid on all outstanding call options do not exceed 2% of
its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.
Closing transactions essentially let the Fund offset put options or
call options prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
In purchasing put and call options, the premium paid by the Fund plus
any transaction costs will reduce any benefit realized by the Fund upon exercise
of the option.
The Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Fund will only invest in
such options to the extent consistent with its 15% limitation on investment in
illiquid securities. The Fund will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose for the purchase or sale of futures contracts for
the Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of the Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
The Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. A purchase of a futures contract
means the acquisition of a contractual right to obtain delivery to the Fund of
the securities or foreign currency called for by the contract at a specified
price during a specified future month. When a futures contract is sold, the Fund
incurs a contractual obligation to deliver the securities or foreign currency
underlying the contract at a specified price on a specified date during a
specified future month. To the extent that the Fund invests in futures contracts
and options thereon for other than bona fide hedging purposes, the Fund will not
enter into such transactions if, immediately thereafter, the sum of the amount
of initial margin deposits and premiums paid for open futures options would
exceed 5% of the Fund's total assets, after taking into account unrealized
profits and unrealized losses on such contracts it has entered into; provided,
however, that, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
The Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium
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paid, to assume a position in a futures contract, rather than actually to
purchase or sell the futures contract, at a specified exercise price at any time
during the period of the option. When the 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 directly or on its behalf in an account at the
Custodian Bank. Thereafter, a "variation margin" may be paid by the 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.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, the Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund purchases an option on a futures contract and fails to
exercise the option prior to the exercise date, it will suffer a loss of the
premium paid. Further, the possible lack of a secondary market could prevent the
Fund from closing out its positions relating to futures.
* * *
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
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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, contact your financial adviser or call Delaware Group at
800-523-4640.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Third Floor
80 Cheapside
London, England EC2V 6EE
SUB-ADVISER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTORS
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
<PAGE>
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GLOBAL EQUITY FUND
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A CLASS
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B CLASS
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C CLASS
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PROSPECTUS
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FEBRUARY 4, 1998
DELAWARE
GROUP
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<PAGE>
GLOBAL EQUITY FUND INSTITUTIONAL PROSPECTUS
FEBRUARY 4, 1998
---------------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For more information about
Global Equity Fund Institutional Class
call Delaware at 800-828-5052
This Prospectus describes shares of the Global Equity Series (the
"Fund" or "Global Equity Fund") of Delaware Group Global & International Funds,
Inc. ("Global Funds, Inc."), a professionally-managed mutual fund of the series
type.
Global Equity Fund's investment objective is to achieve long-term
growth without undue risk to principal. The Fund seeks to achieve this objective
by investing in global securities that provide the potential for capital
appreciation and income. See Investment Objective and Strategy.
The Fund offers Global Equity Fund Institutional Class of shares (the
"Class"). This Prospectus relates only to the Class and sets forth information
that you should read and consider before you invest. Please retain it for future
reference. The Fund's Statement of Additional Information ("Part B" of Global
Funds, Inc.'s registration statement), dated February 4, 1998, as it may be
amended from time to time, contains additional information about the Fund and
has been filed with the Securities and Exchange Commission (the "SEC"). Part B
is incorporated by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address or by
calling the above telephone number. The SEC also maintains a Web site
(http://www.sec.gov) that contains Part B, material incorporated by reference
into Global Funds, Inc.'s registration statement, and other information
regarding registrants that electronically file with the SEC.
The Fund also offers Class A Shares, Class B Shares and Class C Shares.
Shares of these classes are subject to sales charges and other expenses, which
may affect their performance. A prospectus for those classes can be obtained by
writing to Delaware Distributors, L.P. at the above address or by calling the
above number.
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TABLE OF CONTENTS
Cover Page How to Buy Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Financial Highlights Taxes
Investment Objective and Strategy Calculation of Net Asset Value Per Share
Suitability Management of the Fund
Investment Strategy Other Investment Policies and
Special Risk Considerations Risk Considerations
Classes of Shares
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF
THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
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SYNOPSIS
Investment Objective
The investment objective of the Fund is to achieve long-term growth
without undue risk to principal. The Fund seeks to achieve this objective by
investing in global equity securities that provide the potential for capital
appreciation and income. The Fund is a global fund. As such, at least 65% of the
Fund's total assets will be invested in equity securities of issuers organized
or having a majority of their assets in or deriving a majority of their income
in at least three different countries, one of which may be the United States.
For further details, see Investment Objective and Strategy and Other Investment
Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations and Other Investment Policies and
Risk Considerations.
2. The Fund may invest in the markets of certain emerging countries.
These markets may be subject to a greater degree of economic, political and
social instability than is the case in the United States, Western European and
other developed markets. See Special Risk Considerations.
3. The Fund has the right to engage in options and futures transactions
for hedging purposes, to counterbalance portfolio volatility. In connection with
futures transactions, the Fund will maintain certain collateral in special
accounts established with futures commission merchants directly or for their
benefit in the care of The Chase Manhattan Bank (the "Custodian Bank"). While
the Fund does not engage in options and futures for speculative purposes, there
are risks which result from the use of these instruments, and an investor should
carefully review the descriptions of these risks in this Prospectus. See Options
and Futures Contracts and Options on Futures Contracts under Other Investment
Policies and Risk Considerations.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund, subject to the
supervision and direction of Global Funds, Inc.'s Board of Directors. Delaware
Management Company, Inc. ("Delaware" or the "Sub-Adviser") is the investment
sub-adviser for the Fund and, in that capacity, provides investment advice
relating to U.S. securities. Delaware Distributors, L.P. (the "Distributor") is
the national distributor for the Fund and for all of the other mutual funds in
the Delaware Group. Delaware Service Company,
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Inc. (the "Transfer Agent") is the shareholder servicing, dividend disbursing,
accounting services and transfer agent for the Fund and for all of the other
mutual funds in the Delaware Group.
See Summary of Expenses and Management of the Fund for further
information regarding the Manager and the Sub-Adviser and the fees payable under
the Fund's Investment Management Agreement and the Sub-Advisory Agreement on
behalf of the Fund.
Purchase Price
Shares offered by this Prospectus are available at net asset value,
without a front-end or contingent deferred sales charge, and are not subject to
distribution fees under a Rule 12b-1 Distribution Plan. See Classes of Shares.
Redemption and Exchange
Shares of the Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company and Global Equity Fund operates as a diversified fund as defined under
the Investment Company Act of 1940 (the "1940 Act"). Global Funds, Inc. was
organized as a Maryland corporation on May 30, 1991. See Shares under Management
of the Fund.
-4-
<PAGE>
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
Global Equity Fund
Shareholder Transaction Expenses Institutional Class
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................................ None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)............................................ None
Exchange Fees.................................................................. None*
* Exchanges are subject to the requirements of each fund and a front-end sales
charge may apply.
Annual Operating Expenses Global Equity Fund
(as a percentage of average daily net assets) Institutional Class
- -------------------------------------------------------------------------------------------------------------------
Management Fees (after voluntary waivers)...................................... 0.00%**
12b-1 Plan Expenses............................................................ None
Other Operating Expenses (after voluntary payments)............................ 0.80%**
-----
Total Operating Expenses
(after voluntary waivers and payments).................................... 0.80%**
=====
</TABLE>
- -----------------
** Because the Fund did not commence operations until July 21, 1997, "Other
Operating Expenses" and "Total Operating Expenses" for the Class are based
on estimated amounts the Fund expects to pay during the current fiscal
year. Delaware International has elected voluntarily to waive that portion,
if any, of the annual management fees payable by the Fund and to pay
certain expenses of the Fund to the extent necessary to ensure that the
Fund's total operating expenses (exclusive of taxes, interest, brokerage
commissions, and extraordinary expenses) do not exceed , on an annualized
basis, 0.80% of the average daily net assets of the Fund. The Manager's
voluntary fee waiver and expense payment began upon the commencement of the
public offering of the Class and will extend through June 30, 1998. Absent
the Manager's voluntary fee waiver and expense payments, it is estimated
that during the current fiscal year, the Total Operating Expenses, as a
percentage of average daily net assets, would be 1.86%, reflecting
Management Fees of 0.80%.
-5-
<PAGE>
For expense information about the Fund's A Class, B Class and C Class,
see the separate prospectus relating to those classes.
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return and (2) redemption at the end of each time period. Global Funds,
Inc. charges no redemption fees. The following example assumes the voluntary
waiver of the management fee and/or other payments of expenses by the Manager as
discussed in this Prospectus.
1 year 3 years
------ -------
Global Equity
Fund Institutional Class $8 $26
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in the Class will
bear directly or indirectly.
-6-
<PAGE>
- --------------------------------------------------------------------------------
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
Global Equity Fund of Delaware Group Global & International Funds, Inc. and have
been audited by Ernst & Young LLP, independent auditors. The data should be read
in conjunction with the financial statements, related notes, and the report of
Ernst & Young LLP covering such financial information and highlights, all of
which are incorporated by reference into Part B. Further information about the
Fund's performance is contained in Delaware Group Global Funds, Inc.'s Annual
Report to shareholders. A copy of the Fund's Annual Report (including the report
of Ernst & Young LLP) may be obtained from Delaware Group Global & International
Funds, Inc. upon request at no charge.
- --------------------------------------------------------------------------------
-7-
<PAGE>
Global Equity Fund Institutional Class
Period
7/21/97(1)
through
11/30/97
Net Asset Value, Beginning of Period..................... $8.500
Income From Investment Operations
Net Investment Income.................................... 0.056(4)
Net Gain (Loss) on Securities
(both realized and unrealized)..................... (0.326)
Total From Investment Operations................ (0.270)
Less Dividends and Distributions
Dividends from Net Investment Income..................... none
Distributions from Capital Gains......................... none
Total Dividends and Distributions............... none
Net Asset Value, End of Period........................... $8.230
Total Return............................................. (3.18%)(2)
Ratios/Supplemental Data
Net Assets, End of Period (000's omitted)................ $2,903
Ratio of Expenses to Average Daily Net Assets............ 0.80%
Ratio of Expenses to Average Daily Net Assets
Prior to Voluntary Waivers and Payments
of Expenses by the Manager......................... 1.86%
Ratio of Net Investment Income to Average
Daily Net Assets................................... 1.86%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Voluntary Waivers and Payments
of Expenses by the Manager......................... 0.80%
Portfolio Turnover Rate.................................. 25%
Average Commission Rate Paid (3)......................... $0.0260
- ----------
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized. Total return for this short of a time
period may not be representative of longer term results.
(2) Total return reflects the voluntary waivers and payments of expenses by the
Manager referenced under Summary of Expenses and Management of the Fund.
(3) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.
(4) The period ended November 30, 1997 net investment income per share
information was based on the average share outstanding method.
-8-
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGY
SUITABILITY
Investors considering an investment in Global Equity Fund should have a
long-term investment time frame.
The Fund cannot assure a specific rate of return or that principal will
be protected. The value of the Fund's shares can be expected to move up and down
depending on market conditions. Consequently, appreciation may be obtained in
periods of generally rising markets, while in declining markets the value of the
Fund's shares may decline.
Investments in foreign securities whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as well
as to political, economic and social situations different from and potentially
more volatile than those in the United States. In addition, the accounting, tax
and financial reporting standards of foreign countries are different from and
may be less reliable or comprehensive than those relating to U.S. securities
issuers. See Special Risk Considerations for a complete discussion of the risk
factors affecting any international investment. For these reasons, the Fund is
not suitable for short-term investors. However, through the cautious selection
and supervision of its portfolio, the Manager and Sub-Adviser will strive to
achieve the Fund's objective.
The Fund may be suitable for investors with a long-term investment
horizon (at least three years) who are looking for long-term growth potential
from a portfolio of international securities.
* * *
Ownership of Fund shares can reduce the bookkeeping and administrative
inconvenience that is typically connected with direct purchases of the types of
securities in which the Fund invests.
An investor should not consider a purchase of shares of the Fund as
equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
The investment objective of Global Equity Fund is to achieve long-term
growth without undue risk to principal. The Fund seeks to achieve this objective
by investing in global equity securities that provide the potential for capital
appreciation and income. The Fund is a global fund. Under normal circumstances,
at least 65% of the Fund's total assets will be invested in equity securities of
issuers organized or having a majority of their assets in or deriving a majority
of their operating income in at least three different countries, one of which
may be the United States. The Fund will invest in a broad range of equity
securities including common stocks, preferred stocks, convertible securities and
warrants. The Fund may also invest in sponsored or unsponsored American
Depositary Receipts, European Depositary Receipts or Global Depositary Receipts
("Depositary Receipts"), which are receipts typically issued by a bank or trust
company evidencing ownership of underlying securities issued by a foreign
company.
The Fund will attempt to achieve its investment objective by investing
in securities traded in equity markets and currencies that the Manager and
Sub-Adviser believe offer the best relative value within the global investment
universe. A dividend discount model will be employed to assess value across
country boundaries.
-9-
<PAGE>
When using a dividend discount analysis to value individual equity markets, the
Manager and Sub-Adviser will look at future anticipated dividends and discount
the value of those dividends back to what they would be worth if they were being
paid today. The Manager and Sub-Adviser will use this technique to attempt to
compare the value of different investments.
In a global portfolio, currency return is also an integral component of
an investment's total return. The Manager will use a purchasing power parity
approach to access the value of individual currencies. Purchasing power parity
attempts to identify the amounts of goods and services that a dollar will buy in
the United States and compare that to the amount of a foreign currency required
to buy the same amount of goods and services in another country. Eventually,
currencies should trade at levels that would make it possible for the dollar to
buy the same amount of goods and services overseas as in the United States. When
the dollar buys less, the foreign currency may be considered to be overvalued.
When the dollar buys more, the currency may be considered to be undervalued.
Simultaneous with identifying the most attractive equity markets and
currencies, the Manager will attempt to purchase undervalued securities.
Individual equity securities around the world will be selected on the basis of
an analysis of the issuing company's operations, financial statements and each
company's current valuation. In the selection process, the Manager and
Sub-Adviser will place special emphasis on present dividend yield and
expectations for dividend growth.
The Fund may purchase securities in any foreign country, developed and
underdeveloped, or emerging market countries. With respect to certain countries,
investments by an investment company may only be made through investments in
closed-end investment companies that in turn are authorized to invest in the
securities of such countries. See Investment Company Securities under Other
Investment Policies and Risk Considerations.
The Fund may also seek to achieve growth through investment in income
producing debt securities such as U.S. or foreign government or corporate bonds.
In addition, for temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities (and which
are backed by the full faith and credit of the U.S. government), or issued by
foreign or U.S. companies. For example, the Fund may invest in U.S. fixed-income
markets when the Manager believes that the global equity markets are excessively
volatile or overvalued so that the Fund's objective cannot be achieved in such
markets. Any corporate debt obligations will be rated AA or better by Standard &
Poor's Ratings Group ("S&P"), Aa or better by Moody's Investors Service, Inc.
("Moody's") or have an equivalent rating from another nationally recognized
statistical rating organization, or if unrated, will be determined to be of
comparable quality by the Manager. The Fund may also invest in the securities
listed above pending investment of proceeds from new sales of Fund shares and to
maintain sufficient cash to meet redemption requests.
Restricted and Illiquid Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Fund. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. The Fund may
invest up to 15% of the value of its net assets in illiquid securities which are
securities which may not be disposed of within seven days at the price at which
they are carried on the Fund's books. In the event this percentage limitation is
exceeded, whether due to changes in the market value of the Fund's illiquid
-10-
<PAGE>
holdings or because a particular security is deemed to have become illiquid, the
Manager will take steps to remedy these circumstances in an orderly fashion.
* * *
The Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940 Act,
the Fund will operate as a diversified fund. The Fund will not concentrate its
investments in any particular industry, which means that the Fund will not
invest 25% or more of its total assets in any one industry.
The Fund's investment objective, Global Funds, Inc.'s designation as an
open-end investment company, the Fund's designation as a diversified fund, and
the Fund's policies concerning portfolio lending, borrowing and concentration
may not be changed unless authorized by the vote of a majority of the Fund's
outstanding voting securities. A vote of a "majority of the outstanding voting
securities" is the vote by the holders of the lesser of a) 67% or more of the
Fund's voting securities present in person or represented by proxy if the
holders of more than 50% of the outstanding voting securities of the Fund are
present or represented by proxy; or b) more than 50% of the outstanding voting
securities. Part B lists other more specific investment restrictions of the Fund
which may not be changed without a majority shareholder vote.
The remaining investment policies of the Fund not identified above are
not fundamental and may be changed by the Board of Directors of Global Funds,
Inc. without a shareholder vote. See Special Risk Considerations and Other
Investment Policies and Risk Considerations.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Foreign Securities Risk. The Fund has the right to purchase securities
in any developed, underdeveloped or emerging country. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations. These risks are in addition to the
usual risks inherent in domestic investments. There is the possibility of
expropriation, nationalization or confiscatory taxation, taxation of income
earned in foreign nations or other taxes imposed with respect to investments in
foreign nations, foreign exchange control (which may include suspension of the
ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments which could affect investments in securities of issuers in those
nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about companies
in the United States. Foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United States'
generally accepted accounting principles. Also, for an issuer that keeps
accounting records in local currency, inflation accounting rules may require for
both tax and accounting purposes, that certain assets and liabilities be
restated on the issuer's balance sheet in order to express items in terms of
currency or
-11-
<PAGE>
constant purchasing power. Inflation accounting may indirectly generate losses
or profits. Consequently, financial data may be materially affected by
restatements for inflation and may not accurately reflect the real condition of
those issuers and securities markets.
Further, the Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on securities
transactions in foreign countries, which are sometimes fixed rather than subject
to negotiation as in the United States, are likely to be higher. Further, the
settlement period of securities transactions in foreign markets may be longer
than in domestic markets, and may be subject to administrative uncertainties. In
many foreign countries, there is less government supervision and regulation of
business and industry practices, stock exchanges, brokers and listed companies
than in the United States, and capital requirements for brokerage firms are
generally lower. The foreign securities markets of many of the countries in
which the Fund may invest may also be smaller, less liquid and subject to
greater price volatility than those in the United States.
Emerging Markets Securities Risk. Compared to the United States and
other developed countries, in addition to the risks described above, emerging
countries may have volatile social conditions, relatively unstable governments
and political systems, economies based on only a few industries and economic
structures that are less diverse and mature, and securities markets that trade a
small number of securities, which can result in a low or nonexistent volume of
trading. Prices in these securities markets tend to be volatile and, in the
past, securities in these countries have offered greater potential for gain (as
well as loss) than securities of companies located in developed countries. Until
recently, there has been an absence of a capital market structure or
market-oriented economy in certain emerging countries. Further, investments and
opportunities for investments by foreign investors are subject to a variety of
national policies and restrictions in many emerging countries. These
restrictions may take the form of prior governmental approval, limits on the
amount or type of securities held by foreigners, limits on the types of
companies in which foreigners may invest and prohibitions on foreign investments
in issuers or industries deemed sensitive to national interests. Additional
restrictions may be imposed at any time by these or other countries in which the
Fund invests. Also, the repatriation of both investment income and capital from
several foreign countries is restricted and controlled under certain
regulations, including, in some cases, the need for certain governmental
consents. Although these restrictions may in the future make it undesirable to
invest in emerging countries, the Manager does not believe that any current
repatriation restrictions would affect its decision to invest in such countries.
Countries such as those in which the Fund may invest have historically
experienced and may continue to experience, substantial, and in some periods
extremely high rates of inflation for many years, high interest rates, exchange
rate fluctuations or currency depreciation, large amounts of external debt,
balance of payments and trade difficulties and extreme poverty and unemployment.
Other factors which may influence the ability or willingness to service debt
include, but are not limited to, a country's cash flow situation, the
availability of sufficient foreign exchange on the date a payment is due, the
relative size of its debt service burden to the economy as a whole, its
government's policy towards the International Monetary Fund, the World Bank and
other international agencies and the political constraints to which a government
debtor may be subject.
With respect to investments in debt issues of foreign governments, the
ability of a foreign government or government-related issuer to make timely and
ultimate payments on its external debt obligations will also be strongly
influenced by the issuer's balance of payments, including export performance,
its access to international credits and investments, fluctuations in interest
rates and the extent of its foreign reserves. A country whose exports are
concentrated in a few commodities or whose economy depends on certain strategic
imports could be vulnerable to fluctuations in international prices of these
commodities or imports. To the extent that a country receives payment for its
exports in currencies other than dollars, its ability to make debt
-12-
<PAGE>
payments denominated in dollars could be adversely affected. If a foreign
government or government-related issuer cannot generate sufficient earnings from
foreign trade to service its external debt, it may need to depend on continuing
loans and aid from foreign governments, commercial banks and multilateral
organizations, and inflows of foreign investment. The commitment on the part of
these foreign governments, multilateral organizations and others to make such
disbursements may be conditioned on the government's implementation of economic
reforms and/or economic performance and the timely service of its obligations.
Failure to implement such reforms, achieve such levels of economic performance
or repay principal or interest when due may curtail the willingness of such
third parties to lend funds, which may further impair the issuer's ability or
willingness to service its debts in a timely manner. The cost of servicing
external debt will also generally be adversely affected by rising international
interest rates because many external debt obligations bear interest at rates
which are adjusted based upon international interest rates. The ability to
service external debt will also depend on the level of the relevant government's
international currency reserves and its access to foreign exchange. Currency
devaluations may affect the ability of a government issuer to obtain sufficient
foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, the Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible since
the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for the Fund
to purchase additional foreign currency on the spot market (and bear the expense
of such purchase) if the market value of the security is less than the amount of
foreign currency the Fund is obligated to deliver (and if a decision is made to
sell the security and make delivery of the foreign currency). Conversely, it may
be necessary to sell on the spot market some of the foreign currency received
upon the sale of the portfolio security if its market value exceeds the amount
of foreign currency the Fund is obligated to deliver.
* * *
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Fund's investment policies, restrictions and risk factors.
-13-
<PAGE>
CLASSES OF SHARES
The Distributor serves as the national distributor for the Fund. Shares
of the Class may be purchased directly by contacting the Fund or its agent or
through authorized investment dealers. All purchases of shares of the Class are
made at net asset value. There is no front-end or contingent deferred sales
charge.
Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares of the Class
as part of their retirement program should contact their employer for details.
Shares of the Class are available for purchase only by: (a) retirement
plans introduced by persons not associated with brokers or dealers that are
primarily engaged in the retail securities business and rollover individual
retirement accounts from such plans; (b) tax-exempt employee benefit plans of
Delaware or its affiliates and securities dealer firms with a selling agreement
with the Distributor; (c) institutional advisory accounts of Delaware or its
affiliates and those having client relationships with Delaware Investment
Advisers, a division of Delaware 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.
Class A Shares, Class B Shares and Class C Shares
In addition to offering Global Equity Fund Institutional Class of
shares, Global Equity Fund also offers: Global Equity Fund A Class, Global
Equity Fund B Class and Global Equity Fund C Class, which are described in a
separate prospectus. Shares of such classes may be purchased through authorized
investment dealers or directly by contacting the Fund or its Distributor. Class
A Shares carry a front-end sales charge and have annual 12b-1 expenses equal to
a maximum of 0.30%. The maximum front-end sales charge as a percentage of the
offering price of Class A Shares is 4.75% and is reduced on certain transactions
of $100,000 or more. Class B Shares and Class C Shares have no front-end sales
charge but are subject to annual 12b-1 expenses equal to a maximum of 1%. Class
B Shares and Class C Shares and certain Class A Shares may be subject to a
contingent deferred sales charge upon redemption. To obtain a prospectus
relating to such classes, contact the Distributor by writing to the address or
by calling the phone number listed on the back cover of this Prospectus.
-14-
<PAGE>
HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Class.
Investing Directly by Mail
1. Initial Purchases--An Investment Application or, in the case of a retirement
plan account, an appropriate retirement plan application, must be completed,
signed and sent with a check payable to the Fund and Class , to Delaware Group
at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to the specific Fund and Class selected. Your check should be
identified with your name(s) and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Fund and Class in which
you are investing).
1. Initial Purchases--Before you invest, telephone the Client Services
Department to get an account number at 800-828-5052. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application or, in the case of a retirement account, an
appropriate retirement plan application, for the Fund and Class , to Delaware
Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your Client
Services Representative by telephone at 800-828-5052 prior to sending your
wire.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group
and you qualify to purchase shares of the Class, you may write and authorize an
exchange of part or all of your investment into the Fund. However, Class B
Shares and Class C Shares of the Fund and Class B Shares and Class C Shares of
the other funds in the Delaware Group offering such a class of shares may not be
exchanged into the Class. If you wish to open an account by exchange, call your
Client Services Representative at 800-828-5052 for more information. See
Redemption and Exchange for more complete information concerning your exchange
privileges.
Investing through Your Investment Dealer
You can make a purchase of Fund shares through most investment dealers
who, as part of the service they provide, must transmit orders promptly to the
Fund. They may charge for this service.
-15-
<PAGE>
Purchase Price and Effective Date
The purchase price (net asset value) of the Class is determined as of
the close of regular trading on the New York Stock Exchange (ordinarily, 4 p.m.,
Eastern time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund , its agent or designee. The
effective date of a direct purchase is the day your wire, electronic transfer or
check is received, unless it is received after the time the share price is
determined, as noted above. Purchase orders received after such time will be
effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchases by third-party checks or checks that are not drawn on a domestic
branch of a United States financial institution. If a check drawn on a foreign
financial institution is accepted, you may be subject to additional bank charges
for clearance and currency conversion.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of redemptions.
-16-
<PAGE>
REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer for
details.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after the Fund receives your request in good order.
For example, redemption or exchange requests received in good order after the
time the net asset value of shares is determined will be processed on the next
business day. See Purchase Price and Effective Date under How to Buy Shares.
Except as otherwise noted below, for a redemption request to be in "good order,"
you must provide your account number, account registration, and the total number
of shares or dollar amount of the transaction. With regard to exchanges, you
must also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Fund at 800-828-5052. Redemption proceeds will be
distributed promptly, as described below, but not later than seven days after
receipt of a redemption request.
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.
The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will not honor redemption requests as to shares for which a
check was tendered as payment until the Fund is reasonably satisfied that the
check has cleared, which may take up to 15 days from the purchase date. You can
avoid this potential delay if you purchase shares by wiring Federal Funds. The
Fund reserves the right to reject a written or telephone redemption request or
delay payment of redemption proceeds if there has been a recent change to the
shareholder's address of record.
Shares of the Class may be exchanged into any other Delaware Group
mutual fund provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of the
fund being acquired are in a state where that fund is registered. If exchanges
are made into other shares that are eligible for purchase only by those
permitted to purchase shares of the Class, such shares will be exchanged at net
asset value. Shares of the Class may not be exchanged into Class B Shares or
Class C Shares of the funds in the Delaware Group. The Fund may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders.
Various redemption and exchange methods are outlined below. No fee is
charged by the Fund or the Distributor for redeeming or exchanging your shares,
although, in the case of an exchange, a sales charge may apply. You may also
have your investment dealer arrange to have your shares redeemed or exchanged.
Your investment dealer may charge for this service.
All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund to which the
authorization relates or its agent.
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Written Redemption and Exchange
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your shares or to request an exchange of any or all
your shares into another mutual fund in the Delaware Group, subject to the same
conditions and limitations as other exchanges noted above. The request must be
signed by all owners of the account or your investment dealer of record.
For redemptions of more than $50,000, or when the proceeds are not sent
to the shareholder(s) at the address of record, the Fund requires a signature by
all owners of the account and may require a signature guarantee. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
Payment is normally mailed the next business day after receipt of your
redemption request. Certificates are issued for shares only if you submit a
specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.
You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your shares in certificate form, you may redeem or
exchange only by written request and you must return your certificates.
The Telephone Redemption - Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an unusually
large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be provided
for all purchase, exchange and redemption transactions initiated by telephone.
By exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.
Telephone Redemption-Check to Your Address of Record
You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day after receipt of the redemption request.
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Telephone Redemption-Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There are
no fees for this redemption method, but the mail time may delay getting funds
into your bank account. Simply call your Client Services Representative prior to
the time the net asset value is determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange shares into any
fund in the Delaware Group under the same registration. As with the written
exchange service, telephone exchanges are subject to the same conditions and
limitations as other exchanges noted above. Telephone exchanges may be subject
to limitations as to amounts or frequency.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on the Fund to all shareholders
of record of the Class at the time the offering price of shares is determined.
See Purchase Price and Effective Date under How to Buy Shares. Thus, when
redeeming shares, dividends continue to be credited up to and including the date
of redemption.
Global Equity Fund will normally declare and make payments from net
investment income on an annual basis. Both dividends and distributions, if any,
are automatically reinvested in your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that the Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, the Fund may declare special year-end dividend and
capital gains distributions during October, November or December to shareholders
of record on a date in such month. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by the Fund and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
The Class will share proportionately in the investment income and
expenses of the Fund, except that the Class will not incur any distribution fee
under Global Funds, Inc.'s 12b-1 Plans which apply to Class A Shares, Class B
Shares and Class C Shares.
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TAXES
The tax discussion set forth below is included for general information
only. Investors should contact their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Internal Revenue Code (the "Code"). Because many of these changes are complex,
and only indirectly affect the Funds and their distributions to you, they are
discussed in Part B. Changes in the treatment of capital gains, however, are
discussed in this section.
The Fund has qualified, and intends to continue to qualify as a
regulated investment company under Subchapter M of the Code. As such, the 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 certain
other requirements relating to the source of its income and diversification of
its assets.
The Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to those investors who are subject
to income taxes as ordinary income, whether received in cash or in additional
shares. It is expected that either none or only a nominal portion of the Fund's
dividends will be eligible for the dividends-received deductions for
corporations. The portion of dividends paid by the Fund that so qualifies will
be designated each year in a notice from the Fund to the Fund's shareholders.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the length of
time an investor has owned shares in the Fund. The Fund does not seek to realize
any particular amount of capital gains during a year; rather, realized gains are
a by-product of Fund management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in the Fund are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when a
Fund's securities were sold and how long they were held by that Fund before they
were sold. Investors who want more information on holding periods and other
qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record in such a month, but which, for operational reasons,
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may not be paid to the shareholder until the following January, will be treated
for tax purposes as if paid by the Fund and received by the shareholder on
December 31 of the year declared.
The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund and any other fund in the Delaware Group. Any loss incurred on a sale
or exchange of Fund shares that had been held for six months or less will be
treated as long-term capital loss to the extent of capital gains dividends
received with respect to such shares.
The Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total assets
of the Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. If this election is made,
shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by the
Fund), and (ii) entitled to either deduct (as an itemized deduction in the case
of individuals) their share of such foreign taxes in computing their taxable
income or to claim a credit for such taxes against their U.S. income tax,
subject to certain limitations under the Code. Shareholders will be informed by
the Fund at the end of each calendar year regarding the availability of any
credits on and the amount of foreign source income to be included in their
income tax returns.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes . For example, distributions
of interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisors.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the dividends and distributions paid by the Fund. Shareholders will
also receive each year information as to the portion of dividend income, if any,
that is derived from U.S. government securities that are exempt from state
income tax. Of course, shareholders who are not subject to tax on their income
would not be required to pay tax on amounts distributed to them by the Fund.
Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
See Accounting and Tax Issues and Distributions and Taxes in Part B for
additional information on tax matters relating to the Fund and its shareholders.
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CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares is the net asset
value ("NAV") per share of Class shares next computed after the order is
received. The NAV is computed as of the close of regular trading on the New York
Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is
open.
The NAV per share is computed by adding the value of all securities and
other assets in the Fund's portfolio, deducting any liabilities of the Fund
(expenses and fees are accrued daily) and dividing by the number of Fund shares
outstanding. Portfolio securities for which market quotations are available are
priced at market value. Debt securities are priced at fair value by an
independent pricing service using methods approved by Global Funds, Inc.'s Board
of Directors. Short-term investments having a maturity of less than 60 days are
valued at amortized cost, which approximates market value. All other securities
are valued at their fair value as determined in good faith and in a method
approved by Global Funds, Inc.'s Board of Directors.
The Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the net
asset value of the Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Class will not incur any of the expenses under the Fund's 12b-1
Plans and Class A Shares, Class B Shares and Class C Shares of the Fund alone
will bear the 12b-1 Plan expenses payable under their respective 12b-1 Plans.
Due to the specific distribution expenses and other costs that will be allocable
to each class, the net asset value of each class of the Fund will vary.
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MANAGEMENT OF THE FUND
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager and Sub-Adviser Delaware International Advisers Ltd.
("Delaware International" or the "Manager") furnishes investment management
services to the Fund. Delaware International is affiliated with Delaware
Management Company, Inc. ("Delaware" or the "Sub-Adviser") which manages the
U.S. securities portion of the Fund. The Manager has offices located at Third
Floor, 80 Cheapside, London, England EC2V 6EE.
Delaware and its predecessors have been managing the funds in the
Delaware Group since 1938. On November 30, 1997, Delaware and its affiliates
within the Delaware Group, including Delaware International, were managing in
the aggregate more than $39 billion in assets in various institutional or
separately managed (approximately $23,274,532,000) and investment company
(approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). Delaware International is also controlled by DMH through
several subsidiaries. On April 3, 1995, a merger between DMH and a wholly owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, the Manager and the Sub-Adviser are now 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.
Under the Investment Management Agreement between the Manager and
Global Funds, Inc. on behalf of Global Equity Fund, the Manager is entitled to
an annual fee equal to 0.80% of the Fund's average daily net assets. The
directors of Global Funds, Inc. annually review fees paid to the Manager.
Delaware International has elected voluntarily to waive that portion,
if any, of the annual management fees payable by Global Equity Fund and to pay
expenses of the Fund to the extent necessary to ensure that the Total Operating
Expenses (exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) of the Class do not exceed 0.80% through June 30, 1998.
Subject to the overall supervision of the Manager, the Sub-Adviser
manages the U.S. securities portion of Global Equity Fund's portfolio and
furnishes the Manager with investment recommendations, asset allocation advice,
research and other investment services with respect to U.S. securities. For the
services provided to the Manager, the Manager pays the Sub-Adviser a monthly fee
equal to 50% of the fee paid to the Manager under the terms of the Investment
Management Agreement.
Elizabeth A. Desmond has primary responsibility for making day-to-day
investment decisions for the Fund and has had such responsibility since its
inception. Ms. Desmond is a graduate of Wellesley College and the masters
program in East Asian studies at Stanford University. After working for the
Japanese government for two years, she began her investment career as a Pacific
Basin investment manager with Shearson Lehman Global Asset Management. Prior to
joining Delaware in the Spring of 1991, she was a Pacific Basin equity analyst
and senior portfolio manager at Hill Samuel Investment Advisers Ltd. Ms. Desmond
is a CFA charterholder. Robert L. Arnold, Vice President/Portfolio Manager for
the Fund, has responsibility for making
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investment decisions for the U.S. equity portion of Global Equity Fund and has
had such responsibility for the Fund since its inception. Prior to this at the
Delaware Group, he was a financial analyst focusing on the financial services
industry including banks, thrifts, insurance companies and consumer finance
companies. Mr. Arnold holds a BS from Carnegie Mellon University and earned an
MBA from the University of Chicago. He began his investment career as a
management consultant with Arthur Young in Philadelphia. Prior to joining
Delaware Group in March 1992, Mr. Arnold was a planning analyst with Chemical
Bank in New York.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time they
have been held. The degree of portfolio activity will affect brokerage costs of
the Fund and may affect taxes payable by the Fund's shareholders to the extent
that net capital gains are realized. Given the Fund's investment objective, it
is anticipated that the portfolio turnover rate of the Fund will not exceed
100%.
The Manager and the Sub-Adviser use their best efforts to obtain the
best available price and most favorable execution for portfolio transactions.
Orders may be placed with brokers or dealers who provide brokerage and research
services to the Manager or the Sub-Adviser or their advisory clients. These
services may be used by the Manager and the Sub-Adviser in servicing any of
their respective accounts. Subject to best price and execution, the Manager and
the Sub-Adviser may consider a broker/dealer's sales of shares of funds in the
Delaware Group of funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of the
Class in advertising and other types of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value. Each
presentation will include the average annual total return for one-, five- and
ten-year, or life-of-fund, periods, as applicable. The Fund may also advertise
aggregate and average total return information concerning the Class over
additional periods of time.
Because securities prices fluctuate, investment results of the Class
will fluctuate over time. Past performance is not considered a guarantee of
future results.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of dividends. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling your Client Services Representative.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Fund's investments and performance. Global Funds, Inc.'s fiscal year ends on
November 30.
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<PAGE>
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor of the Fund's shares under a Distribution Agreement with Global
Funds, Inc. dated as of July 21, 1997.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund under
an amended and restated agreement. The Transfer Agent also provides accounting
services to the Fund pursuant to the terms of a separate Fund Accounting
Agreement. Certain recordkeeping services and other shareholder services that
otherwise would be performed by the Transfer Agent may be performed by certain
other entities and the Transfer Agent may elect to enter into an agreement to
pay such other entities for those services. In addition, participant account
maintenance fees may be assessed for certain recordkeeping services provided as
part of retirement plan and administration service packages. These fees are
based on the number of participants in the plan and the various services
selected. Fees will be quoted upon request and are subject to change.
The directors of Global Funds, Inc. annually review fees paid to the
Distributor and the Transfer Agent. The Distributor and the Transfer Agent are
indirect, wholly owned subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. The Fund's expenses include
its 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.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a Maryland
corporation on May 30, 1991. Global Funds, Inc. currently offers six series of
shares - International Equity Series, Global Bond Series, Global Assets Series,
Emerging Markets Series, International Small Cap Series and Global Equity
Series. Fund shares have a par value of $.01 and when issued will be fully paid,
non-assessable, fully transferable and redeemable at the option of the holder.
The shares have no preference as to conversion, exchange, dividends, retirement
or other features and have no preemptive rights. The Fund will vote separately
on any matter which affects only that Fund. Shares of the Fund have a priority
over shares of any other fund of Global Funds, Inc. in the assets and income of
the Fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the election
of directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Global Funds, Inc. is not required, and does not intend, to hold
annual meetings of shareholders unless, under certain circumstances, it is
required to do so under the 1940 Act. Shareholders of 10% or more of Global
Funds, Inc.'s outstanding shares may request that a special meeting be called to
consider the removal of a director.
In addition to Institutional Class shares, Global Equity Fund offers
Global Equity Fund A Class, Global Equity Fund B Class and Global Equity Fund C
Class. Shares of each class represent proportionate interests in the assets of
the Fund and have the same voting and other rights and preferences as the other
classes of the
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Fund, except that shares of the Class are not subject to, and may not vote on
matters affecting, the Distribution Plans under Rule 12b-1 relating to Class A
Shares, Class B Shares and Class C Shares.
Lincoln National Corporation Employees' Retirement Trust (the "Trust")
made an investment in the Fund, and, as of December 31, 1997, the Trust holds
99% of the outstanding shares of the Fund. Subject to certain limited
exceptions, there is no limitation on the Trust's ability to redeem its shares
of the Fund and it may elect to do so at any time.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will, however, from time to time, purchase or sell
foreign currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to minimize currency
value fluctuations. The Fund may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market or through entering into contracts to purchase
or sell foreign currencies at a future date (i.e., a "forward foreign currency"
contract or "forward" contract). A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract, agreed upon by the parties, at a
price set at the time of the contract. The Fund will convert currency on a spot
basis from time to time, and investors should be aware of the costs of currency
conversion.
The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, the Fund will be able to protect itself against a possible
loss resulting from an adverse change in currency exchange rates during the
period between the date the security is purchased or sold and the date on which
payment is made or received.
When the Manager believes that the currency of a particular country may
suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Fund's securities
denominated in such foreign currency.
The Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of foreign
securities held by the Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by the
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by the Fund,
the Fund will establish a segregated account with its Custodian Bank consisting
of cash, U.S. government securities or other high-grade liquid debt securities
in an amount equal to the amount the Fund will be required to pay upon exercise
of the put.
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As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate movements
adverse to the Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs. See Special Risk Considerations.
Depositary Receipts
The Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or U.S.
securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the issuer of
the underlying security and a Depositary, and "unsponsored" ADRs, EDRs or GDRs
are issued without the participation of the issuer of the deposited security.
Holders of unsponsored ADRs, EDRs or GDRs generally bear all the costs of such
facilities and the Depositary of an unsponsored ADR, EDR or GDR facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR, EDR or GDR.
ADRs may be listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs and GDRs traded in the over-the-counter market
which do not have an active or substantial secondary market will be considered
illiquid and therefore will be subject to a Portfolio's limitation with respect
to such securities. ADR prices are denominated in U.S. dollars although the
underlying securities are denominated in a foreign currency. Investments in
ADRs, EDRs and GDRs, involve risks similar to those accompanying direct
investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of the
Fund's 15% limitation on investments in illiquid assets. The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
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.
The major risk to which the 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, and the borrower would fail to return the borrowed security.
Therefore, the Fund will only enter into loan arrangements after a review of all
pertinent facts by the Manager, subject to overall supervision by the Board of
Directors, including the creditworthiness of the borrowing broker, dealer or
institution and then only if the consideration to be received from such loans
would justify the risk. In addition, the Fund will require borrowers to deliver
collateral to the Fund before lending securities. Creditworthiness will be
monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Fund makes in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies. Under the 1940 Act's limitations, the Fund may not
(1) own more than 3% of the voting stock of another investment company; (2)
invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply to
the Fund's investments in unregistered investment companies.
-29-
<PAGE>
Repurchase Agreements
The Fund also may use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help the Fund to invest cash on a
temporary basis. The Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, the
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in excess
of one-third of the value of its net assets. The Fund has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank and, to the extent that such borrowing exceeds 5% of the value of the
Fund's net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, the Fund shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the U.S. Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. The Fund will not
pledge more than 10% of its net assets, or issue senior securities as defined in
the 1940 Act, except for notes to banks. Investment securities will not be
purchased while the Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. The Fund may purchase call options on foreign or U.S. securities
and indices and enter into related closing transactions. The Fund may also
purchase put options on such securities and indices and enter into related
closing transactions.
A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or take advantage of a
rise in a particular index. The Fund will only purchase call options to the
extent that premiums paid on all outstanding call options do not exceed 2% of
its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.
-30-
<PAGE>
Closing transactions essentially let the Fund offset put options or
call options prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
In purchasing put and call options, the premium paid by the Fund plus
any transaction costs will reduce any benefit realized by the Fund upon exercise
of the option.
The Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Fund will only invest in
such options to the extent consistent with its 15% limitation on investment in
illiquid securities. The Fund will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose for the purchase or sale of futures contracts for
the Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of the Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
The Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. A purchase of a futures contract
means the acquisition of a contractual right to obtain delivery to the Fund of
the securities or foreign currency called for by the contract at a specified
price during a specified future month. When a futures contract is sold, the Fund
incurs a contractual obligation to deliver the securities or foreign currency
underlying the contract at a specified price on a specified date during a
specified future month. To the extent that the Fund invests in futures contracts
and options thereon for other than bona fide hedging purposes, the Fund will not
enter into such transactions if, immediately thereafter, the sum of the amount
of initial margin deposits and premiums paid for open futures options would
exceed 5% of the Fund's total assets, after taking into account unrealized
profits and unrealized losses on such contracts it has entered into; provided,
however, that, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
The Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium paid,
to assume a position in a futures contract, rather than actually to purchase or
sell the futures contract, at a specified exercise price at any time during the
period of the option. When the 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 directly or on its behalf in an account at the Custodian
Bank. Thereafter, a "variation margin" may be paid by the 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.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, the Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund purchases an option on a futures contract and fails to
exercise the option prior to the exercise date, it will suffer a loss of the
premium paid. Further, the possible lack of a secondary market could prevent the
Fund from closing out its positions relating to futures.
* * *
-31-
<PAGE>
Part B describes certain of these investment policies and risk
considerations. Part B also sets forth other investment policies, risk
considerations and more specific investment restrictions.
-32-
<PAGE>
For more information, call Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
Third Floor
80 Cheapside
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
<PAGE>
- --------------------------------------------------------------------------------
GLOBAL EQUITY FUND INSTITUTIONAL
- --------------------------------------------------------------------------------
PROSPECTUS
- --------------------------------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
--------
<PAGE>
INTERNATIONAL SMALL CAP FUND PROSPECTUS
FEBRUARY 4, 1998
A CLASS SHARES
B CLASS SHARES
C CLASS SHARES
----------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For Prospectus and Performance: Nationwide 800-523-4640
Information on Existing Accounts: (SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services: (BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Representatives of Financial Institutions:
Nationwide 800-659-2265
This Prospectus describes shares of the International Small Cap Series
(the "Fund") of Delaware Group Global & International Funds, Inc. ("Global
Funds, Inc."), a professionally-managed mutual fund of the series type.
The Fund's investment objective is to achieve long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of small non-U.S. companies, which may include companies
located or operating in established or emerging countries. See Investment
Objective and Strategies.
The Fund offers three retail classes of shares: "Class A Shares,"
"Class B Shares" and "Class C Shares" (individually, a "Class" and collectively,
the "Classes").
This Prospectus relates only to the Classes and sets forth information
that you should read and consider before you invest. Please retain it for future
reference. The Fund's Statement of Additional Information ("Part B" of Global
Funds, Inc.'s registration statement), dated February 4, 1998, as it may be
amended from time to time, contains additional information about the Fund and
has been filed with the Securities and Exchange Commission (the "SEC"). Part B
is incorporated by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address or by
calling the above numbers. The Fund's financial statements will appear in the
Annual Report of Global Funds, Inc. and will accompany any response to requests
for Part B. The SEC also
-1-
<PAGE>
maintains a Web site (http://www.sec.gov) that contains Part B, material
incorporated by reference into Global Funds, Inc's registration statement, and
other information regarding registrants that electronically file with the SEC.
The Fund also offers an Institutional Class, which is available for
purchase only by certain investors. A prospectus for the Fund's Institutional
Class can be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above numbers.
TABLE OF CONTENTS
Cover Page How to Buy Shares
Synopsis Redemption and Exchange
Summary of Expenses Dividends and Distributions
Investment Objective and Strategies Taxes
Suitability Calculation of Offering Price and Net
Investment Strategy Asset Value Per Share
Special Risk Considerations Management of the Fund
The Delaware Difference Other Investment Policies and Risk
Plans and Services Considerations
Classes of Shares Appendix A--Ratings
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY
IS A CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND
INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT
INVESTED. SHARES OF THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
-2-
<PAGE>
SYNOPSIS
Investment Objective
The investment objective of the Fund is to achieve long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of small non-U.S. companies, which may include companies
located or operating in established or emerging countries. The Fund is an
international fund. Under normal market conditions, at least 65% of the Fund's
total assets will be invested in equity securities of companies organized or
having a majority of their assets in or deriving a majority of their operating
income in at least three different countries outside of the United States. The
current market capitalization of the companies in which the Fund intends to
invest primarily will generally be $1.5 billion or less (at the time of
purchase). For further details, see Investment Objective and Strategies and
Other Investment Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations-Foreign Securities Risks and Other
Investment Policies and Risk Considerations.
2. The prices of equity securities, especially those of the smaller
non-U.S. companies in which the Fund will primarily invest, tend to fluctuate,
particularly in the shorter term. Investors in the Fund should be willing to
accept the risks associated with emerging and growth-oriented companies, some of
the securities of which may be speculative and subject the Fund to additional
investment risk. See Special Risk Considerations and Other Investment Policies
and Risk Considerations.
3. The Fund may invest a portion of its assets in the markets of
certain emerging countries. Investments in securities of companies in emerging
markets present a greater degree of risk than tends to be the case for foreign
investments in Western Europe and other developed markets. Among other things,
economic markets and structures tend to be less mature and diverse and the
securities markets which are subject to less government regulation or
supervision may also be smaller, less liquid and subject to greater price
volatility. There is a greater possibility of expropriation, nationalization,
confiscatory taxation, income earned or other special taxes, foreign exchange
restrictions, limitations on the repatriation of income and capital from
investments, defaults in foreign government debt, and economic, political or
social instability. In addition, in many emerging markets, there is
substantially less publicly available information about issuers and the
information that is available tends to be of a lesser quality. See Special
Risk Considerations-Emerging Markets Securities Risks.
4. The Fund may invest up to 15% of its assets, in high yield, high
risk foreign fixed-income securities, including Brady Bonds. Consequently,
greater risks may be involved
-3-
<PAGE>
with an investment in the Fund. See High Yield, High Risk Securities under
Investment Objective and Strategies.
5. The Fund has the right to engage in options and futures transactions
for hedging purposes, to counterbalance portfolio volatility. In connection with
futures transactions, the Fund will maintain certain collateral in special
accounts established with futures commission merchants or on its behalf in the
care of The Chase Manhattan Bank (the "Custodian Bank"). While the Fund does not
engage in options and futures for speculative purposes, there are risks which
result from the use of these instruments, and an investor should carefully
review the descriptions of these risks in this Prospectus. See Options and
Futures Contracts and Options on Futures Contracts under Other Investment
Policies and Risk Considerations.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund, subject to the
supervision of Global Funds, Inc.'s Board of Directors. Delaware Distributors,
L.P. (the "Distributor") is the national distributor for the Fund and for all of
the other mutual funds in the Delaware Group. Delaware Service Company, Inc.
(the "Transfer Agent") is the shareholder servicing, dividend disbursing,
accounting services and transfer agent for the Fund and for all of the other
mutual funds in the Delaware Group. See Summary of Expenses and Management of
the Fund for further information regarding the Manager and the fees payable
under the Fund's Investment Management Agreement.
Sales Charges
The price of Class A Shares includes a maximum front-end sales charge
of 4.75% of the offering price. The front-end sales charge is reduced on certain
transactions of at least $100,000 but under $1,000,000. For purchases of
$1,000,000 or more, the front-end sales charge is eliminated (subject to a
contingent deferred sales charge ("Limited CDSC") of 1% if shares are redeemed
within 12 months of purchase and a dealer commission was paid in connection with
such purchase). Class A Shares are subject to annual 12b-1 Plan expenses for the
life of the investment.
The price of Class B Shares is equal to the net asset value per share.
Class B Shares are subject to a CDSC of: (i) 4% if shares are redeemed within
two years of purchase; (ii) 3% if shares are redeemed during the third or fourth
year following purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; and (iv) 1% if shares are redeemed during the sixth year
following purchase. Class B Shares are subject to annual 12b-1 Plan expenses for
approximately eight years after purchase.
The price of Class C Shares is equal to the net asset value per share.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within 12
months of purchase. Class C Shares are subject to annual 12b-1 Plan expenses for
the life of the investment.
See Classes of Shares and Distribution (12b-1) and Service under
Management of the Fund.
-4-
<PAGE>
Purchase Amounts
Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments generally must be at least $100.
Each purchase of Class B Shares is subject to a maximum purchase
limitation of $250,000. For Class C Shares, each purchase must be in an amount
that is less than $1,000,000. An investor may exceed these maximum purchase
limitations for Class B Shares and Class C Shares by making cumulative purchases
over a period of time. An investor should keep in mind, however, that reduced
front-end sales charges apply to investments of $100,000 or more in Class A
Shares, and that Class A Shares are subject to lower annual 12b-1 Plan expenses
than Class B and Class C Shares and generally are not subject to a CDSC. The
minimum and maximum purchase amounts for retirement plans may vary. See How to
Buy Shares.
Redemption and Exchange
Class A Shares may be redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. Neither the Fund
nor the Distributor assesses a charge for redemptions or exchanges of Class A
Shares, except for certain redemptions of shares purchased at net asset value,
which may be subject to a Limited CDSC if a dealer's commission was paid in
connection with such purchases. See Front-End Sales Charge Alternative - Class A
Shares under Classes of Shares.
Class B Shares and Class C Shares may be redeemed or exchanged at the
net asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Fund
nor the Distributor assesses any charges other than the CDSC for redemptions or
exchanges of Class B or Class C Shares. There are certain limitations on an
investor's ability to exchange shares between the various classes of shares that
are offered. See Redemption and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. The Fund operates as a diversified fund as defined under the Investment
Company Act of 1940 (the "1940 Act"). Global Funds, Inc. was organized as a
Maryland corporation on May 30, 1991. See Shares under Management of the Fund.
-5-
<PAGE>
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares follows:
<TABLE>
<CAPTION>
Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price)........................................... 4.75% None None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)................................ None None None
Maximum Contingent Deferred Sales Charge
(as a percentage of original purchase price or
redemption proceeds, as applicable)......................... None* 4.00%* 1.00%*
Redemption Fees.............................................. None** None** None**
</TABLE>
*Class A purchases of $1,000,000 or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is paid to
the financial adviser through whom such purchase is effected, a Limited CDSC of
1% will be imposed on certain redemptions within 12 months of purchase.
Additional Class A purchase options involving the imposition of a CDSC may be
permitted as described in the Prospectus from time to time. Class B Shares are
subject to a CDSC of: (i) 4% if shares are redeemed within two years of
purchase; (ii) 3% if shares are redeemed during the third or fourth year
following purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; (iv) 1% if shares are redeemed during the sixth year
following purchase; and (v) 0% thereafter. Class C Shares are subject to a CDSC
of 1% if the shares are redeemed within 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange; and Deferred Sales Charge Alternative
- - Class B Shares , Level Sales Charge Alternative - Class C Shares and
Contingent Deferred Sales Charge - Class B Shares and Class C Shares under
Classes of Shares.
**CoreStates Bank, N.A. currently charges $7.50 per redemption for redemptions
payable by wire.
-6-
<PAGE>
<TABLE>
<CAPTION>
Annual Operating Expenses Class A Class B Class C
(as a percentage of average daily net assets) Shares Shares Shares
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees (after voluntary waivers)..................... 0.00%++ 0.00%++ 0.00%++
12b-1 Expenses (including service fees)
(after voluntary waivers)..................................... 0.00%+/++ 0.00%+/++ 0.00%+/++
Other Operating Expenses
(after voluntary payments).................................... 1.25%++ 1.25%++ 1.25%++
Total Operating Expenses
(after voluntary waivers and payments)................... 1.25%++ 1.25%++ 1.25%++
</TABLE>
+ Class A Shares, Class B Shares and Class C Shares are subject to separate
12b-1 Plans. Long-term shareholders may pay more than the economic
equivalent of the maximum front-end sales charges permitted by rules of the
National Association of Securities Dealers, Inc. (the "NASD"). The
Distributor has elected voluntarily to waive its right to receive 12b-1
Plan fees (including service fees) from the commencement of the public
offering of the Classes through May 31, 1998. In the absence of those
waivers, 12b-1 Plan expenses would equal 0.30% for Class A Shares and 1.00%
for each of the Class B Shares and Class C Shares. See Distribution (12b-1)
and Service under Management of the Fund.
++ Because the Fund did not commence operations until December 19, 1997,
"Total Operating Expenses" and "Other Operating Expenses" for each Class of
the Fund are based on estimated amounts the Fund expects to pay during the
current fiscal year . The Manager has elected voluntarily to waive that
portion, if any, of the annual management fees payable by the Fund and to
pay certain expenses of the Fund to the extent necessary to ensure that the
Fund's Total Operating Expenses (exclusive of 12b-1 Plan fees, taxes,
interest, brokerage commissions and extraordinary expenses) do not exceed ,
on an annualized basis, 1.25% of the average daily net assets of the Fund.
The Manager's voluntary fee waivers and expense payments began at the
commencement of the public offering of the Classes and will extend through
May 31, 1998. Absent the Manager's voluntary fee waiver and expense
payments (and the Distributor's voluntary waiver of the 12b-1 Plan fees for
each class, it is estimated that during the current fiscal year, the Total
Operating Expenses, as a percentage of average daily net assets, would be
3.17%, 3.87% and 3.87%, respectively, for Class A Shares, Class B Shares
and Class C Shares, reflecting "Management Fees" of 1.25%.
-7-
<PAGE>
For expense information about the Fund's Institutional Class of shares,
see the separate prospectus relating to that class.
Investors utilizing the Delaware Group Asset Planner asset allocation
service also typically incur an annual maintenance fee of $35 per Strategy.
However, effective November 1, 1996, the annual maintenance fee is waived until
further notice. Investors who utilize the Asset Planner for an Individual
Retirement Plan ("IRA") will pay an annual IRA fee of $15 per Social Security
Number. See Part B.
-8-
<PAGE>
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return, (2) redemption and no redemption at the end of each time period
and (3) for Class B Shares and Class C Shares, payment of a CDSC at the time of
redemption, if applicable. The following example assumes the voluntary waiver of
the management fee and/or other payments of expenses by the Manager and of the
12b-1 Plan fees by the Distributor as discussed in this Prospectus.
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
1 year 3 years 1 year 3 years
------ ------- ------ -------
<S> <C> <C> <C> <C>
Class A Shares $60(1) $85 $60 $85
Class B Shares(2) $53 $70 $13 $40
Class C Shares $23 $40 $13 $40
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC or other
CDSC, which has not been reflected in this calculation, may be imposed
on certain redemptions . See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange.
(2) At the end of approximately eight years after purchase, Class B Shares
will be automatically converted into Class A Shares. The example above
does not assume conversion of Class B Shares since it reflects figures
only for one and three years. See Automatic Conversion of Class B
Shares under Classes of Shares for a description of the automatic
conversion feature.
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in each Class will
bear directly or indirectly.
-9-
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGIES
SUITABILITY
Investors considering Fund should have a long-term investment time
frame.
The Fund cannot assure a specific rate of return or that principal will
be protected. The value of the Fund's shares can be expected to move up and down
depending on market conditions. Consequently, appreciation may be obtained in
periods of generally rising markets, while in declining markets the value of the
Fund's shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as well
as to political, economic and social situations different from and potentially
more volatile than those in the United States. In addition, the accounting, tax
and financial reporting standards of foreign countries are different from and
may be less reliable or comprehensive than those relating to U.S. securities
issuers. See Special Risk Considerations for a complete discussion of the risk
factors affecting any international investment. For these reasons, the Fund are
not suitable for short-term investors. However, through the cautious selection
and supervision of its portfolio, the Manager will strive to achieve the Fund's
objective.
The Fund may be suitable for investors with a long-term investment
horizon (of at least three years) who are looking for long-term growth potential
from a portfolio of international securities. The Fund will invest primarily in
equity securities of small non-U.S. companies in established or emerging
countries. Investors should be willing to accept the risks associated with
foreign investing as well as with investments in growth-oriented or emerging
issuers, some of which may be speculative and subject the Fund to additional
investment risk.
* * *
Ownership of shares of the Fund can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities in which the Fund invests.
An investor should not consider a purchase of shares of the Fund as
equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
The investment objective of the Fund is to achieve long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of smaller non-U.S. companies, which may include companies
located or operating in established or emerging countries. The Fund is an
international fund. Under normal circumstances, at least 65% of the Fund's total
assets will be invested in equity securities of companies organized or having a
majority of their assets in or
-10-
<PAGE>
deriving a majority of their operating income in at least three different
countries outside of the United States. The current market capitalization of the
companies in which the Fund intends to invest primarily will generally be $1.5
billion or less (at the time of purchase).
The equity securities in which the Fund may invest include common
stocks, preferred stocks, rights or warrants to purchase common stocks and
securities convertible into common stocks. The Fund may also invest in foreign
companies through sponsored or unsponsored American Depositary Receipts,
European Depositary Receipts or Global Depositary Receipts ("Depositary
Receipts"), which are receipts typically issued by a bank or trust company
evidencing ownership of underlying securities issued by a foreign company. By
focusing on smaller, non-U.S. companies, the Fund seeks to identify equity
securities of emerging and other growth-oriented companies which in the opinion
of the Manager, are responsive to changes within their markets, and have the
fundamental characteristics to support growth. The Manager will seek to identify
changing and dominant trends within the relevant markets, and will purchase
securities of companies which it believes will benefit from these trends. In
addition, the Manager will consider the financial strength of the company, the
nature of its management, and any developments affecting the company or its
industry. The Manager may invest in smaller capitalization companies that may be
temporarily out of favor or overlooked by securities analysts and whose value,
therefore, may not yet be fully recognized by the market. See Special Risk
Considerations - Small Company Investment Risks.
While the Fund may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund may invest will include, but
not be limited to, Canada, Germany, the United Kingdom, France, the Netherlands,
Belgium, Spain, Switzerland, Japan, Australia, New Zealand, Hong Kong ,
Singapore and Malaysia as well as Argentina, Brazil, Chile, Egypt, Greece,
India, Indonesia, Korea, Peru, the Philippines, South Africa, Taiwan , Thailand
and Turkey. With respect to certain countries, investments by an investment
company may only be made through investments in closed-end investment companies
that in turn are authorized to invest in the securities of such countries. See
Investment Company Securities under Other Investment Policies and Risk
Considerations.
In selecting investments for the Fund, the Manager will employ a
dividend discount analysis across country boundaries and will also use a
purchasing power parity approach to identify currencies and markets that are
overvalued or undervalued relative to the U.S. dollar. The Manager uses the
dividend discount analysis to compare the value of different investments. Using
this technique, the Manager looks at future anticipated dividends and discounts
the value of those dividends back to what they would be worth if they were being
paid today. With a purchasing parity approach, the Manager attempts to identify
the amount of goods and services that a dollar will buy in the United States and
compare that to the amount of a foreign currency required to buy the same amount
of goods and services in another country. Eventually, currencies should trade at
levels that should make it possible for the dollar to buy the same amount of
goods and services overseas as in the United States. When the dollar buys less,
the foreign currency may be considered to be overvalued. When the dollar buys
more, the currency may be considered to be undervalued.
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The Fund may invest in both open-end and listed or unlisted closed-end
investment companies, as well as unregistered investment companies. See
Investment Company Securities under Other Investment Policies and Risk
Considerations. The Fund may also invest in convertible preferred stocks that
offer enhanced yield features, such as Preferred Equity Redemption Cumulative
Stock, and certain other non-traditional equity securities.
The Fund may invest up to 15% of its net assets in fixed-income
securities issued by emerging country companies, and foreign governments, their
agencies, instrumentalities or political subdivisions, all of which may be high
yield, high risk fixed-income securities rated lower than BBB by Standard &
Poor's Ratings Group ("S&P") and Baa by Moody's Investors Services, Inc.
("Moody's") or, if unrated, are considered by the Manager to be of equivalent
quality and which present special investment risks. The Fund may also invest in
Brady Bonds. See High Yield, High Risk Securities and Special Risk
Considerations. As of December 31, 1997, the Fund did not hold any of such lower
rated fixed income securities.
For temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities (and which
are backed by the full faith and credit of the U.S. government), or issued by
foreign or U.S. companies. For example, the Fund may invest in U.S. fixed-income
markets when the Manager believes that the global equity markets are excessively
volatile or overvalued so that the Fund's objective cannot be achieved in such
markets. Any such corporate debt obligations will be rated AA or better by S&P,
or Aa or better by Moody's, or if unrated, will be determined to be of
comparable quality by the Manager. The Fund may also invest in the securities
listed above pending investment of proceeds from new sales of Fund shares and to
maintain sufficient cash to meet redemption requests.
Restricted and Illiquid Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Fund. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. The Fund may
invest up to 15% of the value of its net assets in illiquid securities, which
are securities which may not be disposed of within seven days at the price at
which they are carried on the Fund's books. In the event the Fund's percentage
limitation is exceeded, whether due to changes in the market value of the Fund's
illiquid holdings or because a particular security is deemed to have become
illiquid, the Manager will take steps to remedy these circumstances in an
orderly fashion.
High Yield, High Risk Securities
The Fund may invest up to 15% of its net assets in high yield, high
risk foreign fixed-income securities, including so-called Brady Bonds. See
Foreign Government Securities Risks under Special Risk Considerations. In the
past, in the opinion of the Manager, the high yields from these bonds have more
than compensated for their higher default rates. There can be no assurance,
however, that yields
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will continue to offset default rates on these bonds in the future. The Manager
intends to maintain an adequately diversified portfolio of these bonds. While
diversification can help to reduce the effect of an individual default on the
Fund, there can be no assurance that diversification will protect the Fund from
widespread bond defaults brought about by a sustained economic downturn.
Medium- and low-grade bonds held by the Fund may be issued as a
consequence of corporate restructurings, such as leveraged buy-outs, mergers,
acquisitions, debt recapitalizations or similar events. Also these bonds are
often issued by smaller, less creditworthy companies or by highly leveraged
(indebted) firms, which are generally less able than more financially stable
firms to make scheduled payments of interest and principal. The risks posed by
bonds issued under such circumstances are substantial.
The economy and interest rates may affect these high yield, high risk
securities differently from other securities. Prices have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic changes or individual corporate developments.
Also, during an economic downturn or a substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. Changes by recognized rating agencies in their rating of any security
and in the ability of an issuer to make payments of interest and principal will
also ordinarily have a more dramatic effect on the values of these investments
than on the values of higher-rated securities. Such changes in value will not
affect cash income derived from these securities, unless the issuers fail to pay
interest or dividends when due. Such changes will, however, affect the Fund's
net asset value per share.
* * *
The Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940 Act,
the Fund will operate as a diversified fund. The Fund will not concentrate its
investments in any particular industry, which means that the Fund will not
invest 25% or more of its total assets in any one industry.
The Fund's investment objective, Global Funds, Inc.'s designation as an
open-end investment company, the Fund's designation as a diversified fund, and
the Fund's policies concerning portfolio lending, borrowing and concentration
are "fundamental" and may not be changed unless authorized by the vote of a
majority of the Fund's outstanding voting securities. A vote of a "majority of
the outstanding voting securities" is the vote by the holders of the lesser of
a) 67% or more of the Fund's voting securities present in person or represented
by proxy if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy; or b) more than 50% of the
outstanding voting securities. Part B lists other more specific investment
restrictions of the Fund which may not be changed without a majority shareholder
vote.
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The investment policies of the Fund not identified above as
"fundamental" may be changed by the Board of Directors of Global Funds, Inc.
without a shareholder vote. See Special Risk Considerations and Other Investment
Policies and Risk Considerations.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Foreign Securities Risks. The Fund has the right to purchase securities
in any developed, underdeveloped or emerging country. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations. These risks are in addition to the
usual risks inherent in domestic investments. There is the possibility of
expropriation, nationalization or confiscatory taxation, taxation of income
earned in foreign nations or other taxes imposed with respect to investments in
foreign nations, foreign exchange control (which may include suspension of the
ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments which could affect investments in securities of issuers in those
nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about companies
in the United States. Foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United
States' generally accepted accounting principles. Also, for an issuer that keeps
accounting records in local currency, inflation accounting rules may require for
both tax and accounting purposes, that certain assets and liabilities be
restated on the issuer's balance sheet in order to express items in terms of
currency or constant purchasing power. Inflation accounting may indirectly
generate losses or profits. Consequently, financial data may be materially
affected by restatements for inflation and may not accurately reflect the real
condition of those issuers and securities markets.
Further, the Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on securities
transactions in foreign countries, which are sometimes fixed rather than subject
to negotiation as in the United States, are likely to be higher. Further, the
settlement period of securities transactions in foreign markets may be longer
than in domestic markets, and may be subject to administrative uncertainties. In
many foreign countries, there is less government supervision and regulation of
business and industry practices, stock exchanges, brokers and listed companies
than in the United States, and capital requirements for brokerage firms are
generally lower. The foreign securities markets of many of the countries in
which the Fund may invest may also be smaller, less liquid and subject to
greater price volatility than those in the United States.
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Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse and
mature, and securities markets that trade a small number of securities, which
can result in a low or nonexistent volume of trading. Prices in these securities
markets tend to be volatile and, in the past, securities in these countries have
offered greater potential for gain (as well as loss) than securities of
companies located in developed countries. Until recently, there has been an
absence of a capital market structure or market-oriented economy in certain
emerging countries. Further, investments and opportunities for investments by
foreign investors are subject to a variety of national policies and restrictions
in many emerging countries. These restrictions may take the form of prior
governmental approval, limits on the amount or type of securities held by
foreigners, limits on the types of companies in which foreigners may invest and
prohibitions on foreign investments in issuers or industries deemed sensitive to
national interests. Additional restrictions may be imposed at any time by these
or other countries in which the Fund invests. Also, the repatriation of both
investment income and capital from several foreign countries is restricted and
controlled under certain regulations, including, in some cases, the need for
certain governmental consents. Although these restrictions may in the future
make it undesirable to invest in emerging countries, the Manager does not
believe that any current repatriation restrictions would affect its decision to
invest in such countries. Countries such as those in which the Fund may invest
have historically experienced and may continue to experience, substantial, and
in some periods extremely high rates of inflation for many years, high interest
rates, exchange rate fluctuations or currency depreciation, large amounts of
external debt, balance of payments and trade difficulties and extreme poverty
and unemployment. Other factors which may influence the ability or willingness
to service debt include, but are not limited to, a country's cash flow
situation, the availability of sufficient foreign exchange on the date a payment
is due, the relative size of its debt service burden to the economy as a whole,
its government's policy towards the International Monetary Fund, the World Bank
and other international agencies and the political constraints to which a
government debtor may be subject.
Foreign Government Securities Risks. With respect to investment in debt
issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits and
investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or whose
economy depends on certain strategic imports could be vulnerable to fluctuations
in international prices of these commodities or imports. To the extent that a
country receives payment for its exports in currencies other than dollars, its
ability to make debt payments denominated in dollars could be adversely
affected. If a foreign government or government-related issuer cannot generate
sufficient earnings from foreign trade to service its external debt, it may need
to depend on continuing loans and aid from foreign governments, commercial banks
and multilateral organizations, and inflows of foreign investment. The
commitment on the part of these foreign governments, multilateral organizations
and others to make such disbursements may be conditioned on the government's
implementation of economic reforms and/or economic performance and the timely
service of its obligations. Failure to implement such reforms, achieve such
levels of
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economic performance or repay principal or interest when due may curtail the
willingness of such third parties to lend funds, which may further impair the
issuer's ability or willingness to service its debts in a timely manner. The
cost of servicing external debt will also generally be adversely affected by
rising international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to foreign
exchange. Currency devaluations may affect the ability of a government issuer to
obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, the Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.
Among the foreign government and government related issuers in which
the Fund may invest are certain high-yield securities, including so-called Brady
Bonds. The issuers of the foreign government and government-related high yield
securities, including Brady Bonds, in which the Fund expect to invest have in
the past experienced substantial difficulties in servicing their external debt
obligations, which have led to defaults on certain obligations and the
restructuring of certain indebtedness. Restructuring arrangements have included,
among other things, reducing and rescheduling interest and principal payments by
negotiating new or amended credit agreements or converting outstanding principal
and unpaid interest to Brady Bonds, and obtaining new credit to finance interest
payments. Holders of certain foreign government and government-related high
yield securities may be requested to participate in the restructuring of such
obligations and to extend further loans to their issuers. There can be no
assurance that the Brady Bonds and other foreign government and
government-related high yield securities in which the Fund may invest will not
be subject to similar defaults or restructuring arrangements which may adversely
affect the value of such investments. Furthermore, certain participants in the
secondary market for such debt may be directly involved in negotiating the terms
of these arrangements and may therefore have access to information not available
to other market participants.
Brady Bonds are debt securities issued under the framework of the Brady
Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F.
Brady in 1989 as a mechanism for debtor nations to restructure their outstanding
external indebtedness (generally, commercial bank debt). In restructuring its
external debt under the Brady Plan framework, a debtor nation negotiates with
its existing bank lenders as well as multilateral institutions such as the World
Bank and the International Monetary Fund. The Brady Plan framework, as it has
developed, contemplates the exchange of commercial bank debt for new issued
bonds (Brady Bonds). The investment advisers believe that economic reforms
undertaken by countries in connection with the issuance of Brady Bonds make the
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debt of countries which have issued or have announced plans to issue Brady Bonds
an attractive opportunity for investment. Investors, however, should recognize
that the Brady Plan only sets forth general guiding principles for economic
reform and debt reduction, emphasizing that solutions must be negotiated on a
case-by-case basis between debtor nations and their creditors. In addition,
Brady Bonds have been issued only recently and, accordingly, do not have a long
payment history.
Small Company Investment Risks. Investments in common stocks in general
are subject to market, economic and business risks that will cause their price
to fluctuate over time. The securities of companies with smaller revenues and
capitalizations in which the Fund may invest may offer greater opportunity for
capital appreciation than larger companies, but investment in such companies
presents greater risks than securities of larger, more established companies.
Historically, smaller capitalization stocks have been more volatile in price
than larger capitalization stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of liquidity in the markets
for such stocks, and the potentially greater sensitivity of such small companies
to changes in or failure of management, and in many other changes in
competitive, business, industry and economic conditions, including risks
associated with limited production, markets, management depth, or financial
resources. Investors should therefore expect that the value of the Fund's shares
will be more volatile than the shares of a fund that invests in larger
capitalization stocks.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible since
the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for the Fund
to purchase additional foreign currency on the spot market (and bear the expense
of such purchase) if the market value of the security is less than the amount of
foreign currency the Fund is obligated to deliver (and if a decision is made to
sell the security and make delivery of the foreign currency). Conversely, it may
be necessary to sell on the spot market some of the foreign currency received
upon the sale of the portfolio security if its market value exceeds the amount
of foreign currency the Fund is obligated to deliver.
The Fund may invest up to 15% of its net assets in high yield, high
risk foreign fixed-income securities. These securities are rated lower than BBB
by S&P and Baa by Moody's or, if unrated, are considered by the Manager to be of
equivalent quality. See Investment Objectives and Strategies and High Yield,
High Risk Securities. The Fund will not purchase securities rated lower than C
by S&P or Ca by Moody's, or, if unrated, considered to be of an equivalent
quality to such ratings by the Manager. See Appendix A - Ratings to this
Prospectus for more rating information. Fixed-income securities of this type are
considered to be of poor standing and predominantly speculative. Such securities
are subject to a substantial degree of credit risk.
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* * *
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Fund's investment policies, restrictions and risk factors.
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THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
Fund Information; Literature; Price; Yield and Performance
Figures
Shareholder Service Center
800-523-1918
Information on Existing Regular Investment Accounts and
Retirement Plan Accounts; Wire Investments; Wire Liquidations;
Telephone Liquidations and Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
You can call the Investor Information Center at any time for current
performance information. Current yield and total return information may also be
included in advertisements and information given to shareholders. Yields are
computed on an annual basis over a 30-day period.
Shareholder Services
During business hours, you can call the Delaware Group's Shareholder
Service Center. Our representatives can answer any questions about your account,
the Fund, various service features and other funds in the Delaware Group.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations. Delaphone also provides
current performance information on the Fund, as well as other funds in the
Delaware Group. Delaphone is available seven days a week, 24 hours a day.
Dividend Payments
Dividends, capital gains and other distributions , if any, are
automatically reinvested in your account. You may also elect to have the
dividends earned in one fund automatically invested in
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another Delaware Group fund with a different investment objective, subject to
certain exceptions and limitations.
For more information, see Additional Methods of Adding to Your
Investment - Dividend Reinvestment Plan under How to Buy Shares or call the
Shareholder Service Center.
Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of dividends. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling the Shareholder Service Center.
Duplicate Confirmations
If your financial adviser or investment dealer is noted on your
investment application, we will send a duplicate confirmation to him or her.
This makes it easier for your adviser to help you manage your investments.
Tax Information
Each year, Global Funds, Inc. will mail to you information on the tax
status of your dividends and distributions.
Retirement Planning
An investment in the Fund may be a suitable investment option for
tax-deferred retirement plans. Delaware Group offers a full spectrum of
qualified and non-qualified retirement plans, including the popular 401(k)
deferred compensation plan, IRA, and the new Roth IRA. Please call the Delaware
Group at 800-523-1918 for more information.
Right of Accumulation
With respect to Class A Shares, the Right of Accumulation feature
allows you to combine the value of your current holdings of Class A Shares,
Class B Shares and Class C Shares of the Fund with the dollar amount of new
purchases of Class A Shares of the Fund to qualify for a reduced front-end sales
charge on such purchases of Class A Shares. Under the Combined Purchases
Privilege, you may also include certain shares that you own in other funds in
the Delaware Group. See Classes of Shares.
Letter of Intention
The Letter of Intention feature permits you to obtain a reduced
front-end sales charge on purchases of Class A Shares by aggregating certain of
your purchases of Delaware Group fund shares over a 13-month period. See Classes
of Shares and Part B.
12-Month Reinvestment Privilege
The 12-Month Reinvestment Privilege permits you to reinvest proceeds
from a redemption of Class A Shares, within one year of the date of the
redemption, without paying a front-end sales charge. See Part B.
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Exchange Privilege
The Exchange Privilege permits you to exchange all or part of your
shares into shares of other mutual funds in the Delaware Group, subject to
certain exceptions and limitations. For additional information on exchanges, see
Investing by Exchange under How to Buy Shares and Redemption and Exchange.
Wealth Builder Option
You may elect to invest in the Fund through regular liquidations of
shares in your accounts in other funds in the Delaware Group. Investments under
this feature are exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Fund shares. See Additional Methods of Adding
to Your Investment - Wealth Builder Option and Investing by Exchange under How
to Buy Shares, and Redemption and Exchange.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Fund's investments and performance. Global Funds, Inc.'s fiscal year ends on
November 30.
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CLASSES OF SHARES
Alternative Purchase Arrangements
Shares may be purchased at a price equal to the next determined net
asset value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
Class B Shares ("deferred sales charge alternative") or Class C Shares ("level
sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Absent any applicable fee waiver, Class A Shares are subject to annual
12b-1 Plan expenses of up to a maximum of 0.30% of average daily net assets of
such shares. Certain purchases of Class A Shares qualify for reduced front-end
sales charges. See Front-End Sales Charge Alternative - Class A Shares, below.
See also Contingent Deferred Sales Charge for Certain Redemptions of Class A
Shares Purchased at Net Asset Value under Redemption and Exchange and
Distribution (12b-1) and Service under Management of the Fund.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares, which do not incur a front-end sales charge
when they are purchased, but are subject to a contingent deferred sales charge
if they are redeemed within six years of purchase. Absent any applicable fee
waiver, Class B Shares are 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 such shares for approximately eight
years after purchase. Class B Shares permit all of the investor's dollars to
work from the time the investment is made. If no waiver of 12b-1 fees is in
effect, the higher 12b-1 Plan expenses paid by Class B Shares will cause such
shares to have a higher expense ratio and to pay lower dividends than Class A
Shares. At the end of approximately eight years after purchase, Class B Shares
automatically will be converted into Class A Shares and, thereafter, for the
remainder of the life of the investment, the annual 12b-1 Plan fee of up to
0.30% for Class A Shares will apply. See Automatic Conversion of Class B Shares,
below.
Class C Shares. An investor who elects the level sales charge
alternative acquires Class C Shares, which do not incur a front-end sales charge
when they are purchased, but are subject to a contingent deferred sales charge
if they are redeemed within 12 months of purchase. Absent any applicable fee
waiver, Class C Shares are 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 such shares for the life of the
investment. If no waiver of 12b-1 fees is in effect, the higher 12b-1 Plan
expenses paid by Class C Shares will cause such shares to have a higher expense
ratio and to pay lower dividends than Class A Shares. Unlike Class B Shares,
Class C Shares do not convert to another class.
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The alternative purchase arrangements described above permit investors
to choose the method of purchasing shares that is most suitable given the amount
of their purchase, the length of time they expect to hold their shares and other
relevant circumstances. Investors should determine whether, given their
particular circumstances, it is more advantageous to purchase Class A Shares and
incur a front-end sales charge, purchase Class B Shares and have the entire
initial purchase amount invested in the Fund with their investment being subject
to a CDSC if they redeem shares within six years of purchase, or purchase Class
C Shares and have the entire initial purchase amount invested in the Fund with
their investment being subject to a CDSC if they redeem shares within 12 months
of purchase. In addition, investors should consider the level of annual 12b-1
Plan expenses applicable to each Class. If no waiver of 12b-1 fees is in effect,
the higher 12b-1 Plan expenses on Class B Shares and Class C Shares will be
offset to the extent a return is realized on the additional money initially
invested upon the purchase of such shares. However, there can be no assurance as
to the return, if any, that will be realized on such additional money. In
addition, the effect of any return earned on such additional money will diminish
over time. In comparing Class B Shares to Class C Shares, investors should also
consider the duration of the annual 12b-1 Plan expenses to which each of the
Classes is subject and the desirability of an automatic conversion feature,
which is available only for Class B Shares.
For the distribution and related services provided to, and the expenses
borne on behalf of, the Fund, absent any applicable fee waiver, the Distributor
and others will be paid, in the case of Class A Shares, from the proceeds of the
front-end sales charge and 12b-1 Plan fees and, in the case of Class B Shares
and Class C Shares, from the proceeds of the 12b-1 Plan fees and, if applicable,
the CDSC incurred upon redemption. Financial advisers may receive different
compensation for selling Class A Shares, Class B Shares and Class C Shares.
Investors should understand that the purpose and function of the respective
12b-1 Plans and the CDSCs applicable to Class B Shares and Class C Shares are
the same as those of the 12b-1 Plan and the front-end sales charge applicable to
Class A Shares in that such fees and charges are used to finance the
distribution of the respective Classes. See Distribution (12b-1) and Service
under Management of the Fund.
Dividends, if any, paid on Class A Shares, Class B Shares and Class C
Shares will be calculated in the same manner, at the same time, and on the same
day and will be in the same amount, except that, when assessed, the additional
amount of 12b-1 Plan expenses relating to Class B Shares and Class C Shares will
be borne exclusively by such shares. See Calculation of Offering Price and Net
Asset Value Per Share.
The NASD has adopted certain rules relating to investment company sales
charges. Global Funds, Inc. and the Distributor intend to operate in compliance
with these rules.
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<PAGE>
Front-End Sales Charge Alternative - Class A Shares
Class A Shares may be purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.
Purchases of $100,000 or more carry a reduced front-end sales charge as
shown in the following table.
<TABLE>
<CAPTION>
International Small Cap Fund A Class
- -------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Front-End Sales Commission***
Charge as % of Charge as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
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
- -------------------------------------------------------------------------------------------------------------------
</TABLE>
* There is no front-end sales charge on purchases of Class A Shares of
$1,000,000 or more but, under certain limited circumstances, a 1% Limited
CDSC may apply upon redemption of such shares.
** Based on the initial net asset value of $8.50 per share of International
Small Cap Fund A Class.
*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify
for the reduced front-end sales charge on the basis of previous or
current purchases. The reduced front-end sales charge will be granted
upon confirmation of the shareholder's holdings by the Fund. Such
reduced front-end sales charges are not retroactive.
From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during
which the Distributor may reallow to dealers up to the full amount of
the front-end sales charge shown above. In addition, certain dealers
who enter into an agreement to provide extra training and information
on Delaware Group products and services and who increase sales of
Delaware Group funds may receive an additional commission of up to
0.15% of the offering price. Dealers who receive 90% or more of the
sales charge may be deemed to be underwriters under the 1933 Act.
- --------------------------------------------------------------------------------
-24-
<PAGE>
For initial purchases of Class A Shares of $1,000,000 or more, a
dealer's commission may be paid by the Distributor to financial advisers through
whom such purchases are made in accordance with the following schedule:
Dealer's Commission
(as a 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
For accounts with assets over $1,000,000, the dealer commission
resets annually to the highest incremental commission rate on the anniversary of
the first purchase. In determining a financial adviser's eligibility for the
dealer's commission, purchases of Class A Shares of other Delaware Group funds
as to which a Limited CDSC applies may be aggregated with those of Class A
Shares of the 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.
Redemptions of Class A Shares purchased at net asset value may result
in the imposition of a Limited CDSC if the dealer's commission described above
was paid in connection with the purchase of those shares. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange.
Combined Purchases Privilege
By combining your holdings of Class A Shares with your holdings of
Class B Shares and/or Class C Shares of the Fund and shares of the other funds
in the Delaware Group, except as noted below, you can reduce the front-end sales
charges on any additional purchases of Class A Shares. Shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products may be combined with other Delaware Group fund holdings. In
addition, assets held by investment advisory clients of the Manager or its
affiliates in a stable value account may be combined with other Delaware Group
fund holdings. Shares of other funds that do not carry a
-25-
<PAGE>
front-end sales charge or CDSC may not be included unless they were acquired
through an exchange from a Delaware Group fund that does carry a front-end sales
charge or CDSC.
This privilege permits you to combine your purchases and holdings with
those of your spouse, your children under 21 and any trust, fiduciary or
retirement account for the benefit of such family members. It also permits you
to use these combinations under a Letter of Intention. A Letter of Intention
allows you to make purchases over a 13-month period and qualify the entire
purchase for a reduction in front-end sales charges on Class A Shares.
Combined purchases of $1,000,000 or more, including certain purchases
made at net asset value pursuant to a Right of Accumulation or under a Letter of
Intention, may result in the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative - Class A Shares, above.
Allied Plans
Class A Shares are available for purchase by participants in certain
401(k) Defined Contribution Plans ("Allied Plans") which are made available
under a joint venture agreement between the Distributor and another institution
through which mutual funds are marketed and which allow investments in Class A
Shares of designated Delaware Group funds ("eligible Delaware Group fund
shares"), as well as shares of designated classes of non-Delaware Group funds
("eligible non-Delaware Group fund shares"). Class B Shares and Class C Shares
are not eligible for purchase by Allied Plans.
With respect to purchases made in connection with an Allied Plan, the
value of eligible Delaware Group and eligible non-Delaware Group fund shares
held by the Allied Plan may be combined with the dollar amount of new purchases
by that Allied Plan to obtain a reduced front-end sales charge on additional
purchases of eligible Delaware Group fund shares.
Participants in Allied Plans may exchange all or part of their eligible
Delaware Group fund shares for other eligible Delaware Group fund shares or for
eligible non-Delaware Group fund shares at net asset value without payment of a
front-end sales charge. However, exchanges of eligible fund shares, both
Delaware Group and non-Delaware Group, which were not subject to a front-end
sales charge, will be subject to the applicable sales charge if exchanged for
eligible Delaware Group fund shares to which a sales charge applies. No sales
charge will apply if the eligible fund shares were previously acquired through
the exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.
A dealer's commission may be payable on purchases of eligible Delaware
Group fund shares under an Allied Plan. In determining a financial adviser's
eligibility for a dealer's commission on net asset value purchases of eligible
Delaware Group fund shares in connection with Allied Plans, all participant
holdings in the Allied Plan will be aggregated.
-26-
<PAGE>
The Limited CDSC is applicable to redemptions of net asset value
purchases from an Allied Plan on which a dealer's commission has been paid.
Waivers of the Limited CDSC, as described under Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Group and non-Delaware Group fund shares. When
eligible Delaware Group fund shares are exchanged into eligible non-Delaware
Group fund shares, the Limited CDSC will be imposed at the time of the exchange,
unless the joint venture agreement specifies that the amount of the Limited CDSC
will be paid by the financial adviser or selling dealer. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.
Buying Class A Shares at Net Asset Value
Class A Shares of the Fund may be purchased at net asset value under
the Delaware Group Dividend Reinvestment Plan and, under certain circumstances,
the Exchange Privilege or the 12-Month Reinvestment Privilege. See The
Delaware Difference and Redemption and Exchange for additional information.
Purchases of Class A Shares may be made at net asset value by current
and former officers, directors and employees (and members of their families) of
the Manager, any affiliate, any of the funds in the Delaware Group, certain of
their agents and registered representatives and employees of authorized
investment dealers and by employee benefit plans for such entities. Individual
purchases, including those in retirement accounts, must be for accounts in the
name of the individual or a qualifying family member.
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. Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with special investment products, such as wrap
accounts or similar fee based programs.
Purchases of Class A Shares at net asset value may also be made by the
following: institutions investing for the account of their trust customers if
they are not eligible to purchase shares of the Institutional Class of the Fund;
and any group retirement plan (excluding defined benefit pension
-27-
<PAGE>
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 any stable value
account available to investment advisory clients of the Manager or its
affiliates, or (ii) is sponsored by an employer that has at any point after May
1, 1997 had 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. See Group Investment Plans for information
regarding the applicability of the Limited CDSC.
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.
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.
The Fund must be notified in advance that an investment qualifies for
purchase at net asset value.
Group Investment Plans
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, and 403(b)(7) and 457 Deferred Compensation Plans) may
benefit from the reduced front-end sales charges available on Class A Shares
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 will be
aggregated to determine the applicable front-end sales charge reduction on each
purchase, both initial and subsequent, if, at the time of each such purchase,
the company notifies the Fund that it qualifies for the reduction. Employees
participating in such Group Investment Plans may also combine the investments
held in their plan account to determine the front-end sales charge applicable to
purchases in non-retirement Delaware Group investment accounts if, at the time
of each such purchase, they notify the Fund that they are eligible to combine
purchase amounts held in their plan account.
The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid only if such redemption is made pursuant to a
withdrawal of the entire plan from Delaware Group funds. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.
For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class B Shares at the time of
purchase from its own assets in an amount equal to no more than 4% of the dollar
amount purchased. In addition, from time to time,
-28-
<PAGE>
upon written notice to all of its dealers, the Distributor may hold special
promotions for specified periods during which the Distributor may pay additional
compensation to dealers or brokers for selling Class B Shares at the time of
purchase. As discussed below, however, absent any applicable fee waiver, Class B
Shares are subject to annual 12b-1 Plan expenses and, if redeemed within six
years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid
to the Distributor and others for providing distribution and related services,
and bearing related expenses, in connection with the sale of Class B Shares.
These payments support the compensation paid to dealers or brokers for selling
Class B Shares. Payments to the Distributor and others under the Class B 12b-1
Plan may be in an amount equal to no more than 1% annually. The combination of
the CDSC and the proceeds of the 12b-1 Plan fees makes it possible for the Fund
to sell Class B Shares without deducting a front-end sales charge at the time of
purchase.
Holders of Class B Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class B Shares
described in this Prospectus, even after the exchange. Such CDSC schedule may be
higher than the CDSC schedule for Class B Shares acquired as a result of the
exchange. See Redemption and Exchange.
Automatic Conversion of Class B Shares
Class B Shares, other than shares acquired through reinvestment of
dividends, held for eight years after purchase are eligible for automatic
conversion into Class A Shares. Conversions of Class B Shares into Class A
Shares will occur only four times in any calendar year, on the last business day
of the second full week of March, June, September and December (each, a
"Conversion Date"). If the eighth anniversary after a purchase of Class B Shares
falls on a Conversion Date, an investor's Class B Shares will be converted on
that date. If the eighth anniversary occurs between Conversion Dates, an
investor's Class B Shares will be converted on the next Conversion Date after
such anniversary. Consequently, if a shareholder's eighth anniversary falls on
the day after a Conversion Date, that shareholder will have to hold Class B
Shares for as long as three additional months after the eighth anniversary of
purchase before the shares will automatically convert into Class A Shares.
Class B Shares of a fund acquired through a reinvestment of dividends
will convert to the corresponding Class A Shares of that fund (or, in the case
of Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant
Class) pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute
tax-free exchanges for federal income tax purposes. See Taxes.
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class C Shares at the time of
purchase from its own assets in an amount equal to no more than 1% of the dollar
amount purchased. As discussed below, absent any applicable fee waiver, Class C
Shares are subject to annual 12b-1 Plan expenses and, if redeemed within 12
months of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid
to the Distributor and others for providing distribution and related services,
and bearing related expenses, in connection with the sale of Class C Shares.
These payments support the compensation paid to dealers or brokers for selling
Class C Shares.
-29-
<PAGE>
Payments to the Distributor and others under the Class C 12b-1 Plan may be in an
amount equal to no more than 1% annually.
Holders of Class C Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class C Shares as
described in this Prospectus. See Redemption and Exchange.
Contingent Deferred Sales Charge - Class B Shares and Class C Shares
Class B Shares redeemed within six years of purchase may be subject to
a CDSC at the rates set forth below and Class C Shares redeemed within 12 months
of purchase may be subject to a CDSC of 1%. CDSCs are charged as a percentage of
the dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the net asset value at the time of purchase of the shares
being redeemed or the net asset value of those shares at 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 reinvestments of dividends or capital gains distributions.
For purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of Class B Shares or Class
C Shares of the Fund, even if those shares are later exchanged for shares of
another Delaware Group fund. In the event of an exchange of the shares, the "net
asset value of such shares at the time of redemption" will be the net asset
value of the shares that were acquired in the exchange.
The following table sets forth the rates of the CDSC for Class B
Shares of the 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 will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares, absent any applicable fee waiver. See Automatic Conversion of Class B
Shares, above. Investors are reminded that the Class A Shares into which Class
B Shares will convert are subject to ongoing annual 12b-1 Plan expenses of up to
a maximum of 0.30% of average daily net assets of such shares.
In determining whether a CDSC applies to a redemption of Class B
Shares, it will be assumed that shares held for more than six years are redeemed
first, followed by shares acquired through the reinvestment of dividends or
distributions, and finally by shares held longest during the six-year period.
With respect to Class C Shares, it will be assumed that shares held for more
than 12 months are redeemed first followed by shares acquired through the
reinvestment of dividends or distributions, and finally by shares held for 12
months or less.
-30-
<PAGE>
All investments made during a calendar month, regardless of what day of
the month the investment occurred, will age one month on the last day of that
month and each subsequent month.
The CDSC is waived on certain redemptions of Class B Shares and Class C
Shares. See Waiver of Contingent Deferred Sales Charge - Class B and Class C
Shares under Redemption and Exchange.
Other Payments to Dealers -- Class A Shares, Class B Shares and Class C Shares
From time to time at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of the Classes exceed certain limits, as
set by the Distributor, may receive from the Distributor an additional payment
of up to 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.
Subject to pending amendments to the NASD's Conduct Rules, in
connection with the promotion of Delaware Group fund shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising and may, from time to time,
pay or allow additional promotional incentives to dealers, which shall include
non-cash concessions, such as certain luxury merchandise or a trip to or
attendance at a business or investment seminar at a luxury resort, as part of
preapproved sales contests. Payment of non-cash compensation to dealers is
currently under review by the NASD and the Securities and Exchange Commission.
It is likely that the NASD's Conduct Rules will be amended such that the ability
of the Distributor to pay non-cash compensation as described above will be
restricted in some fashion. The Distributor intends to comply with the NASD's
Conduct Rules as they may be amended.
International Small Cap Fund Institutional Class
In addition to offering Class A Shares, Class B Shares and Class C
Shares, the Fund also offers the International Small Cap Fund Institutional
Class, which is described in a separate prospectus and is available for purchase
only by certain investors. International Small Cap Fund Institutional Class
shares generally are distributed directly by the Distributor and do not have a
front-end sales charge, a CDSC or a Limited CDSC, and are not subject to 12b-1
Plan distribution expenses. To obtain the prospectus that describes
International Small Cap Fund Institutional Class, contact the Distributor by
writing to the address or by calling the telephone number listed on page 1 of
this Prospectus.
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<PAGE>
HOW TO BUY SHARES
Purchase Amounts
Generally, the minimum initial purchase is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. For purchases under a Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act or through an Automatic Investing Plan,
there is a minimum initial purchase of $250 and a minimum subsequent purchase of
$25. Minimum purchase requirements do not apply to retirement plans other than
IRAs, for which there is a minimum initial purchase of $250, and a minimum
subsequent purchase of $25, regardless of which Class is selected.
There is a maximum purchase limitation of $250,000 on each purchase of
Class B Shares. For Class C Shares, each purchase must be in an amount that is
less than $1,000,000. An investor may exceed these maximum purchase limitations
by making cumulative purchases over a period of time. In doing so, an investor
should keep in mind that reduced front-end sales charges are available on
investments of $100,000 or more in Class A Shares, and that Class A Shares (i)
are subject to lower annual 12b-1 Plan expenses than Class B Shares and Class C
Shares and (ii) generally are not subject to a CDSC. For retirement plans, the
maximum purchase limitations apply only to the initial purchase of Class B
Shares or Class C Shares by the plan.
Investing through Your Investment Dealer
You can make a purchase of shares of the Fund through most investment
dealers who, as part of the service they provide, must transmit orders promptly.
They may charge for this service. If you want a dealer but do not have one, the
Delaware Group can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application, or in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to International Small Cap Fund A Class,
International Small Cap Fund B Class or International Small Cap Fund C Class, to
Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to the specific Fund and Class selected. Your check should be
identified with your name(s) and account number. An investment slip (similar to
a deposit slip) is provided at the bottom of transaction confirmations and
dividend statements that you will receive from Global Funds, Inc. Use of this
investment slip can help expedite processing of your check when making
additional purchases. Your investment may be delayed if you send additional
purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number for the Class in which you are
investing).
1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application, or in the case of a retirement account, an appropriate retirement
plan application, to the specific Fund and Class selected, to Delaware Group at
1818 Market Street, Philadelphia, PA 19103.
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<PAGE>
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a retirement plan account, call the
Shareholder Service Center for special wiring instructions.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group,
you may write and authorize an exchange of part or all of your investment into
shares of the Fund. If you wish to open an account by exchange, call the
Shareholder Service Center for more information. All exchanges are subject to
the eligibility and minimum purchase requirements set forth in each fund's
prospectus. See Redemption and Exchange for more complete information concerning
your exchange privileges.
Holders of Class A Shares may exchange all or part of their shares for
certain of the shares of other funds in the Delaware Group, including other
Class A Shares, but may not exchange their Class A Shares for Class B Shares or
Class C Shares of the Fund or of any other fund in the Delaware Group. Holders
of Class B Shares of the Fund are permitted to exchange all or part of their
Class B Shares only into Class B Shares of other Delaware Group funds.
Similarly, holders of Class C Shares of the Fund are permitted to exchange all
or part of their Class C Shares only into Class C Shares of other Delaware Group
funds. Class B Shares of the Fund and Class C Shares of the Fund acquired by
exchange will continue to carry the CDSC and, in the case of Class B Shares, the
automatic conversion schedule of the fund from which the exchange is made. The
holding period of Class B Shares of the Fund acquired by exchange will be added
to that of the shares that were exchanged for purposes of determining the time
of the automatic conversion into Class A Shares of the Fund.
Permissible exchanges into Class A Shares of the Fund will be made
without a front-end sales charge, except for exchanges of shares that were not
previously subject to a front-end sales charge (unless such shares were acquired
through the reinvestment of dividends). Permissible exchanges into Class B
Shares or Class C Shares of the Fund will be made without the imposition of a
CDSC by the fund from which the exchange is being made at the time of the
exchange.
See Allied Plans under Classes of Shares for information on exchanges
by participants in an Allied Plan.
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish to
use the following services:
1. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize Global Funds,
Inc. to transfer a designated amount monthly from your checking account to your
Fund account. Many shareholders use this as an automatic savings plan.
Shareholders should allow a reasonable amount of time for initial purchases and
changes to these plans to become effective.
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<PAGE>
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.
2. Direct Deposit
You may have your employer or bank make regular investments directly to
your Fund account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad Retirement
benefits, etc.
* * *
Should investments through an automatic investing plan or by direct
deposit be reclaimed or returned for some reason, Global Funds, Inc. has the
right to liquidate your shares to reimburse the government or transmitting bank.
If there are insufficient funds in your account, you are obligated to reimburse
the Fund.
3. Wealth Builder Option
You can use our Wealth Builder Option to invest in the Fund through
regular liquidations of shares in your accounts in other funds in the Delaware
Group. You may also elect to invest in other mutual funds in the Delaware Group
through the Wealth Builder Option through regular liquidations of shares in your
Fund account.
Under this automatic exchange program, you can authorize regular
monthly amounts (minimum of $100 per fund) to be liquidated from your account in
one or more funds in the Delaware Group and invested automatically into any
other account in a Delaware Group mutual fund that you may specify. If in
connection with the election of the Wealth Builder Option, you wish to open a
new account to receive the automatic investment, such new account must meet the
minimum initial purchase requirements described in the prospectus of the fund
that you select. All investments under this option are exchanges and are
therefore subject to the same conditions and limitations as other exchanges
noted above. You can terminate your participation in Wealth Builder at any time
by giving written notice to the fund from which the exchanges are made. See
Redemption and Exchange.
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, 403(b)(7) or 457 Deferred
Compensation Plans.
4. Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or dividend
income) reinvested in your Fund account or invested in certain other funds in
the Delaware Group, subject to the exceptions noted below as well as the
eligibility and minimum purchase requirements set forth in each fund's
prospectus.
Reinvestments of distributions into Class A Shares of the Fund or of
other Delaware Group funds are made without a front-end sales charge.
Reinvestments of distributions into Class B Shares of the Fund or of other
Delaware Group funds or into Class C Shares of the Fund or of other Delaware
Group funds are also made without any sales charge and will not be subject to a
CDSC if later redeemed. See Automatic Conversion of
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Class B Shares under Classes of Shares for information concerning the automatic
conversion of Class B Shares acquired by reinvesting dividends.
Holders of Class A Shares of the Fund may not reinvest their
distributions into Class B Shares or Class C Shares of any fund in the Delaware
Group, including the Fund. Holders of Class B Shares of the Fund may reinvest
their distributions only into Class B Shares of the funds in the Delaware Group
which offer that class of shares. Similarly, holders of Class C Shares of the
Fund may reinvest their distributions only into Class C Shares of the funds in
the Delaware Group which offer that class of shares. For more information about
reinvestments, call the Shareholder Service Center.
Capital gains and/or dividend distributions for participants in the
following retirement plans are automatically reinvested into the same Delaware
Group fund in which their investments are held: 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.
Purchase Price and Effective Date
The offering price and net asset value of Class A Shares, Class B
Shares and Class C Shares are determined as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the
Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund, its agent or designee. The effective
date of a direct purchase is the day your wire, electronic transfer or check is
received unless it is received after the time the offering price or net asset
value of shares is determined, as noted above. Purchase orders received after
such time will be effective the next business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
The Fund also reserves the right, following shareholder notification,
to charge a service fee on non-retirement accounts that, as a result of
redemption, have remained below the minimum stated account balance for a period
of three or more consecutive months. Holders of such accounts may be notified of
their insufficient account balance and advised that they have until the end of
the current calendar quarter to raise their balance to the stated minimum. If
the account has not reached the minimum balance requirement by that time, the
Fund will charge a $9 fee for that quarter and each subsequent calendar quarter
until the account is brought up to the minimum balance. The service fee will be
deducted from the account during the first week of each calendar quarter for the
previous quarter, and will be used to help defray the cost of maintaining
low-balance accounts. No fees will be charged without proper notice, and no CDSC
will apply to such assessments.
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The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of a
CDSC or Limited CDSC if he or she redeems any portion of his or her account.
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REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways.
The exchange service is useful if your investment requirements change and you
want an easy way to invest in other equity funds, bond funds, tax-advantaged
funds or money market funds. This service is also useful if you are anticipating
a major expenditure and want to move a portion of your investment into a fund
that has the checkwriting feature. Exchanges are subject to the requirements of
each fund and all exchanges of shares constitute taxable events. See Taxes.
Further, in order for an exchange to be processed, shares of the fund being
acquired must be registered in the state where the acquiring shareholder
resides. You may want to consult your financial adviser or investment dealer to
discuss which funds in the Delaware Group will best meet your changing
objectives, and the consequences of any exchange transaction. You may also call
the Delaware Group directly for fund information.
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.
Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after the Fund receives your request in good order,
subject, in the case of a redemption, to any applicable CDSC or Limited CDSC.
For example, redemption or exchange requests received in good order after the
time the offering price and net asset value of shares are determined will be
processed on the next business day. See Purchase Price and Effective Date under
How to Buy Shares. A shareholder submitting a redemption request may indicate
that he or she wishes to receive redemption proceeds of a specific dollar
amount. In the case of such a request, and in the case of certain redemptions
from retirement plan accounts, the Fund will redeem the number of shares
necessary to deduct the applicable CDSC in the case of Class B Shares and Class
C Shares, and, if applicable, the Limited CDSC in the case of Class A Shares and
tender to the shareholder the requested amount, assuming the shareholder holds
enough shares in his or her account for the redemption to be processed in this
manner. Otherwise, the amount tendered to the shareholder upon redemption will
be reduced by the amount of the applicable CDSC or Limited CDSC. Redemption
proceeds will be distributed promptly, as described below, but not later than
seven days after receipt of a redemption request.
Except as noted below, for a redemption request to be in "good order,"
you must provide your account number, account registration, and the total number
of shares or dollar amount of the transaction. For exchange requests, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Shareholder Service Center at 800-523-1918. The Fund
may suspend, terminate, or amend the terms of the exchange privilege upon 60
days' written notice to shareholders.
The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the purchase check has cleared, which may take
up to 15 days from the purchase date. You can avoid this potential delay if you
purchase shares by wiring Federal Funds. The Fund reserves the right to reject a
written or telephone redemption request or delay payment of redemption proceeds
if there has been a recent change to the shareholder's address of record.
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There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not subject
to a front-end sales charge, except for exchanges involving assets that were
previously invested in a fund with a front-end sales charge and/or exchanges
involving the reinvestment of dividends.
Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for shares of other funds in the Delaware Group (in each
case, "New Shares") in a permitted exchange, will not be subject to a CDSC that
might otherwise be due upon redemption of the Original Shares. However, such
shareholders will continue to be subject to the CDSC and, in the case of Class B
Shares, the automatic conversion schedule of the Original Shares as described in
this Prospectus and any CDSC assessed upon redemption will be charged by the
fund from which the Original Shares were exchanged. In an exchange of Class B
Shares from the Fund, the Fund's CDSC schedule may be higher than the CDSC
schedule relating to the New Shares acquired as a result of the exchange. For
purposes of computing the CDSC that may be payable upon a disposition of the New
Shares, the period of time that an investor held the Original Shares is added to
the period of time that an investor held the New Shares. With respect to Class B
Shares, the automatic conversion schedule of the Original Shares may be longer
than that of the New Shares. Consequently, an investment in New Shares by
exchange may subject an investor, absent any applicable fee waiver, to the
higher 12b-1 fees applicable to Class B Shares of the Fund for a longer period
of time than if the investment in New Shares were made directly.
Various redemption and exchange methods are outlined below. Except for
the CDSC applicable to certain redemptions of Class B Shares and Class C Shares
and the Limited CDSC applicable to certain redemptions of Class A Shares
purchased at net asset value, there is no fee charged by the Fund or the
Distributor for redeeming or exchanging your shares, but such fees could be
charged in the future. You may have your investment dealer arrange to have your
shares redeemed or exchanged. Your investment dealer may charge for this
service.
All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your shares. The request must be signed by all owners
of the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.
Payment is normally mailed the next business day after receipt of your
redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good order.
Certificates are issued for Class A Shares only if a shareholder submits a
specific request. Certificates are not issued for Class B Shares or Class C
Shares.
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Written Exchange
You may also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your shares into another mutual
fund in the Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your Class A Shares in certificate form, you may
redeem or exchange only by written request and you must return your
certificate(s).
The Telephone Redemption--Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an unusually
large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.
Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day after receipt of the redemption request. This service is only available to
individual, joint and individual fiduciary-type accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption proceeds. If you ask for a check, it will normally be mailed the next
business day after receipt of your redemption request to your predesignated bank
account. There are no separate fees for this redemption method, but the mail
time may delay getting funds into your bank account. Simply call the Shareholder
Service Center prior to the time the offering price and net asset value are
determined, as noted above.
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Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to
adjust your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into other funds in the Delaware Group under the same registration,
subject to the same conditions and limitations as other exchanges noted above.
As with the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value
A Limited CDSC will be imposed on certain redemptions of Class A Shares
(or shares into which such Class A Shares are exchanged) made within 12 months
of purchase, if such purchases were made at net asset value and triggered the
payment by the Distributor of the dealer's commission previously described. See
Classes of Shares.
The Limited CDSC will be paid to the Distributor and will be equal to
the lesser of 1% of: (1) the net asset value at the time of purchase of Class
A Shares being redeemed; or (2) the net asset value of such Class A Shares at
the time of redemption. For purposes of this formula, the "net asset value at
the time of purchase" will be the net asset value at purchase of Class A
Shares even if those shares are later exchanged for shares of another Delaware
Group fund and, in the event of an exchange of Class A Shares, the "net asset
value of such shares at the time of redemption" will be the net asset value of
the shares acquired in the exchange.
Redemptions of such Class A Shares held for more than 12 months will
not be subjected to the Limited CDSC and an exchange of such Class A Shares into
another Delaware Group fund will not trigger the imposition of the Limited CDSC
at the time of such exchange. The period a shareholder owns shares into which
Class A Shares are exchanged will count towards satisfying the 12-month holding
period. The Limited CDSC is assessed if such 12-month period is not satisfied
irrespective of whether the redemption triggering its payment is of Class A
Shares of the Fund or Class A Shares acquired in the exchange.
In determining whether a Limited CDSC is payable, it will be assumed
that shares not subject to the Limited CDSC are the first redeemed followed by
other shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of what day of the month the investment
occurred, will age one month on the last day of that month and each subsequent
month.
Waiver of Limited Contingent Deferred Sales Charge - Class A Shares
The Limited CDSC for Class A Shares on which a dealer's commission has
been paid will be waived in the following instances: (i) redemptions that result
from the Fund's right to liquidate a shareholder's account if the aggregate net
asset value of the shares held in the account is less than the then-effective
minimum account size; (ii) distributions to participants from a retirement plan
qualified under section 401(a) or 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code"), or due to death of a participant in such a plan; (iii)
redemptions pursuant to the direction of a participant or beneficiary of a
retirement plan qualified under section 401(a) or 401(k) of the Code with
respect to that retirement plan; (iv) periodic distributions from an IRA, SIMPLE
IRA or 403(b)(7) or 457 Deferred Compensation Plan or due to death, disability,
or attainment of age
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59 1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; (v) returns of excess contributions to an IRA; (vi) distributions
by other employee benefit plans to pay benefits; (vii) distributions described
in (ii), (iv), and (vi) above pursuant to a systematic withdrawal plan; and
(viii) redemptions by the classes of shareholders who are permitted to purchase
shares at net asset value, regardless of the size of the purchase (see Buying
Class A Shares at Net Asset Value under Classes of Shares).
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA, SIMPLE IRA,
SEP/IRA, 403(b)(7) or 457 Deferred Compensation Plan; (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, 403(b)(7) or 457
Deferred Compensation Plan due to death, disability or attainment of age 59 1/2,
and IRA distributions qualifying under Section 72(t) of the Code; and (iv)
distributions from an account if the redemption results from the death of all
registered owners of the account (in the case of accounts established under the
Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust accounts,
the waiver applies upon the death of all beneficial owners) or a total and
permanent disability (as defined in Section 72 of the Code) of all registered
owners occurring after the purchase of the shares being redeemed.
The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in the
account is less than the then-effective minimum account size; (ii) returns of
excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution Plan; (iii) periodic distributions from a 403(b)(7) or 457
Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing Plan,
Money Purchase Plan, 401(k) Defined Contribution Plan upon attainment of age 70
1/2, and IRA distributions qualifying under Section 72(t) of the Code; (iv)
distributions from a 403(b)(7) Deferred Compensation Plan, 457 Deferred
Compensation Plan, Profit Sharing Plan, or 401(k) Defined Contribution Plan,
under hardship provisions of the plan; (v) distributions from a 403(b)(7) or
457 Deferred Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan
or a 401(k) Defined Contribution Plan upon attainment of normal retirement age
under the plan or upon separation from service; (vi) periodic distributions from
an IRA or SIMPLE IRA on or after attainment of age 59 1/2; and (vii)
distributions from an account if the redemption results from the death of all
registered owners of the account (in the case of accounts established under the
Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust accounts,
the waiver applies upon the death of all beneficial owners) or a total and
permanent disability (as defined in Section 72 of the Code) of all registered
owners occurring after the purchase of the shares being redeemed.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend on the Fund to all shareholders
of record of the Classes of the Fund at the time the offering price of shares is
determined. See Purchase Price and Effective Date under How to Buy Shares. Thus,
when redeeming shares, dividends continue to be credited up to and including the
date of redemption.
The Fund will normally declare and make payments from net investment
income on an annual basis. Payments from net realized securities profits of the
Fund, if any, will be made in the quarter following the close of the fiscal
year. Both dividends and distributions, if any, are automatically reinvested in
your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that the Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, the Fund may declare special year-end dividend and
capital gains distributions during October, November or December to shareholders
of record on a date in such month. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by the Fund and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
Each Class of the Fund will share proportionately in the investment
income and expenses of the Fund, except that, absent any applicable fee waiver,
the per share dividends from net investment income on Class A Shares, Class B
Shares and Class C Shares will vary due to the expenses under the 12b-1 Plan
applicable to each Class. Generally, when a 12b-1 Plan fee waiver is not in
effect, the dividends per share on Class B Shares and Class C Shares can be
expected to be lower than the dividends per share on Class A Shares because the
expenses under the 12b-1 Plans relating to Class B Shares and Class C Shares
will be higher than the expenses under the 12b-1 Plan relating to Class A
Shares. See Distribution (12b-1) and Service under Management of the Fund.
Both dividends and distributions, if any, are automatically reinvested
in your account at net asset value. See The Delaware Difference for more
information on reinvestment options.
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TAXES
The tax discussion set forth below is included for general information
only. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Code. Because many of these changes are complex, and only indirectly affect
the Fund and its distributions to you, they are discussed in Part B. Changes in
the treatment of capital gains, however, are discussed in this section.
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. As such, the 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 certain other requirements relating to the
sources of its income and diversification of its assets.
The Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to those investors who are subject
to income taxes as ordinary income, whether received in cash or in additional
shares. It is expected that either none or only a nominal portion of the Fund's
dividends will be eligible for the dividends-received deductions for
corporations. The portion of dividends paid by the Fund that so qualifies will
be designated each year in a notice from the Fund to the Fund's shareholders.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the length of
time an investor has owned shares in the Fund. The Fund does not seek to realize
any particular amount of capital gains during a year; rather, realized gains are
a by-product of Fund management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in the Fund are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
the Fund's securities were sold and how long they were held by the Fund before
they were sold. Investors who want more information on holding periods and other
qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
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Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November or December to shareholders of
record on a specified date in one of those months, but which, for operational
reasons, may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the shareholder
on December 31 of the calendar year in which they are declared.
The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund any other fund in the Delaware Group. Any loss incurred on a sale or
exchange of Fund shares that had been held for six months or less will be
treated as a long-term capital loss to the extent of capital gains dividends
received with respect to such shares. All or a portion of the sales charge
incurred in acquiring Fund shares will be excluded from the federal tax basis of
any of such shares sold or exchanged within 90 days of their purchase (for
purposes of determining gain or loss upon the sale of such shares) if the sale
proceeds are reinvested in the Fund or in another fund in the Delaware Group of
funds and a sales charge that would otherwise apply to the reinvestment is
reduced or eliminated. Any portion of such sales charge excluded from the tax
basis of the shares sold will be added to the tax basis of the shares acquired
in the reinvestment.
The Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total assets
of the Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. If this election is made,
shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by the
Fund), and (ii) entitled to either deduct (as an itemized deduction in the case
of individuals) their share of such foreign taxes in computing their taxable
income or to claim a credit for such taxes against their U.S. income tax,
subject to certain limitations under the Code. Shareholders will be informed by
the Fund at the end of each calendar year regarding the availability of any
credits on and the amount of foreign source income to be included in their
income tax returns.
The automatic conversion of Class B Shares into Class A Shares at the
end of approximately eight years after purchase will be tax-free for federal tax
purposes. See Automatic Conversion of Class B Shares under Classes of Shares.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. For example, distributions
of interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisers.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the Fund's dividends and distributions. Shareholders will also receive
each year information as to the portion of dividend income, if any, that is
derived from U.S. government securities that are exempt from state income tax.
Of course, shareholders who are not subject to tax on their income would not be
required to pay tax on amounts distributed to them by the Fund.
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Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
See Accounting and Tax Issues and Distributions in Part B for
additional information on tax matters relating to the Fund and its shareholders.
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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE
The net asset value ("NAV") per share is computed by adding the value
of all securities and other assets in the Fund's portfolio, deducting any
liabilities of the Fund (expenses and fees are accrued daily) and dividing by
the number of Fund shares outstanding. Portfolio securities for which market
quotations are available are priced at market value. Debt securities are priced
at fair value by an independent pricing service using methods approved by Global
Funds, Inc.'s Board of Directors. Short-term investments having a maturity of
less than 60 days are valued at amortized cost, which approximates market value.
All other securities are valued at their fair value as determined in good faith
and in a method approved by Global Funds, Inc.'s Board of Directors.
Class A Shares are purchased at the offering price per share, while
Class B Shares and Class C Shares are purchased at the NAV per share. The
offering price per share of Class A Shares consists of the NAV per share next
computed after the order is received, plus any applicable front-end sales
charges.
The offering price and NAV are computed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open.
The Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the net
asset value of the Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that International Small Cap Fund Institutional Class will not incur any
of the expenses under Global Funds, Inc.'s 12b-1 Plans, and Class A Shares,
Class B Shares and Class C Shares of the Fund alone will bear the 12b-1 Plan
expenses, if any, payable under their respective 12b-1 Plans. Due to the
specific distribution expenses and other costs that will be allocable to each
class, the NAV of each class of the Fund will vary.
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MANAGEMENT OF THE FUND
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager
The Manager furnishes investment management services to the Fund. The
Manager has offices located at 80 Cheapside, Third Floor, London, England EC2V
6EE.
Delaware Management Company, Inc. ("Delaware") and its predecessors
have been managing the funds in the Delaware Group since 1938. On November 30,
1997, Delaware and its affiliates within the Delaware Group, including the
Manager, were managing in the aggregate more than $39 billion in assets in the
various institutional or separately managed (approximately $16,181,491,000)
and investment company (approximately $23,274,532,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). The Manager is also controlled by DMH through several
subsidiaries. On April 3, 1995, a merger between DMH and a wholly owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, Delaware and the Manager 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. The Manager has entered into an Investment
Management Agreement with Global Funds, Inc. on behalf of the Fund.
The Manager manages the Fund's investments and for its services, the
Manager is entitled to an annual fee equal to 1.25% of the average daily net
assets of the Fund. The directors of Global Funds, Inc. annually review fees
paid to the Manager.
As noted below, the Distributor has temporarily elected to voluntarily
waive its right to receive 12b-1 fees from the Fund. The Manager has also
elected voluntarily to waive that portion, if any, of the annual management fees
payable by International Small Cap Fund and to pay expenses of the Fund to the
extent necessary to ensure that the Total Operating Expenses (exclusive of
taxes, interest, brokerage commissions and extraordinary expenses and 12b-1
expenses) of Class A Shares, Class B Shares and Class C Shares do not exceed
1.25% through May 31, 1998.
The investment management fees paid to the Manager, while higher than
the advisory fees paid by other mutual funds in general, are comparable to fees
paid by other mutual funds with similar objectives and policies.
Clive A. Gillmore and Timothy W. Sanderson have primary responsibility
for making day-to-day investment decisions for the Fund and have co-managed the
Fund since its inception. A graduate of the University of Warwick and having
begun his career at Legal and General Investment Management, Mr. Gillmore joined
the Delaware Group in 1990 after eight years of investment experience. His most
recent position prior to joining the Delaware Group was as a Pacific Basin
equity analyst and senior portfolio manager
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for Hill Samuel Investment Advisers Ltd. Mr. Gillmore completed the London
Business School Investment program. A graduate of University College, Oxford,
Mr. Sanderson began his investment career in 1979 with Hill Samuel Investment
Management Group. Prior to joining Delaware International in 1990 as Senior
Portfolio Manager and Director, he was an analyst and senior portfolio manager
for Hill Samuel where, since 1987, he had responsibility for Pacific Basin
research and the management of international institutional portfolios. Mr.
Sanderson was appointed Chief Investment Officer - Equities of Delaware
International in 1998.
In making investment decisions for the Fund, Mr. Gillmore and Mr.
Sanderson regularly consult with Fiona A. Barwick. Ms. Barwick, a portfolio
manager, joined the Delaware Group in 1993 to cover the Pacific Basin markets.
Prior to this, she spent three years at Touche Remnant & Co. in London as an
assistant portfolio manager and research analyst. She is a graduate of
University College, London.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time they
have been held. The degree of portfolio activity will affect brokerage costs of
the Fund and may affect taxes payable by the Fund's shareholders to the extent
that net capital gains are realized. Given the Fund's investment objective, it
is anticipated that the portfolio turnover rate of the Fund will not exceed
100%.
The Manager uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or their advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the
Manager may consider a broker/dealer's sales of shares of funds in the Delaware
Group of funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of its
Classes in advertising and other types of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value and: (i) in
the case of Class A Shares, the impact of the maximum front-end sales charge at
the beginning of each specified period; and (ii) in the case of Class B Shares
and Class C Shares, the deduction of any applicable CDSC at the end of the
relevant period. Each presentation will include the average annual total return
for one-, five- and ten-year, or life-of-fund periods, as applicable. The Fund
may also advertise aggregate and average total return information concerning a
Class over additional periods of time. In addition, the Fund may present total
return information that does not reflect the deduction of the maximum front-end
sales charge or any applicable CDSC. In this case, such total return information
would be more favorable than total return information that includes deductions
of the maximum front-end sales charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the Classes
will fluctuate over time. Past performance is not considered a guarantee of
future results.
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Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for the Fund's shares under a Distribution Agreement with Global
Funds, Inc. dated July 21, 1997.
Global Funds, Inc. has adopted a separate distribution plan under Rule
12b-1 for each of the Class A Shares, Class B Shares and Class C Shares of the
Fund (the "Plans"). The Plans permit the Fund to pay the Distributor from the
assets of its respective Classes a monthly fee for the Distributor's services
and expenses in distributing and promoting sales of shares.
These expenses include, among other things, preparing and distributing
advertisements, sales literature, and prospectuses and reports used for sales
purposes, compensating sales and marketing personnel, holding special promotions
for specified periods of time, and paying distribution and maintenance fees to
brokers, dealers and others. In connection with the promotion of shares of the
Classes, the Distributor may, from time to time, pay to participate in
dealer-sponsored seminars and conferences, and reimburse dealers for expenses
incurred in connection with preapproved seminars, conferences, and advertising.
The Distributor may pay or allow additional promotional incentives to dealers as
part of preapproved sales contests and/or to dealers who provide extra training
and information concerning a Class and increase sales of the Class. In addition,
the Fund may make payments from the 12b-1 Plan fees of its respective Classes
directly to others, such as banks, who aid in the distribution of Class shares
or provide services in respect of a Class, pursuant to service agreements with
Global Funds, Inc. The Distributor has elected voluntarily to waive its right to
receive 12b-1 fees (including service fees) from the commencement of the public
offering of the Classes through May 31, 1998.
The 12b-1 Plan expenses relating to each of the Class B Shares and
Class C Shares of the Fund are also used to pay the Distributor for advancing
the commission costs to dealers with respect to the initial sale of such shares.
Absent any applicable fee waiver, the aggregate fees paid by the Fund
from the assets of the respective Classes to the Distributor and others under
the Plans may not exceed (i) 0.30% of the Class A Shares' average daily net
assets in any year, and (ii) 1% (0.25% of which are service fees to be paid by
the Fund to the Distributor, dealers and others for providing personal service
and/or maintaining shareholder accounts) of each of the Class B Shares' and
Class C Shares' average daily net assets in any year. The Fund's Class A Shares,
Class B Shares and Class C Shares will not incur any distribution expenses
beyond these limits, which may not be increased without shareholder approval.
While payments, if any, pursuant to the Plans may not exceed 0.30%
annually with respect to Class A Shares, and 1% annually with respect to each of
the Class B Shares and Class C Shares, the Plans do not limit fees to amounts
actually expended by the Distributor. It is therefore possible that the
Distributor may realize a profit in any particular year. However, the
Distributor currently expects that distribution expenses will likely equal or
exceed payments under the Plans. The Distributor may, however, incur such
additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly fees
paid to the Distributor under the Plans are subject to the review and approval
of Global Funds, Inc.'s unaffiliated directors, who may reduce the fees or
terminate the Plans at any time.
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The Plans do not apply to shares of International Small Cap Fund
Institutional Class. Those 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 International Small Cap Fund Institutional Class.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund
pursuant to an amended and restated agreement. The Transfer Agent also provides
accounting services to the Fund pursuant to the terms of a separate Fund
Accounting Agreement.
The directors of Global Funds, Inc. annually review service fees paid
to the Distributor and the Transfer Agent. The Distributor and the Transfer
Agent are also indirect, wholly owned subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. The Fund's expenses include
its 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.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a Maryland
corporation on May 30, 1991. Global Funds, Inc. currently offers six series of
shares - International Equity Series, International Small Cap Series, Global
Bond Series, Global Assets Series, Emerging Markets Series and Global Equity
Series. Fund shares have a par value of $.01 and when issued will be fully paid,
non-assessable, fully transferable and redeemable at the option of the holder.
The shares have no preference as to conversion, exchange, dividends, retirement
or other features and have no preemptive rights. Each fund will vote separately
on any matter which affects only that fund. Shares of each fund have a priority
over shares of any other fund of Global Funds, Inc. in the assets and income of
that fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the election
of directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Global Funds, Inc. is not required, and does not intend, to hold
annual meetings of shareholders unless, under certain circumstances, it is
required to do so under the 1940 Act. Shareholders of 10% or more of Global
Funds, Inc.'s outstanding shares may request that a special meeting be called to
consider the removal of a director.
International Small Cap Fund also offers International Small Cap Fund
Institutional Class of shares, as well as Class A Shares, Class B Shares and
Class C Shares. Shares of each Class represent proportionate interests in the
assets of the Fund and have the same voting and other rights and preferences as
the other Classes of the Fund, except that shares of International Small Cap
Fund Institutional Class are not subject to, and may not vote on matters
affecting, the Distribution Plans under Rule 12b-1 relating to Class A Shares,
Class B
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Shares and Class C Shares. Similarly, as a general matter, the shareholders of
Class A Shares, Class B Shares and Class C Shares may vote only on matters
affecting the 12b-1 Plan that relates to the class of shares that they hold.
However, Class B Shares of the Fund may vote on any proposal to increase
materially the fees to be paid by the Fund under the 12b-1 Plan relating to
Class A Shares.
Lincoln National Corporation Employees' Retirement Trust (the
"Trust") made an investment in the Fund, and, as of December 31, 1997, the
Trust holds 99% of the outstanding shares of the Fund. Subject to certain
limited exceptions, there is no limitation on the Trust's ability to redeem
its shares of the Fund and it may elect to do so at any time.
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OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will, however, from time to time, purchase or sell
foreign currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to minimize currency
value fluctuations. The Fund may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market or through entering into contracts to purchase
or sell foreign currencies at a future date (i.e., a "forward foreign currency"
contract or "forward" contract). A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract, agreed upon by the parties, at a
price set at the time of the contract. The Fund will convert currency on a spot
basis from time to time, and investors should be aware of the costs of currency
conversion.
The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, the Fund will be able to protect itself against a possible
loss resulting from an adverse change in currency exchange rates during the
period between the date the security is purchased or sold and the date on which
payment is made or received.
When the Manager believes that the currency of a particular country may
suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Fund's securities
denominated in such foreign currency.
The Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of foreign
securities held by the Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by the
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by the Fund,
the
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Fund will establish a segregated account with its Custodian Bank consisting of
cash, U.S. government securities or other high-grade liquid debt securities in
an amount equal to the amount the Fund will be required to pay upon exercise of
the put.
As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate movements
adverse to the Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs. See Special Risk Considerations.
Depositary Receipts
The Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or U.S.
securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the issuer of
the underlying security and a Depositary, and "unsponsored" ADRs, EDRs or GDRs
are issued without the participation of the issuer of the deposited security.
Holders of unsponsored ADRs, EDRs or GDRs generally bear all the costs of such
facilities and the Depositary of an unsponsored ADR, EDR or GDR facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR, EDR or GDR.
ADRs may be listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs and GDRs traded in the over-the-counter market
which do not have an active or substantial secondary market will be considered
illiquid and therefore will be subject to a Portfolio's limitation with respect
to such securities. ADR prices are denominated in U.S. dollars although the
underlying securities are denominated in a foreign currency. Investments in
ADRs, EDRs and GDRs, involve risks similar to those accompanying direct
investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of the
Fund's 15% limitation on investments in illiquid assets. The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
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.
The major risk to which the 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, and the borrower would fail to return the borrowed security.
Therefore, the Fund will only enter into loan arrangements after a
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review of all pertinent facts by the Manager, subject to overall supervision by
the Board of Directors, including the creditworthiness of the borrowing broker,
dealer or institution and then only if the consideration to be received from
such loans would justify the risk. In addition, the Fund will require borrowers
to deliver collateral to the Fund before lending securities. Creditworthiness
will be monitored on an ongoing basis by the Manager.
Investment Company Securities
Any investments that the Fund makes in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies. Under the 1940 Act's limitations, the Fund may not
(1) own more than 3% of the voting stock of another investment company; (2)
invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply to
the Fund's investments in unregistered investment companies. Repurchase
Agreements
The Fund also may use repurchase agreements that are at least 102%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its agencies or
instrumentalities. Repurchase agreements help the Fund to invest cash on a
temporary basis. The Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, the
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in excess
of one-third of the value of its net assets. The Fund has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank and, to the extent that such borrowing exceeds 5% of the value of the
Fund's net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, the Fund shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the U.S. Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. The Fund will not
pledge more than 10% of its net assets, or issue senior securities as defined in
the 1940 Act, except for notes to banks. Investment securities will not be
purchased while the Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. The Fund may purchase call options on foreign or U.S. securities
and indices and enter into related closing transactions. The Fund may also
purchase put options on such securities and indices and enter into related
closing transactions.
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A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or take advantage of a
rise in a particular index. The Fund will only purchase call options to the
extent that premiums paid on all outstanding call options do not exceed 2% of
its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.
Closing transactions essentially let the Fund offset put options or
call options prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
In purchasing put and call options, the premium paid by the Fund plus
any transaction costs will reduce any benefit realized by the Fund upon exercise
of the option.
The Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Fund will only invest in
such options to the extent consistent with its 15% limitation on investment in
illiquid securities. The Fund will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts for
the Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of the Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
The Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. A purchase of a futures contract
means the acquisition of a contractual right to obtain delivery to the Fund of
the securities or foreign currency called for by the contract at a specified
price during a specified future month. When a futures contract is sold, the Fund
incurs a contractual obligation to deliver the securities or foreign currency
underlying the contract at a specified price on a specified date during a
specified future month. To the extent that the Fund invests in futures contracts
and options thereon for other than bona fide hedging purposes, the Fund will not
enter into such transactions if, immediately thereafter, the sum of the amount
of initial margin deposits and premiums paid for open futures options would
exceed 5% of the Fund's total assets, after taking into account unrealized
profits and unrealized losses on such contracts it has entered into; provided,
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however, that, in the case of an option that is in-the-money at the time of
purchase, the in-the-money amount may be excluded in calculating the 5%.
The Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium paid,
to assume a position in a futures contract, rather than actually to purchase or
sell the futures contract, at a specified exercise price at any time during the
period of the option. When the 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 directly or on its behalf in an account at the Custodian
Bank. Thereafter, a "variation margin" may be paid by the 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.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, the Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund purchases an option on a futures contract and fails to
exercise the option prior to the exercise date, it will suffer a loss of the
premium paid. Further, the possible lack of a secondary market could prevent the
Fund from closing out its positions relating to futures.
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APPENDIX A--RATINGS
General Rating Information
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to
be the best quality. They carry the smallest degree of investment risk;
Aa--judged to be of high quality by all standards; A--possess favorable
attributes and are considered "upper medium" grade obligations; Baa--considered
as medium grade obligations. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time; Ba--judged to
have speculative elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its bond ratings: AAA--highest grade
obligations. They possess the ultimate degree of protection as to principal and
interest; AA--also qualify as high grade obligations, and in the majority of
instances differ from AAA issues only in a small degree; A--strong ability to
pay interest and repay principal although more susceptible to changes in
circumstances; BBB--regarded as having an adequate capacity to pay interest and
repay principal; BB, B, CCC, CC--regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC the highest degree of speculation. While such debt will
likely have some quality and protective characteristics, these are outweighed by
large uncertainties or major risk exposures to adverse conditions; C--reserved
for income bonds on which no interest is being paid; D--in default, and payment
of interest and/or repayment of principal is in arrears.
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<PAGE>
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, contact your financial adviser or call
Delaware Group at 800-523-4640.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
80 Cheapside
Third Floor
London, England EC2V 6EE
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
<PAGE>
- --------------------------------------------------------------------------------
INTERNATIONAL SMALL CAP FUND
- --------------------------------------------------------------------------------
A CLASS
B CLASS
C CLASS
- --------------------------------------------------------------------------------
P R O S P E C T U S
- --------------------------------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
--------
<PAGE>
INTERNATIONAL PROSPECTUS
SMALL CAP FUND INSTITUTIONAL FEBRUARY 4, 1998
----------------------------------------------------
1818 Market Street, Philadelphia, PA 19103
For more information about International Small Cap Fund
Institutional Class
call Delaware Group at 800-828-5052
This Prospectus describes shares of the International Small Cap Series
(the "Fund") of Delaware Group Global & International Funds, Inc. ("Global
Funds, Inc."), a professionally-managed mutual fund of the series type.
The Fund's investment objective is to achieve long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of small non-U.S. companies, which may include companies
located or operating in established or emerging countries. See Investment
Objective and Strategies.
The Fund offers an Institutional Class of shares (the "Class"). This
Prospectus relates only to the Class and sets forth information that you should
read and consider before you invest. Please retain it for future reference. The
Fund's Statement of Additional Information ("Part B" of Global Funds, Inc.'s
registration statement), dated February 4, 1998, as it may be amended from time
to time, contains additional information about the Fund and has been filed with
the Securities and Exchange Commission (the "SEC"). Part B is incorporated by
reference into this Prospectus and is available, without charge, by writing to
Delaware Distributors, L.P. at the above address or by calling the above
numbers. The Fund's financial statements will appear in the Annual Report of
Global Funds, Inc. and will accompany any response to requests for Part B. The
SEC also maintains a Web site (http://www.sec.gov) that contains Part B,
material included by reference into Global Funds, Inc.'s registration statement,
and other information regarding registrants that electronically file with the
SEC.
The Fund also offers Class A Shares, Class B Shares and Class C Shares.
Shares of these classes are subject to sales charges and other expenses, which
may affect their performance. A prospectus for these classes can be obtained by
writing to Delaware Distributors, L.P. at the above address or by calling the
above number.
-1-
<PAGE>
TABLE OF CONTENTS
Cover Page Redemption and Exchange
Synopsis Dividends and Distributions
Summary of Expenses Taxes
Investment Objective and Strategies Calculation of Net Asset Value Per Share
Suitability Management of the Fund
Investment Strategy Other Investment Policies and Risk
Special Risk Considerations Considerations
Classes of Shares Appendix A -- Ratings
How to Buy Shares
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS A
CRIMINAL OFFENSE.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF
THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
-2-
<PAGE>
SYNOPSIS
Investment Objective
The investment objective of the Fund is to achieve long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of small non-U.S. companies, which may include companies
located or operating in established or emerging countries. The Fund is an
international fund. Under normal market conditions, at least 65% of the Fund's
total assets will be invested in equity securities of companies organized or
having a majority of their assets in or deriving a majority of their operating
income in at least three different countries outside of the United States. The
current market capitalization of the companies in which the Fund intends to
invest primarily will generally be $1.5 billion or less (at the time of
purchase). For further details, see Investment Objective and Strategies and
Other Investment Policies and Risk Considerations.
Risk Factors and Special Considerations
Prospective investors should consider a number of factors:
1. Investing in securities of non-United States companies which are
generally denominated in foreign currencies and the utilization of forward
foreign currency exchange contracts involve certain risk and opportunity
considerations not typically associated with investing in United States
companies. See Special Risk Considerations-Foreign Securities Risks and Other
Investment Policies and Risk Considerations.
2. The prices of equity securities, especially those of the smaller
non-U.S. companies in which the Fund will primarily invest, tend to fluctuate,
particularly in the shorter term. Investors in the Fund should be willing to
accept the risks associated with emerging and growth-oriented companies, some of
the securities of which may be speculative and subject the Fund to additional
investment risk. See Special Risk Considerations and Other Investment Policies
and Risk Considerations.
3. The Fund may invest a portion of its assets in the markets of
certain emerging countries. Investments in securities of companies in emerging
markets present a greater degree of risk than tends to be the case for foreign
investments in Western Europe and other developed markets. Among other things,
economic markets and structures tend to be less mature and diverse and the
securities markets which are subject to less government regulation or
supervision may also be smaller, less liquid and subject to greater price
volatility. There is a greater possibility of expropriation, nationalization,
confiscatory taxation, income earned or other special taxes, foreign exchange
restrictions, limitations on the repatriation of income and capital from
investments, defaults in foreign government debt, and economic, political or
social instability. In addition, in many emerging markets, there is
substantially less publicly available information about issuers and the
information that is available tends to be of a lesser quality. See Special Risk
Considerations-Emerging Markets Securities Risks.
4. The Fund may invest up to 15% of its assets, in high yield, high
risk foreign fixed-income securities, including Brady Bonds. Consequently,
greater risks may be involved with an
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<PAGE>
investment in the Fund. See High Yield, High Risk Securities under Investment
Objective and Strategies.
5. The Fund has the right to engage in options and futures transactions
for hedging purposes, to counterbalance portfolio volatility. In connection with
futures transactions, the Fund will maintain certain collateral in special
accounts established with futures commission merchants or on its behalf in the
care of The Chase Manhattan Bank (the "Custodian Bank"). While the Fund does not
engage in options and futures for speculative purposes, there are risks which
result from the use of these instruments, and an investor should carefully
review the descriptions of these risks in this Prospectus. See Options and
Futures Contracts and Options on Futures Contracts under Other Investment
Policies and Risk Considerations.
Investment Manager, Sub-Adviser, Distributor and Service Agent
Delaware International Advisers Ltd. ("Delaware International" or the
"Manager") furnishes investment management services to the Fund, subject to the
supervision of Global Funds, Inc.'s Board of Directors. Delaware Distributors,
L.P. (the "Distributor") is the national distributor for the Fund and for all of
the other mutual funds in the Delaware Group. Delaware Service Company, Inc.
(the "Transfer Agent") is the shareholder servicing, dividend disbursing,
accounting services and transfer agent for the Fund and for all of the other
mutual funds in the Delaware Group. See Summary of Expenses and Management of
the Fund for further information regarding the Manager and the fees payable
under the Fund's Investment Management Agreement.
Purchase Price
Shares of the Class offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are not
subject to distribution fees under a Rule 12b-1 distribution plan.
Redemption and Exchange
Shares of the Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
Open-End Investment Company
Global Funds, Inc. is an open-end, registered management investment
company. The Fund operates as a diversified fund as defined under the Investment
Company Act of 1940 (the "1940 Act"). Global Funds, Inc. was organized as a
Maryland corporation on May 30, 1991. See Shares under Management of the Fund.
-4-
<PAGE>
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
International
Small Cap Fund
Shareholder Transaction Expenses Institutional Class
- -------------------------------------------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)............................................ None
Maximum Sales Charge Imposed on
Reinvested Dividends (as a percentage
of offering price)............................................................. None
Exchange Fees.................................................................. None*
*Exchanges are subject to the requirements of each fund and a front-end sales
charge may apply.
Annual Operating Expenses International
(as a percentage of Small Cap Fund
average daily net assets) Institutional Class
- -------------------------------------------------------------------------------------------------------------------
Management Fees
(after voluntary waivers)...................................................... 0.00%**
12b-1 Plan Expenses............................................................ None
Other Operating Expenses
(after voluntary payments)..................................................... 1.25%**
-----
Total Operating Expenses
(after voluntary waivers
and payments)............................................................ 1.25%**
=====
</TABLE>
**Because the Fund did not commence operations until December 19, 1997, "Other
Operating Expenses" and "Total Operating Expenses" for the Class are based on
estimated amounts the Fund expects to pay during the current fiscal year .
Delaware International has elected voluntarily to waive that portion, if any, of
the annual management fees payable by the Fund and to pay certain expenses of
the Fund to the extent necessary to ensure that the Fund's Total Operating
Expenses (exclusive of taxes, interest, brokerage commissions and extraordinary
expenses) do not exceed , on an annualized basis, 1.25% of the average daily net
assets of the Fund. The Manager's voluntary fee waiver and expense payments
began upon the commencement of the public offering of the Class and will extend
through May 31, 1998. Absent the Manager's voluntary fee waiver and expense
-5-
<PAGE>
payments, it is estimated that during the current fiscal year, the Total
Operating Expenses, as a percentage of average daily net assets, would be 2.87%,
reflecting "Management Fees" of 1.25%.
For expense information about the Fund's A Class, B Class and C Class,
see the separate prospectus relating to those classes.
The following example illustrates the expenses that an investor would
pay on a $1,000 investment over various time periods, assuming (1) a 5% annual
rate of return and (2) redemption at the end of each time period. The Fund does
not charge a redemption fee. The following example assumes the voluntary waiver
of the management fee and/or other payments of expenses by the Manager as
discussed in this Prospectus.
1 year 3 years
------ -------
International Small Cap Institutional Class $13 $40
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor in the Class will
bear directly or indirectly.
-6-
<PAGE>
INVESTMENT OBJECTIVE AND STRATEGIES
SUITABILITY
Investors considering Fund should have a long-term investment time
frame.
The Fund cannot assure a specific rate of return or that principal will
be protected. The value of the Fund's shares can be expected to move up and down
depending on market conditions. Consequently, appreciation may be obtained in
periods of generally rising markets, while in declining markets the value of the
Fund's shares may decline.
Investments in foreign securities, whether equity or fixed-income,
involve special risks including those related to currency fluctuations, as well
as to political, economic and social situations different from and potentially
more volatile than those in the United States. In addition, the accounting, tax
and financial reporting standards of foreign countries are different from and
may be less reliable or comprehensive than those relating to U.S. securities
issuers. See Special Risk Considerations for a complete discussion of the risk
factors affecting any international investment. For these reasons, the Fund are
not suitable for short-term investors. However, through the cautious selection
and supervision of its portfolio, the Manager will strive to achieve the Fund's
objective.
The Fund may be suitable for investors with a long-term investment
horizon (of at least three years) who are looking for long-term growth potential
from a portfolio of international securities. The Fund will invest primarily in
equity securities of small non-U.S. companies in established or emerging
countries. Investors should be willing to accept the risks associated with
foreign investing as well as with investments in growth-oriented or emerging
issuers, some of which may be speculative and subject the Fund to additional
investment risk.
* * *
Ownership of shares of the Fund can reduce the bookkeeping and
administrative inconvenience that is typically connected with direct purchases
of the type of securities in which the Fund invests.
An investor should not consider a purchase of shares of the Fund as
equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used together to create a more complete investment program.
INVESTMENT STRATEGY
The investment objective of the Fund is to achieve long-term capital
appreciation. The Fund seeks to achieve its objective by investing primarily in
equity securities of smaller non-U.S. companies, which may include companies
located or operating in established or emerging countries. The Fund is an
international fund. Under normal circumstances, at least 65% of the Fund's total
assets will be invested in equity securities of companies organized or having a
majority of their assets in or
-7-
<PAGE>
deriving a majority of their operating income in at least three different
countries outside of the United States. The current market capitalization of the
companies in which the Fund intends to invest primarily will generally be $1.5
billion or less (at the time of purchase).
The equity securities in which the Fund may invest include common
stocks, preferred stocks, rights or warrants to purchase common stocks and
securities convertible into common stocks. The Fund may also invest in foreign
companies through sponsored or unsponsored American Depositary Receipts,
European Depositary Receipts or Global Depositary Receipts ("Depositary
Receipts"), which are receipts typically issued by a bank or trust company
evidencing ownership of underlying securities issued by a foreign company. By
focusing on smaller, non-U.S. companies, the Fund seeks to identify equity
securities of emerging and other growth-oriented companies which in the opinion
of the Manager, are responsive to changes within their markets, and have the
fundamental characteristics to support growth. The Manager will seek to identify
changing and dominant trends within the relevant markets, and will purchase
securities of companies which it believes will benefit from these trends. In
addition, the Manager will consider the financial strength of the company, the
nature of its management, and any developments affecting the company or its
industry. The Manager may invest in smaller capitalization companies that may be
temporarily out of favor or overlooked by securities analysts and whose value,
therefore, may not yet be fully recognized by the market. See Special Risk
Considerations - Small Company Investment Risks.
While the Fund may purchase securities in any foreign country,
developed and underdeveloped, or emerging market countries, it is currently
anticipated that the countries in which the Fund may invest will include, but
not be limited to, Canada, Germany, the United Kingdom, France, the Netherlands,
Belgium, Spain, Switzerland, Japan, Australia, Hong Kong , Singapore and
Malaysia as well as Indonesia, Korea, the Philippines, Taiwan and Thailand. With
respect to certain countries, investments by an investment company may only be
made through investments in closed-end investment companies that in turn are
authorized to invest in the securities of such countries. See Investment Company
Securities under Other Investment Policies and Risk Considerations.
In selecting investments for the Fund, the Manager will employ a
dividend discount analysis across country boundaries and will also use a
purchasing power parity approach to identify currencies and markets that are
overvalued or undervalued relative to the U.S. dollar. The Manager uses the
dividend discount analysis to compare the value of different investments. Using
this technique, the Manager looks at future anticipated dividends and discounts
the value of those dividends back to what they would be worth if they were being
paid today. With a purchasing parity approach, the Manager attempts to identify
the amount of goods and services that a dollar will buy in the United States and
compare that to the amount of a foreign currency required to buy the same amount
of goods and services in another country. Eventually, currencies should trade at
levels that should make it possible for the dollar to buy the same amount of
goods and services overseas as in the United States. When the dollar buys less,
the foreign currency may be considered to be overvalued. When the dollar buys
more, the currency may be considered to be undervalued.
-8-
<PAGE>
The Fund may invest in both open-end and listed or unlisted closed-end
investment companies, as well as unregistered investment companies. See
Investment Company Securities under Other Investment Policies and Risk
Considerations. The Fund may also invest in convertible preferred stocks that
offer enhanced yield features, such as Preferred Equity Redemption Cumulative
Stock, and certain other non-traditional equity securities.
The Fund may invest up to 15% of its net assets in fixed-income
securities issued by emerging country companies, and foreign governments, their
agencies, instrumentalities or political subdivisions, all of which may be high
yield, high risk fixed-income securities rated lower than BBB by Standard &
Poor's Ratings Group ("S&P") and Baa by Moody's Investors Services, Inc.
("Moody's") or, if unrated, are considered by the Manager to be of equivalent
quality and which present special investment risks. The Fund may also invest in
Brady Bonds. See High Yield, High Risk Securities and Special Risk
Considerations.
For temporary defensive purposes, the Fund may invest all or a
substantial portion of its assets in high quality debt instruments issued by
foreign governments, their agencies, instrumentalities or political
subdivisions, the U.S. government, its agencies or instrumentalities (and which
are backed by the full faith and credit of the U.S. government), or issued by
foreign or U.S. companies. For example, the Fund may invest in U.S. fixed-income
markets when the Manager believes that the global equity markets are excessively
volatile or overvalued so that the Fund's objective cannot be achieved in such
markets. Any such corporate debt obligations will be rated AA or better by S&P,
or Aa or better by Moody's, or if unrated, will be determined to be of
comparable quality by the Manager. The Fund may also invest in the securities
listed above pending investment of proceeds from new sales of Fund shares and to
maintain sufficient cash to meet redemption requests.
Restricted and Illiquid Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers, such as the Fund. See Rule 144A
Securities under Other Investment Policies and Risk Considerations. The Fund may
invest up to 15% of the value of its net assets in illiquid securities, which
are securities which may not be disposed of within seven days at the price at
which they are carried on the Fund's books. In the event the Fund's percentage
limitation is exceeded, whether due to changes in the market value of the Fund's
illiquid holdings or because a particular security is deemed to have become
illiquid, the Manager will take steps to remedy these circumstances in an
orderly fashion.
High Yield, High Risk Securities The Fund may invest up to 15% of its
net assets in high yield, high risk foreign fixed-income securities, including
so-called Brady Bonds. See Foreign Government Securities Risks under Special
Risk Considerations. In the past, in the opinion of the Manager, the high yields
from these bonds have more than compensated for their higher default rates.
There can be no assurance, however, that yields will continue to offset default
rates on these bonds in the future. The Manager intends to maintain an
-9-
<PAGE>
adequately diversified portfolio of these bonds. While diversification can help
to reduce the effect of an individual default on the Fund, there can be no
assurance that diversification will protect the Fund from widespread bond
defaults brought about by a sustained economic downturn.
Medium- and low-grade bonds held by the Fund may be issued as a
consequence of corporate restructurings, such as leveraged buy-outs, mergers,
acquisitions, debt recapitalizations or similar events. Also these bonds are
often issued by smaller, less creditworthy companies or by highly leveraged
(indebted) firms, which are generally less able than more financially stable
firms to make scheduled payments of interest and principal. The risks posed by
bonds issued under such circumstances are substantial.
The economy and interest rates may affect these high yield, high risk
securities differently from other securities. Prices have been found to be less
sensitive to interest rate changes than higher rated investments, but more
sensitive to adverse economic changes or individual corporate developments.
Also, during an economic downturn or a substantial period of rising interest
rates, highly leveraged issuers may experience financial stress which would
adversely affect their ability to service principal and interest payment
obligations, to meet projected business goals and to obtain additional
financing. Changes by recognized rating agencies in their rating of any security
and in the ability of an issuer to make payments of interest and principal will
also ordinarily have a more dramatic effect on the values of these investments
than on the values of higher-rated securities. Such changes in value will not
affect cash income derived from these securities, unless the issuers fail to pay
interest or dividends when due. Such changes will, however, affect the Fund's
net asset value per share.
* * *
The Fund may invest in securities issued in any currency and may hold
foreign currency. Securities of issuers within a given country may be
denominated in the currency of another country or in multinational currency
units such as the European Currency Unit ("ECU"). For purposes of the 1940 Act,
the Fund will operate as a diversified fund. The Fund will not concentrate its
investments in any particular industry, which means that the Fund will not
invest 25% or more of its total assets in any one industry.
The Fund's investment objective, Global Funds, Inc.'s designation as an
open-end investment company, the Fund's designation as a diversified fund, and
the Fund's policies concerning portfolio lending, borrowing and concentration
are "fundamental" and may not be changed unless authorized by the vote of a
majority of the Fund's outstanding voting securities. A vote of a "majority of
the outstanding voting securities" is the vote by the holders of the lesser of
a) 67% or more of the Fund's voting securities present in person or represented
by proxy if the holders of more than 50% of the outstanding voting securities of
the Fund are present or represented by proxy; or b) more than 50% of the
outstanding voting securities. Part B lists other more specific investment
restrictions of the Fund which may not be changed without a majority shareholder
vote.
-10-
<PAGE>
The investment policies of the Fund not identified above as
"fundamental" may be changed by the Board of Directors of Global Funds, Inc.
without a shareholder vote. See Special Risk Considerations and Other Investment
Policies and Risk Considerations.
SPECIAL RISK CONSIDERATIONS
Shareholders should understand that all investments involve risk and
there can be no guarantee against loss resulting from an investment in the Fund,
nor can there be any assurance that the Fund's investment objective will be
attained.
Foreign Securities Risks. The Fund has the right to purchase securities
in any developed, underdeveloped or emerging country. Investors should consider
carefully the substantial risks involved in investing in securities issued by
companies and governments of foreign nations. These risks are in addition to the
usual risks inherent in domestic investments. There is the possibility of
expropriation, nationalization or confiscatory taxation, taxation of income
earned in foreign nations or other taxes imposed with respect to investments in
foreign nations, foreign exchange control (which may include suspension of the
ability to transfer currency from a given country), default in foreign
government securities, political or social instability or diplomatic
developments which could affect investments in securities of issuers in those
nations.
In addition, in many countries, there is substantially less publicly
available information about issuers than is available in reports about companies
in the United States. Foreign companies are not subject to uniform accounting,
auditing and financial reporting standards, and auditing practices and
requirements may not be comparable to those applicable to United States
companies. In particular, the assets and profits appearing on the financial
statements of a developing or emerging country issuer may not reflect its
financial position or results of operations in the way they would be reflected
had the financial statements been prepared in accordance with the United States'
generally accepted accounting principles. Also, for an issuer that keeps
accounting records in local currency, inflation accounting rules may require for
both tax and accounting purposes, that certain assets and liabilities be
restated on the issuer's balance sheet in order to express items in terms of
currency or constant purchasing power. Inflation accounting may indirectly
generate losses or profits. Consequently, financial data may be materially
affected by restatements for inflation and may not accurately reflect the real
condition of those issuers and securities markets.
Further, the Fund may encounter difficulty or be unable to pursue legal
remedies and obtain judgments in foreign courts. Commission rates on securities
transactions in foreign countries, which are sometimes fixed rather than subject
to negotiation as in the United States, are likely to be higher. Further, the
settlement period of securities transactions in foreign markets may be longer
than in domestic markets, and may be subject to administrative uncertainties. In
many foreign countries, there is less government supervision and regulation of
business and industry practices, stock exchanges, brokers and listed companies
than in the United States, and capital requirements for brokerage firms are
generally lower. The foreign securities markets of many of the countries in
which the Fund may invest may also be smaller, less liquid and subject to
greater price volatility than those in the United States.
-11-
<PAGE>
Emerging Markets Securities Risks. Compared to the United States and
other developed countries, emerging countries may have volatile social
conditions, relatively unstable governments and political systems, economies
based on only a few industries and economic structures that are less diverse and
mature, and securities markets that trade a small number of securities, which
can result in a low or nonexistent volume of trading. Prices in these securities
markets tend to be volatile and, in the past, securities in these countries have
offered greater potential for gain (as well as loss) than securities of
companies located in developed countries. Until recently, there has been an
absence of a capital market structure or market-oriented economy in certain
emerging countries. Further, investments and opportunities for investments by
foreign investors are subject to a variety of national policies and restrictions
in many emerging countries. These restrictions may take the form of prior
governmental approval, limits on the amount or type of securities held by
foreigners, limits on the types of companies in which foreigners may invest and
prohibitions on foreign investments in issuers or industries deemed sensitive to
national interests. Additional restrictions may be imposed at any time by these
or other countries in which the Fund invests. Also, the repatriation of both
investment income and capital from several foreign countries is restricted and
controlled under certain regulations, including, in some cases, the need for
certain governmental consents. Although these restrictions may in the future
make it undesirable to invest in emerging countries, the Manager does not
believe that any current repatriation restrictions would affect its decision to
invest in such countries. Countries such as those in which the Fund may invest
have historically experienced and may continue to experience, substantial, and
in some periods extremely high rates of inflation for many years, high interest
rates, exchange rate fluctuations or currency depreciation, large amounts of
external debt, balance of payments and trade difficulties and extreme poverty
and unemployment. Other factors which may influence the ability or willingness
to service debt include, but are not limited to, a country's cash flow
situation, the availability of sufficient foreign exchange on the date a payment
is due, the relative size of its debt service burden to the economy as a whole,
its government's policy towards the International Monetary Fund, the World Bank
and other international agencies and the political constraints to which a
government debtor may be subject.
Foreign Government Securities Risks. With respect to investment in debt
issues of foreign governments, the ability of a foreign government or
government-related issuer to make timely and ultimate payments on its external
debt obligations will also be strongly influenced by the issuer's balance of
payments, including export performance, its access to international credits and
investments, fluctuations in interest rates and the extent of its foreign
reserves. A country whose exports are concentrated in a few commodities or whose
economy depends on certain strategic imports could be vulnerable to fluctuations
in international prices of these commodities or imports. To the extent that a
country receives payment for its exports in currencies other than dollars, its
ability to make debt payments denominated in dollars could be adversely
affected. If a foreign government or government-related issuer cannot generate
sufficient earnings from foreign trade to service its external debt, it may need
to depend on continuing loans and aid from foreign governments, commercial banks
and multilateral organizations, and inflows of foreign investment. The
commitment on the part of these foreign governments, multilateral organizations
and others to make such disbursements may be conditioned on the government's
implementation of economic reforms and/or economic performance and the timely
service of its obligations. Failure to implement such reforms, achieve such
levels of
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<PAGE>
economic performance or repay principal or interest when due may curtail the
willingness of such third parties to lend funds, which may further impair the
issuer's ability or willingness to service its debts in a timely manner. The
cost of servicing external debt will also generally be adversely affected by
rising international interest rates because many external debt obligations bear
interest at rates which are adjusted based upon international interest rates.
The ability to service external debt will also depend on the level of the
relevant government's international currency reserves and its access to foreign
exchange. Currency devaluations may affect the ability of a government issuer to
obtain sufficient foreign exchange to service its external debt.
As a result of the foregoing, a foreign governmental issuer may default
on its obligations. If such a default occurs, the Fund may have limited
effective legal recourse against the issuer and/or guarantor. Remedies must, in
some cases, be pursued in the courts of the defaulting party itself, and the
ability of the holder of foreign government and government-related debt
securities to obtain recourse may be subject to the political climate in the
relevant country. In addition, no assurance can be given that the holders of
commercial bank debt will not contest payments to the holders of other foreign
government and government-related debt obligations in the event of default under
their commercial bank loan agreements.
Among the foreign government and government related issuers in which
the Fund may invest are certain high-yield securities, including so-called Brady
Bonds. The issuers of the foreign government and government-related high yield
securities, including Brady Bonds, in which the Fund expect to invest have in
the past experienced substantial difficulties in servicing their external debt
obligations, which have led to defaults on certain obligations and the
restructuring of certain indebtedness. Restructuring arrangements have included,
among other things, reducing and rescheduling interest and principal payments by
negotiating new or amended credit agreements or converting outstanding principal
and unpaid interest to Brady Bonds, and obtaining new credit to finance interest
payments. Holders of certain foreign government and government-related high
yield securities may be requested to participate in the restructuring of such
obligations and to extend further loans to their issuers. There can be no
assurance that the Brady Bonds and other foreign government and
government-related high yield securities in which the Fund may invest will not
be subject to similar defaults or restructuring arrangements which may adversely
affect the value of such investments. Furthermore, certain participants in the
secondary market for such debt may be directly involved in negotiating the terms
of these arrangements and may therefore have access to information not available
to other market participants.
Brady Bonds are debt securities issued under the framework of the Brady
Plan, an initiative announced by former U.S. Treasury Secretary Nicholas F.
Brady in 1989 as a mechanism for debtor nations to restructure their outstanding
external indebtedness (generally, commercial bank debt). In restructuring its
external debt under the Brady Plan framework, a debtor nation negotiates with
its existing bank lenders as well as multilateral institutions such as the World
Bank and the International Monetary Fund. The Brady Plan framework, as it has
developed, contemplates the exchange of commercial bank debt for new issued
bonds (Brady Bonds). The investment advisers believe that economic reforms
undertaken by countries in connection with the issuance of Brady Bonds make the
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debt of countries which have issued or have announced plans to issue Brady Bonds
an attractive opportunity for investment. Investors, however, should recognize
that the Brady Plan only sets forth general guiding principles for economic
reform and debt reduction, emphasizing that solutions must be negotiated on a
case-by-case basis between debtor nations and their creditors. In addition,
Brady Bonds have been issued only recently and, accordingly, do not have a long
payment history.
Small Company Investment Risks. Investments in common stocks in general
are subject to market, economic and business risks that will cause their price
to fluctuate over time. The securities of companies with smaller revenues and
capitalizations in which the Fund may invest may offer greater opportunity for
capital appreciation than larger companies, but investment in such companies
presents greater risks than securities of larger, more established companies.
Historically, smaller capitalization stocks have been more volatile in price
than larger capitalization stocks. Among the reasons for the greater price
volatility of these securities are the lower degree of liquidity in the markets
for such stocks, and the potentially greater sensitivity of such small companies
to changes in or failure of management, and in many other changes in
competitive, business, industry and economic conditions, including risks
associated with limited production, markets, management depth, or financial
resources. Investors should therefore expect that the value of the Fund's shares
will be more volatile than the shares of a fund that invests in larger
capitalization stocks.
Risks Related to Additional Investment Techniques. With respect to
forward foreign currency contracts, the precise matching of forward contract
amounts and the value of the securities involved is generally not possible since
the future value of such securities in foreign currencies will change as a
consequence of market movements in the value of those securities between the
date the forward contract is entered into and the date it matures. The
projection of short-term currency strategy is highly uncertain.
It is impossible to forecast the market value of portfolio securities
at the expiration of the contract. Accordingly, it may be necessary for the Fund
to purchase additional foreign currency on the spot market (and bear the expense
of such purchase) if the market value of the security is less than the amount of
foreign currency the Fund is obligated to deliver (and if a decision is made to
sell the security and make delivery of the foreign currency). Conversely, it may
be necessary to sell on the spot market some of the foreign currency received
upon the sale of the portfolio security if its market value exceeds the amount
of foreign currency the Fund is obligated to deliver.
The Fund may invest up to 15% of its net assets in high yield, high
risk foreign fixed-income securities. These securities are rated lower than BBB
by S&P and Baa by Moody's or, if unrated, are considered by the Manager to be of
equivalent quality. See Investment Objectives and Strategies and High Yield,
High Risk Securities. The Fund will not purchase securities rated lower than C
by S&P or Ca by Moody's, or, if unrated, considered to be of an equivalent
quality to such ratings by the Manager. See Appendix A - Ratings to this
Prospectus for more rating information. Fixed-income securities of this type are
considered to be of poor standing and predominantly speculative. Such securities
are subject to a substantial degree of credit risk.
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* * *
For additional information about the Fund's investment policies and
certain risks associated with investments in certain types of securities
including purchasing put and call options, futures contracts and options
thereon, and options on foreign currencies, see Other Investment Policies and
Risk Considerations in this Prospectus. Part B provides more information
concerning the Fund's investment policies, restrictions and risk factors.
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CLASSES OF SHARES
The Distributor serves as the national distributor for the Fund. Shares
of the Class may be purchased directly by contacting the Fund or its agent or
through authorized investment dealers. All purchases of shares of the Class are
at net asset value. There is no front-end or contingent deferred sales charge.
Investment instructions given on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees considering purchasing shares of the Class
as part of their retirement program should contact their employer for details.
Shares of the Class are available for purchase only by: (a) retirement
plans introduced by persons not associated with brokers or dealers that are
primarily engaged in the retail securities business and rollover individual
retirement accounts from such plans; (b) tax-exempt employee benefit plans of
the Manager or its affiliates and securities dealer firms with a selling
agreement with the Distributor; (c) institutional advisory accounts of the
Manager or its affiliates and those having client relationships with Delaware
Investment Advisers, a division of the Manager, 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.
International Small Cap Fund A Class, International Small Cap Fund B Class and
International Small Cap Fund C Class
In addition to offering International Small Cap Fund Institutional
Class, the Fund also offers International Small Cap Fund A Class, International
Small Cap Fund B Class and International Small Cap Fund C Class, which are
described in a separate prospectus. Shares of International Small Cap Fund A
Class, International Small Cap Fund B Class and International Small Cap Fund C
Class may be purchased through authorized investment dealers or directly by
contacting the Fund or its Distributor. Class A Shares, Class B Shares and Class
C Shares may have different sales charges and other expenses which may affect
performance. To obtain a prospectus relating to such classes, contact the
Distributor by writing to the address or by calling the phone numbers listed on
page 1 of this Prospectus.
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HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Class.
Investing Directly by Mail
1. Initial Purchases--An Investment Application, or in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to International Small Cap Fund Institutional
Class, to Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to International Small Cap Fund Institutional Class. Your check
should be identified with your name(s) and account number.
Investing Directly by Wire
You may purchase shares by requesting your bank to transmit funds by
wire to CoreStates Bank, N.A., ABA #031000011, account number 1412893401
(include your name(s) and your account number).
1. Initial Purchases--Before you invest, telephone the Fund's Client Services
Department at 800-828-5052 to get an account number. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application, or in the case of a retirement account, an
appropriate retirement plan application, to International Small Cap Fund
Institutional Class, to Delaware Group at 1818 Market Street, Philadelphia, PA
19103.
2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your Client
Services Representative by telephone at 800-828- 5052 prior to sending your
wire.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group
and you qualify to purchase shares of the Class, you may write and authorize an
exchange of part or all of your investment into the Fund. However, shares of
International Small Cap Fund B Class and International Small Cap Fund C Class
and Class B Shares and Class C Shares of the other funds in the Delaware Group
offering such a class of shares may not be exchanged into the Class. If you wish
to open an account by exchange, call your Client Services Representative at
800-828-5052 for more information. See Redemption and Exchange for more complete
information concerning your exchange privileges.
Investing through Your Investment Dealer
You can make a purchase of Fund shares through most investment dealers
who, as part of the service they provide, must transmit orders promptly. They
may charge for this service.
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Purchase Price and Effective Date
The purchase price (net asset value) is determined as of the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.
The effective date of a purchase made through an investment dealer is
the date the order is received by the Fund, its agent or designee. The effective
date of a direct purchase is the day your wire, electronic transfer or check is
received, unless it is received after the time the share price is determined, as
noted above. Purchase orders received after such time will be effective the next
business day.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase order. If a purchase
is canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional bank
charges for clearance and currency conversion.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of redemptions.
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REDEMPTION AND EXCHANGE
Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer for
details.
Your shares will be redeemed or exchanged based on the net asset value
next determined after the Fund receives your request in good order. For example,
redemption or exchange requests received in good order after the time the net
asset value of shares is determined will be processed on the next business day.
See Purchase Price and Effective Date under How to Buy Shares. Except as
otherwise noted below, for a redemption request to be in "good order," you must
provide your account number, account registration, and the total number of
shares or dollar amount of the transaction. With regard to exchanges, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Fund at 800-828-5052. Redemption proceeds will be
distributed promptly, as described below, but not later than seven days after
receipt of a redemption request.
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.
The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the check has cleared, which may take up to 15
days from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if there
has been a recent change to the shareholder's address of record.
Shares of the Class may be exchanged into any other Delaware Group
mutual fund, provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of the
fund being acquired are in a state where that fund is registered. If exchanges
are made into other shares that are eligible for purchase only by those
permitted to purchase shares of the Class, such shares will be exchanged at net
asset value. Shares of the Class may not be exchanged into Class B Shares or
Class C Shares of the funds in the Delaware Group. The Fund may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders.
Various redemption and exchange methods are outlined below. No fee is
charged by the Fund or the Distributor for redeeming or exchanging your shares,
although in the case of an exchange, a
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sales charge may apply. You may also have your investment dealer arrange to have
your shares redeemed or exchanged. Your investment dealer may charge for this
service.
All authorizations given by shareholders, including selection of any of
the features described below, shall continue in effect until such time as a
written revocation or modification has been received by the Fund or its agent.
Written Redemption and Exchange
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your shares or to request an exchange of any or all of
your shares into another mutual fund in the Delaware Group, subject to the same
conditions and limitations as other exchanges noted above. The request must be
signed by all owners of the account or your investment dealer of record.
For redemptions of more than $50,000, or when the proceeds are not sent
to the shareholder(s) at the address of record, the Fund requires a signature by
all owners of the account and may require a signature guarantee. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
Payment is normally mailed the next business day after receipt of your
redemption request. Certificates are issued for shares only if you submit a
specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.
You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your shares in certificate form, you may redeem or
exchange only by written request and you must return your certificates.
The Telephone Redemption--Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an unusually
large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, the Fund will follow
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reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be provided
for all purchase, exchange and redemption transactions initiated by telephone.
By exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.
Telephone Redemption--Check to Your Address of Record
You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your record address. Checks will be payable to
the shareholder(s) of record. Payment is normally mailed the next business day
after receipt of the redemption request.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There are
no fees for this redemption method, but the mail time may delay getting funds
into your bank account. Simply call your Client Services Representative prior to
the time the net asset value is determined, as noted above.
Telephone Exchange
You or your investment dealer of record can exchange shares into any
fund in the Delaware Group under the same registration. As with the written
exchange service, telephone exchanges are subject to the same conditions and
limitations as other exchanges noted above. Telephone exchanges may be subject
to limitations as to amounts or frequency.
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DIVIDENDS AND DISTRIBUTIONS
Global Funds, Inc. declares a dividend to all shareholders of record of
the Class of the Fund at the time the offering price of shares is determined.
See Purchase Price and Effective Date under How to Buy Shares. Thus, when
redeeming shares, dividends continue to be credited up to and including the date
of redemption.
The Fund will normally declare and make payments from net investment
income on an annual basis. Payments from net realized securities profits of the
Fund, if any, will be made in the quarter following the close of the fiscal
year. Both dividends and distributions, if any, are automatically reinvested in
your account at net asset value.
In addition to the dividends from net investment income and
distributions from realized securities profits that the Fund may declare and
make, as noted above, in order to satisfy certain distribution requirements of
the Tax Reform Act of 1986, the Fund may declare special year-end dividend and
capital gains distributions during October, November or December to shareholders
of record on a date in such month. Such distributions, if received by
shareholders by January 31, are deemed to have been paid by the Fund and
received by shareholders on the earlier of the date paid or December 31 of the
prior year.
Each class of the Fund will share proportionately in the investment
income and expenses of the Fund, except that the Class will not incur any
distribution fee under Global Funds, Inc.'s 12b-1 Plans which apply to Class A
Shares, Class B Shares and Class C Shares.
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TAXES
The tax discussion set forth below is included for general information
only. Investors should consult their own tax advisers concerning the federal,
state, local or foreign tax consequences of an investment in the Fund.
On August 5, 1997, President Clinton signed into law the Taxpayer
Relief Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Internal Revenue Code (the "Code"). Because many of these changes are complex,
and only indirectly affect the Fund and its distributions to you, they are
discussed in Part B. Changes in the treatment of capital gains, however, are
discussed in this section.
The Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. As such, the 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 certain other requirements relating to the
sources of its income and diversification of its assets.
The Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to those investors who are subject
to income taxes as ordinary income, whether received in cash or in additional
shares. It is expected that either none or only a nominal portion of the Fund's
dividends will be eligible for the dividends-received deductions for
corporations. The portion of dividends paid by the Fund that so qualifies will
be designated each year in a notice from the Fund to the Fund's shareholders.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who are
subject to income taxes as long-term capital gains, regardless of the length of
time an investor has owned shares in the Fund. The Fund does not seek to realize
any particular amount of capital gains during a year; rather, realized gains are
a by-product of Fund management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in the Fund are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.
The Treatment of Capital Gain Distributions under the Taxpayer Relief Act of
1997
The 1997 Act creates a category of long-term capital gain for
individuals that will be taxed at new lower tax rates. For investors who are in
the 28% or higher federal income tax brackets, these gains will be taxed at a
maximum rate of 20%. For investors who are in the 15% federal income tax
bracket, these gains will be taxed at a maximum rate of 10%. Capital gain
distributions will qualify for these new maximum tax rates, depending on when
the Fund's securities were sold and how long they were held by the Fund before
they were sold. Investors who want more information on holding periods and other
qualifying rules relating to these new rates should review the expanded
discussion in Part B, or should contact their own tax advisers.
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Global Funds, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November or December to shareholders of
record on a specified date in one of those months, but which, for operational
reasons, may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the shareholder
on December 31 of the calendar year in which they are declared.
The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund any other fund in the Delaware Group.
The Fund may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% in value of the total assets
of the Fund at the end of its fiscal year are invested in securities of foreign
corporations, the Fund may elect to pass-through to its shareholders a pro-rata
share of foreign income taxes paid by the Fund. If this election is made,
shareholders will be (i) required to include in their gross income their
pro-rata share of foreign source income (including any foreign taxes paid by the
Fund), and (ii) entitled to either deduct (as an itemized deduction in the case
of individuals) their share of such foreign taxes in computing their taxable
income or to claim a credit for such taxes against their U.S. income tax,
subject to certain limitations under the Code. Shareholders will be informed by
the Fund at the end of each calendar year regarding the availability of any
credits on and the amount of foreign source income to be included in their
income tax returns.
In addition to the federal taxes described above, shareholders may or
may not be subject to various state and local taxes. For example, distributions
of interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisers.
Each year, Global Funds, Inc. will mail to you information on the tax
status of the Fund's dividends and distributions. Shareholders will also receive
each year information as to the portion of dividend income, if any, that is
derived from U.S. government securities that are exempt from state income tax.
Of course, shareholders who are not subject to tax on their income would not be
required to pay tax on amounts distributed to them by the Fund.
Global Funds, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
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<PAGE>
See Accounting and Tax Issues and Distributions in Part B for
additional information on tax matters relating to the Fund and its shareholders.
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CALCULATION OF NET ASSET VALUE PER SHARE
The purchase and redemption price of Class shares is the net asset
value ("NAV") per share of Class shares next computed after the order is
received. The NAV is computed as of the close of regular trading on the New York
Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is
open.
The NAV per share is computed by adding the value of all securities and
other assets in the Fund's portfolio, deducting any liabilities of the Fund
(expenses and fees are accrued daily) and dividing by the number of Fund shares
outstanding. Portfolio securities for which market quotations are available are
priced at market value. Debt securities are priced at fair value by an
independent pricing service using methods approved by Global Funds, Inc.'s Board
of Directors. Short-term investments having a maturity of less than 60 days are
valued at amortized cost, which approximates market value. All other securities
are valued at their fair value as determined in good faith and in a method
approved by Global Funds, Inc.'s Board of Directors.
The Fund's portfolio securities, from time to time, may be listed
primarily on foreign exchanges which trade on days when the New York Stock
Exchange is closed (such as U.S. holidays or Saturdays). As a result, the net
asset value of the Fund may be significantly affected by such trading on days
when shareholders have no access to the Fund.
The net asset values of all outstanding shares of each class of the
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in the Fund represented by the value of shares
of that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Class will not incur any of the expenses under the Fund's 12b-1
Plans and Class A Shares, Class B Shares and Class C Shares of the Fund alone
will bear the 12b-1 Plan expenses payable under their respective 12b-1 Plans.
Due to the specific distribution expenses and other costs that will be allocable
to each class, the net asset value of each class of the Fund will vary.
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MANAGEMENT OF THE FUND
Directors
The business and affairs of Global Funds, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Global Funds, Inc.'s directors and officers.
Investment Manager
The Manager furnishes investment management services to the Fund. The
Manager has offices located at 80 Cheapside, Third Floor, London, England EC2V
6EE.
Delaware Management Company, Inc. ("Delaware") and its predecessors
have been managing the funds in the Delaware Group since 1938. On November 30,
1997, Delaware and its affiliates within the Delaware Group, including the
Manager, were managing in the aggregate more than $39 billion in assets in the
various institutional or separately managed (approximately $23,274,532,000) and
investment company (approximately $16,181,491,000) accounts.
Delaware is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). The Manager is also controlled by DMH through several
subsidiaries. On April 3, 1995, a merger between DMH and a wholly owned
subsidiary of Lincoln National Corporation ("Lincoln National") was completed.
DMH, Delaware and the Manager 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. The Manager has entered into an Investment
Management Agreement with Global Funds, Inc. on behalf of the Fund.
The Manager manages the Fund's investments and for its services, the
Manager is entitled to an annual fee equal to 1.25% of the average daily net
assets of the Fund. The directors of Global Funds, Inc. annually review the fees
paid to the Manager.
The Manager has elected voluntarily to waive that portion, if any, of
the annual management fees payable by the and to pay expenses of the Fund to the
extent necessary to ensure that the Total Operating Expenses (exclusive of
taxes, interest, brokerage commissions and extraordinary expenses) of Class A
Shares, Class B Shares and Class C Shares do not exceed 1.25% through May 31,
1998.
The investment management fees paid to the Manager, while higher than
the advisory fees paid by other mutual funds in general, are comparable to fees
paid by other mutual funds with similar objectives and policies.
Clive A. Gillmore and Timothy W. Sanderson have primary responsibility
for making day-to-day investment decisions for the Fund and have co-managed the
Fund since its inception. A graduate of the University of Warwick and having
begun his career at Legal and General Investment Management, Mr. Gillmore joined
the Delaware Group in 1990 after eight years of investment
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experience. His most recent position prior to joining the Delaware Group was as
a Pacific Basin equity analyst and senior portfolio manager for Hill Samuel
Investment Advisers Ltd. Mr. Gillmore completed the London Business School
Investment program. A graduate of University College, Oxford, Mr. Sanderson
began his investment career in 1979 with Hill Samuel Investment Management
Group. Prior to joining Delaware International in 1990 as Senior Portfolio
Manager and Director, he was an analyst and senior portfolio manager for Hill
Samuel where, since 1987, he had responsibility for Pacific Basin research and
the management of international institutional portfolios. Mr. Sanderson was
appointed Chief Investment Officer - Equities of Delaware International in 1998.
In making investment decisions for the Fund, Mr. Gillmore and Mr.
Sanderson regularly consult with Fiona A. Barwick. Ms. Barwick, a portfolio
manager, joined the Delaware Group in 1993 to cover the Pacific Basin markets.
Prior to this, she spent three years at Touche Remnant & Co. in London as an
assistant portfolio manager and research analyst. She is a graduate of
University College, London.
Portfolio Trading Practices
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time they
have been held. The degree of portfolio activity will affect brokerage costs of
the Fund and may affect taxes payable by the Fund's shareholders to the extent
that net capital gains are realized. Given the Fund's investment objective, it
is anticipated that the portfolio turnover rate of the Fund will not exceed
100%.
The Manager uses its best efforts to obtain the best available price
and most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or their advisory clients. These services may be used by the Manager in
servicing any of their its accounts. Subject to best price and execution, the
Manager may consider a broker/dealer's sales of shares of funds in the Delaware
Group of funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.
Performance Information
From time to time, the Fund may quote total return performance of the
Class in advertising and other types of literature.
Total return will be based on a hypothetical $1,000 investment,
reflecting the reinvestment of all distributions at net asset value. Each
presentation will include the average annual total return for one-, five- and
ten-year, or life-of-fund periods, as applicable. The Fund may also advertise
aggregate and average total return information concerning the Class over
additional periods of time.
Because securities prices fluctuate, investment results of the Class
will fluctuate over time. Past performance is not considered a guarantee of
future results.
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Statements and Confirmations
You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of dividends. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling your Client Services Representative.
Financial Information about the Fund
Each fiscal year, you will receive an audited annual report and an
unaudited semi-annual report. These reports provide detailed information about
the Fund's investments and performance. Global Funds, Inc.'s fiscal year ends on
November 30.
Distribution and Service
The Distributor, Delaware Distributors, L.P., serves as the national
distributor for the Fund's shares under a Distribution Agreement with Global
Funds, Inc. dated as of December 19, 1997.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund under
an amended and restated agreement. The Transfer Agent also provides accounting
services to the Fund pursuant to the terms of a separate Fund Accounting
Agreement. Certain recordkeeping services and other shareholder services that
otherwise would be performed by the Transfer Agent may be performed by certain
other entities and the Transfer Agent may elect to enter into an agreement to
pay such other entities for those services. In addition, participant account
maintenance fees may be assessed for certain recordkeeping services provided as
part of retirement plan and administration service packages. These fees are
based on the number of participants in the plan and the various services
selected. Fees will be quoted upon request and are subject to change.
The directors of Global Funds, Inc. annually review the fees paid to
the Distributor and the Transfer Agent. The Distributor and the Transfer Agent
are indirect, wholly owned subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those borne
by the Distributor under the Distribution Agreement. The Fund's expenses include
its 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.
Shares
Global Funds, Inc. is an open-end management investment company.
Commonly known as a mutual fund, Global Funds, Inc. was organized as a Maryland
corporation on May 30, 1991. Global Funds, Inc. currently offers six series of
shares - International Equity Series, International Small Cap Series, Global
Bond Series, Global Assets Series, Emerging Markets Series and Global Equity
Series.
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<PAGE>
Fund shares have a par value of $.01 and when issued will be fully paid,
non-assessable, fully transferable and redeemable at the option of the holder.
The shares have no preference as to conversion, exchange, dividends, retirement
or other features and have no preemptive rights. Each fund will vote separately
on any matter which affects only that fund. Shares of each fund have a priority
over shares of any other fund of Global Funds, Inc. in the assets and income of
that fund.
All shares have noncumulative voting rights which means that the
holders of more than 50% of Global Funds, Inc.'s shares voting for the election
of directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Global Funds, Inc. is not required, and does not intend, to hold
annual meetings of shareholders unless, under certain circumstances, it is
required to do so under the 1940 Act. Shareholders of 10% or more of Global
Funds, Inc.'s outstanding shares may request that a special meeting be called to
consider the removal of a director.
In addition to Institutional Class shares, the Fund also offers
International Small Cap Fund A Class, International Small Cap Fund B Class and
International Small Cap Fund C Class. Shares of each Class represent
proportionate interests in the assets of the Fund and have the same voting and
other rights and preferences as the other classes of the Fund, except that
shares of the Classes are not subject to, and may not vote on matters affecting,
the Distribution Plans under Rule 12b-1 relating to Class A Shares, Class B
Shares and Class C Shares.
Lincoln National Corporation Employees' Retirement Trust (the "Trust")
made an investment in the Fund, and, as of December 31, 1997, the Trust holds
99% of the outstanding shares of the Fund. Subject to certain limited
exceptions, there is no limitation on the Trust's ability to redeem its shares
of the Fund and it may elect to do so at any time.
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<PAGE>
OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS
Foreign Currency Transactions
Although the Fund values its assets daily in terms of U.S. dollars, it
does not intend to convert its holdings of foreign currencies into U.S. dollars
on a daily basis. The Fund will, however, from time to time, purchase or sell
foreign currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to minimize currency
value fluctuations. The Fund may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market or through entering into contracts to purchase
or sell foreign currencies at a future date (i.e., a "forward foreign currency"
contract or "forward" contract). A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract, agreed upon by the parties, at a
price set at the time of the contract. The Fund will convert currency on a spot
basis from time to time, and investors should be aware of the costs of currency
conversion.
The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, the Fund will be able to protect itself against a possible
loss resulting from an adverse change in currency exchange rates during the
period between the date the security is purchased or sold and the date on which
payment is made or received.
When the Manager believes that the currency of a particular country may
suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract to sell,
for a fixed amount of U.S. dollars or other appropriate currency, the amount of
foreign currency approximating the value of some or all of the Fund's securities
denominated in such foreign currency.
The Fund will not enter into forward contracts or maintain a net
exposure to such contracts where the consummation of the contracts would
obligate the Fund to deliver an amount of foreign currency in excess of the
value of the Fund's securities or other assets denominated in that currency.
At the maturity of a forward contract, the Fund may either sell the
portfolio security and make delivery of the foreign currency, or it may retain
the security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.
The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the
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U.S. dollar cost of foreign securities held by the Fund and against increases in
the U.S. dollar cost of such securities to be acquired. Call options on foreign
currency written by the Fund will be covered, which means that the Fund will own
the underlying foreign currency. With respect to put options on foreign currency
written by the Fund, the Fund will establish a segregated account with its
Custodian Bank consisting of cash, U.S. government securities or other
high-grade liquid debt securities in an amount equal to the amount the Fund will
be required to pay upon exercise of the put.
As in the case of other kinds of options, the writing of an option on
foreign currency will constitute only a partial hedge, up to the amount of the
premium received, and the Fund could be required to purchase or sell foreign
currencies at disadvantageous exchange rates, thereby incurring losses. The
purchase of an option on foreign currency may constitute an effective hedge
against fluctuations in exchange rates, although, in the event of rate movements
adverse to the Fund's position, the Fund may forfeit the entire amount of the
premium plus related transaction costs. See Special Risk Considerations.
Depositary Receipts
The Fund may invest in sponsored and unsponsored American Depositary
Receipts ("ADRs"), European Depositary Receipts ("EDRs") and Global Depositary
Receipts ("GDRs") that are actively traded in the United States. ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. EDRs and
GDRs are receipts issued by non-U.S. Banks or trust companies and foreign
branches of U.S. banks that evidence ownership of the underlying foreign or U.S.
securities. "Sponsored" ADRs, EDRs or GDRs are issued jointly by the issuer of
the underlying security and a Depositary, and "unsponsored" ADRs, EDRs or GDRs
are issued without the participation of the issuer of the deposited security.
Holders of unsponsored ADRs, EDRs or GDRs generally bear all the costs of such
facilities and the Depositary of an unsponsored ADR, EDR or GDR facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR, EDR or GDR.
ADRs may be listed on a national securities exchange or may be traded in the
over-the-counter market. EDRs and GDRs traded in the over-the-counter market
which do not have an active or substantial secondary market will be considered
illiquid and therefore will be subject to a Portfolio's limitation with respect
to such securities. ADR prices are denominated in U.S. dollars although the
underlying securities are denominated in a foreign currency. Investments in
ADRs, EDRs and GDRs, involve risks similar to those accompanying direct
investments in foreign securities.
Rule 144A Securities
While maintaining oversight, the Board of Directors of Global Funds,
Inc. has delegated to the Manager the day-to-day functions of determining
whether or not individual Rule 144A Securities are liquid for purposes of the
Fund's 15% limitation on investments in illiquid assets. The Board has
instructed the Manager to consider the following factors in determining the
liquidity of a Rule 144A Security: (i) the frequency of trades and trading
volume for the security; (ii) whether at least three dealers are willing to
purchase or sell the security and the number of potential purchasers; (iii)
whether at least two dealers are making a market in the security; and (iv) the
nature of the security and the nature of the marketplace trades (e.g., the time
needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 15% limitation on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to its respective limitation.
Portfolio Loan Transactions
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.
The major risk to which the 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, and the borrower would fail to return the borrowed security.
Therefore, the Fund will only enter into loan arrangements after a review of all
pertinent facts by the Manager, subject to overall supervision by the Board of
Directors, including the creditworthiness of the borrowing broker, dealer or
institution and then only if the consideration to be received from such loans
would justify the risk. In addition, the Fund will require borrowers to deliver
collateral to the Fund
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<PAGE>
before lending securities. Creditworthiness will be monitored on an ongoing
basis by the Manager.
Investment Company Securities
Any investments that the Fund makes in either closed-end or open-end
investment companies will be limited by the 1940 Act, and would involve an
indirect payment of a portion of the expenses, including advisory fees, of such
other investment companies. Under the 1940 Act's limitations, the Fund may not
(1) own more than 3% of the voting stock of another investment company; (2)
invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. These percentage limitations also apply to
the Fund's investments in unregistered investment companies.
Repurchase Agreements
The Fund also may use repurchase agreements that are at least 102%
collateralized by securities in which the Fund can invest directly, including
securities issued or guaranteed by the U.S. government or its
agencies or instrumentalities. Repurchase agreements help the Fund to invest
cash on a temporary basis. The Fund may invest cash balances in joint repurchase
agreements with other Delaware Group funds. Under a repurchase agreement, the
Fund acquires ownership and possession of a security, and the seller agrees to
buy the security back at a specified time and higher price. Repurchase
agreements involve the risks of loss if a seller defaults on its obligations
under the agreements. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities. To minimize this
possibility, the Manager, pursuant to direction from the Global Funds, Inc.'s
Board of Directors, considers the creditworthiness of banks and dealers when
entering into repurchase agreements.
Borrowings
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions. The Fund will not borrow money in excess
of one-third of the value of its net assets. The Fund has no intention of
increasing its net income through borrowing. Any borrowing will be done from a
bank and, to the extent that such borrowing exceeds 5% of the value of the
Fund's net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, the Fund shall,
within three days thereafter (not including Sunday or holidays) or such longer
period as the U.S. Securities and Exchange Commission may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. The Fund will not
pledge more than 10% of its net assets, or issue senior securities as defined in
the 1940 Act, except for notes to banks. Investment securities will not be
purchased while the Fund has an outstanding borrowing.
Options
The Manager may employ options techniques in an attempt to protect
appreciation attained and to take advantage of the liquidity available in the
options market. The Fund may purchase call options
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<PAGE>
on foreign or U.S. securities and indices and enter into related closing
transactions. The Fund may also purchase put options on such securities and
indices and enter into related closing transactions.
A call option enables the purchaser, in return for the premium paid, to
purchase securities from the writer of the option at an agreed price up to an
agreed date. The advantage is that the purchaser may hedge against an increase
in the price of securities it ultimately wishes to buy or take advantage of a
rise in a particular index. The Fund will only purchase call options to the
extent that premiums paid on all outstanding call options do not exceed 2% of
its total assets.
A put option enables the purchaser of the option, in return for the
premium paid, to sell the security underlying the option to the writer at the
exercise price during the option period, and the writer of the option has the
obligation to purchase the security from the purchaser of the option. The Fund
will only purchase put options to the extent that the premiums on all
outstanding put options do not exceed 2% of its total assets. The advantage is
that the purchaser can be protected should the market value of the security
decline or should a particular index decline.
An option on a securities index gives the purchaser of the option, in
return for the premium paid, the right to receive from the seller cash equal to
the difference between the closing price of the index and the exercise price of
the option.
Closing transactions essentially let the Fund offset put options or
call options prior to exercise or expiration. If the Fund cannot effect closing
transactions, it may have to hold a security it would otherwise sell or deliver
a security it might want to hold.
In purchasing put and call options, the premium paid by the Fund plus
any transaction costs will reduce any benefit realized by the Fund upon exercise
of the option.
The Fund may use both Exchange-traded and over-the-counter options.
Certain over-the-counter options may be illiquid. The Fund will only invest in
such options to the extent consistent with its 15% limitation on investment in
illiquid securities. The Fund will comply with U.S. Securities and Exchange
Commission asset segregation and coverage requirements when engaging in these
types of transactions.
Futures Contracts and Options on Futures Contracts
The principal purpose of the purchase or sale of futures contracts for
the Fund is to protect the Fund against the fluctuations in interest or exchange
rates which otherwise might adversely affect the value of the Fund's portfolio
securities or adversely affect the prices of securities which the Fund intends
to purchase at a later date without actually buying or selling such securities.
The Fund may enter into contracts for the purchase or sale for future
delivery of securities or foreign currencies. A purchase of a futures contract
means the acquisition of a contractual right to obtain delivery to the Fund of
the securities or foreign currency called for by the contract at a specified
price during a specified future month. When a futures contract is sold, the Fund
incurs a contractual
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<PAGE>
obligation to deliver the securities or foreign currency underlying the contract
at a specified price on a specified date during a specified future month. To the
extent that the Fund invests in futures contracts and options thereon for other
than bona fide hedging purposes, the Fund will not enter into such transactions
if, immediately thereafter, the sum of the amount of initial margin deposits and
premiums paid for open futures options would exceed 5% of the Fund's total
assets, after taking into account unrealized profits and unrealized losses on
such contracts it has entered into; provided, however, that, in the case of an
option that is in-the-money at the time of purchase, the in-the-money amount may
be excluded in calculating the 5%.
The Fund may also purchase and write options to buy or sell futures
contracts. Options on futures are similar to options on securities except that
options on futures give the purchaser the right, in return for the premium paid,
to assume a position in a futures contract, rather than actually to purchase or
sell the futures contract, at a specified exercise price at any time during the
period of the option. When the 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 directly or on its behalf in an account at the Custodian
Bank. Thereafter, a "variation margin" may be paid by the 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.
To the extent that interest or exchange rates or securities prices move
in an unexpected direction, the Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund purchases an option on a futures contract and fails to
exercise the option prior to the exercise date, it will suffer a loss of the
premium paid. Further, the possible lack of a secondary market could prevent the
Fund from closing out its positions relating to futures.
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<PAGE>
APPENDIX A--RATINGS
General Rating Information
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged to
be the best quality. They carry the smallest degree of investment risk;
Aa--judged to be of high quality by all standards; A--possess favorable
attributes and are considered "upper medium" grade obligations; Baa--considered
as medium grade obligations. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time; Ba--judged to
have speculative elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be very moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
Excerpts from S&P's description of its bond ratings: AAA--highest grade
obligations. They possess the ultimate degree of protection as to principal and
interest; AA--also qualify as high grade obligations, and in the majority of
instances differ from AAA issues only in a small degree; A--strong ability to
pay interest and repay principal although more susceptible to changes in
circumstances; BBB--regarded as having an adequate capacity to pay interest and
repay principal; BB, B, CCC, CC--regarded, on balance, as predominantly
speculative with respect to capacity to pay interest and repay principal in
accordance with the terms of the obligation. BB indicates the lowest degree of
speculation and CC
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<PAGE>
For more information contact the
Delaware Group at 800-828-5052.
INVESTMENT MANAGER
Delaware International Advisers Ltd.
80 Cheapside
Third Floor
London, England EC2V 6EE
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
<PAGE>
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INTERNATIONAL SMALL CAP FUND
- --------------------------------------------------------------------------------
INSTITUTIONAL CLASS
- --------------------------------------------------------------------------------
P R O S P E C T U S
- --------------------------------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
---------
<PAGE>
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
FEBRUARY 4, 1998
DELAWARE
GROUP
---------
<PAGE>
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
<PAGE>
- --------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION
FEBRUARY 4, 1998
- --------------------------------------------------------------------------------
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
- --------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- --------------------------------------------------------------------------------
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
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Cover Page
- --------------------------------------------------------------------------------
Investment Policies and Portfolio Techniques
- --------------------------------------------------------------------------------
Accounting and Tax Issues
- --------------------------------------------------------------------------------
Performance Information
- --------------------------------------------------------------------------------
Trading Practices and Brokerage
- --------------------------------------------------------------------------------
Purchasing Shares
- --------------------------------------------------------------------------------
Investment Plans
- --------------------------------------------------------------------------------
Determining Offering Price and Net Asset Value
- --------------------------------------------------------------------------------
Redemption and Repurchase
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Distributions
- --------------------------------------------------------------------------------
Investment Management Agreements and Sub-Advisory Agreements
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Officers and Directors
- --------------------------------------------------------------------------------
Exchange Privilege
- --------------------------------------------------------------------------------
General Information
- --------------------------------------------------------------------------------
Financial Statements
- --------------------------------------------------------------------------------
<PAGE>
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. Due to voluntary waivers by Delaware Distributors, L.P. (the
"Distributor"), Global Equity Fund will not pay a 12b-1 fee with respect to any
Class until June 30, 1998. International Small Cap Fund will not pay a 12b-1 fee
with respect to any Class until May 31, 1998; and Emerging Markets Fund A Class
will pay a 12b-1 fee of 0.25% until May 31, 1998.
This Part B supplements the information contained in the current
Prospectuses for the Fund Classes and the Institutional Classes dated February
4, 1998, 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., 1818 Market Street, Philadelphia, PA 19103.
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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
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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
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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 1933 Act. 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
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favorably or unfavorably by changes in currency rates and in exchange control
regulations, and may incur costs in connection with conversions between various
currencies. The investment policies of each Fund permit it to enter into forward
foreign currency exchange contracts in order to hedge each Fund's holdings and
commitments against changes in the level of future currency rates. Such
contracts involve an obligation to purchase or sell a specific currency at a
future date at a price set at the time of the contract.
There has been in the past, and there may be again in the future, an
interest equalization tax levied by the United States in connection with the
purchase of foreign securities such as those purchased by a Fund. Payment of
such interest equalization tax, if imposed, would reduce a Fund's rate of return
on its investment. Dividends paid by foreign issuers may be subject to
withholding and other foreign taxes which may decrease the net return on such
investments as compared to dividends paid to a Fund by United States
corporations. Special rules govern the federal income tax treatment of certain
transactions denominated in terms of a currency other than the U.S. dollar or
determined by reference to the value of one or more currencies other than the
U.S. dollar. The types of transactions covered by the special rules generally
include the following: (i) the acquisition of, or becoming the obligor under, a
bond or other debt instrument (including, to the extent provided in Treasury
Regulations, preferred stock); (ii) the accruing of certain trade receivables
and payables; and (iii) the entering into or acquisition of any forward
contract, futures contract, option and similar financial instruments other than
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
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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 102% 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 portfolio 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.
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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.
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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
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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.
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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
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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 and Poor's 500 (R) Composite Stock Price Index ("S&P 500") or the
New York Stock Exchange Composite Index, or a narrower market index such as the
Standard & Poor's 100 Index ("S&P 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
the purchase of a Rule 144A Security, however, the Board of Directors and the
Manager will continue to monitor the liquidity of that security to ensure that a
Fund has no more than 10% (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
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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.
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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 has qualified, and intends to continue 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) A 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 that
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Fund's total assets, and, with respect to 50% of that 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 that Fund's
total assets;
(ii) A 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) A Fund must distribute to its shareholders at least 90% of its
investment company taxable income and net tax-exempt income for each of its
fiscal years, and
(iv) A 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 a Fund 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 such
Fund) to shareholders 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 shareholders
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.
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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 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 for 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 at 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
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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
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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.
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PERFORMANCE INFORMATION
From time to time, each Fund may state its Classes' total return and
yield 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 periods, as applicable.
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 or other 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 or other 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.
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
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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.
The performance of each Class of the International Equity, Global Bond,
Global Assets, Emerging Markets and Global Equity Funds, as shown below, is the
average annual total return or aggregate total return quotations, as applicable,
through November 30, 1997.
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, 1997. The total
return for Class B Shares and Class C Shares excluding deferred sales charge
assumes the shares were not redeemed on November 30, 1997 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 is not provided because
that Fund was not operating on November 30, 1997.
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<TABLE>
<CAPTION>
Average Annual Total Return(1)
International Equity International Equity International Equity
Fund A Class Fund A Class Fund Institutional
(at Offer)(2) (at NAV) Class (3)
<S> <C> <C> <C>
1 year ended
11/30/97 (1.64%) 3.27% 3.55%
3 years ended
11/30/97 9.75% 11.54% 11.88%
5 years ended
11/30/97 12.18% 13.28% 13.62%
Period 10/31/91(4)
through 11/30/97 9.24% 10.12% 10.38%
</TABLE>
(1) Beginning December 1, 1995, the Manager 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 each
of International Equity Fund A Class and International Equity Fund
Institutional Class do not exceed 1.55% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, and in
the case of Class A Shares, exclusive of applicable 12b-1 plan
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 in the case of Class A Shares, exclusive
12b-1 plan expenses). Prior to June 1, 1994, a waiver and
reimbursement commitment was in place to ensure that Total Operating
Expenses did not exceed 0.95% (exclusive of taxes, interest,
brokerage commissions, extraordinary expenses, and in the case of
Class A Shares, exclusive 12b-1 plan expenses) for International
Equity Fund A Class and International Equity Fund Institutional
Class. In the absence of such voluntary fee waivers and expense
payments, 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
plan expenses, and performance would have been affected had such an
adjustment been made.
(4) Date of initial public offering of International Equity Fund A Class.
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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
11/30/97 (1.46%) 2.54%
3 years ended
11/30/97 9.96% 10.78%
Period 9/6/94(2)
through 11/30/97 6.64% 7.43%
(1) Beginning December 1, 1995, the Manager 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 1.55% (exclusive of
12b-1 plan expenses, taxes, interest, brokerage commissions and
extraordinary 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 12b-1 plan
expenses, taxes, interest, brokerage commissions and extraordinary
expenses) through November 30, 1994. In the absence of such voluntary
fee waivers and expense payments, performance would have been
affected negatively.
(2) Date of initial public offering of International Equity Fund B Class.
Average Annual Total Return(1)
International Equity International Equity
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
1 year ended
11/30/97 1.54% 2.54%
Period 11/29/95 (2)
through 11/30/97 12.22% 12.22%
(1) Beginning December 1, 1995, the Manager 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 1.55% (exclusive of
12b-1 Plan expenses, taxes, interest, brokerage commissions and
extraordinary expenses) through May 31, 1998. In the absence of such
voluntary fee waivers and expense payments, performance would have
been affected negatively.
(2) Date of initial public offering of International Equity Fund C Class.
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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
11/30/97 (3.55%) 1.24% 1.45%
Period 12/27/94(2)
through 11/30/97 9.65% 11.49% 11.81%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 each of Class A Shares and Institutional Class
shares of this Fund do not exceed 0.95% (in each case, exclusive of
taxes, interest, brokerage commissions and extraordinary expenses,
and in the case of Class A Shares, exclusive of applicable 12b-1 plan
expenses). In the absence of such voluntary fee waivers and expense
payments, 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
11/30/97 (3.27%) 0.48%
Period 12/27/94(2)
through 11/30/97 9.90% 10.75%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 Class B Shares of this Fund do not exceed 0.95%
(exclusive of 12b-1 Plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, performance would have
been affected negatively.
(2) Date of initial public offering of Global Bond Fund B Class.
-23-
<PAGE>
Average Annual Total Return(1)
Global Bond Global Bond
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
1 year ended
11/30/97(2) (0.45%) 0.49%
Period 11/29/95(2)
through 11/30/97 6.61% 6.61%
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 Class C Shares of this Fund do not exceed 0.95% (exclusive
of 12b-1 plan expenses, taxes, interest, brokerage commissions and
extraordinary expenses). In the absence of such voluntary fee waivers
and expense payments, performance would have been affected negatively.
(2) Date of initial public offering of Global Bond Fund C Class.
Average Annual Total Return(1)
Global Assets
Global Assets Global Assets Fund
Fund A Class Fund A Class Institutional
(at Offer)(2) (at NAV) Class
1 year ended
11/30/97 4.71% 9.91% 10.34%
Period 12/27/94(3)
through 11/30/97 14.92% 16.85% 17.20%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 each of Class A Shares and Institutional
Class shares do not exceed 0.95% (in each case, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, and, in
the case of Class A Shares, exclusive of applicable 12b-1 plan
expenses). In the absence of such voluntary fee waivers and expense
payments, 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.
-24-
<PAGE>
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
11/30/97 5.18% 9.18%
Period 12/27/94(2)
through 11/30/97 15.28% 16.05%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 Class B Shares do not exceed 0.95%
(exclusive of 12b-1 plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, 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 Deferred (Excluding Deferred
Sales Charge) Sales Charge)
1 year ended
11/30/97 8.21% 9.21%
Period 11/29/95(2)
through 11/30/97 12.92% 12.92%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 Class C Shares of this Fund do not exceed
0.95% (exclusive of 12b-1 plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, performance would have
been affected negatively.
(2) Date of initial public offering of Global Assets Fund C Class.
-25-
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return(1)
Emerging Markets
Emerging Markets Emerging Markets Fund
Fund A Class Fund A Class Institutional
(at Offer) (at NAV) Class
<S> <C> <C> <C>
1 year ended
11/30/97 (1.74%) 3.19% 3.64%
Period 6/10/96(2)
through 11/30/97 (1.37%) 1.94% 2.38%
</TABLE>
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 the extent necessary to ensure that the
Total Operating Expenses of each of Class A Shares and Institutional
Class shares, do not exceed 1.70% (in each case, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, and, in
the case of Class A Shares, exclusive of applicable 12b-1 plan
expenses). In the absence of such voluntary fee waivers and expense
payments, performance would have been affected negatively. For the
period beginning February 1, 1998 through May 31, 1998, the
Distributor has elected voluntarily to waive 0.05% of the 0.30% 12b-1
plan expenses payable by the Fund with respect to Class A Shares.
Such waiver will have favorable impact on the performance of Class A
Shares.
(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.
Average Annual Total Return(1)
Emerging Markets Emerging Markets
Fund B Class Fund B Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
1 year ended
11/30/97 (1.52%) 2.48%
Period 6/10/96(2)
through 11/30/97 (1.45%) 1.26%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 the extent necessary to ensure that the
Total Operating Expenses of Class B Shares of this Fund do not exceed
1.70% (exclusive of 12b-1 Plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, performance would have
been affected negatively.
(2) Date of initial public offering of Emerging Markets Fund B Class.
-26-
<PAGE>
Average Annual Total Return(1)
Emerging Markets Emerging Markets
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
1 year ended
11/30/97 1.48% 2.48%
Period 6/10/96(2)
through 11/30/97 1.26% 1.26%
(1) For the period from the commencement of operations through May 31,
1998, the Manager 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 the extent necessary to ensure that the
Total Operating Expenses of Class C Shares of this Fund do not exceed
1.70% (exclusive of 12b-1 plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, performance would have
been affected negatively.
(2) Date of initial public offering of Emerging Markets Fund C Class.
<TABLE>
<CAPTION>
Aggregate Total Return(1)
Global Equity Global Equity Global Equity
Fund A Class(3) Fund A Class(3) Fund
(at Offer) (at NAV) Institutional Class
<S> <C> <C> <C>
Period 7/22/97(2)
through 11/30/97 (7.74%) (3.18%) (3.18%)
</TABLE>
(1) For the period from the commencement of operations through June 30,
1998, Delaware International 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 ensure that the
Total Operating Expenses of each of Class A Shares and Institutional
Class shares of this Fund do not exceed 0.80% on an annualized basis
(in each case, exclusive of taxes, interest, brokerage commissions
and extraordinary expenses, and, in the case of Class A Shares,
exclusive of 12b-1 plan expenses). In the absence of such voluntary
fee waivers and expense payments, performance would have been
affected negatively.
(2) Date of initial public offering of Global Equity Fund A Class; total
return for this short of a time period may not be representative of
longer term results.
(3) For the period from the commencement of operations through June 30,
1998, the Distributor elected voluntarily to waive its right to
receive 12b-1 Plan fees otherwise payable with respect to Class A
Shares. In the absence of such voluntary waiver, performance would
have been affected negatively.
-27-
<PAGE>
Total return performance for a Class will be computed by adding all
reinvested income and realized securities profits distributions plus the change
in net asset value during a specific period and dividing by the offering price
at the beginning of the period. It will also reflect, as applicable, the maximum
front-end sales charge or CDSC paid with respect to the illustrated investment
amount, but not any income taxes payable by shareholders on the reinvested
distributions included in the calculation. Because securities prices fluctuate,
past performance should not be considered as a representation of the results
which may be realized from an investment in a Fund in the future.
From time to time, each Fund may also quote its Classes' actual total
return performance, dividend results and other performance information in
advertising and other types of literature. This information may be compared to
that of other mutual funds with similar investment objectives and to stock, bond
and other relevant indices or to rankings prepared by independent services or
other financial or industry publications that monitor the performance of mutual
funds. For example, the performance of a Fund (of Fund Class) may be compared to
data prepared by Lipper Analytical Services, Inc., Morningstar, Inc., or to the
S&P 500 Index, the Dow Jones Industrial Average, the Morgan Stanley Capital
International (MSCI), Europe, Australia and Far East (EAFE) Index, the MSCI
Emerging Markets Free Index, or the Salomon Brothers World Government Bond
Index.
Lipper Analytical Services, Inc. maintains statistical performance
databases, as reported by a diverse universe of independently-managed mutual
funds. Morningstar, Inc. is a mutual fund rating service that rates mutual funds
on the basis of risk-adjusted performance. Rankings that compare a Fund's
performance to another fund in appropriate categories over specific time periods
also may be quoted in advertising and other types of literature. The S&P 500 and
the Dow Jones Industrial Average are industry-accepted unmanaged indices of
generally-conservative securities used for measuring general market performance.
Similarly, the MSCI, EAFE Index, the MSCI Emerging Markets Free Index, and the
Salomon Brothers World Government Bond Index are industry-accepted unmanaged
indices of equity securities in developed countries and global debt securities,
respectively, 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. A direct investment in an
unmanaged index is not possible.
As stated in the Prospectuses, Global Bond Fund may also quote the
current yield of each of its Classes in advertisements and investor
communications.
-28-
<PAGE>
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 for the 30-day period ended November 30, 1997 were 4.25%,
3.76%, 3.76% and 4.76%, respectively, reflecting the voluntary waiver of fees
and payment of expenses 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.
Comparative information on the Consumer Price Index may also be
included in advertisements or other literature. 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.
-29-
<PAGE>
Each Fund may also promote its Classes' yield and/or total return
performance and use comparative performance information computed by and
available from certain industry and general market research and publications,
such as Lipper Analytical Services, Inc., IBC/Donoghue's Money Market Report and
Morningstar, Inc.
The performance of multiple indices compiled and maintained by
statistical research firms, such as Morgan Stanley, Salomon Brothers and Lehman
Brothers, may be combined to create a blended performance result for comparative
purposes. 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.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides
historical returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury bills,
the U.S. rate of inflation (based on the Consumer Price Index), and combinations
of various capital markets. The performance of these capital markets is based on
the returns of different indices. The Funds may use the performance of these
capital markets in order to demonstrate general risk-versus-reward investment
scenarios. Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to those
of the Funds. The Funds may also compare performance to that of other
compilations or indices that may be developed and made available in the future.
The Funds may include discussions or illustrations of the potential
investment goals of a prospective investor (including materials that describe
general principles of investing, such as asset allocation, diversification, risk
tolerance, and goal setting, questionnaires designed to help create a personal
financial profile, worksheets used to project savings needs based on assumed
rates of inflation and hypothetical rates of return and action plans offering
investment alternatives), investment management techniques, policies or
investment suitability of a Fund (such as value investing, market timing, dollar
cost averaging, asset allocation, constant ratio transfer, automatic account
rebalancing, the advantages and disadvantages of investing in tax-deferred and
taxable investments or global or international investments), economic and
political conditions, the relationship between sectors of the economy and the
economy as a whole, the effects of inflation and historical performance of
various asset classes, including but not limited to, stocks, bonds and Treasury
bills. From time to time advertisements, sales literature, communications to
shareholders or other materials may summarize the substance of information
contained in shareholder reports (including the investment composition of a
Fund), as well as the views as to current market, economic, trade and interest
rate trends, legislative, regulatory and monetary developments, investment
strategies and related matters believed to be of relevance to a Fund. In
addition, selected indices may be used to illustrate historic performance of
selected asset classes. The Funds may also include in advertisements, sales
literature, communications to shareholders or other materials, charts, graphs or
drawings which illustrate the potential risks and rewards of investment in
various investment vehicles, including but not limited to, domestic and
international stocks, and/or bonds, treasury bills and shares of a Fund. In
addition, advertisements, sales literature, communications to shareholders or
other materials may include a discussion of certain attributes or benefits to be
derived by an investment in a Fund and/or other mutual funds, shareholder
profiles and hypothetical investor scenarios, timely information on financial
management, tax and retirement planning (such as information on Roth IRAs and
Educational IRAs) and investment alternatives to certificates of deposit and
other financial instruments. Such sales literature, communications to
shareholders or other materials may
-30-
<PAGE>
include symbols, headlines or other material which highlight or summarize the
information discussed in more detail therein
Materials may refer to the CUSIP numbers of the Funds and may
illustrate how to find the listings of the Funds in newspapers and periodicals.
Materials may also include discussions of other Funds, products, and services.
The Funds may quote various measures of volatility and benchmark
correlation in advertising. In addition, the Funds may compare these measures to
those of other funds. Measures of volatility seek to compare the historical
share price fluctuations or total returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a comparative benchmark may be.
Measures of volatility and correlation may be calculated using averages of
historical data. A Fund may advertise its current interest rate sensitivity,
duration, weighted average maturity or similar maturity characteristics.
Advertisements and sales materials relating to a Fund may include information
regarding the background and experience of its portfolio managers.
The following tables present examples, for purposes of illustration
only, of cumulative total return performance for each Class of International
Equity, Global Bond, Global Assets, Emerging Markets and Global Equity Funds
through November 30, 1997. 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 reflects the
maximum front-end sales charge paid on purchases of shares but 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.
-31-
<PAGE>
Cumulative Total Return(1)
International International
Equity Fund Equity Fund
A Class Institutional
(at Offer)(2) Class(3)
3 months ended
11/30/97 (7.75%) (3.11%)
6 months ended
11/30/97 (9.56%)(4) (4.92%)
9 months ended
11/30/97 (3.38%) 1.61%
1 year ended
11/30/97 (1.64%) 3.55%
3 years ended
11/30/97 32.21% 40.02%
5 years ended
11/30/97 77.64% 89.32%
Period 10/31/91(5)
through 11/30/97 71.18% 82.43%
(1) Beginning December 1, 1995, the Manager 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 each
of International Equity Fund A Class and International Equity Fund
Institutional Class do not exceed 1.55% (exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, and, in
the case of Class A Shares, exclusive of applicable 12b-1 Plan
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 each 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 Class A
Shares, 12b-1 plan expenses) through November 30, 1994. Prior to June
1, 1994, a waiver and reimbursement commitment was in place to ensure
that Total Operating Expenses did not exceed 0.95% (exclusive of
taxes, interest, brokerage commissions, extraordinary expenses, and,
in the case of Class A Shares, 12b-1 plan expenses) for International
Equity Fund A Class and International Equity Fund Institutional
Class. In the absence of such voluntary fee waivers and expense
payments, 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
plan expenses, and performance would have been affected had such an
adjustment been made.
(4) For the six months ended November 30, 1997, cumulative total return
for International Equity Fund A Class at net asset value was (5.07%).
(5) Date of initial public offering of International Equity Fund A Class.
-32-
<PAGE>
Cumulative Total Return (1)
International Equity International Equity
Fund B Class Fund B Class
(Including (Excluding
Deferred Sales Deferred Sales
Charge) Charge)
3 months ended
11/30/97 (7.19%) (3.33%)
6 months ended
11/30/97 (9.18%) (5.40%)
9 months ended
11/30/97 (3.13%) 0.87%
1 year ended
11/30/97 (1.46%) 2.54%
3 years ended
11/30/97 32.95% 35.95%
Period 9/6/94(2)
through 11/30/97 23.11% 26.11%
(1) Beginning December 1, 1995, the Manager 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 1.55% (exclusive of
12b-1 plan expenses, taxes, interest, brokerage commissions and
extraordinary expenses). 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 12b-1 plan expenses, taxes,
interest, brokerage commissions and extraordinary expenses) through
November 30, 1994. In the absence of such voluntary fee waivers and
expense payments, performance would have been affected negatively.
(2) Date of initial public offering of International Equity Fund B Class.
-33-
<PAGE>
Cumulative Total Return (1)
International Equity International Equity
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
3 months ended
11/30/97 (4.30%) (3.33%)
6 months ended
11/30/97 (6.35%) (5.41%)
9 months ended
11/30/97 (0.19%) 0.81%
1 year ended
11/30/97 1.54% 2.54%
Period 11/29/95(2)
through 11/30/97 26.01% 26.01%
(1) Beginning December 1, 1995, the Manager 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 1.55% (exclusive of
12b-1 plan expenses, taxes, interest, brokerage commissions and
extraordinary expenses) throug May 31, 1998. In the absence of such
voluntary fee waivers and expense payments, performance would have
been affected negatively.
(2) Date of initial public offering of International Equity Fund C Class.
-34-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
Global Bond Global Bond
Fund B Class Fund B Class
Global Bond (Including (Excluding
Global Bond Fund Deferred Deferred
Fund A Class Institutional Sales Sales
(at Offer) Class Charge) Charge)
<S> <C> <C> <C> <C>
3 months ended
11/30/97 (2.02%) 2.93% (1.30%) 2.70%
6 months ended
11/30/97 (1.60%)(2) 3.40% (1.10%) 2.90%
9 months ended
11/30/97 (1.25%) 3.80% (0.93%) 3.03%
1 year ended
11/30/97 (3.55%) 1.45% (3.27%) 0.48%
Period 12/27/94(3)
through 11/30/97 30.97% 38.68% 31.85% 34.85%
</TABLE>
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 each of the Class A Shares, Class B Shares and Institutional
Class shares do not exceed 0.95% (in each case, exclusive of taxes,
interest, brokerage commissions and extraordinary expenses, and, in the
case of Class A Shares and Class B Shares, exclusive of applicable 12b-1
plan expenses). In the absence of such voluntary fee waivers and expense
payments, performance would have been affected negatively.
(2) For the six months ended November 30, 1997, cumulative total return for
Global Bond Fund A Class at net asset value was 3.34%.
(3) Date of initial public offering of Global Bond Fund A Class, Global Bond
Fund Institutional Class and Global Bond Fund B Class.
-35-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
Global Bond Global Bond
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
<S> <C> <C>
3 months ended
11/30/97 1.71% 2.71%
6 months ended
11/30/97 2.01% 3.01%
9 months ended
11/30/97 2.15% 3.14%
1 year ended
11/30/97 (0.45%) 0.49%
Period 11/29/95(2)
through 11/30/97 13.70% 13.70%
</TABLE>
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 0.95% (exclusive of
12b- 1 plan expenses, taxes, interest, brokerage commissions and
extraordinary expenses) through May 31, 1998. In the absence of such
voluntary fee waivers and expense payments, performance would have been
affected negatively.
(2) Date of initial public offering of Global Bond Fund C Class.
-36-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
Global Assets Global Assets
Fund B Class Fund B Class
Global Assets (Including (Excluding
Global Assets Fund Deferred Deferred
Fund A Class Institutional Sales Sales
(at Offer)(2) Class Charge) Charge)
<S> <C> <C> <C> <C>
3 months ended
11/30/97 (3.23%) 1.64% (2.57%) 1.43%
6 months ended
11/30/97 (1.67%)(3) 3.39% (1.11%) 2.89%
9 months ended
11/30/97 3.52% 9.01% 4.17% 8.17%
1 year ended
11/30/97 4.71% 10.34% 5.18% 9.18%
Period 12/27/94(4)
through 11/30/97 50.26% 59.19% 51.64% 54.64%
</TABLE>
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 each of the Class A Shares, Class B Shares and
Institutional Class shares do not exceed 0.95% (in each case, exclusive
of taxes, interest, brokerage commissions and extraordinary expenses,
and, in the case of Class A Shares and Class B Shares, exclusive of
applicable 12b-1 plan expenses). In the absence of such voluntary fee
waivers and expense payments, 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, 1997, cumulative total return for
Global Assets Fund A Class at net asset value was 3.26%.
(4) Date of initial public offering of Global Assets Fund A Class, Global
Assets Fund Institutional Class and Global Assets Fund B Class.
-37-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
Global Assets Global Assets
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
<S> <C> <C>
3 months ended
11/30/97 0.36% 1.36%
6 months ended
11/30/97 1.90% 2.90%
9 months ended
11/30/97 7.20% 8.20%
1 year ended
11/30/97 8.21% 9.21%
Period 11/29/95(2)
through 11/30/97 27.60% 27.60%
</TABLE>
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 0.95%
(exclusive of 12b-1 plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, performance would have been
affected negatively.
(2) Date of initial public offering of Global Assets Fund C Class.
-38-
<PAGE>
<TABLE>
<CAPTION>
Cumulative Total Return(1)
Emerging Markets Emerging Markets Emerging Market
Emerging Markets Fund Fund B Class Fund B Class
Fund A Class Institutional (Including Deferred (Excluding Deferred
(at Offer)(2) Class Sales Charge) Sales Charge)
<S> <C> <C> <C> <C>
3 months ended
11/30/97 (18.47%) (14.30%) (18.03%) (14.61%)
6 months ended
11/30/97 (19.05%)(3) (14.87%) (18.71%) (15.33%)
9 months ended
11/30/97 (15.21%) (10.71%) (15.09%) (11.55%)
1 year ended
11/30/97 (1.74%) 3.64% (1.52%) 2.48%
Period 6/10/96(4)
through 11/30/97 (2.02%) 3.54% (2.13%) 1.87%
</TABLE>
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 the extent necessary to ensure that the Total
Operating Expenses of each of the Class A Shares, Class B Shares and
Institutional Class shares do not exceed 1.70% (in each case, exclusive
of taxes, interest, brokerage commissions and extraordinary expenses,
and, in the case of Class A Shares and Class B Shares, exclusive of
applicable 12b-1 expenses). In the absence of such voluntary fee waivers
and expense payments, performance would have been affected negatively.
(2) For the period beginning February 1, 1998 through May 31, 1998, the
Distributor has elected voluntarily to waive 0.05% of the 0.30% 12b-1
Plan expenses otherwise payable by the Fund with respect to the Class A
Shares. Such waiver will have a favorable impact on the performance of
the Class A Shares.
(3) For the six months ended November 30, 1997, cumulative total return for
Emerging Markets Fund A Class at net asset value was (15.00%).
(4) Date of initial public offering of Emerging Markets Fund A Class,
Emerging Markets Fund Institutional Class and Emerging Markets Fund B
Class.
-39-
<PAGE>
Cumulative Total Return(1)
Emerging Markets Emerging Markets
Fund C Class Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
3 months ended
11/30/97 (15.47%) (14.61%)
6 months ended
11/30/97 (16.17%) (15.33%)
9 months ended
11/30/97 (12.36%) (11.47%)
1 year ended
11/30/97 1.48% 2.48%
Period 6/10/96(2)
through 11/30/97 1.87% 1.87%
(1) For the period from the commencement of operations through May 31, 1998,
the Manager 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 the extent necessary to ensure that the Total
Operating Expenses of the Class C Shares of this Fund do not exceed
1.70% (exclusive of 12b-1 plan expenses, taxes, interest, brokerage
commissions and extraordinary expenses). In the absence of such
voluntary fee waivers and expense payments, performance would have been
affected negatively.
(2) Date of initial public offering of Emerging Markets Fund C Class.
Cumulative Total Return(1)
Global Equity Global Equity
Fund A Class(3) Fund
(at Offer) Institutional Class
3 months ended
11/30/97 (4.08%) 0.73%
Period 7/22/97(2)
through 11/30/97 (7.74%) (3.18%)
(1) For the period from the commencement of operations through June 30,
1998, the Manager elected to voluntarily waive that portion, if any, of
the annual management fees payable by Global Equity Fund and to pay the
Fund's expenses to the extent necessary to ensure that the Total
Operating Expenses of each of Class A Shares and Institutional Class
shares of this Fund each do not exceed 0.80% on an annualized basis (in
each case, exclusive of taxes, interest, brokerage commissions and
extraordinary expenses, and, in the case of Class A Shares, exclusive of
12b-1 plan expenses). In the absence of such voluntary fee waivers and
expense payments, performance would have been affected negatively.
(2) Date of initial public offering of Global Equity Fund A Class and Global
Equity Fund Institutional Class; total return for this short of a time
period may not be representative of longer term results.
(3) For the period from the commencement of operations through June 30,
1998, the Distributor elected voluntarily to waive its right to receive
12b-1 plan expenses otherwise payable by the Fund with respect to Class
A Shares. In the absence of such voluntary waiver, performance would
have been affected negatively.
-40-
<PAGE>
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 or the Manager, including the number of such clients
serviced by Delaware and/or the Manager.
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 high 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.
-41-
<PAGE>
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 stock or bond fund in the Delaware
Group of Funds.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Fund
shares, your investment is given yet another opportunity to grow. It's called
the Power of Compounding. Each Fund may include illustrations showing the power
of compounding in advertisements and other types of literature.
-42-
<PAGE>
TRADING PRACTICES AND BROKERAGE
The Manager selects brokers or dealers to execute transactions on
behalf of each Fund for the purchase or sale of portfolio securities on the
basis of its judgment of their professional capability to provide the service.
The Sub-Adviser performs this function with respect to transactions on behalf of
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,
Emerging Markets Fund and Global Equity Fund were as follows:
<TABLE>
<CAPTION>
November 30,
1997 1996 1995
---- ---- ----
<S> <C> <C> <C>
International Equity Fund $318,619 $142,445 $85,113
Global Assets Fund(1) 18,340 21,197 5,155
Emerging Markets Fund(2) 91,510 28,013 N/A
Global Equity Fund (3) 1,541 N/A N/A
</TABLE>
(1) Date of initial public offering of Global Assets Fund was December 27, 1994.
(2) Date of initial public offering of Emerging Markets Fund was June 10, 1996.
(3) Date of initial public offering of Global Equity Fund was July 22, 1997.
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.
-43-
<PAGE>
During the fiscal year ended November 30, 1997, 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:
<TABLE>
<CAPTION>
Portfolio Brokerage
Transactions Commissions
Amounts Amounts
------------ -----------
<S> <C> <C>
International Equity Fund $40,601,631 $91,878
Global Assets Fund 4,355,081 6,113
Global Equity Fund(1) 41,475 75
</TABLE>
(1) Date of initial public offering of Global Equity Fund was July 22, 1997.
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.
-44-
<PAGE>
Consistent with the Conduct Rules of the National Association of
Securities Dealers, Inc. (the "NASD"), and subject to seeking best price and
execution, a Fund 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 shares of such funds 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,
1997 1996
---- ----
International Equity Fund 8% 9%
Global Bond Fund 76% 42%
Global Assets Fund 74% 34%
Emerging Markets Fund(1) 65% 36%*
Global Equity Fund (2) 25%* N/A
* Annualized
(1) Date of initial public offering of Emerging Markets Fund was June 10, 1996.
(2) Date of initial public offering of Global Equity Fund was July 22, 1997.
-45-
<PAGE>
PURCHASING SHARES
The Distributor serves as the national distributor for each Fund's
shares 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 amendments to its Conduct Rules, 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.
-46-
<PAGE>
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 Global Equity Fund from the commencement of the public offering
through June 30, 1998 and by International Small Cap Fund from the commencement
of the public offering through May 31, 1998; and has voluntarily elected to
waiver the payment of 0.05% of the 12b-1 plan expenses by the Emerging Markets
Fund A Class from February 1, 1998 through May 31, 1998. As a result, the 12b-1
Plan expenses payable by the Emerging Markets Fund A Class during the waiver
period will be 0.25% and the Fund Classes of the Global Equity Fund and
International Small Cap Fund will not incur any 12b-1 plan expenses during such
period.
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 Plans Under Rule 12b-1 for the Fund Classes under
Purchasing Shares, and Determining Offering Price and Net Asset Value 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 Shares, Class B Shares
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
-47-
<PAGE>
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 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.
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
As described more fully in the Prospectuses for the Fund Classes, 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. See Front-End Sales Charge Alternative - Class A Shares in the
Prospectuses for the Fund Classes for the applicable schedule and further
details.
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 above, 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 Shares
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. 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.
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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 Classes 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 Shares 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 Shares, Class B Shares and Class C
Shares directly to other unaffiliated parties, such as banks, who either aid in
the distribution of shares of, or provide services to, such classes.
The maximum aggregate fee payable by a Fund under its Plans and a
Fund's Distribution Agreement, is on an annual basis, up to 0.30% of average
daily net assets of Class A Shares, 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 Shares, Class B Shares 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 each Fund and that there is a reasonable
likelihood of the Plan relating to a 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
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directors who are not "interested persons" or by a majority vote of the relevant
Class' outstanding voting securities. Any amendment materially increasing the
percentage payable under the Plans must likewise be approved by a majority vote
of the relevant Class' outstanding voting securities, as well as by a majority
vote of those directors who are not "interested persons." With respect to each
Class A Shares' Plan any material increase in the maximum percentage payable
thereunder must also be approved by a majority of the outstanding voting
securities of the respective Fund's B Class. 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, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of International Equity Fund amounted
to $327,517, $222,271 and $71,300, respectively. Such amounts were used for the
following purposes:
<TABLE>
<CAPTION>
International International International
Equity Fund Equity Fund Equity Fund
A Class B Class C Class
------------- ------------- -------------
<S> <C> <C> <C>
Advertising $2,136 --- ---
Annual/Semi-Annual Reports $5,012 --- ---
Broker Trails $241,882 $51,203 $3,340
Broker Sales Charges --- $95,079 $51,830
Dealer Service Expenses $214 --- $1,267
Interest on Broker Sales Charges --- $60,511 $3,077
Commissions to Wholesalers $5,926 $12,763 $8,008
Promotional-Broker Meetings $5,976 $2,361 $669
Promotional-Other $53,753 --- ---
Prospectus Printing $16,918 --- ---
Telephone $100 --- $112
Wholesaler Expenses $90 $354 $2,997
Other --- --- ---
</TABLE>
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<PAGE>
For the fiscal year ended November 30, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of Global Bond Fund amounted to
$13,520, $10,638 and $6,528, respectively. Such amounts were used for the
following purposes:
<TABLE>
<CAPTION>
Global Bond Fund Global Bond Fund Global Bond Fund
A Class B Class C Class
------- ------- -------
<S> <C> <C> <C>
Advertising $100 --- ---
Annual/Semi-Annual Reports $260 --- ---
Broker Trails $10,612 $2,710 $386
Broker Sales Charges --- $4,389 $4,087
Dealer Service Expenses --- $6 $241
Interest on Broker Sales Charges --- $2,806 $247
Commissions to Wholesalers $73 $450 $724
Promotional-Broker Meetings $144 $106 $68
Promotional-Other $1,912 --- ---
Prospectus Printing $419 --- ---
Telephone --- $6 $8
Wholesaler Expenses --- $165 $767
Other --- --- ---
</TABLE>
For the fiscal year ended November 30, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of Global Assets Fund amounted to
$24,720, $41,899 and $22,970, respectively. Such amounts were used for the
following purposes:
<TABLE>
<CAPTION>
Global Global Global
Assets Fund Assets Fund Assets Fund
A Class B Class C Class
------- ------- -------
<S> <C> <C> <C>
Advertising $243 --- ---
Annual/Semi-Annual Reports $733 --- ---
Broker Trails $19,944 $9,804 $4,510
Broker Sales Charges --- $14,198 $16,315
Dealer Service Expenses --- --- $90
Interest on Broker Sales Charges --- $15,132 $578
Commissions to Wholesalers $435 $1,967 $1,104
Promotional-Broker Meetings $340 $402 $127
Promotional-Other $2,463 --- ---
Prospectus Printing $570 --- ---
Telephone --- $13 $12
Wholesaler Expenses --- $383 $234
Other --- --- ---
</TABLE>
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<PAGE>
For the fiscal year ended November 30, 1997, payments from Class A
Shares, Class B Shares and Class C Shares of Emerging Markets Fund amounted to
$26,889, $24,831 and $7,393, respectively. Such amounts were used for the
following purposes:
<TABLE>
<CAPTION>
Emerging Emerging Emerging
Markets Fund Markets Fund Markets Fund
A Class B Class C Class
------- ------- -------
<S> <C> <C> <C>
Advertising $198 --- ---
Annual/Semi-Annual Reports $194 --- ---
Broker Trails $21,287 $5,805 $1,020
Broker Sales Charges --- $11,211 $5,433
Dealer Service Expenses --- --- $107
Interest on Broker Sales Charges --- $6,171 $349
Commissions to Wholesalers $676 $1,434 $198
Promotional-Broker Meetings $482 $210 $6
Promotional-Other $3,215 --- ---
Prospectus Printing $837 --- ---
Telephone --- --- $3
Wholesaler Expenses --- --- $277
Other --- --- ---
</TABLE>
For the period July 22, 1997 (date of initial public offering) through
November 30, 1997, payments from Class A Shares, Class B Shares and Class C
Shares of Global Equity Fund were waived by the Distributor.
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 Shares, Class B Shares 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, or any of the Sub-Adviser's current affiliates and those 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 (regardless of
age) of such persons at
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<PAGE>
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. 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 a
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 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.
Global Funds, Inc. must be notified in advance that the trade qualifies
for purchase at net asset value.
Letter of Intention
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<PAGE>
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
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<PAGE>
Delaware Group fund which carried a front-end sales charge, CDSC or Limited
CDSC). In addition, assets held by investment advisory clients of the Manager or
its affiliates in a stable value account may be combined with other Delaware
Group fund holdings.
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 the current purchase. Investors should refer to the table of
sales charges for Class A Shares to determine the applicability of the Right of
Accumulation to their particular circumstances.
12-Month Reinvestment Privilege
Holders of Class A Shares of a Fund (and of 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.
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<PAGE>
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' Prospectuses) 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 Prospectuses for Fund
Classes, 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.
Institutional Classes
The Institutional Class of each Fund 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 Institutional Classes are available for purchase at net asset
value, without the imposition of a front-end or contingent deferred sales charge
and are not subject to Rule 12b-1 expenses.
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INVESTMENT PLANS
Reinvestment Plan/Open Account
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 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 Shares,
Class B Shares 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 Prospectuses 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.
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.
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Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for any Fund to
accept for investment in Class A Shares, Class B Shares 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 Shares, Class B
Shares and Class C Shares may make automatic investments by authorizing, in
advance, monthly payments directly from their checking account for deposit into
their Fund account. This type of investment will be handled in either of the
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
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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 Prospectuses 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'
Prospectuses. 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 in Wealth Builder at
any time by giving written notice to the fund from which exchanges are made.
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
Prospectuses. 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 Shares, Class B Shares
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.
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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.
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 Shares
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 Institutional Classes, above. For additional information on any of the plans
and Delaware's retirement services, call the Shareholder Service Center
telephone number.
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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.
Prototype Profit Sharing or Money Purchase Pension Plans
Prototype Plans are available for self-employed individuals,
partnerships and corporations. These plans can be maintained as Section 401(k),
profit sharing or money purchase pension plans. Contributions may be invested
only in Class A and Class C Shares.
Individual Retirement Account ("IRA")
A document is available for an individual who wants to establish an IRA
and make contributions which may be tax-deductible, even if the individual is
already participating in an employer-sponsored retirement plan. Even if
contributions are not deductible for tax purposes, as indicated below, earnings
will be tax-deferred. In addition, an individual may make contributions on
behalf of a spouse who has no compensation for the year or, for years prior to
1997, elects to be treated as having no compensation for the year. Investments
in each of the Fund Classes are permissible.
An individual can contribute up to $2,000 to his or her IRA each year.
Contributions may or may not be deductible depending upon the taxpayer's
adjusted gross income and whether the taxpayer or his or her spouse is an active
participant in an employer-sponsored retirement plan. Even if a taxpayer (or his
or her spouse) is an active participant in an employer-sponsored retirement
plan, the full $2,000 deduction is still available if the taxpayer's adjusted
gross income is below $25,000 ($40,000 for taxpayers filing joint returns). A
partial deduction is allowed for married couples with incomes between $40,000
and $50,000, and for single individuals with incomes between $25,000 and
$35,000. No deductions are available for contributions to IRAs by taxpayers
whose adjusted gross income before IRA deductions exceeds $50,000 ($35,000 for
singles) and who are active participants in an employer-sponsored retirement
plan. Taxpayers who are not allowed deductions on IRA contributions still can
make nondeductible IRA contributions of as much as $2,000 for each working
spouse ($2,250 for one-income couples for years prior to 1997), and defer taxes
on interest or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing separate
returns.
Effective for tax years beginning after 1996, one-income couples can
contribute up to $2,000 to each spouse's IRA provided the combined compensation
of both spouses is at least equal to the total contributions for both spouses.
If the working spouse is an active participant in an employer-sponsored
retirement plan and earns over $40,000, the maximum deduction limit is reduced
in the same way that the limit is reduced for contributions to a non-spousal
IRA.
A company or association may establish a Group IRA for employees or
members who want to purchase shares of a Fund. Purchases of $1 million or more
of Class A Shares qualify for purchase at net asset value but may, under certain
circumstances, be subject to a Limited CDSC. See Purchasing Shares for
information on reduced front-end sales charges applicable to Class A Shares.
Investments generally must be held in the IRA until age 59 1/2 in order
to avoid premature distribution penalties, but distributions generally must
commence no later than April 1 of the calendar year following the year in
<PAGE>
which the participant reaches age 70 1/2. Individuals are entitled to revoke the
account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven days
after receipt of the IRA Disclosure Statement, the account may not be revoked.
Distributions from the account (except for the pro-rata portion of any
nondeductible contributions) are fully taxable as ordinary income in the year
received. Excess contributions removed after the tax filing deadline, plus
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and certain
other limited circumstances) will be subject to a 10% excise tax on the amount
prematurely distributed, in addition to the income tax resulting from the
distribution. See Alternative Purchase Arrangements - Class B Shares and Class C
Shares under Classes of Shares, Contingent Deferred Sales Charge - Class B
Shares and Class C Shares under Classes of Shares, and Waiver of Contingent
Deferred Sales Charge - Class B and Class C Shares under Redemption and Exchange
in the Fund Classes' Prospectuses concerning the applicability of a CDSC upon
redemption.
Effective January 1, 1997, the 10% premature distribution penalty will
not apply to distributions from an IRA that are used to pay medical expenses in
excess of 7.5% of adjusted gross income or to pay health insurance premiums by
an individual who has received unemployment compensation for 12 consecutive
weeks.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all
eligible employees. Each of the Fund Classes is available for investment by a
SEP/IRA.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Although new SAR/SEP plans may not be established after December 31,
1996, existing plans may be maintained by employers having 25 or fewer
employees. An employer may elect to make additional contributions to such
existing plans.
Prototype 401(k) Defined Contribution Plan
Section 401(k) of the Code permits employers to establish qualified
plans based on salary deferral contributions. Plan documents are available to
enable employers to establish a plan. An employer may also elect to make profit
sharing contributions and/or matching contributions with investments in only
Class A Shares and Class C Shares or certain other funds in the Delaware Group.
Purchases under the plan may be combined for purposes of computing the reduced
front-end sales charge applicable to Class A Shares as set forth in the
Prospectuses for Fund Classes.
Deferred Compensation Plan for Public Schools and Non-Profit Organizations
("403(b)(7)")
Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account
to fund deferred compensation arrangements for their employees. A custodial
account agreement is available for those employers who wish to purchase any of
the Fund Classes in conjunction with such an arrangement. Applicable front-end
sales charges with respect to Class A Shares for such purchases are set forth in
the Prospectuses for Fund Classes.
Deferred Compensation Plan for State and Local Government Employees ("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares
<PAGE>
of any of the Fund Classes. Although investors may use their own plan, there is
available a Delaware Group 457 Deferred Compensation Plan. Interested investors
should contact the Distributor or their investment dealers to obtain further
information. Applicable front-end sales charges for such purchases of Class A
Shares are set forth in the Prospectuses for Fund Classes.
SIMPLE IRA
A SIMPLE IRA combines many of the features of an IRA and a 401(k) Plan
but is easier to administer than a typical 401(k) Plan. It requires employers to
make contributions on behalf of their employees and also has a salary deferral
feature that permits employees to defer a portion of their salary into the plan
on a pre-tax basis.
SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors are
limited to 100 employees and, in exchange for mandatory plan sponsor
contributions, discrimination testing is no longer required. Class B Shares are
not available for purchase by such plans.
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DETERMINING OFFERING PRICE AND NET ASSET VALUE
Orders for purchases of Class A Shares are effected at the offering
price next calculated by the Fund in which shares are being purchased after
receipt of the order by the Fund, its agent or certain other authorized persons.
See Distribution and Service under Investment Management Agreements and
Sub-Advisory Agreements. 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, its agent or certain other authorized persons. 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, Martin Luther King, Jr.'s
Birthday, 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 currencies and foreign securities denominated 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 based on
rates in effect that day. 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. Foreign securities and the prices of foreign
securities denominated in foreign currencies are translated to U.S. dollars
based on rates in effect as of 12 p.m., Eastern time. 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
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the Institutional Classes will not incur any of the expenses under Global Funds,
Inc.'s 12b-1 Plans and Class A Shares, Class B Shares 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. For so long as the
current waivers of 12b-1 Plan expenses by the Distributor in connection with the
distribution of Class A Shares, Class B Shares and Class C Shares of Global
Equity Fund and International Small Cap Fund remain applicable, no such variance
shall arise.
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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,
its agent or certain other authorized persons, subject to any applicable CDSC or
Limited CDSC. See Distribution and Service under Investment Management
Agreements and Sub-Advisory Agreements. 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 Prospectuses 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
Prospectuses for the Fund Classes. Except for the applicable CDSC or Limited
CDSC and, with respect to the expedited payment by wire described below for
which, 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.
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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 SEC has provided for such suspension for the protection of
shareholders, a Fund may postpone payment or suspend the right of redemption or
repurchase. In such case, the shareholder may withdraw the request for
redemption or leave it standing as a request for redemption at the net asset
value next determined after the suspension has been terminated.
Payment for shares redeemed or repurchased may be made either in cash
or kind, or partly in cash and partly in kind. Any portfolio securities paid or
distributed in kind would be valued as described in Determining Offering Price
and Net Asset Value. Subsequent sale by an investor receiving a distribution in
kind could result in the payment of brokerage commissions. However, 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
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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 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.
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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 Shares, Class B Shares 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 Shares and Class C Shares and Waiver of Limited
Contingent Deferred Sales Charge - Class A Shares under Redemption and Exchange
in the Prospectuses for the Fund Classes. Shareholders should consult their
financial advisers to determine whether a Systematic Withdrawal Plan would be
suitable for them.
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<PAGE>
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 Institutional
Classes, or currently, any of the Fund Classes of Global Equity Fund or
International Small Cap Fund.
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<PAGE>
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
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<PAGE>
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.
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<PAGE>
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 November 30,
1997, Delaware and its affiliates within the Delaware Group, including the
Manager, were managing in the aggregate more than $39 billion in assets in the
various institutional or separately managed (approximately $23,274,532,000) and
investment company (approximately $16,181,491,000) 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 Agreement 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 Investment Management Agreement
for International Small Cap Fund is dated July 21, 1997 and was approved by the
initial shareholder on July 21, 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 payable 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 payable by Global Equity Fund, is equal
to (on an annual basis) 0.80% of the Fund's average daily net assets. The fees
payable 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.
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<PAGE>
On November 30, 1997, the total net assets of Global Funds, Inc. were
$281,237,811, broken down as follows:
International Equity Fund $227,326,719
Global Bond Fund $17,629,426
Global Assets Fund $16,788,202
Emerging Markets Fund $16,584,087
Global Equity Fund $2,909,377
Beginning December 1, 1995, Delaware International 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 pay
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 pay the Fund's
expenses to the extent necessary 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. Effective as of February 1, 1998, the Distributor
has elected voluntarily to waive its right to receive 12b-1 Plan fees with
respect to Class A Shares of Emerging Markets Fund to the extent necessary to
limit such fees to no more than 0.25% through May 31, 1998. Had such waiver been
in effect during the fiscal year ended November 30, 1997, the ratio of operating
expenses to average daily net assets for Class A Shares of Emerging Markets
Funds would have been 1.95%.
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 Class A Shares, Class B Shares, Class C
Shares and the Institutional Class of this Fund do not exceed 1.25% (exclusive
of taxes, interest, brokerage commissions and extraordinary expenses) on an
annualized basis.
Beginning with the commencement of operations of Global Equity Fund
through June 30, 1998, 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%
(exclusive of taxes, interest, brokerage commissions and extraordinary expenses)
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,
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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 the extent necessary
to ensure that expenses did not exceed 0.95% (exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, and, in the case of
International Equity Fund A Class, 12b-1 expenses) for each of International
Equity Fund A Class and International Equity Fund Institutional Class. 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 the extent necessary 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>
Fund November 30, 1997 November 30, 1996 November 30, 1995
- ---- ----------------- ----------------- -----------------
<S> <C> <C> <C>
International Equity Fund $1,412,913 earned $792,625 earned $512,638 paid
$1,400,095 paid $683,170 paid
$12,818 waived $109,455 waived
Global Bond Fund(1) $111,059 earned $29,065 earned $4,777 earned
$-0- paid -$0- paid -$0- paid
$111,059 waived $29,065 waived $4,777 waived
Global Assets Fund(1) $126,579 earned $95,908 paid $12,907 earned
$-0- paid -$0- paid -$0- paid
$126,579 waived $95,908 waived $12,907 waived
Emerging Markets Fund(2) $185,509 earned $35,197 earned N/A
$34,313 paid -$0- paid N/A
$151,196 waived $35,197 waived N/A
Global Equity Fund (3) $8,529 earned N/A N/A
$-0- paid N/A N/A
$8,529 waived N/A N/A
</TABLE>
(1) Date of initial public offering was December 27, 1994.
(2) Date of initial public offering was June 10, 1996.
(3) Date of initial public offering was July 22, 1997.
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<PAGE>
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.
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 Global Equity Fund
and International Small Cap Fund under separate Distribution Agreements each
dated 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 Class A Shares, Class B Shares and Class C
Shares of Global Equity Fund during the commencement of the public offering of
the Fund through June 30, 1998 and of International Small Cap Fund during the
commencement of the public offering of the Fund through May 31, 1998. In
addition, commencing February 1, 1998, the Distributor has elected voluntarily
to waive 0.05% of the 0.30% 12b-1 plan expenses otherwise payable by Emerging
Markets Fund A Class.
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.
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders in addition to the Transfer Agent. Such brokers
are authorized to designate other intermediaries to accept purchase and
redemption orders on the behalf of the Funds. For purposes of pricing, the Funds
will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order.
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<PAGE>
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 December 31,
1997, the officers and directors of Global Funds, Inc., as a group, owned less
than 1% of the outstanding shares of Class A Shares, Class B Shares, Class C
Shares and Institutional Class Shares of International Equity Fund, Global Bond
Fund, International Equity Fund, Global Equity Fund and Emerging Markets Fund;
less than 1% of the outstanding shares of Class B Shares, Class C Shares and
Institutional Class Shares of Global Assets Fund; and approximately 2% of the
outstanding shares of Class A Shares of Global Assets Fund.
As of December 31, 1997, management believes the following accounts
held 5% or more of a Class of shares of a Fund:
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
International Merrill Lynch, Pierce, Fenner & Smith 452,886 19.14%
Equity Fund B Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
International Merrill Lynch, Pierce Fenner & Smith 319,733 38.14%
Equity Fund C Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
International Equity County of Los Angeles Def Comp 1,605,551 31.84%
Fund Institutional and Thrift Plan
Class c/o Great West Life and Annuity
8515 East Orchard Road #2T2
Englewood, CO 80111
Northern Telecom, Inc. 1,604,462 31.81%
Long Term Investment Plan
c/o BTNY Service
Attention: Gina Anzalone
34 Exchange Place MS 3064
Jersey City, NJ 07302
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
International Equity RS 401(k) Plan 938,018 18.60%
Fund Institutional Price Waterhouse LLP Savings Plan
Class 1410 North Westshore Blvd.
P.O. Box 30004
Tampa, FL 33630
RS DMC Employee Profit Sharing Plan 286,401 5.67%
Delaware Management Company
Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103
Charles Schwab & Co. Inc. 257,040 5.09%
Attention: Mutual Fund Dept.
101 Montgomery Street
San Francisco, CA 94104
Global Assets Fund Richard H. Hoffman 33,353 6.15%
A Class and Merris Ann Hoffman
1811 Lesher Mill Road
Palm, PA 18070
Global Assets Fund Merrill Lynch, Pierce, Fenner & Smith 118,785 33.40%
B Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
Global Assets Fund Merrill Lynch, Pierce, Fenner & Smith 167,407 69.07%
C Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
Global Assets Fund Delaware Management Co. 100,226 55.90%
Institutional Class c/o Joseph H. Hastings
1818 Market Street - 17th Floor
Philadelphia, PA 19103
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Global Assets Fund RS DMC Employee Profit Sharing Plan 67,455 37.62%
Institutional Class Delaware Management Company
Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103
Global Bond Fund Bruce A. Baker and Claire B. Baker 10,715 10.35%
B Class 5 Shaftsbury Villa Allen St.
United Kingdom Kensington
London W86UZ
NFSC/FEBO 9,606 9.28%
Bodil B. Ottesen
6004 Hunt Ridge Road #2631
Baltimore, MD 21210
NFSC/FMTC IRA 9,472 9.15%
FBO Jennifer J. Thomas
12603 Mt. Laurel Court
Reisterstown, MD 21136
Merrill Lynch, Pierce, Fenner & Smith 5,605 5.41%
For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
Global Bond Fund NFSC/FMTC IRA Rollover 22,351 33.94%
C Class FBO Lester C. Gilman, Jr.
1485 Kathleen Place
Englewood, FL 34223
Prudential Securities, Inc. 10,039 15.24%
FBO Cline G. Hickok
120 Nature Valley Place
Owatonna, MN 55060
Global Bond Fund Lincoln National Life Insurance Co. 310,265 29.10%
Institutional Class Attention: Karen Gerke 4CO1
1300 S. Clinton Street
Fort Wayne, IN 46802
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Emerging Markets Main Street Trust Co. CUST 49,407 5.09%
Fund A Class API Trust Growth Fund
1 Ellsworth Street
Martinsville, VA 24112
Emerging Markets Merrill Lynch, Pierce, Fenner & Smith 31,568 8.47%
Fund B Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
Emerging Markets Merrill Lynch, Pierce, Fenner & Smith 16,227 11.61%
Fund C Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246
Emerging Markets RS DMC Employee Profit Sharing Plan 101,847 55.61%
Fund Institutional Delaware Management Company
Class Employee Profit Sharing Trust
c/o Rick Seidel
1818 Market Street
Philadelphia, PA 19103
Bost & Co. 31,773 17.35%
Acct. No. SAGF2074002
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230
Bost & Co. 12,579 6.87%
Acct. No. SAGF2336002
Mutual Funds Operations
P.O. Box 3198
Pittsburgh, PA 15230
Global Equity Fund Kandiah Balendran and 292 55.59%
A Class Radhika Balendran JT WROS
1 Bromley Court
Voorhees, NJ 08043
</TABLE>
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<PAGE>
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Global Equity Fund Christopher A. McGinnis 179 34.02%
A Class Fountainview Village J28
Blackwood, NJ 08012
Edward Connolly and 60 11.35%
Sara P. Connolly JT WROS
304 Conestoga Road
Wayne, PA 19087
Global Equity Fund Lincoln National Life Ins. Co. 357,728 99.99%
Institutional Class c/o Lincoln Inv. Mgt. Inc.
Attn: Carol A. Schmidt - MGR SEC ADM 3R
200 East Berry Street
Fort Wayne, IN 46802
International Small Lincoln National Life Insurance Company 352,941 99.99%
Cap Fund A 1300 S. Clinton Street
Institutional Class Fort Wayne, IN 46802
</TABLE>
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<PAGE>
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 33 investment companies 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.
- ----------
*Director affiliated with the Funds' investment manager and considered an
"interested person" as defined in the 1940 Act.
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<PAGE>
*Jeffrey J. Nick (44)
President, Chief Executive Officer, Director and/or Trustee of Global
Funds, Inc. and each of the 33 other investment companies in
the Delaware Group.
President, Chief Executive Officer and Director of Delaware Management
Holdings, Inc. and 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.
Richard G. Unruh, Jr. (58)
Executive Vice President of Global Funds, Inc. and each of the other 33
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)
ExecutiveVice President/Chief Investment Officer, Fixed Income of
Global Funds, Inc., each of the other 33 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 and 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 33
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.
- ----------
*Director affiliated with the Funds' investment manager and considered an
"interested person" as defined in the 1940 Act.
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<PAGE>
Anthony D. Knerr (59)
Director and/or Trustee of Global Funds, Inc. and each of the other 33
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 33
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 33
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 33 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 33
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.
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David K. Downes (58)
Executive Vice President/Chief Operating Officer/Chief Financial
Officer of Global Funds, Inc., each of the other 33 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, Chief Financial
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, Secretary and General Counsel of Global Funds,
Inc., each of the other 33 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.
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<PAGE>
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.
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<PAGE>
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.
Robert L. Arnold (34)
Vice President/Portfolio Manager of Global Funds, Inc. and two
other investment companies in the Delaware Group.
During the past five years, Mr. Arnold 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, 1997 and an estimate of annual
benefits to be received upon retirement under the Delaware Group Retirement Plan
for Directors/Trustees as of December 31, 1997.
<TABLE>
<CAPTION>
Pension or
Retirement Total
Benefits Estimated Compensation
Aggregate Accrued Annual from all 33
Compensation as Part of Benefits Delaware Group
from Global Global Funds, Upon Investment
Name Funds, Inc. Inc. Expenses Retirement* Companies
<S> <C> <C> <C> <C>
W. Thacher Longstreth $1,555 None $38,500 $59,243
Ann R. Leven $1,640 None $38,500 $64,452
Walter P. Babich $1,624 None $38,500 $63,452
Anthony D. Knerr $1,624 None $38,500 $63,452
Charles E. Peck $1,459 None $38,500 $56,057
Thomas F. Madison** $837 None $38,500 $37,225
</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 December 31, 1997, he or she would be
entitled to annual payments totaling $38,500, 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.
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<PAGE>
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 prospectus 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.
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<PAGE>
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.
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<PAGE>
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. Social Awareness 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. High-Yield Opportunities Fund seeks to provide
investors with total return and, as a secondary objective, high current income.
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
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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 15 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 portfolio 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 valuation strategy to select securities issued by
established companies that are believed to demonstrate potential for income and
capital growth. International Equity Series seeks long-term growth without undue
risk to principal by investing primarily in equity securities of foreign issuers
that provide the potential for capital appreciation and income. Value Series
seeks capital appreciation by investing in small- to mid-cap common stocks whose
market value appears low relative to their underlying value or future earnings
and growth potential. Emphasis will also be placed on securities of companies
that may be temporarily out of favor or whose value is not yet recognized by the
market. 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
and 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
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<PAGE>
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.
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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.
-91-
<PAGE>
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).
-92-
<PAGE>
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 15 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
------ ----------- ---------- -----------
11/30/97 $637,741 $528,999 $108,742
11/30/96 279,857 231,351 48,506
11/30/95 299,368 259,217 40,151
-93-
<PAGE>
Global Bond Fund
Class A Shares
Total
Amount of
Fiscal Under- Amounts Net
Year writing Reallowed Commission
Ended Commissions to Dealers to DDLP/DDI
----- ----------- ---------- -----------
11/30/97 $36,196 $28,643 $7,553
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
----- ----------- ---------- -----------
11/30/97 $76,768 $64,018 $12,750
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
----- ----------- ---------- --------------
11/30/97 $281,015 $266,705 $14,310
11/30/96(1) 21,927 18,174 3,753
(1) Date of initial public offering was June 10, 1996.
-94-
<PAGE>
Global Equity Fund
Class A Shares
Total
Fiscal Amount of Amounts Net
Year Underwriting Reallowed Commission
Ended Commissions to Dealers to Distributor
11/30/97(1) $-0- $-0- $-0-
(1) Date of initial public offering was July 22, 1997.
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:
<TABLE>
<CAPTION>
Limited CDSC Payments
Fiscal International Global Bond Global Assets Emerging Markets Global Equity
Year Equity Fund Fund A Fund A Fund A Fund A
Ended A Class Class (1) Class (1) Class (1) Class (1)
----- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C>
11/30/97 $-0- $-0- $-0- $-0- $-0-
11/30/96 --- --- --- --- N/A
11/30/95 3,911 --- --- N/A N/A
</TABLE>
(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. Date of
initial public offering of Global Equity Fund A Class was July 22,
1997.
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:
<TABLE>
<CAPTION>
CDSC Payments
Fiscal International Global Bond Global Assets Emerging Markets Global Equity
Year Equity Fund Fund B Fund B Fund B Fund B
Ended B Class Class (1) Class (1) Class (1) Class (1)
----- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
11/30/97 $56,080 $3,667 $9,391 $4,249 $-0-
11/30/96 6,825 931 8,335 --- N/A
11/30/95 2,602 --- $324 N/A N/A
</TABLE>
(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. Date of
initial public offering of Global Equity Fund B Class was July 22,
1997.
The Distributor received in the aggregate CDSC payments with respect to
Class C Shares of each Fund as follows:
-95-
<PAGE>
<TABLE>
<CAPTION>
CDSC Payments
Fiscal International Global Bond Global Assets Emerging Markets Global Equity
Year Equity Fund Fund C Fund C Fund C Fund C
Ended C Class Class (1) Class (1) Class (1) Class (1)
----- ------- --------- --------- --------- ---------
<S> <C> <C> <C> <C> <C> <C>
11/30/97 $5,271 $65 $1,088 $678 $-0-
11/30/96 127 --- 580 --- N/A
11/30/95 --- --- --- N/A N/A
</TABLE>
(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. Date of initial public offering of Global
Equity Fund C Class was July 22, 1997.
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. Each Fund
currently offers four classes of shares. The Board of Directors has allocated
fifty million shares to each of the Fund's Class A Shares and Institutional
Class, and has allocated twenty-five million shares to each of the Fund's Class
B Shares and Class C Shares.
-96-
<PAGE>
While shares of Global Funds, Inc. have equal voting rights, except as
noted below, on matters affecting the Funds, each Fund would vote separately on
any matter it is directly affected by, such as any change in its fundamental
investment policies and as otherwise prescribed by the 1940 Act. Shares of each
Fund have a priority in that Fund's assets, and in gains on and income from the
portfolio of that Fund. All shares have no preemptive rights, are fully
transferable and, when issued, are fully paid and nonassessable.
Each Class of each Fund represents a proportionate interest in the
assets of such Fund and has the same voting and other rights and preferences as
the other classes of that Fund, except that shares of a Fund's Institutional
Class may not vote on any matter affecting the Fund Classes' Plans under Rule
12b-1. Similarly, as a general matter, shareholders of Class A Shares, Class B
Shares and Class C Shares of a Fund may vote only on matters affecting the 12b-1
Plan that relates to the class of shares that they hold. However, Class B Shares
of a Fund may vote on any proposal to increase materially the fees to be paid by
a Fund under the 12b-1 Plan relating to its Class A Shares. General expenses of
a Fund will be allocated on a pro-rata basis to the respective classes according
to asset size, except that expenses of the 12b-1 Plans of each Fund's Class A
Shares, Class B Shares and Class C Shares will be allocated solely to those
Classes.
The Registration Statements of the Funds and Classes of Global Funds,
Inc. became effective on the following dates:
International Equity Fund October 30, 1991
International Equity Fund A Class October 30, 1991
International Equity Fund B Class September 6, 1994
International Equity Fund C Class November 29, 1995
International Equity Fund Institutional Class November 9, 1992
Global Assets Fund October 30, 1991
Global Assets Fund A Class October 30, 1991
Global Assets Fund B Class December 27, 1994
Global Assets Fund C Class November 29, 1995
Global Assets Fund Institutional Class November 9, 1992
Global Bond Fund October 30, 1991
Global Bond Fund A Class October 30, 1991
Global Bond Fund B Class December 27, 1994
Global Bond Fund C Class November 29, 1995
Global Bond Fund Institutional Class November 9, 1992
Emerging Markets Fund
Emerging Markets Fund A Class May 1, 1996
Emerging Markets Fund B Class May 1, 1996
Emerging Markets Fund C Class May 1, 1996
Emerging Markets Fund Institutional Class May 1, 1996
-97-
<PAGE>
International Small Cap Fund
International Small Cap Fund A Class July 21, 1997
International Small Cap Fund B Class July 21, 1997
International Small Cap Fund C Class July 21, 1997
International Small Cap Fund Institutional Class July 21, 1997
Global Equity Fund
Global Equity Fund A Class July 21, 1997
Global Equity Fund B Class July 21, 1997
Global Equity Fund C Class July 21, 1997
Global Equity Fund Institutional Class July 21, 1997
Prior to September 6, 1994, International Equity Fund A Class was known
as International Equity Fund class and International Equity Fund Institutional
Class was known as International Equity Fund (Institutional) class.
Noncumulative Voting
Global Funds, Inc. shares have noncumulative voting rights which means
that the holders of more than 50% of the shares of Global Funds, Inc. voting for
the election of directors can elect all the directors if they choose to do so,
and, in such event, the holders of the remaining shares will not be able to
elect any directors.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.
-98-
<PAGE>
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for Delaware Group
Global & International Funds, Inc. and, in its capacity as such, audits the
annual financial statements of the Funds. International Equity Fund's, Global
Bond Fund's, Global Assets Fund's, Emerging Markets Fund's and Global Equity
Fund's Statements of Net Assets, Statements of Operations, Statements of Changes
in Net Assets, Financial Highlights and Notes to Financial Statements, as well
as the reports of Ernst & Young LLP, independent auditors, for the fiscal year
ended November 30, 1997 are included in Delaware Group Global & International
Funds, Inc.'s Annual Reports to shareholders. The financial statements and
financial highlights the notes relating thereto and the reports of Ernst & Young
LLP listed above are incorporated by reference from the Annual Reports into this
Part B.
-99-
<PAGE>
PART C
------
Other Information
-----------------
Item 24. Financial Statements and Exhibits
---------------------------------
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statement of Net Assets
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Accountant's Reports
* The financial statements and Accountant's Report listed above
relating to International Equity, Global Assets, Global Bond,
Emerging Markets and Global Equity Series are incorporated by
reference into Part B from the Registrant's Annual Report for
the fiscal year ended November 30, 1997. International Small
Cap Series commenced operations on December 19, 1997.
(b) Exhibits:
(1) Articles of Incorporation.
(a) Articles of Incorporation, as amended and
supplemented through April 30, 1996,
incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
(b) Executed Articles Supplementary (November 28,
1995) incorporated into this filing by
reference to Post-Effective Amendment No. 11
filed January 31, 1996.
(c) Executed Articles Supplementary (April 30,
1996) incorporated into this filing by
reference to Post-Effective Amendment No. 13
filed May 16, 1996.
(d) Executed Articles Supplementary (July 21,
1997) attached as Exhibit.
(2) By-Laws. By-Laws, as amended through June 30, 1995,
incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
(3) Voting Trust Agreement. Inapplicable.
<PAGE>
PART C - Other Information
(Continued)
(4) Copies of All Instruments Defining the Rights of
Holders.
(a) Articles of Incorporation, Articles of Amendment and
Articles Supplementary.
(i) Article Fifth and Article Ninth of the
Articles of Incorporation (May 30, 1991),
Article Second of Articles Supplementary (May
22, 1992 and September 6, 1994), Article
Second of Certificate of Correction to
Articles Supplementary (December 28, 1994)
incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed
November 27, 1995.
(ii) Article Third, Article Fourth and Article
Fifth of Articles Supplementary (November 28,
1995) incorporated into this filing by
reference to Post-Effective Amendment No. 11
filed January 31, 1996.
(iii) Article Fourth of Articles Supplementary
(April 30, 1996) incorporated into this
filing by reference to Post-Effective
Amendment No. 13 filed May 16, 1996.
(iv) Article Fifth of Articles Supplementary (July
21, 1997) attached as Exhibit 24(b)(1)(d).
(b) By-Laws. Article II and Article III, as amended, and
Article XIV incorporated into this filing by reference
to Post-Effective Amendment No.9 filed June 30, 1995.
(5) Investment Management Agreements.
(a) Investment Management Agreement (April 3, 1995) between
Delaware International Advisers Ltd. and the Registrant
on behalf of the International Equity Series
incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
(b) Investment Management Agreement (April 3, 1995) between
Delaware International Advisers Ltd. and the Registrant
on behalf of the Global Assets Series incorporated into
this filing by reference to Post-Effective Amendment
No. 9 filed June 30, 1995.
(c) Investment Management Agreement (April 3, 1995) between
Delaware International Advisers Ltd. and the Registrant
on behalf of the Global Bond Series incorporated into
this filing by reference to Post-Effective Amendment
No. 9 filed June 30, 1995.
<PAGE>
PART C - Other Information
(Continued)
(d) Sub-Advisory Agreement (April 3, 1995) between Delaware
International Advisers Ltd. and Delaware Management
Company, Inc. on behalf of the Global Bond Series
incorporated into this filing by reference to Post-
Effective Amendment No. 9 filed June 30, 1995.
(e) Investment Management Agreement (May 1, 1996) between
Delaware International Advisers Ltd. and the Registrant
on behalf of the Emerging Markets Series incorporated
into this filing by reference to Post-Effective
Amendment No. 13 filed May 16, 1996.
(f) Executed Investment Management Agreement (July 21,
1997) between Delaware International Advisers Ltd. and
the Registrant on behalf of the International Small Cap
Series attached as Exhibit.
(g) Investment Management Agreement (1997) between Delaware
International Advisers Ltd. and the Registrant on
behalf of the Global Equity Series to be filed by
Amendment.
(h) Sub-Advisory Agreement (1997) between Delaware
International Advisers Ltd. and Delaware Management
Company, Inc. on behalf of the Global Equity Series to
be filed by Amendment.
(6) (a) Distribution Agreements.
(i) Form of Distribution Agreement (April 3, 1995)
incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed November
27, 1995.
(ii) Form of Amendment No. 1 to Distribution
Agreement (November 29, 1995) incorporated into
this filing by reference to Post-Effective
Amendment No. 10 filed November 27, 1995.
(iii) Executed Distribution Agreement (May 1, 1996)
between Delaware Distributors, L.P. and the
Registrant on behalf of the Emerging Markets
Series incorporated into this filing by
reference to Post-Effective Amendment No. 13
filed May 16, 1996.
(iv) Proposed Distribution Agreement (1997) (Module)
between Delaware Distribution, L.P. and the
Registrant on behalf of the Global Equity Series
incorporated into this filing by reference to
Post-Efective Amendment No. 16 filed April 28,
1997.
(v) Executed Distribution Agreement (July 21, 1997)
between Delaware Distribution, L.P. and the
Registrant on behalf of Internatioanl Small Cap
Series attached as Exhibit.
(b) Administration and Service Agreement. Form of
Administration and Service Agreement (Module) (as
amended November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 10 filed
November 27, 1995.
<PAGE>
PART C - Other Information
(Continued)
(c) Dealer's Agreements.
(i) Dealer's Agreement (Module) with Delaware
Distributors, Inc. (as amended November 1995)
incorporated into this filing by reference to
Post-Effective Amendment No. 10 filed November
27, 1995.
(d) Mutual Fund Agreement for the Delaware Group of Funds
(Module) (November 1995) incorporated into this filing
by reference to Post-Effective Amendment No. 11 filed
January 31, 1996.
(7) Bonus, Profit Sharing, Pension Contracts.
(a) Amended and Restated Profit Sharing Plan (November 17,
1994) incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
(b) Amendment to Profit Sharing Plan (December 21, 1995)
incorporated into this filing by reference to Post-
Effective Amendment No. 11 filed January 31, 1996.
(8) Custodian Agreements.
(a) Executed Custodian Agreement (Module) between
The Chase Manhattan Bank and the Registrant on behalf
of each Series (May 1, 1996) incorporated into this
filing by reference to Post-Effective Amendment No. 14
filed November 27, 1996.
(i) Amendment (November 1997) to Custodian Agreement
between The Chase Manhattan Bank and the
Registrant on behalf of each Series attached as
Exhibit.
(b) Form of Securities Lending Agreement (1996) between The
Chase Manhattan Bank and the Registrant on behalf of
each Series incorporated into this filing by reference
to Post-Effective Amendment No. 13 filed May 16, 1996.
(9) Other Material Contracts.
(a) Shareholders Services Agreement (October 25, 1991)
between Delaware Service Company, Inc. and the
Registrant on behalf of the International Equity Series
incorporated into this filing by reference to Post-
Effective Amendment No. 14 filed November 27, 1996.
<PAGE>
PART C - Other Information
(Continued)
(b) Shareholders Services Agreement (October 25, 1991)
between Delaware Service Company, Inc. and the
Registrant on behalf of the Global Assets Series
(formerly Global Total Return Series ) incorporated
into this filing by reference to Post-Effective
Amendment No. 14 filed November 27, 1996.
(c) Shareholders Services Agreement (October 25, 1991)
between Delaware Service Company, Inc. and the
Registrant on behalf of the Global Bond Series
(formerly Global Income Series) incorporated into this
filing by reference to Post-Effective Amendment No. 14
filed November 27, 1996.
(d) Shareholders Services Agreement (May 1, 1996) between
Delaware Service Company, Inc. and the Registrant on
behalf of the Emerging Markets Series incorporated into
this filing by reference to Post-Effective Amendment
No. 13 filed May 16, 1996.
(e) Proposed Amended and Restated Shareholders Services
Agreement (1997) (Module) between Delaware Service
Company, Inc. and the Registrant on behalf of each
Series incorporated into this filing by reference to
Post-Effective Amendment No. 16 filed April 28, 1997.
(f) Executed Delaware Group of Funds Fund Accounting
Agreement between Delaware Service Company, Inc. and
the Registrant (August 19, 1996) incorporated into this
filing by reference to Post-Effective Amendment
No. 14 filed November 27, 1996.
(i) Executed Amendment No. 4A (April 14, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(ii) Executed Amendment No. 5 (May 1, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(iii) Executed Amendment No. 6 (July 21, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(iv) Executed Amendment No. 7 (October 14, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(v) Executed Amendment No. 8 (December 18, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
(10) Opinion of Counsel. Inapplicable.
(11) Consent of Auditors. Attached as Exhibit.
<PAGE>
PART C - Other Information
(Continued)
(12) Inapplicable.
(13) Undertaking of Initial Shareholder. Incorporated into this
filing by reference to Pre-Effective Amendment No. 1 filed
August 22, 1991.
(14) Model Plans. Incorporated into this filing by reference to
Post-Effective Amendment No. 5 filed March 24, 1994 and
Post-Effective Amendment No. 8 filed March 3, 1995.
(15) Plans under Rule 12b-1.
(a) Form of Plan under Rule 12b-1 for Class A of the
International Equity, Global Bond and Global Assets
Series (November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 10 filed
November 27, 1995.
(b) Form of Plan under Rule 12b-1 for Class B of the
International Equity, Global Bond and Global Assets
Series (November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 10 filed
November 27, 1995.
(c) Form of Plan under Rule 12b-1 for Class C of the
International Equity, Global Bond and Global Assets
Series (November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 10 filed
November 27, 1995.
(d) Executed Plan under Rule 12b-1 (May 1, 1996) for Class
A Shares of the Emerging Markets Series incorporated
into this filing by reference to Post-Effective
Amendment No. 13 filed May 16, 1996.
(e) Executed Plan under Rule 12b-1 (May 1, 1996) for Class
B Shares of the Emerging Markets Series incorporated
into this filing by reference to Post-Effective
Amendment No. 13 filed May 16, 1996.
(f) Executed Plan under Rule 12b-1 (May 1, 1996) for Class
C Shares of the Emerging Markets Series incorporated
into this filing by reference to Post-Effective
Amendment No. 13 filed May 16, 1996.
(g) Proposed Plan under Rule 12b-1 for Global Equity Series
Class A (1997) (Module) incorporated into this filing
by reference to Post- Effective Amendment No. 16 filed
April 28, 1997.
(h) Proposed Plan under Rule 12b-1 for Global Equity Series
Class B (1997) (Module) incorporated into this filing
by reference to Post- Effective Amendment No. 16 filed
April 28, 1997.
(i) Proposed Plan under Rule 12b-1 for Global Equity Series
Class C (1997) (Module) incorporated into this filing
by reference to Post-Effective Amendment No. 16 filed
April 28, 1997.
(j) Form of Plan under Rule 12b-1 for International Small
Cap Series Class A (July 1997) attached as Exhibit.
(k) Form of Plan under Rule 12b-1 for International Small
Cap Series Class B (July 1997) attached as Exhibit.
(l) Form of Plan under Rule 12b-1 for International Small
Cap Series Class C (July 1997) attached as Exhibit.
<PAGE>
PART C - Other Information
(Continued)
(16) Schedules of Computation for each Performance Quotation.
(a) Incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995,
Post-Effective Amendment No. 11 filed January 31, 1996,
Post-Effective Amendment No. 14 filed November 27, 1996
and Post-Effective Amendment No. 15 filed March 21,
1997.
(b) Schedules of Computation for each Performance Quotation
for periods not previously shown attached as Exhibit.
(17) Financial Data Schedules. Attached as Exhibit.
(18) Plan under Rule 18f-3.
(a) Plan under Rule 18f-3 (September 18, 1997) attached as
Exhibit.
(i) Amended Appendix A to Plan under Rule 18f-3
attached as Exhibit.
(19) Other: Directors' Power of Attorney.
(a) Incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
(b) Power of Attorney for Thomas F. Madison and Jeffrey J.
Nick attached as Exhibit.
Item 25. Persons Controlled by or under Common Control with Registrant. None
Item 26. Number of Holders of Securities.
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s International Equity Series:
International Equity Fund A Class
Common Stock 8,877 Accounts as of
$.01 Par Value Per Share December 31, 1997
International Equity Fund B Class
Common Stock 3,497 Accounts as of
$.01 Par Value Per Share December 31, 1997
<PAGE>
PART C - Other Information
(Continued)
Number of
Title of Class Record Holders
-------------- --------------
International Equity Fund C Class
Common Stock 911 Accounts as of
$.01 Par Value Per Share December 31, 1997
International Equity Fund Institutional Class
Common Stock 66 Accounts as of
$.01 Par Value Per Share December 31, 1997
Delaware Group Global & International
Funds, Inc.'s Global Assets Series:
Global Assets Fund A Class
Common Stock 796 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Assets Fund B Class
Common Stock 472 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Assets Fund C Class
Common Stock 142 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Assets Fund Institutional Class
Common Stock 18 Accounts as of
$.01 Par Value Per Share December 31, 1997
Delaware Group Global & International
Funds, Inc.'s Global Bond Series:
Global Bond Fund A Class
Common Stock 381 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Bond Fund B Class
Common Stock 113 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Bond Fund C Class
Common Stock 50 Accounts as of
$.01 Par Value Per Share December 31, 1997
<PAGE>
PART C - Other Information
(Continued)
Number of
Title of Class Record Holders
-------------- ------------------
Global Bond Fund Institutional Class
Common Stock 123 Accounts as of
$.01 Par Value Per Share December 31, 1997
Delaware Group Global & International
Funds, Inc.'s Emerging Markets Series:
Emerging Markets Fund A Class
Common Stock 1,372 Accounts as of
$.01 Par Value Per Share December 31, 1997
Emerging Markets Fund B Class
Common Stock 774 Accounts as of
$.01 Par Value Per Share December 31, 1997
Emerging Markets Fund C Class
Common Stock 236 Accounts as of
$.01 Par Value Per Share December 31, 1997
Emerging Markets Fund Institutional Class
Common Stock 21 Accounts as of
$.01 Par Value Per Share December 31, 1997
Delaware Group Global & International
Funds, Inc.'s Global Equity Series:
Global Equity Fund A Class
Common Stock 4 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Equity Fund B Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Equity Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share December 31, 1997
Global Equity Fund Institutional Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share December 31, 1997
<PAGE>
PART C - Other Information
(Continued)
Number of
Title of Class Record Holders
-------------- --------------
Delaware Group Global & International
Funds, Inc.'s International Small Cap Series:
International Small Cap Fund A Class
Common Stock 1 Account as of
$.01 Par Value Per Share December 31, 1997
International Small Cap Fund B Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share December 31, 1997
International Small Cap Fund C Class
Common Stock 0 Accounts as of
$.01 Par Value Per Share December 31, 1997
International Small Cap Fund Institutional Class
Common Stock 2 Accounts as of
$.01 Par Value Per Share December 31, 1997
Item 27. Indemnification. Incorporated into this filing by reference to
initial Registration Statement filed June 4, 1991 and Article XIV
of the By-Laws incorporated into this filing by reference to
Post-Effective Amendment No. 9 filed June 30, 1995.
<PAGE>
PART C - Other Information
(Continued)
Item 28. Business and Other Connections of Investment Adviser.
Delaware International Advisers Ltd. ("Delaware International")
serves as investment manager to International Equity Series, Global Bond
Series, Global Assets Series, Emerging Markets Series, International Small Cap
Series and Global Equity Series of the Registrant, and also serves as
investment manager or sub-investment adviser to certain of the other funds in
the Delaware Group (Delaware Group Global Dividend and Income Fund, Inc.,
Delaware Group Income Funds, Inc., Delaware Pooled Trust, Inc. and Delaware
Group Premium Fund, Inc.) and provides investment advisory services to
institutional accounts, primarily retirement plans and endowment funds.
Information regarding the officers and directors of Delaware
International and the positions they have held with the Registrant during the
past two fiscal years is provided below.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------
<S> <C>
*Wayne A. Stork Chairman, Chief Executive Officer and Director of Delaware International Advisers Ltd.
and Delaware International Holdings Ltd.; Chairman of the Board and Director of the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc. and Delaware Capital Management, Inc.; Chairman of the Board,
President, Chief Executive Officer, Chief Investment Officer and Director of Delaware
Management Company, Inc.; Chairman of the Board, President, Chief Executive Officer
and Director of DMH Corp., Delaware Distributors, Inc. and Founders Holdings, Inc.;
President and Chief Executive Officer of Delvoy, Inc.; Chairman of Delaware
Distributors, L.P.; and Director of Delaware Service Company, Inc. and Delaware
Investment & Retirement Services, Inc.
**David G. Tilles Managing Director, Chief Investment Officer and Director of Delaware International
Advisers Ltd. and Chief Investment Officer and Director of Delaware International
Holdings, Ltd.
**G. Roger H. Kitson Vice Chairman and Director of Delaware International Advisers Ltd.
**Ian G. Sims Deputy Managing Director/ Chief Investment Officer/Global Fixed Income and Director
of Delaware International Advisers Ltd.
**John Emberson Secretary, Compliance Officer, Finance Director and Director of Delaware International
Advisers Ltd.
**Nigel G. May Senior Portfolio Manager/Head of Pacific Basin Group and Director of Delaware International
Advisers Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England EC2V 6EE.
</TABLE>
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------
<S> <C>
**Elizabeth A. Desmond Senior Portfolio Manager/Head of European Group and Director of Delaware International
Advisers Ltd.
*David K. Downes Director of Delaware International Advisers Ltd.; Executive Vice President, Chief Operating
Officer, Chief Financial Officer and Director of Delaware Management Company, Inc., DMH
Corp., Delaware Distributors, Inc., Founders Holdings, Inc. and Delvoy, Inc.; Executive
Vice President, Chief Operating Officer and Chief Financial Officer of the Registrant and
each of the other funds in the Delaware Group, Delaware Management Holdings, Inc., Founders
CBO Corporation, Delaware Capital Management, Inc. and Delaware Distributors, L.P.;
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 Ltd.; Chairman, Chief Executive Officer and
Director of Delaware Investment & Retirement Services, Inc.; Chairman and Director of
Delaware Management Trust Company; and Vice President of Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton Place,
Newtown Square, PA
*Richard G. Unruh, Jr. Director of Delaware International Advisers Ltd.; Executive Vice President and
Director of Delaware Management Company, Inc.; Executive Vice President of the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc. and Delaware Capital Management, Inc.
Board of Directors, Chairman of Finance Committee, Keystone Insurance
Company since 1989, 2040 Market Street, Philadelphia, PA; Board of
Directors, Chairman of Finance Committee, Mid Atlantic, Inc. since 1989,
2040 Market Street, Philadelphia, PA; Board of Directors, Metron, Inc.
since 1995, 11911 Freedom Drive, Reston, VA
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England EC2V 6EE.
</TABLE>
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with Delaware International Advisers Ltd.
Business Address and its Affiliates and Other Positions and Offices Held
- ------------------ ---------------------------------------------------------------
<S> <C>
*Richard J. Flannery Director of Delaware International Advisers Ltd.; Senior Vice President/Corporate and
International Affairs of the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Distributors, L.P., Delaware Management Trust Company,
Delaware Capital Management, Inc., Delaware Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.; Executive Vice President/Corporate & International Affairs and
Director of Delaware International Holdings Ltd.; Senior Vice President/Corporate and
International Affairs and Director of Founders Holdings, Inc. and Delvoy, Inc.; and Senior
Vice President of Founders CBO Corporation
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton, PA; Director
and Member of Executive Committee of Stonewall Links, Inc. since 1991, Bulltown Rd.,
Elverton, PA
*John C. E. Campbell Director of Delaware International Advisers Ltd., Senior Vice President/Client Services of
Delaware Investment Advisers.
*George M. Director of Delaware International Advisers Ltd.; Senior Vice President, General
Chamberlain, Jr. Counsel, Secretary and Director of Delaware Management Company, Inc., DMH Corp.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Capital Management, Inc., Delaware Investment &
Retirement Services, Inc. and Delvoy, Inc.; Senior Vice President,
Secretary and General Counsel of the Registrant, each of the other funds
in the Delaware Group, Delaware Distributors, L.P. and Delaware
Management Holdings, Inc.; Senior Vice President and Director of Delaware
International Holdings Ltd.; Executive Vice President, Secretary, General
Counsel and Director of Delaware Management Trust Company; and Secretary
of Lincoln Funds Corporation
*George E. Deming Director of Delaware International Advisers Ltd.; Vice President/Senior Portfolio Manager,
Delaware Investment Advisers.
**Timothy W. Sanderson Senior Portfolio Manager, Deputy Compliance Officer, Director Equity Research, Chief Investment
Officer-Equities and Director of Delaware International Advisers Ltd.
**Clive A. Gillmore Senior Portfolio Manager, Director U.S. Mutual Fund Liaison and Director of Delaware
International Advisers Ltd.
**Hamish O. Parker Senior Portfolio Manager, Director U.S. Marketing Liaison and Director of Delaware
International Advisers Ltd.
**Gavin A. Hall Senior Portfolio Manager of Delaware International Advisers Ltd.
**Robert Akester Senior Portfolio Manager of Delaware International Advisers Ltd.
**Hywel Morgan Senior Portfolio Manager of Delaware International Advisers Ltd.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
** Business address of each is Third Floor, 80 Cheapside, London, England EC2V 6EE.
</TABLE>
<PAGE>
PART C - Other Information
(Continued)
Delaware Management Company, Inc. ("DMC"), an affiliate of
Delaware International, serves as investment manager to a portion of the
portfolio of the Global Assets Series and Global Equity Series and as
investment manager or sub-adviser to certain of the other funds in the
Delaware Group (Delaware Group Equity Funds I, Inc., Delaware Group Equity
Funds II, Inc., Delaware Group Equity Funds III, Inc., Delaware Group Equity
Funds IV, Inc., Delaware Group Equity Funds V, Inc., Delaware Group Government
Fund, Inc., Delaware Group Income Funds, Inc., Delaware Group Limited-Term
Government Funds, Inc., Delaware Group Cash Reserve, Inc., Delaware Group
Tax-Free Fund, Inc., Delaware Group State Tax-Free Income Trust, Delaware
Group Tax-Free Money Fund, Inc., Delaware Group Premium Fund, Inc., Delaware
Pooled Trust, Inc., Delaware Group Adviser Funds, Inc., Delaware Group
Dividend and Income Fund, Inc., Delaware Group Global Dividend and Income
Fund, Inc., Delaware Group Foundation Funds, Inc., Voyageur Tax-Free Funds,
Inc., Voyageur Intermediate Tax-Free Funds, Inc., Voyageur Insured Funds,
Inc., Voyageur Funds, Inc., Voyageur Investment Trust, Voyageur Investment
Trust II, Voyageur Mutual Funds, Inc., Voyageur Mutual Funds II, Inc.,
Voyageur Mutual Funds III, Inc., Voyageur Arizona Municipal Income Fund, Inc.,
Voyageur Colorado Insured Municipal Income Fund, Inc., Voyageur Florida
Insured Municipal Income Fund, Voyageur Minnesota Municipal Fund, Inc.,
Voyageur Minnesota Municipal Fund II, Inc. and Voyageur Minnesota Municipal
Fund III, Inc.) and provides investment advisory services to institutional
accounts, primarily retirement plans and endowment funds. In addition, certain
directors of the Manager also serve as directors/trustees of the other
Delaware Group funds, and certain officers are also officers of these other
funds. A company owned by the Manager's parent company acts as principal
underwriter to the mutual funds in the Delaware Group (see Item 29 below) and
another such company acts as the shareholder services, dividend disbursing,
accounting servicing and transfer agent for all of the mutual funds in the
Delaware Group.
The following persons serving as directors or officers of
the Manager have held the following positions during the past two years:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, President, Chief Executive Officer, Chief Investment Officer and
Director of Delaware Management Company, Inc.; Chairman of the Board, President,
Chief Executive Officer and Director of DMH Corp., Delaware Distributors, Inc. and
Founders Holdings, Inc.; Chairman, Chief Executive Officer and Director of Delaware
International Holdings Ltd. and Delaware International Advisers Ltd.; Chairman of the
Board and Director of the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., and Delaware Capital Management, Inc.;
Chairman of Delaware Distributors, L.P.; President and Chief Executive Officer of
Delvoy, Inc.; and Director of Delaware Service Company, Inc. and Delaware Investment
& Retirement Services, Inc.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware Management Company, Inc.;
Executive Vice President of the Registrant, each of the other funds in the Delaware
Group, Delaware Management Holdings, Inc. and Delaware Capital Management, Inc.;
and Director of Delaware International Advisers Ltd.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company since 1989,
2040 Market Street, Philadelphia, PA; Board of Directors, Chairman of Finance Committee,
AAA Mid Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA; Board of
Directors, Metron, Inc. since 1995, 11911 Freedom Drive, Reston, VA
Paul E. Suckow Executive Vice President/Chief Investment Officer, Fixed Income of Delaware Management
Company, Inc., the Registrant, each of the other funds in the Delaware Group and Delaware
Management Holdings, Inc.; Executive Vice President and Director of Founders Holdings,
Inc.; Executive Vice President of Delaware Capital Management, Inc.; and Director of
Founders CBO Corporation
Director, HYPPCO Finance Company Ltd.
David K. Downes Executive Vice President, Chief Operating Officer, Chief Financial Officer and Director
of Delaware Management Company, Inc., DMH Corp., Delaware Distributors, Inc.,
Founders Holdings, Inc. and Delvoy, Inc.; Executive Vice President, Chief Operating
Officer and Chief Financial Officer of the Registrant and each of the other funds in the
Delaware Group, Delaware Management Holdings, Inc., Founders CBO Corporation,
Delaware Capital Management, Inc. and Delaware Distributors, L.P.; 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 Ltd.; 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.; and Vice
President of Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton Place,
Newtown Square, PA
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
George M. Senior Vice President, General Counsel, Secretary and Director of
Chamberlain, Jr. Delaware Management Company, Inc., DMH Corp., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Founders Holdings, Inc., Delaware Capital Management,
Inc., Delaware Investment & Retirement Services, Inc. and Delvoy, Inc.; Senior Vice
President, Secretary and General Counsel of the Registrant, each of the other funds in the
Delaware Group, Delaware Distributors, L.P. and Delaware Management Holdings, Inc.; Senior
Vice President and Director of Delaware International Holdings Ltd.; Executive Vice
President, Secretary, General Counsel and Director of Delaware Management Trust Company;
Director of Delaware International Advisers Ltd.; Secretary of Lincoln Funds Corporation
Richard J. Flannery Senior Vice President/Corporate & International Affairs of the Registrant, each of the
other funds in the Delaware Group, Delaware Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Distributors, Inc., Delaware Distributors, L.P.,
Delaware Management Trust Company, Delaware Capital Management, Inc., Delaware Service
Company, Inc. and Delaware Investment & Retirement Services, Inc.; Executive Vice
President/Corporate & International Affairs & Director of Delaware International
Holdings Ltd.; Senior Vice President/Corporate and International Affairs and Director of
Founders Holdings, Inc. and Delvoy, Inc.; Senior Vice President of Founders CBO
Corporation; and Director of Delaware International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton, PA;
Director and Member of Executive Committee of Stonewall Links, Inc. since 1991,
Bulltown Rd., Elverton, PA
Michael P. Bishof Senior Vice President and Treasurer of the Registrant, each of the other funds in the
Delaware Group 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.; Assistant Treasurer of Founders CBO Corporation; and Senior Vice
President and Manager of Investment Accounting of Delaware International Holdings
Ltd.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Joseph H. Hastings Senior Vice President/Corporate Controller and Treasurer of Delaware Management
Holdings, Inc., DMH Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Capital Management, Inc., Delaware Distributors, L.P.,
Delaware Service Company, Inc., Delaware International Holdings Ltd. and Delvoy,
Inc.; Senior Vice President/Corporate Controller of the Registrant, each of the other
funds in the Delaware Group and Founders Holdings, Inc.; Executive Vice President,
Chief Financial Officer and Treasurer of Delaware Management Trust Company;
Chief Financial Officer and Treasurer of Delaware Investment & Retirement Services,
Inc.; Senior Vice President/Assistant Treasurer of Founders CBO Corporation; and
Treasurer of Lincoln Funds Corporation.
Michael T. Taggart Senior Vice President/Facilities Management and Administrative Services of
Delaware Management Company, Inc.
Douglas L. Anderson Senior Vice President/Operations of Delaware Management Company, Inc.,
Delaware Investment and Retirement Services, Inc. and Delaware Service Company,
Inc.; Senior Vice President/Operations and Director of Delaware Management Trust
Company
James L. Shields Senior Vice President/Chief Information Officer of Delaware Management Company,
Inc., Delaware Service Company, Inc. and Delaware Investment & Retirement
Services, Inc.
Eric E. Miller Vice President, Assistant Secretary and Deputy General Counsel of the Registrant
and each of the other funds in the Delaware Group, Delaware Management
Company, Inc., Delaware Management Holdings, Inc., DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Founders Holdings, Inc., Delaware Capital
Management, Inc. and Delaware Investment & Retirement Services, Inc.; and Vice
President and Assistant Secretary of Delvoy, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware
Service Company, Inc., DMH Corp., Delaware Management Trust Company,
Delaware Capital Management, Inc., Delaware Investment & Retirement Services,
Inc., Founders Holdings, Inc. and Delvoy, Inc.; Vice President and Secretary of
Delaware International Holdings Ltd.; and Secretary of Founders CBO Corporation;
Partner of Tri-R Associates since 1989, 10001 Sandmeyer Lane, Philadelphia, PA
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Richard Salus(1) Vice President/Assistant Controller of Delaware Management Company, Inc. and
Delaware Management Trust Company
Bruce A. Ulmer Vice President/Director of LNC Internal Audit of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management Holdings,
Inc., DMH Corp., Delaware Management Trust Company and Delaware Investment & Retirement
Services, Inc.; Vice President/Director of Internal Audit of Delvoy, Inc.
Steven T. Lampe Vice President/Taxation of Delaware Management Company, Inc., the Registrant,
each of the other funds in the Delaware Group, Delaware Management Holdings,
Inc., DMH Corp., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware
Service Company, Inc., Delaware Management Trust Company, Founders Holdings,
Inc., Founders CBO Corporation, Delaware Capital Management, Inc., Delaware
Investment & Retirement Services, Inc. and Delvoy, Inc.
Christopher Adams Vice President/Strategic Planning of Delaware Management Company, Inc. and
Delaware Service Company, Inc.
Susan L. Hanson Vice President/Strategic Planning of Delaware Management Company, Inc. and
Delaware Service Company, Inc.
Dennis J. Mara(2) Vice President/Acquisitions of Delaware Management Company, Inc.
Scott Metzger Vice President/Business Development of Delaware Management Company, Inc. and
Delaware Service Company, Inc.
Lisa O. Brinkley Vice President/Compliance of Delaware Management Company, Inc., the Registrant, each of
the other funds in the Delaware Group, DMH Corp., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc., Delaware Management Trust Company,
Delaware Capital Management, Inc. and Delaware Investment & Retirement Services, Inc.;
Vice President of Delvoy, Inc.
Rosemary E. Milner Vice President/Legal Registrations of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Distributors,
L.P. and Delaware Distributors, Inc.
Mary Ellen Carrozza Vice President/Client Services of Delaware Management Company, Inc. and the
Registrant
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
<S> <C>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds, the fixed income funds and the closed-end funds
in the Delaware Group; Vice President of Founders Holdings, Inc.; and Treasurer, Assistant
Secretary and Director of Founders CBO Corporation
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds, the fixed income funds and the closed-end funds
in the Delaware Group; Vice President of Founders Holdings, Inc.; and President and
Director of Founders CBO Corporation
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., each of the
tax-exempt funds and the fixed income funds in the Delaware Group and Delaware Capital
Management, Inc.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., each of the
tax-exempt funds and the fixed income funds in the Delaware Group and Delaware Capital
Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware Group
Mitchell L. Conery(3) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc. and each of
the tax-exempt and fixed income funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company, Inc. and each of
the equity funds in the Delaware Group and Delaware Capital Management, Inc.
Gerald S. Frey(4) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc. and each of
the equity funds in the Delaware Group
Christopher Beck(5) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc. and each of
the equity funds in the Delaware Group
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Elizabeth H. Howell(6) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and the Delaware-Voyageur Tax-Free Minnesota Intermediate, Delaware-Voyageur
Minnesota Insured, Delaware-Voyageur Tax-Free Minnesota, Delaware-Voyageur
Tax-Free Idaho, Delaware-Voyageur Tax-Free Kansas, Delaware-Voyageur Tax-
Free Missouri, Delaware-Voyageur Tax-Free Oregon, Delaware-Voyageur Tax-Free
Washington, Delaware-Voyageur Tax-Free Iowa and Delaware-Voyageur Tax-Free
Wisconsin Funds
Andrew M. McCullagh, Jr.(7) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc. and the
Delaware-Voyageur Tax-Free Arizona Insured, Delaware-Voyageur Tax-Free Arizona,
Delaware-Voyageur Tax-Free California Insured, Delaware-Voyageur Tax-Free Colorado,
Delaware-Voyageur Tax-Free New Mexico, Delaware-Voyageur Tax-Free North Dakota and
Delaware-Voyageur Tax-Free Utah Funds.
Babak Zenouzi Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.
and each of the equity funds and the closed-end funds in the Delaware Group
Paul Grillo Vice President/Portfolio Manager of Delaware Management Company, Inc. and each
of the tax-exempt and fixed income funds in the Delaware Group
Marshall T. Bassett Vice President/Portfolio Manager of Delaware Management Company, Inc. and each
of the equity funds in the Delaware Group.
John Heffern Vice President/Portfolio Manager of Delaware Management Company, Inc. and each
of the equity funds in the Delaware Group.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
1 SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
2 CORPORATE CONTROLLER, IIS prior to July 1997 and DIRECTOR, FINANCIAL PLANNING, Decision One prior to
March 1996.
3 INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
4 SENIOR DIRECTOR, Morgan Grenfell Capital Management prior to June 1996.
5 SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
6 SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May 1997.
7 SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset Management LLC prior to May 1997.
</TABLE>
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal underwriter for
all the mutual funds in the Delaware Group.
(b Information with respect to each director, officer or partner
of principal underwriter:
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
Delaware Distributors, Inc. General Partner None
Delaware Management
Company, Inc. Limited Partner Investment Manager
Delaware Capital
Management, Inc. Limited Partner None
Wayne A. Stork Chairman Chairman
Bruce D. Barton President and Chief Executive None
Officer
David K. Downes Executive Vice President, Executive Vice
Chief Operating Officer President/Chief
and Chief Financial Officer Operating Officer/
Chief Financial Officer
George M. Chamberlain, Jr. Senior Vice President/Secretary/ Senior Vice President/
General Counsel Secretary/General Counsel
Richard J. Flannery Senior Vice President/Corporate Senior Vice President/
and International Affairs Corporate and
International Affairs
Joseph H. Hastings Senior Vice President/Corporate Senior Vice President/
Controller & Treasurer Corporate Controller
Terrence P. Cunningham Senior Vice President/ Financial None
Institutions
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
Holly W. Reimel Vice President/Manager, National None
Accounts
Mac McAuliffe Senior Vice President/Sales None
Manager, Western Division
William F. Hostler Senior Vice President/ None
Marketing Services
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
<S> <C> <C>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
J. Chris Meyer Senior Vice President/ None
Director Product Management
Stephen H. Slack Senior Vice President/Wholesaler None
William M. Kimbrough Senior Vice President/Wholesaler None
Daniel J. Brooks Senior Vice President/Wholesaler None
Bradley L. Kolstoe Senior Vice President/Western None
Division Sales Manager
Henry W. Orvin Senior Vice President/Eastern None
Division Sales Manager
Michael P. Bishof Senior Vice President and Treasurer/ Senior Vice
Manager, Investment Accounting President/Treasurer
Eric E. Miller Vice President/Assistant Secretary/ Vice President/
Deputy General Counsel Assistant Secretary/
Deputy General Counsel
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Steven T. Lampe Vice President/Taxation Vice President/Taxation
Lisa O. Brinkley Vice President/Compliance Vice President/
Compliance
Rosemary E. Milner Vice President/Legal Registrations Vice President/Legal
Registrations
Daniel H. Carlson Vice President/Strategic Marketing None
Diane M. Anderson Vice President/Plan Record Keeping None
and Administration
Anthony J. Scalia Vice President/Defined Contribution None
Sales, SW Territory
Courtney S. West Vice President/Defined Contribution None
Sales, NE Territory
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Denise F. Guerriere Vice President/Client Services None
Gordon E. Searles Vice President/Client Services None
Julia R. Vander Els Vice President/Participant Services None
Jerome J. Alrutz Vice President/Retail Sales None
Joanne A. Mettenheimer Vice President/New Business None
Development
Scott Metzger Vice President/Business Development Vice President/Business
Development
Stephen C. Hall Vice President/Institutional Sales None
Gregory J. McMillan Vice President/ National Accounts None
Christopher H. Price Vice President/Manager, None
Insurance
Stephen J. DeAngelis Vice President/Product None
Development
Andrew W. Whitaker Vice President/Financial Institutions None
Jesse Emery Vice President/ Marketing None
Communications
Darryl S. Grayson Vice President, Broker/Dealer None
Internal Sales
Susan T. Friestedt Vice President/Client Service None
Dinah J. Huntoon Vice President/Product None
Manager Equity
Soohee Lee Vice President/Fixed Income None
Product Management
Michael J. Woods Vice President/ UIT Product None
Management
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Ellen M. Krott Vice President/Marketing None
Dale L. Kurtz Vice President/Marketing Support None
David P. Anderson Vice President/Wholesaler None
Lee D. Beck Vice President/Wholesaler None
Gabriella Bercze Vice President/Wholesaler None
Terrence L. Bussard Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William L. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Thomas C. Gallagher Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Ronald A. Haimowitz Vice President/Wholesaler None
Christopher L. Johnston Vice President/Wholesaler None
Michael P. Jordan Vice President/Wholesaler None
Jeffrey A. Keinert Vice President/Wholesaler None
Thomas P. Kennett Vice President/ Wholesaler None
Debbie A. Marler Vice President/Wholesaler None
Nathan W. Medin Vice President/Wholesaler None
Roger J. Miller Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Stephen C. Nell Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ ---------------- ---------------
<S> <C> <C>
Julia A. Nye Vice President/Wholesaler None
Joseph T. Owczarek Vice President/Wholesaler None
Mary Ellen Pernice-Fadden Vice President/Wholesaler None
Mark A. Pletts Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Laura E. Roman Vice President/Wholesaler None
Linda Schulz Vice President/Wholesaler None
Edward B. Sheridan Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Julia A. Stanton Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Edward J. Wagner Vice President/Wholesaler None
Wayne W. Wagner Vice President/Wholesaler None
John A. Wells Vice President/Marketing Technology None
Scott Whitehouse Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia at 1818
Market Street, Philadelphia, PA 19103 or One Commerce Square,
Philadelphia, PA 19103, or in London at Third Floor, 80 Cheapside,
London, England EC2V 6EE.
Item 31. Management Services. None.
<PAGE>
PART C - Other Information
(Continued)
Item 32. Undertakings.
(a) Not Applicable.
(b) The Registrant hereby undertakes to file a post-effective
amendment, using financial statements which need not be
certified, within four to six months from the public
offering of shares of International Small Cap Series.
(c) The Registrant hereby undertakes to furnish each person to
whom a prospectus is delivered with a copy of the
Registrant's latest annual report to shareholders, upon
request and without charge.
(d) The Registrant hereby undertakes to promptly call a meeting
of shareholders for the purpose of voting upon the question
of removal of any director when requested in writing to do
so by the record holders of not less than 10% of the
outstanding shares.
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia, Commonwealth of Pennsylvania on this
27th day of January, 1998.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
By /s/ Wayne A. Stork
-----------------------------------
Wayne A. Stork
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
- --------- ----- ----
<S> <C> <C>
/s/ Wayne A. Stork Chairman of the Board and Director January 27, 1998
- --------------------------------
Wayne A. Stork
Executive Vice President/Chief Operating
Officer/Chief Financial Officer
/s/ David K. Downes (Principal Financial Officer and Principal January 27, 1998
- -------------------------------- Accounting Officer)
David K. Downes
/s/ Walter P. Babich * Director January 27, 1998
- --------------------------------
Walter P. Babich
/s/ Anthony D. Knerr * Director January 27, 1998
- --------------------------------
Anthony D. Knerr
/s/ Ann R. Leven * Director January 27, 1998
- --------------------------------
Ann R. Leven
/s/ W. Thacher Longstreth * Director January 27, 1998
- --------------------------------
W. Thacher Longstreth
/s/Thomas F. Madison * Director January 27, 1998
- --------------------------------
Thomas F. Madison
/s/Jeffrey J. Nick * Director January 27, 1998
- --------------------------------
Jeffrey J. Nick
/s/Charles E. Peck * Director January 27, 1998
- --------------------------------
Charles E. Peck
</TABLE>
*By /s/ Wayne A. Stork
--------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.B1D Executed Articles Supplementary (July 21, 1997)
EX-99.B5F Executed Investment Management Agreement (July 21,
1997) on behalf of International Small Cap Fund
EX-99.B6AV Executed Distribution Agreement (July 21, 1997) on
behalf of International Small Cap Fund
EX-99.B8AI Amendment (November 1997) to Custodian Agreement
between The Chase Manhattan Bank and the Registrant on
behalf of each Series
EX-99.B9FI Executed Amendment No. 4A (April 14, 1997) to Schedule
A to Delaware Group of Funds Fund Accounting Agreement
EX-99.B9FII Executed Amendment No. 5 (May 1, 1997) to Schedule A to
Delaware Group of Funds Fund Accounting Agreement
EX-99.B9FIII Executed Amendment No. 6 (July 21, 1997) to Schedule A
to Delaware Group of Funds Fund Accounting Agreement
EX-99.B9FIV Executed Amendment No. 7 (October 14, 1997) to Schedule
A to Delaware Group of Funds Fund Accounting Agreement
EX-99.B9FV Executed Amendment No. 8 (December 18, 1997) to
Schedule A to Delaware Group of Funds Fund Accounting
Agreement
EX-99.B11 Consent of Auditors
EX-99.B15J Form of Plan under Rule 12b-1 for International Small
Cap Series Class A
EX-99.B15K Form of Plan under Rule 12b-1 for International Small
Cap Series Class B
EX-99.B15L Form of Plan under Rule 12b-1 for International Small
Cap Series Class C
EX-99.B16B Schedules of Computation for each Performance Quotation
for periods not previously shown
EX-27 Financial Data Schedules
EX-99.B18A Plan under Rule 18f-3 (September 18, 1997)
EX-99.B18AI Amended Appendix A to Plan under Rule 18f-3
EX-99.B19B Power of Attorney for Thomas F. Madison and Jeffrey J.
Nick
<PAGE>
EX-99.B1D
EXHIBIT 24(b)(1)(d)
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
ARTICLES SUPPLEMENTARY
TO
ARTICLES OF INCORPORATION
Delaware Group Global & International Funds, Inc., a
Maryland corporation having its principal office in Baltimore, Maryland (the
"Corporation"), hereby certifies, in accordance with Section 2-208 of the
Maryland General Corporation Law, to the State Department of Assessments and
Taxation of Maryland that:
FIRST: The Corporation has authority to issue One Billion
(1,000,000,000) shares of common stock with a par value of One Cent ($0.01)
per share of the Corporation ("Common Stock"), having an aggregate par value
of Ten Million Dollars ($10,000,000). Of such One Billion (1,000,000,000)
shares of Common Stock, One Hundred Fifty Million (150,000,000) shares have
been allocated to each of the International Equity Series, Global Assets
Series, Global Bond Series and Emerging Markets Series of the Common Stock.
Fifty Million (50,000,000) shares of the International Equity Series of the
Common Stock have been allocated to each of the International Equity Fund
class and the International Equity Fund (Institutional) class, and Twenty-Five
Million (25,000,000) shares of the International Equity Series of the Common
Stock have been allocated to each of International Equity Fund B Class and the
International Equity Fund C Class. Fifty Million (50,000,000) shares of the
Global Assets Series of the Common Stock have been allocated to each of the
Global Assets Fund A Class and Global Assets Fund Institutional Class, and
Twenty-Five Million (25,000,000) shares of the Global Assets Series of the
Common Stock have been allocated to each of the Global Assets Fund B Class and
the Global Assets Fund C Class. Fifty Million (50,000,000) shares of the
Global Bond Series of the Common Stock have been allocated to each of the
Global Bond Fund A Class and the Global Bond Fund Institutional Class, and
Twenty-Five Million (25,000,000) shares of the Global Bond Series of the
Common Stock have been allocated to each of the Global Bond Fund B Class and
the Global Bond Fund C Class. Fifty Million (50,000,000) shares of the
Emerging Markets Series of the Common Stock have been allocated to each of the
Emerging Markets Fund A Class and the Emerging Markets Fund Institutional
Class, and Twenty-Five Million (25,000,000) shares of the Emerging Markets
Series of the Common Stock have been allocated to each of the Emerging Markets
Fund B Class and the Emerging Markets Fund C Class.
<PAGE>
SECOND: The Board of Directors of the Corporation, at a
meeting held on July 17, 1997, adopted resolutions designating two additional
series of the Corporation's Common Stock as the International Small Cap Series
and Global Equity Series, and classifying and allocating One Hundred Fifty
Million (150,000,000) shares of authorized, unissued and unclassified Common
Stock to each of the International Small Cap Series and Global Equity Series.
Of such One Hundred Fifty Million (150,000,000) shares of Common Stock
allocated to the International Small Cap Series, Fifty Million (50,000,000)
shares have been allocated to each of the International Small Cap Fund A Class
and International Small Cap Fund Institutional Class, and Twenty-Five Million
(25,000,000) shares of the International Small Cap Series of the Common Stock
have been allocated to each of the International Small Cap Fund B Class and
the International Small Cap Fund C Class. Of the One Hundred Fifty Million
(150,000,000) shares of the Common Stock allocated to the Global Equity
Series, Fifty Million (50,000,000) shares have been allocated to each of the
Global Equity Fund A Class and Global Equity Fund Institutional Class, and
Twenty-Five Million (25,000,000) shares of the Global Equity Series of the
Common Stock have been allocated to each of the Global Equity Fund B Class and
the Global Equity Fund C Class.
THIRD: As a result of the aforesaid designation,
classification and allocation of such series and classes of the Corporation's
Common Stock, of the One Billion (1,000,000,000) authorized shares of Common
Stock, Nine Hundred Million (900,000,000) shares of Common Stock have been
allocated to various series as follows: One Hundred Fifty Million
(150,000,000) shares have been allocated to each of the International Equity
Series, Global Assets Series, Global Bond Series, Emerging Markets Series,
International Small Cap Series and Global Equity Series. Fifty Million
(50,000,000) shares of the International Equity Series of the Common Stock
have been allocated to each of the International Equity Fund class and the
International Equity Fund (Institutional) class, and Twenty-Five Million
(25,000,000) shares of the International Equity Series of the Common Stock
have been allocated to each of International Equity Fund B Class and the
International Equity Fund C Class. Fifty Million (50,000,000) shares of the
Global Assets Series of the Common Stock have been allocated to each of the
Global Assets Fund A Class and Global Assets Fund Institutional Class, and
Twenty-Five Million (25,000,000) shares of the Global Assets Series of the
Common Stock have been allocated to each of the Global Assets Fund B Class and
the Global Assets Fund C Class. Fifty Million (50,000,000) shares of the
Global Bond Series of the Common Stock have been allocated to each of the
Global Bond Fund A Class and the Global Bond Fund Institutional Class, and
Twenty-Five Million (25,000,000) shares of the Global Bond Series of the
Common Stock have been allocated to each of the Global Bond Fund B Class and
the Global Bond Fund C Class. Fifty
-2-
<PAGE>
Million (50,000,000) shares of the Emerging Markets Series of the Common Stock
have been allocated to each of the Emerging Markets Fund A Class and the
Emerging Markets Fund Institutional Class, and Twenty-Five Million
(25,000,000) shares of the Emerging Markets Series of the Common Stock have
been allocated to each of the Emerging Markets Fund B Class and the Emerging
Markets Fund C Class. Fifty Million (50,000,000) shares of the International
Small Cap Series of the Common Stock have been allocated to each of the
International Small Cap Fund A Class and International Small Cap Fund
Institutional Class, and Twenty-Five Million (25,000,000) shares of the
International Small Cap Series of the Common Stock have been allocated to each
of the International Small Cap Fund B Class and the International Small Cap
Fund C Class. Fifty Million (50,000,000) shares of the Global Equity Series of
the Common Stock have been allocated to each of the Global Equity Fund A Class
and Global Equity Fund Institutional Class, and Twenty-Five Million
(25,000,000) shares of the Global Equity Series of the Common Stock have been
allocated to each of the Global Equity Fund B Class and the Global Equity Fund
C Class.
FOURTH: The shares of the International Small Cap Fund A
Class, the International Small Cap Fund B Class, the International Small Cap
Fund C Class and the International Small Cap Fund Institutional Class of the
International Small Cap Series shall represent proportionate interests in the
same portfolio of investments. The shares of the International Small Cap Fund
A Class, the International Small Cap Fund B Class, the International Small Cap
Fund C Class and the International Small Cap Fund Institutional Class of the
International Small Cap Series shall have the same preferences, conversion or
other rights, voting powers, restrictions, limitations as to dividends,
qualifications, or terms or conditions of redemption, all as set forth in the
Articles of Incorporation of the Corporation, except for the differences
hereinafter set forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the International
Small Cap Fund A Class, the International Small Cap Fund B
Class, the International Small Cap Fund C Class and the
International Small Cap Fund Institutional Class of the
International Small Cap Series of the Common Stock shall be
in such amounts as may be declared from time to time by the
Board of Directors, and such dividends and distributions may
vary with respect to each such class from the dividends and
distributions of investment income and capital gains with
respect to the other classes of the International Small Cap
Series of the Common Stock, to reflect differing allocations
of the expenses of the Corporation among the classes and any
resultant difference among the net asset values per share of
-3-
<PAGE>
the classes, to such extent and for such purposes as the Board
of Directors may deem appropriate. The allocation of
investment income and capital gains and expenses and
liabilities of the International Small Cap Series among its
four classes of Common Stock shall be determined by the
Board of Directors in a manner that is consistent with the
order, as applicable, dated September 6, 1994 (Investment
Company Act of 1940 Release No. 20529) issued by the
Securities and Exchange Commission, and any amendments to
such orders, any existing or future order or any Multiple
Class Plan adopted by the Corporation in accordance with
Rule 18f-3 under the Investment Company Act of 1940, as
amended, that modifies or supersedes such orders.
2. Except as may otherwise be required by law, pursuant to
any applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the
holders of shares of the International Small Cap Fund A
Class, the International Small Cap Fund B Class, the
International Small Cap Fund C Class and the International
Small Cap Fund Institutional Class of the International
Small Cap Series of the Common Stock shall have (i)
exclusive voting rights with respect to any matter submitted
to a vote of stockholders that affects only holders of
shares of the International Small Cap Fund A Class, the
International Small Cap Fund B Class, the International
Small Cap Fund C Class and the International Small Cap Fund
Institutional Class of the International Small Cap Series,
respectively, including, without limitation, the provisions
of any Distribution Plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (a
"Distribution Plan"), applicable to shares of the
International Small Cap Fund A Class, the International
Small Cap Fund B Class and the International Small Cap Fund
C Class, and (ii) no voting rights with respect to the
provisions of any Distribution Plan applicable to any other
class of the International Small Cap Series of the Common
Stock or with regard to any other matter submitted to a vote
of stockholders which does not affect holders of shares of
the International Small Cap Fund A Class, the International
Small Cap Fund B Class and the International Small Cap Fund
C Class.
3. (a) Other than shares described in paragraph (3)(b)
herein, each share of the International Small Cap Fund B
Class shall be converted automatically, and without any
action or choice on the part of the holder thereof, into
shares of the International Small Cap Fund A Class on the
Conversion Date. The term
-4-
<PAGE>
"Conversion Date" when used herein shall mean a date set
forth in the prospectus of the International Small Cap Fund
B Class, as such prospectus may be amended from time to
time, that is no later than three months after either (i)
the date on which the eighth anniversary of the date of
issuance of the share occurs, or (ii) any such other
anniversary date as may be determined by the Board of
Directors and set forth in the prospectus of the
International Small Cap Fund B Class, as such prospectus may
be amended from time to time; provided that any such other
anniversary date determined by the Board of Directors shall
be a date that will occur prior to the anniversary date set
forth in clause (i) and any such other date theretofore
determined by the Board of Directors pursuant to this clause
(ii); but further provided that, subject to the provisions
of the next sentence, for any shares of the International
Small Cap Fund B Class acquired through an exchange, or
through a series of exchanges, as permitted by the
Corporation as provided in the prospectus of the
International Small Cap Fund B Class, as such prospectus may
be amended from time to time, from another investment
company or another series of the Corporation (an "eligible
investment company"), the Conversion Date shall be the
conversion date applicable to the shares of stock of the
eligible investment company originally subscribed for in
lieu of the Conversion Date of any stock acquired through
exchange if such eligible investment company issuing the
stock originally subscribed for had a conversion feature,
but not later than the Conversion Date determined under (i)
above. For the purpose of calculating the holding period
required for conversion, the date of issuance of a share of
the International Small Cap Fund B Class shall mean (i) in
the case of a share of the International Small Cap Fund B
Class obtained by the holder thereof through an original
subscription to the Corporation, the date of the issuance of
such share of the International Small Cap Fund B Class, or
(ii) in the case of a share of the International Small Cap
Fund B Class obtained by the holder thereof through an
exchange, or through a series of exchanges, from an eligible
investment company, the date of issuance of the share of the
eligible investment company to which the holder originally
subscribed.
(b) Each share of the International Small Cap Fund
B Class (i) purchased through the automatic reinvestment of
a dividend or distribution with respect to the International
Small Cap Fund B Class or the corresponding class of any
other investment company or of any other series of the
-5-
<PAGE>
Corporation issuing such class of shares or (ii) issued pursuant
to an exchange privilege granted by the Corporation in an
exchange or series of exchanges for shares originally purchased
through the automatic reinvestment of a dividend or distribution
with respect to shares of capital stock of an eligible investment
company shall be segregated in a separate sub-account on the
stock records of the Corporation for each of the holders of
record thereof. On any Conversion Date, a number of the shares
held in the separate sub-account of the holder of record of the
share or shares being converted, calculated in accordance with
the next following sentence, shall be converted automatically,
and without any action or choice on the part of the holder, into
shares of the International Small Cap Fund A Class. The number of
shares in the holder's separate sub-account so converted shall
(i) bear the same ratio to the total number of shares maintained
in the separate sub-account on the Conversion Date (immediately
prior to conversion) as the number of shares of the holder
converted on the Conversion Date pursuant to paragraph (3)(a)
hereof bears to the total number of International Small Cap Fund
B Class shares of the holder on the Conversion Date (immediately
prior to conversion) after subtracting the shares then maintained
in the holder's separate sub-account, or (ii) be such other
number as may be calculated in such other manner as may be
determined by the Board of Directors and set forth in the
prospectus of the International Small Cap Fund B Class, as such
prospectus may be amended from time to time.
(c) The number of shares of the International Small Cap Fund
A Class into which a share of the International Small Cap Fund B
Class is converted pursuant to paragraphs 3(a) and 3(b) hereof
shall equal the number (including for this purpose fractions of a
share) obtained by dividing the net asset value per share of the
International Small Cap Fund B Class for purposes of sales and
redemption thereof on the Conversion Date by the net asset value
per share of the International Small Cap Fund A Class for
purposes of sales and redemption thereof on the Conversion Date.
(d) On the Conversion Date, the shares of the International
Small Cap Fund B Class converted into shares of the International
Small Cap Fund A Class will no longer be deemed outstanding and
the rights of the holders thereof (except the right to receive
(i) the number of shares of the International Small Cap Fund A
Class into which the shares of the International Small Cap Fund B
Class have been converted and (ii) declared
-6-
<PAGE>
but unpaid dividends to the Conversion Date or such other date
set forth in the prospectus of the International Small Cap Fund B
Class, as such prospectus may be amended from time to time and
(iii) the right to vote converting shares of the International
Small Cap Fund B Class held as of any record date occurring on or
before the Conversion Date and theretofore set with respect to
any meeting held after the Conversion Date) will cease.
Certificates representing shares of the International Small Cap
Fund A Class resulting from the conversion need not be issued
until certificates representing shares of the International Small
Cap Fund B Class converted, if issued, have been received by the
Corporation or its agent duly endorsed for transfer.
(e) The automatic conversion of the International Small Cap
Fund B Class into the International Small Cap Fund A Class, as
set forth in paragraphs 3(a) and 3(b) of this Article FOURTH
shall be suspended at any time that the Board of Directors
determines (i) that there is not available a reasonably
satisfactory opinion of counsel to the effect that (x) the
assessment of the higher fee under the Distribution Plan with
respect to the International Small Cap Fund B Class does not
result in the Corporation's dividends or distributions
constituting a "preferential dividend" under the Internal Revenue
Code of 1986, as amended, and (y) the conversion of the
International Small Cap Fund B Class does not constitute a
taxable event under federal income tax law, or (ii) any other
condition to conversion set forth in the prospectus of the
International Small Cap Fund B Class, as such prospectus may be
amended from time to time, is not satisfied.
(f) The automatic conversion of the International Small Cap
Fund B Class into International Small Cap Fund A Class, as set
forth in paragraphs 3(a) and 3(b) hereof, may also be suspended
by action of the Board of Directors at any time that the Board of
Directors determines such suspension to be appropriate in order
to comply with, or satisfy the requirements of the Investment
Company Act of 1940, as amended, and in effect from time to time,
or any rule, regulation or order issued thereunder relating to
voting by the holders of the International Small Cap Fund B Class
on any Distribution Plan with respect to, as relevant, the
International Small Cap Fund A Class and in effect from time to
time, and in connection with, or in lieu of, any such suspension,
the Board of Directors may provide holders of the International
Small Cap Fund B Class
-7-
<PAGE>
with alternative conversion or exchange rights into other classes
of stock of the Corporation in a manner consistent with the law,
rule, regulation or order giving rise to the possible suspension
of the conversion right.
4. The shares of the International Small Cap Fund C Class
and the International Small Cap Fund Institutional Class shall
not automatically convert into shares of the International Small
Cap Fund A Class of the International Small Cap Series of the
Common Stock as do the shares of the International Small Cap Fund
B Class of the International Small Cap Series of the Common
Stock.
FIFTH: The shares of the International Small Cap Fund A
Class, the International Small Cap Fund B Class, the International Small Cap
Fund C Class and the International Small Cap Fund Institutional Class of the
International Small Cap Series have been classified by the Board of Directors
pursuant to authority contained in the Articles of Incorporation of the
Corporation.
SIXTH: The shares of the Global Equity Fund A Class, the
Global Equity Fund B Class, the Global Equity Fund C Class and the Global Equity
Fund Institutional Class of the Global Equity Series shall represent
proportionate interests in the same portfolio of investments. The shares of the
Global Equity Fund A Class, the Global Equity Fund B Class, the Global Equity
Fund C Class and the Global Equity Fund Institutional Class of the Global Equity
Series shall have the same preferences, conversion or other rights, voting
powers, restrictions, limitations as to dividends, qualifications, or terms or
conditions of redemption, all as set forth in the Articles of Incorporation of
the Corporation, except for the differences hereinafter set forth:
1. The dividends and distributions of investment income and
capital gains with respect to shares of the Global Equity
Fund A Class, the Global Equity Fund B Class, the Global
Equity Fund C Class and the Global Equity Fund Institutional
Class of the Global Equity Series of the Common Stock shall
be in such amounts as may be declared from time to time by
the Board of Directors, and such dividends and distributions
may vary with respect to each such class from the dividends
and distributions of investment income and capital gains
with respect to the other classes of the Global Equity
Series of the Common Stock, to reflect differing allocations
of the expenses of the Corporation among the classes and any
resultant difference among the net asset values per share of
the classes, to such extent and for such purposes as the
Board of Directors may
-8-
<PAGE>
deem appropriate. The allocation of investment income and
capital gains and expenses and liabilities of the Global
Equity Series among its four classes of Common Stock shall
be determined by the Board of Directors in a manner that is
consistent with the order, as applicable, dated September 6,
1994 (Investment Company Act of 1940 Release No. 20529)
issued by the Securities and Exchange Commission, and any
amendments to such orders, any existing or future order or
any Multiple Class Plan adopted by the Corporation in
accordance with Rule 18f-3 under the Investment Company Act
of 1940, as amended, that modifies or supersedes such
orders.
2. Except as may otherwise be required by law, pursuant to
any applicable order, rule or interpretation issued by the
Securities and Exchange Commission, or otherwise, the
holders of shares of the Global Equity Fund A Class, the
Global Equity Fund B Class, the Global Equity Fund C Class
and the Global Equity Fund Institutional Class of the Global
Equity Series of the Common Stock shall have (i) exclusive
voting rights with respect to any matter submitted to a vote
of stockholders that affects only holders of shares of the
Global Equity Fund A Class, the Global Equity Fund B Class,
the Global Equity Fund C Class and the Global Equity Fund
Institutional Class of the Global Equity Series,
respectively, including, without limitation, the provisions
of any Distribution Plan adopted pursuant to Rule 12b-1
under the Investment Company Act of 1940, as amended (a
"Distribution Plan"), applicable to shares of the Global
Equity Fund A Class, the Global Equity Fund B Class and the
Global Equity Fund C Class, and (ii) no voting rights with
respect to the provisions of any Distribution Plan
applicable to any other class of the Global Equity Series of
the Common Stock or with regard to any other matter
submitted to a vote of stockholders which does not affect
holders of shares of the Global Equity Fund A Class, the
Global Equity Fund B Class and the Global Equity Fund C
Class.
3. (a) Other than shares described in paragraph (3)(b)
herein, each share of the Global Equity Fund B Class shall
be converted automatically, and without any action or choice
on the part of the holder thereof, into shares of the Global
Equity Fund A Class on the Conversion Date. The term
"Conversion Date" when used herein shall mean a date set
forth in the prospectus of the Global Equity Fund B Class,
as such prospectus may be amended from time to time, that is
no later than three months after either (i) the date on
which the
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<PAGE>
eighth anniversary of the date of issuance of the share
occurs, or (ii) any such other anniversary date as may be
determined by the Board of Directors and set forth in the
prospectus of the Global Equity Fund B Class, as such
prospectus may be amended from time to time; provided that
any such other anniversary date determined by the Board of
Directors shall be a date that will occur prior to the
anniversary date set forth in clause (i) and any such other
date theretofore determined by the Board of Directors
pursuant to this clause (ii); but further provided that,
subject to the provisions of the next sentence, for any
shares of the Global Equity Fund B Class acquired through an
exchange, or through a series of exchanges, as permitted by
the Corporation as provided in the prospectus of the Global
Equity Fund B Class, as such prospectus may be amended from
time to time, from another investment company or another
series of the Corporation (an "eligible investment
company"), the Conversion Date shall be the conversion date
applicable to the shares of stock of the eligible investment
company originally subscribed for in lieu of the Conversion
Date of any stock acquired through exchange if such eligible
investment company issuing the stock originally subscribed
for had a conversion feature, but not later than the
Conversion Date determined under (i) above. For the purpose
of calculating the holding period required for conversion,
the date of issuance of a share of the Global Equity Fund B
Class shall mean (i) in the case of a share of the Global
Equity Fund B Class obtained by the holder thereof through
an original subscription to the Corporation, the date of the
issuance of such share of the Global Equity Fund B Class, or
(ii) in the case of a share of the Global Equity Fund B
Class obtained by the holder thereof through an exchange, or
through a series of exchanges, from an eligible investment
company, the date of issuance of the share of the eligible
investment company to which the holder originally
subscribed.
(b) Each share of the Global Equity Fund B Class
(i) purchased through the automatic reinvestment of a
dividend or distribution with respect to the Global Equity
Fund B Class or the corresponding class of any other
investment company or of any other series of the Corporation
issuing such class of shares or (ii) issued pursuant to an
exchange privilege granted by the Corporation in an exchange
or series of exchanges for shares originally purchased
through the automatic reinvestment of a dividend or
distribution with respect to shares of capital stock of an
eligible investment company shall be segregated in a
separate sub-account
-10-
<PAGE>
on the stock records of the Corporation for each of the
holders of record thereof. On any Conversion Date, a number
of the shares held in the separate sub-account of the holder
of record of the share or shares being converted, calculated
in accordance with the next following sentence, shall be
converted automatically, and without any action or choice on
the part of the holder, into shares of the Global Equity
Fund A Class. The number of shares in the holder's separate
sub-account so converted shall (i) bear the same ratio to
the total number of shares maintained in the separate
sub-account on the Conversion Date (immediately prior to
conversion) as the number of shares of the holder converted
on the Conversion Date pursuant to paragraph (3)(a) hereof
bears to the total number of Global Equity Fund B Class
shares of the holder on the Conversion Date (immediately
prior to conversion) after subtracting the shares then
maintained in the holder's separate sub-account, or (ii) be
such other number as may be calculated in such other manner
as may be determined by the Board of Directors and set forth
in the prospectus of the Global Equity Fund B Class, as such
prospectus may be amended from time to time.
(c) The number of shares of the Global Equity Fund
A Class into which a share of the Global Equity Fund B Class
is converted pursuant to paragraphs 3(a) and 3(b) hereof
shall equal the number (including for this purpose fractions
of a share) obtained by dividing the net asset value per
share of the Global Equity Fund B Class for purposes of
sales and redemption thereof on the Conversion Date by the
net asset value per share of the Global Equity Fund A Class
for purposes of sales and redemption thereof on the
Conversion Date.
(d) On the Conversion Date, the shares of the
Global Equity Fund B Class converted into shares of the
Global Equity Fund A Class will no longer be deemed
outstanding and the rights of the holders thereof (except
the right to receive (i) the number of shares of the Global
Equity Fund A Class into which the shares of the Global
Equity Fund B Class have been converted and (ii) declared
but unpaid dividends to the Conversion Date or such other
date set forth in the prospectus of the Global Equity Fund B
Class, as such prospectus may be amended from time to time
and (iii) the right to vote converting shares of the Global
Equity Fund B Class held as of any record date occurring on
or before the Conversion Date and theretofore set with
respect to any meeting held after the Conversion Date) will
cease. Certificates representing shares of the Global Equity
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<PAGE>
Fund A Class resulting from the conversion need not be
issued until certificates representing shares of the Global
Equity Fund B Class converted, if issued, have been received
by the Corporation or its agent duly endorsed for transfer.
(e) The automatic conversion of the Global Equity
Fund B Class into the Global Equity Fund A Class, as set
forth in paragraphs 3(a) and 3(b) of this Article FOURTH
shall be suspended at any time that the Board of Directors
determines (i) that there is not available a reasonably
satisfactory opinion of counsel to the effect that (x) the
assessment of the higher fee under the Distribution Plan
with respect to the Global Equity Fund B Class does not
result in the Corporation's dividends or distributions
constituting a "preferential dividend" under the Internal
Revenue Code of 1986, as amended, and (y) the conversion of
the Global Equity Fund B Class does not constitute a taxable
event under federal income tax law, or (ii) any other
condition to conversion set forth in the prospectus of the
Global Equity Fund B Class, as such prospectus may be
amended from time to time, is not satisfied.
(f) The automatic conversion of the Global Equity
Fund B Class into Global Equity Fund A Class, as set forth
in paragraphs 3(a) and 3(b) hereof, may also be suspended by
action of the Board of Directors at any time that the Board
of Directors determines such suspension to be appropriate in
order to comply with, or satisfy the requirements of the
Investment Company Act of 1940, as amended, and in effect
from time to time, or any rule, regulation or order issued
thereunder relating to voting by the holders of the Global
Equity Fund B Class on any Distribution Plan with respect
to, as relevant, the Global Equity Fund A Class and in
effect from time to time, and in connection with, or in lieu
of, any such suspension, the Board of Directors may provide
holders of the Global Equity Fund B Class with alternative
conversion or exchange rights into other classes of stock of
the Corporation in a manner consistent with the law, rule,
regulation or order giving rise to the possible suspension
of the conversion right.
4. The shares of the Global Equity Fund C Class and the
Global Equity Fund Institutional Class shall not
automatically convert into shares of the Global Equity Fund
A Class of the Global Equity Series of the Common Stock as
do the shares of the Global Equity Fund B Class of the
Global Equity Series of the Common Stock.
-12-
<PAGE>
SEVENTH: The shares of the Global Equity Fund A Class, the
Global Equity Fund B Class, the Global Equity Fund C Class and the Global
Equity Fund Institutional Class of the Global Equity Series have been
classified by the Board of Directors pursuant to authority contained in the
Articles of Incorporation of the Corporation.
EIGHTH: The Corporation is registered as an open-end
company under the Investment Company Act of 1940, as amended.
NINTH: These Articles Supplementary shall become
effective at 9:00 a.m. on July 21, 1997.
-13-
<PAGE>
IN WITNESS WHEREOF, Delaware Group Global & International
Funds, Inc. has caused these Articles Supplementary to be signed in its name
and on its behalf this 18th day of July, 1997.
DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC.
By: /s/ Eric E. Miller
---------------------------------
Eric E. Miller
Vice President and Assistant
Secretary
ATTEST:
/s/ Michael D. Mabry
- ----------------------------
Michael D. Mabry
Assistant Vice President and
Assistant Secretary
-14-
<PAGE>
THE UNDERSIGNED, Vice President and Assistant Secretary of
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC., who executed on behalf of
said Corporation the foregoing Articles Supplementary, of which this
instrument is made a part, hereby acknowledges, in the name of and on behalf
of said Corporation, said Articles Supplementary to be the corporate act of
said Corporation and further certifies that, to the best of his knowledge,
information and belief, the matters and facts set forth therein with respect
to the authorization and approval thereof are true in all material respects,
under the penalties of perjury.
/s/ Eric E. Miller
--------------------
Eric E. Miller
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<PAGE>
EX-99.B5F
Exhibit 24(b)(5)(f)
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INVESTMENT MANAGEMENT AGREEMENT
AGREEMENT, made by and between DELAWARE GROUP GLOBAL & INTERNATIONAL
FUNDS, INC., a Maryland corporation (the "Fund"), for the INTERNATIONAL SMALL
CAP SERIES (the "Series") and DELAWARE INTERNATIONAL ADVISERS LTD., a U.K.
company (the "Investment Manager").
W I T N E S S E T H:
WHEREAS, the Fund has been organized and operates as an investment
company registered under the Investment Company Act of 1940 and engages in the
business of investing and reinvesting its assets in securities; and
WHEREAS, the Investment Manager is a registered Investment Adviser
under the Investment Advisers Act of 1940 and engages in the business of
providing investment management services; and
WHEREAS, the Investment Manager serves as the investment manager for
the other series of the Fund and the Fund desires to retain the Investment
Manager to serve as the investment manager for the Series effective as of the
date of this Agreement.
NOW, THEREFORE, in consideration of the mutual covenants herein
contained, and each of the parties hereto intending to be legally bound, it is
agreed as follows:
1. The Fund hereby employs the Investment Manager to manage the
investment and reinvestment of the Series' assets and to administer its affairs,
<PAGE>
subject to the direction of the Board of Directors and officers of the Fund for
the period and on the terms hereinafter set forth. The Investment Manager hereby
accepts such employment and agrees during such period to render the services and
assume the obligations herein set forth for the compensation herein provided.
The Investment Manager shall for all purposes herein, be deemed to be an
independent contractor, and shall, unless otherwise expressly provided and
authorized, have no authority to act for or represent the Fund in any way, or in
any way be deemed an agent of the Fund. The Investment Manager shall regularly
make decisions as to what securities to purchase and sell on behalf of the
Series, shall effect the purchase and sale of investments in furtherance of the
Series' objectives and policies and shall furnish the Board of Directors of the
Fund with such information and reports regarding the Series' investments as the
Investment Manager deems appropriate or as the Directors of the Fund may
reasonably request.
2. The Fund shall conduct its own business and affairs and shall bear
the expenses and salaries necessary and incidental thereto including, but not in
limitation of the foregoing, the costs incurred in the following: the
maintenance of its corporate existence; the maintenance of its own books,
records and procedures; dealing with its own shareholders; the payment of
dividends; transfer of stock, including issuance, redemption and repurchase of
shares; preparation of share certificates; reports and notices to shareholders;
calling and holding of shareholders' meetings; miscellaneous office expenses;
brokerage commissions; custodian fees; legal and accounting fees; taxes; and
federal and state registration fees.
3. (a) Subject to the primary objective of obtaining the best available
prices and execution, the Investment Manager will place orders for the purchase
and sale of portfolio securities with such broker/dealers who provide
statistical factual and financial information and services to the Fund, to the
-2-
<PAGE>
Investment Manager or to any other fund for which the Investment Manager
provides investment advisory services and/or with broker/dealers who sell shares
of the Fund or who sell shares of any other fund for which the Investment
Manager provides investment advisory services. Broker/dealers who sell shares of
the funds of which Delaware International Advisers Ltd. is investment manager,
shall only receive orders for the purchase or sale of portfolio securities to
the extent that the placing of such orders is in compliance with the Rules of
the Securities and Exchange Commission and the National Association of
Securities Dealers, Inc.
(b) Notwithstanding the provisions of subparagraph (a) above
and subject to such policies and procedures as may be adopted by the Board of
Directors and officers of the Fund, the Investment Manager may ask the Fund and
the Fund may agree to pay a member of an exchange, broker or dealer an amount of
commission for effecting a securities transaction in excess of the amount of
commission another member of an exchange, broker or dealer would have charged
for effecting that transaction, in such instances where it and the Investment
Manager have determined in good faith that such amount of commission was
reasonable in relation to the value of the brokerage and research services
provided by such member, broker or dealer, viewed in terms of either that
particular transaction or the Investment Manager's overall responsibilities with
respect to the Fund and to other funds and other advisory accounts for which the
Investment Manager exercises investment discretion.
4. As compensation for the services to be rendered to the Fund by the
Investment Manager under the provisions of this Agreement, the Fund shall pay to
the Investment Manager monthly from the Series' assets a fee (at an annual rate)
equal to 1.25% of the average daily net assets of the Series during the month.
-3-
<PAGE>
If this Agreement is terminated prior to the end of any calendar month,
the management fee shall be prorated for the portion of any month in which this
Agreement is in effect according to the proportion which the number of calendar
days during which the Agreement is in effect bears to the number of calendar
days in the month, and shall be payable within 10 days after the date of
termination.
5. The services to be rendered by the Investment Manager to the Fund
under the provisions of this Agreement are not to be deemed to be exclusive, and
the Investment Manager shall be free to render similar or different services to
others so long as its ability to render the services provided for in this
Agreement shall not be impaired thereby.
6. The Investment Manager, its directors, officers, employees, agents
and shareholders may engage in other businesses, may render investment advisory
services to other investment companies, or to any other corporation,
association, firm or individual, and may render underwriting services to the
Fund or to any other investment company, corporation, association, firm or
individual.
7. In the absence of willful misfeasance, bad faith, gross negligence,
or a reckless disregard of the performance of duties of the Investment Manager
to the Fund, the Investment Manager shall not be subject to liabilities to the
Fund or to any shareholder of the Fund for any action or omission in the course
of, or connected with, rendering services hereunder or for any losses that may
be sustained in the purchase, holding or sale of any security, or otherwise.
-4-
<PAGE>
8. This Agreement shall be executed and become effective as of the date
written below if approved by the vote of a majority of the outstanding voting
securities of the Series. It shall continue in effect for a period of two years
and may be renewed thereafter only so long as such renewal and continuance is
specifically approved at least annually by the Board of Directors or by vote of
a majority of the outstanding voting securities of the Series and only if the
terms and the renewal hereof have been approved by the vote of a majority of the
Directors of the Fund, who are not parties hereto or interested persons of any
such party, cast in person at a meeting called for the purpose of voting on such
approval. Notwithstanding the foregoing, this Agreement may be terminated by the
Fund at any time, without the payment of a penalty, on sixty days' written
notice to the Investment Manager of the Fund's intention to do so, pursuant to
action by the Board of Directors of the Fund or pursuant to vote of a majority
of the outstanding voting securities of the Series. The Investment Manager may
terminate this Agreement at any time, without the payment of a penalty on sixty
days' written notice to the Fund of its intention to do so. Upon termination of
this Agreement, the obligations of all the parties hereunder shall cease and
terminate as of the date of such termination, except for any obligation to
respond for a breach of this Agreement committed prior to such termination, and
except for the obligation of the Fund to pay to the Investment Manager the fee
provided in Paragraph 4 hereof, prorated to the date of termination. This
Agreement shall automatically terminate in the event of its assignment.
9. This Agreement shall extend to and bind the heirs, executors,
administrators and successors of the parties hereto.
-5-
<PAGE>
10. For the purposes of this Agreement, the terms "vote of a majority
of the outstanding voting securities"; "interested persons"; and "assignment"
shall have the meanings defined in the Investment Company Act of 1940.
IN WITNESS WHEREOF, the parties hereto have executed this
Agreement by having it signed by their duly authorized officers as of the 21st
day of July, 1997.
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
for the INTERNATIONAL SMALL CAP SERIES
Attest:
/s/Richelle S. Maestro By: /s/David K. Downes
- ---------------------------- -------------------------------
Richelle S. Maestro David K. Downes
Assistant Secretary Executive Vice President/Chief Financial
Officer/Chief Operating Officer
DELAWARE INTERNATIONAL ADVISERS LTD.
Attest:
/s/John Emberson By: /s/David G. Tilles
- ---------------------------- -------------------------------
John Emberson David G. Tilles
Company Secretary Managing Director
-6-
<PAGE>
EX-99.B6AV
EXHIBIT 24(b)(6)(a)(v)
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
DISTRIBUTION AGREEMENT
Distribution Agreement (the "Agreement") made as of this 21st day of
July, 1997 by and between DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC., a
Maryland corporation (the "Fund"), for the INTERNATIONAL SMALL CAP SERIES (the
"Series"), and DELAWARE DISTRIBUTORS, L.P. (the "Distributor"), a Delaware
limited partnership.
WITNESSETH
WHEREAS, the Fund is an investment company regulated by Federal and
State regulatory bodies, and
WHEREAS, the Distributor is engaged in the business of promoting the
distribution of the securities of investment companies and, in connection
therewith and acting solely as agent for such investment companies and not as
principal, advertising, promoting, offering and selling their securities to the
public, and
WHEREAS, the Fund desires to enter into an agreement with the
Distributor on behalf of the Series, pursuant to which the Distributor shall
serve as the national distributor of the Series' International Small Cap Fund A
Class ("Class A Shares"), International Small Cap Fund B Class ("Class B
Shares"), International Small Cap Fund C Class ("Class C Shares"), and
International Small Cap Fund Institutional Class ("Institutional Class Shares"),
which Series and classes may do business under these or such other names as the
Board of Directors may designate from time to time, on the terms and conditions
set forth below.
NOW, THEREFORE, the parties hereto, intending to be legally bound
hereby, agree as follows:
1 The Fund hereby engages the Distributor to promote the
distribution of the Series' shares and, in connection therewith
and as agent for the Fund and not as principal, to advertise,
promote, offer and sell the Series' shares to the public.
2. (a) The Distributor agrees to serve as distributor of the
Series' shares and, as agent for the Fund and not as
principal, to advertise, promote and use its best efforts
to sell the Series' shares wherever their sale is legal,
either through dealers or otherwise, in such places and in
such manner, not inconsistent with the law and the
provisions of this Agreement and the Fund's Registration
Statement under the Securities Act of 1933, including the
Prospectuses contained therein, and the Statement of
Additional Information contained therein as may be
mutually determined by the Fund and the Distributor from
time to time.
(b) For the Institutional Class Shares, the Distributor
will bear all costs of financing any activity which is
primarily intended to result in the sale of that class of
<PAGE>
shares, including, but not necessarily limited to,
advertising, compensation of underwriters, dealers and sales
personnel, the printing and mailing of sales literature and
distribution of that class of shares.
(C) For its services as agent for the Class A Shares, Class B
Shares, and Class C Shares, the Distributor shall be
entitled to compensation on each sale or redemption, as
appropriate, of shares of such classes equal to any
front-end or deferred sales charge described in the
Prospectus from time to time and may allow concessions to
dealers in such amounts and on such terms as are therein
set forth.
(d) For the Class A Shares, Class B Shares, and Class C
Shares, the Fund shall, in addition, compensate the
Distributor for its services as provided in the
Distribution Plan as adopted on behalf of the Class A
Shares, Class B Shares, and Class C Shares, respectively,
pursuant to Rule 12b-1 under the Investment Company Act
of 1940 (the "Plans"), copies of which as presently in
force are attached hereto as, respectively, Exhibit "A,"
"B", and "C."
3. (a) The Fund agrees to make available for sale by the Fund
through the Distributor all or such part of the authorized
but unissued shares of the Series as the Distributor shall
require from time to time, and except as provided in
Paragraph 3(b) hereof, the Fund will not sell Series'
shares other than through the efforts of the Distributor.
(b) The Fund reserves the right from time to time (1) to sell
and issue shares other than for cash; (2) to issue shares
in exchange for substantially all of the assets of any
corporation or trust, or in exchange of shares of any
corporation or trust; (3) to pay stock dividends to its
shareholders, or to pay dividends in cash or stock at the
option of its stockholders, or to sell stock to existing
stockholders to the extent of dividends payable from time
to time in cash, or to split up or combine its outstanding
shares of common stock; (4) to offer shares for cash to
its stockholders as a whole, by the use of transferable
rights or otherwise, and to sell and issue shares pursuant
to such offers; and (5) to act as its own distributor in
any jurisdiction in which the Distributor is not
registered as a broker-dealer.
4. The Fund warrants the following:
(a) The Fund is, or will be, a properly registered investment
company, and any and all Series' shares which it will sell
through the Distributor are, or will be, properly
registered with the Securities and Exchange Commission
("SEC").
(b) The provisions of this Agreement do not violate the terms
of any instrument by which the Fund is bound, nor do they
violate any law or regulation of any body having
jurisdiction over the Fund or its property.
- 2 -
<PAGE>
5. (a) The Fund will supply to the Distributor a conformed copy of
the Registration Statement, all amendments thereto, all
exhibits, and each Prospectus and Statement of Additional
Information.
(b) The Fund will register or qualify the Series' shares for
sale in such states as is deemed desirable.
(c) The Fund, without expense to the Distributor:
(1) will give and continue to give such financial
statements and other information as may be required by
the SEC or the proper public bodies of the states in
which the Series' shares may be qualified;
(2) from time to time, will furnish to the Distributor as
soon as reasonably practicable true copies of its
periodic reports to stockholders;
(3) will promptly advise the Distributor in person or by
telephone or telegraph, and promptly confirm such
advice in writing, (a) when any amendment or supplement
to the Registration Statement becomes effective, (b) of
any request by the SEC for amendments or supplements to
the Registration Statement or the Prospectuses or for
additional information, and (c) of the issuance by the
SEC of any Stop Order suspending the effectiveness of
the Registration Statement, or the initiation of any
proceedings for that purpose;
(4) if at any time the SEC shall issue any Stop Order
suspending the effectiveness of the Registration
Statement, will make every reasonable effort to obtain
the lifting of such order at the earliest possible
moment;
(5) will from time to time, use its best effort to keep a
sufficient supply of Series' shares authorized, any
increases being subject to the approval of shareholders
as may be required;
(6) before filing any further amendment to the Registration
Statement or to any Prospectus, will furnish to the
Distributor copies of the proposed amendment and will
not, at any time, whether before or after the effective
date of the Registration Statement, file any amendment
to the Registration Statement or supplement to any
Prospectus of which the Distributor shall not
previously have been advised or to which the
Distributor shall reasonably object (based upon the
accuracy or completeness thereof) in writing;
(7) will continue to make available to its stockholders
(and forward copies to the Distributor) of such
periodic, interim and any other reports as are
- 3 -
<PAGE>
now, or as hereafter may be, required by the provisions
of the Investment Company Act of 1940; and
(8) will, for the purpose of computing the offering price
of Series' shares, advise the Distributor within one
hour after the close of the New York Stock Exchange (or
as soon as practicable thereafter) on each business day
upon which the New York Stock Exchange may be open of
the net asset value per share of the Series' shares of
common stock outstanding, determined in accordance
with any applicable provisions of law and the
provisions of the Articles of Incorporation, as
amended, of the Fund as of the close of business on
such business day. In the event that prices are to be
calculated more than once daily, the Fund will promptly
advise the Distributor of the time of each calculation
and the price computed at each such time.
6. The Distributor agrees to submit to the Fund, prior to its
use, the form of all sales literature proposed to be
generally disseminated by or for the Distributor, all
advertisements proposed to be used by the Distributor, all
sales literature or advertisements prepared by or for the
Distributor for such dissemination or for use by others in
connection with the sale of the Series' shares, and the form
of dealers' sales contract the Distributor intends to use in
connection with sales of the Series' shares. The Distributor
also agrees that the Distributor will submit such sales
literature and advertisements to the NASD, SEC or other
regulatory agency as from time to time may be appropriate,
considering practices then current in the industry. The
Distributor agrees not to use such form of dealers' sales
contract or to use or to permit others to use such sales
literature or advertisements without the written consent of
the Fund if any regulatory agency expresses objection
thereto or if the Fund delivers to the Distributor a written
objection thereto.
7. The purchase price of each share sold hereunder shall be the
offering price per share mutually agreed upon by the parties
hereto, and as described in the Fund's Prospectuses, as
amended from time to time, determined in accordance with any
applicable provision of law, the provisions of its Articles
of Incorporation and the Conduct Rules of the National
Association of Securities Dealers, Inc.
8. The responsibility of the Distributor hereunder shall be
limited to the promotion of sales of Series' shares. The
Distributor shall undertake to promote such sales solely as
agent of the Fund, and shall not purchase or sell such
shares as principal. Orders for Series' shares and payment
for such orders shall be directed to the Fund's agent,
Delaware Service Company, Inc. for acceptance on behalf of
the Fund. The Distributor is not empowered to approve orders
for sales of Series' shares or accept payment for such
orders. Sales of Series' shares shall be deemed to be made
when and where accepted by Delaware Service Company, Inc. on
behalf of the Fund.
- 4 -
<PAGE>
9. With respect to the apportionment of costs between the Fund
and the Distributor of activities with which both are
concerned, the following will apply:
(a) The Fund and the Distributor will cooperate in
preparing the Registration Statements, the
Prospectuses, the Statement of Additional Information,
and all amendments, supplements and replacements
thereto. The Fund will pay all costs incurred in the
preparation of the Fund's Registration Statement,
including typesetting, the costs incurred in printing
and mailing Prospectuses and Annual, Semi-Annual and
other financial reports to its own shareholders and
fees and expenses of counsel and accountants.
(b) The Distributor will pay the costs incurred in printing
and mailing copies of Prospectuses to prospective
investors.
(c) The Distributor will pay advertising and promotional
expenses, including the costs of literature sent to
prospective investors.
(d) The Fund will pay the costs and fees incurred in
registering or qualifying the Series' shares with the
various states and with the SEC.
(e) The Distributor will pay the costs of any additional
copies of Fund financial and other reports and other
Fund literature supplied to the Distributor by the Fund
for sales promotion purposes.
10. The Distributor may engage in other business, provided such
other business does not interfere with the performance by
the Distributor of its obligations under this Agreement.
11. The Fund agrees to indemnify, defend and hold harmless from
the assets of the Series the Distributor and each person, if
any, who controls the Distributor within the meaning of
Section 15 of the Securities Act of 1933, from and against
any and all losses, damages, or liabilities to which,
jointly or severally, the Distributor or such controlling
person may become subject, insofar as the losses, damages or
liabilities arise out of the performance of its duties
hereunder, except that the Fund shall not be liable for
indemnification of the Distributor or any controlling person
thereof for any liability to the Fund or its security
holders to which they would otherwise be subject by reason
of willful misfeasance, bad faith, or gross negligence in
the performance of their duties under this Agreement.
12. Copies of financial reports, Registration Statements and
Prospectuses, as well as demands, notices, requests,
consents, waivers, and other communications in writing which
it may be necessary or desirable for either party to deliver
or furnish to the other will be duly delivered or furnished,
if delivered to such party at its address shown below during
regular business hours, or if sent to that party by
registered mail or by prepaid telegram filed with an office
or with an agent of Westem Union or another nationally
- 5 -
<PAGE>
recognized telegraph service, in all cases within the time
or times herein prescribed, addressed to the recipient at
1818 Market Street, Philadelphia, Pennsylvania 19103, or at
such other address as the Fund or the Distributor may
designate in writing and furnish to the other.
13. This Agreement shall not be assigned, as that term is
defined in the Investment Company Act of 1940, by the
Distributor and shall terminate automatically in the event
of its attempted assignment by the Distributor. This
Agreement shall not be assigned by the Fund without the
written consent of the Distributor signed by its duly
authorized officers and delivered to the Fund. Except as
specifically provided in the indemnification provision
contained in Paragraph 11 herein, this Agreement and all
conditions and provisions hereof are for the sole and
exclusive benefit of the parties hereto and their legal
successors and no express or implied provision of this
Agreement is intended or shall be construed to give any
person other than the parties hereto and their legal
successors any legal or equitable right, remedy or claim
under or in respect of this Agreement or any provisions
herein contained.
14. (a) This Agreement shall remain in force for a period
of two years from the date hereof and from year to year
thereafter, but only so long as such continuance is
specifically approved at least annually by the Board of
Directors or by vote of a majority of the outstanding
voting securities of the Series and only if the terms
and the renewal thereof have been approved by the vote
of a majority of the Directors of the Fund who are not
parties hereto or interested persons of any such party,
cast in person at a meeting called for the purpose of
voting on such approval.
(b) The Distributor may terminate this Agreement on written
notice to the Fund at any time in case the
effectiveness of the Registration Statement shall be
suspended, or in case Stop Order proceedings are
initiated by the SEC in respect of the Registration
Statement and such proceedings are not withdrawn or
terminated within thirty days. The Distributor may also
terminate this Agreement at any time by giving the Fund
written notice of its intention to terminate the
Agreement at the expiration of three months from the
date of delivery of such written notice of intention to
the Fund.
(c) The Fund may terminate this Agreement at any time on at
least thirty days prior written notice to the
Distributor (1) if proceedings are commenced by the
Distributor or any of its partners for the
Distributor's liquidation or dissolution or the winding
up of the Distributor's affairs; (2) if a receiver or
trustee of the Distributor or any of its property is
appointed and such appointment is not vacated within
thirty days thereafter; (3) if, due to any action by or
before any court or any federal or state commission,
regulatory body, or administrative agency or other
governmental body, the Distributor shall be prevented
from selling securities in the United States or because
of any action or conduct on the Distributor's part,
sales of the shares are not qualified for sale. The
Fund may
- 6 -
<PAGE>
also terminate this Agreement at any time upon prior
written notice to the Distributor of its intention to
so terminate at the expiration of three months from the
date of the delivery of such written notice to the
Distributor.
15. The validity, interpretation and construction of this
Agreement, and of each part hereof, will be governed by the
laws of the Commonwealth of Pennsylvania.
16. In the event any provision of this Agreement is determined
to be void or unenforceable, such determination shall not
affect the remainder of the Agreement, which shall continue
to be in force.
DELAWARE DISTRIBUTORS, L.P.
By: DELAWARE DISTRIBUTORS, INC.,
General Partner
Attest:
/s/ Eric E. Miller By: /s/ Bruce D. Barton
- ------------------------ -------------------------------
Name: Eric E. Miller Name: Bruce D. Barton
Title: Assistant Secretary Title: President and Chief Executive
Officer
DELAWARE GROUP GLOBAL &
INTERNATIONAL FUNDS, INC.
for the INTERNATIONAL SMALL CAP
SERIES
Attest:
/s/ Richelle S. Maestro By: /s/ David K. Downes
- -------------------------- -------------------------------
Name: Richelle S. Maestro Name: David K. Downes
Title: Assistant Secretary Title: Executive Vice President/
Chief Financial Officer/
Chief Operating Officer
- 7 -
<PAGE>
EXHIBIT A
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INTERNATIONAL SMALL CAP FUND A CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the International
Small Cap Series (the "Series") on behalf of the International Small Cap Fund A
Class ("Class"), which Fund, Series and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
The Plan has been adopted prior to any public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Investment Advisers Ltd. ("Delaware International") serves as the Series'
investment adviser and manager pursuant to an Investment Management Agreement
and Delaware Management Company, Inc. serves as sub-adviser under a Sub-Advisory
Agreement with Delaware International. Delaware Service Company, Inc. serves as
the Series' shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Series' shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund on
behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. The Fund shall pay to the Distributor a monthly fee not to exceed
0.30% (3/10 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class (the "Maximum Amount") as may be determined
by the Fund's Board of Directors from time to time. Such monthly fee shall be
reduced by the aggregate sums paid by the Fund on behalf of the Series to
persons other than
A-1
<PAGE>
broker-dealers (the "Service Providers") who may, pursuant to servicing
agreements, provide to the Series services in the Series' marketing of shares of
the Class.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1 above to furnish, or cause or encourage others to furnish, services
and incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
(b) The Service Providers shall use the monies paid respectively to
them to reimburse themselves for the actual costs they have incurred in
confirming that their customers have received the Prospectus and Statement of
Additional Information, if applicable, and as a fee for (1) assisting such
customers in maintaining proper records with the Fund, (2) answering questions
relating to their respective accounts, and (3) aiding in maintaining the
investment of their respective customers in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Plan; both the Distributor and the Service Providers shall
furnish the Board of Directors of the Fund with such other information as the
Board may reasonably request in connection with the payments made under the Plan
and the use thereof by the Distributor and the Service Providers, respectively,
in order to enable the Board to make an informed determination of the amount of
the Fund's payments and whether the Plan should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the non-interested Directors, cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to be
spent for distribution pursuant to paragraph 1 hereof without approval by the
shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
A-2
<PAGE>
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
July 21, 1997
A-3
<PAGE>
EXHIBIT B
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INTERNATIONAL SMALL CAP FUND B CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the International
Small Cap Series (the "Series") on behalf of the International Small Cap Fund B
Class (the "Class"), which Fund, Series and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
The Plan has been adopted prior to any public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Investment Advisers Ltd. ("Delaware International") serves as the Series'
investment adviser and manager pursuant to an Investment Management Agreement
and Delaware Management Company, Inc. serves as sub-adviser under a Sub-Advisory
Agreement with Delaware International. Delaware Service Company, Inc. serves as
the Series' shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Series' shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund on
behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in (a) above, the Fund shall
pay (i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25%
B-1
<PAGE>
(1/4 of 1%) per annurn of the Series' average daily net assets represented by
shares of the Class, as a service fee pursuant to dealer or servicing
agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3 . The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor
and any others receiving fees under the Plan shall furnish the Board of
Directors of the Fund with such other information as the Board may reasonably
request in connection with the payments made under the Plan and the use thereof
by the Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the non-interested Directors, cast in person at a meeting called for the
purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to be
spent for distribution pursuant to paragraph 1 hereof without approval by the
shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
B-2
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
July 21, 1997
B-3
<PAGE>
EXHIBIT C
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INTERNATIONAL SMALL CAP FUND C CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the International
Small Cap Series (the "Series") on behalf of the International Small Cap Fund C
Class (the "Class"), which Fund, Series and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
The Plan has been adopted prior to any public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
Investment Advisers Ltd. ("Delaware International") serves as the Series'
investment adviser and manager pursuant to an Investment Management Agreement
and Delaware Management Company, Inc. serves as sub-adviser under a Sub-Advisory
Agreement with Delaware International. Delaware Service Company, Inc. serves as
the Series' shareholder servicing, dividend disbursing and transfer agent.
Delaware Distributors, L.P. (the "Distributor") is the principal underwriter and
national distributor for the Series' shares, including shares of the Class,
pursuant to the Distribution Agreement between the Distributor and the Fund on
behalf of the Series ("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in paragraph 1(a) above, the
Fund shall pay: (i) to the Distributor for payment to dealers or others or (ii)
directly to others, an amount not to exceed
C-1
<PAGE>
0.25% (1/4 of 1%) per annum of the Series, average daily net assets represented
by shares of the Class, as a service fee pursuant to dealer or servicing
agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3 . The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor
and any others receiving fees under the Plan shall furnish the Board of
Directors of the Fund with such other information as the Board may reasonably
request in connection with the payments made under the Plan and the use thereof
by the Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the non-interested Directors, cast in person at a meeting called for the
purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to be
spent for distribution pursuant to paragraph 1 hereof without approval by the
shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
C-2
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
July 21, 1997
C-3
<PAGE>
EX-99.B8AI
Exhibit 24(b)(8)(a)(i)
AMENDMENT, dated November 20, 1997 to the May 1, 1996 custody
agreement ("Agreement"), between those registered investment companies listed
on Schedule A to the Agreement (each a "Customer"), having a place of business
at 1818 Market Street, Philadelphia, PA 19103 and The Chase Manhattan Bank
("Bank"), having a place of business at 270 Park Ave., New York, N.Y.
10017-2070.
It is hereby agreed as follows:
Section 1. Except as modified hereby, the Agreement is confirmed in
all respects. Capitalized terms used herein without definition shall have the
meanings ascribed to them in the Agreement.
Section 2. The Agreement is amended by deleting the mutual fund rider
thereto and inserting, in lieu thereof, the following mutual fund rider:
1. Add a new Section 15 to the Agreement as follows:
15. Compliance with SEC rule 17f-5 ("Rule 17f-5").
(a) Customer's board of directors (or equivalent body) (hereinafter
"Board") hereby delegates to Bank, and Bank hereby accepts the delegation to
it, of the obligation to perform as Customer's "Foreign Custody Manager" (as
that term is defined in Rule 17f-5(a)(2)) adopted under the Investment Company
Act of 1940 ("Act"), as amended ("1940 Act"), the following responsibilities
in a manner consistent with Rule 17f-5, to: (i) select Eligible Foreign
Custodians (as that term is defined in Rule 17f-5(a)(1), and as the same may
be amended from time to time, or that have otherwise been made exempt pursuant
to an SEC exemptive order); (ii) enter into written contracts with such
Eligible Foreign Custodians that are banks or trust companies and with
Eligible Foreign Custodians that are "Securities Depositories" (as defined in
Rule 17f-5(a)(6)) and that are not Compulsory Depositories (as defined below)
where the Depository has such a contract; and (iii) to monitor the
appropriateness of maintaining Assets of the series of the Customer with such
Eligible Foreign Custodians; provided that, Bank shall not be responsible for
these duties with respect to any compulsory Securities Depository ("Compulsory
Depository"). A Compulsory Depository shall mean a Securities Depository or
clearing agency the use of which is compulsory because: (1) its use is
required by law or regulation or (2) maintaining securities outside the
depository is not consistent with prevailing custodial practices in the
<PAGE>
country which the Depository serves. Compulsory Depositories used by Chase as
of the date hereof are set forth in Appendix 1-A hereto. Appendix 1-A may be
amended on notice to Customer from time to time. In that connection, Bank
shall notify Customer promptly of pending changes to Appendix 1-A.
(b) In connection with the foregoing, Bank shall:
(i) provide written reports to Customer's Board upon the placement of
Assets with a particular Eligible Foreign Custodian and of any
Material Change (as defined below) in the arrangements with such
Eligible Foreign Custodians, with such reports to be provided to
Customer's Board at such times as the Board deems reasonable and
appropriate based on the circumstances of Customer's foreign custody
arrangements (and until further notice from Customer such reports
shall be provided within 30 days after Bank becomes aware of any such
Material Change. For purposes of the foregoing, a Material Change
shall include, but shall not be limited to, Bank's decision to remove
Customer's Assets from a particular Eligible Foreign Custodian, an
event that has a material adverse affect on an Eligible Foreign
Custodian's financial or operational strength, any non-compliance by
an Eligible Foreign Custodian with a "Material Term" of Bank's
subcustodian agreement with such Eligible Foreign Custodian (as
defined below) or any failure by an Eligible Foreign Custodian to
meet the requirements for its status as such under Rule 17f-5. A
Material Term shall mean a term which provides that (a) the Customer
will be adequately indemnified or its Assets adequately insured, or
an adequate combination thereof, in the event of loss; (b) the Assets
of the Series will not be subject to any right, charge, security
interest, lien or claim of any kind in favor of an Eligible Foreign
Custodian or such Eligible Foreign Custodian's creditors, except a
claim of payment for their safe custody or administration, or in the
case of cash deposits, liens or rights in favor of creditors of the
Eligible Foreign Custodian arising under bankruptcy, insolvency or
similar laws; (c) beneficial ownership for the Assets of the Series
will be freely transferable without the payment of money or value
other than for safe custody or administration of the Assets of the
Series; (d) adequate records will be maintained identifying the
Assets as belonging to the Customer or the Series or as being held by
a third party for the benefit of the Customer or the Series; (e) the
independent auditors for the Customer will be given access to those
records or confirmation of the contents of those records; and (f) the
Customer will receive periodic reports with respect to the
safekeeping of the Series' Assets, including, but not necessarily
limited to, notification of any transfer to or from the Customer's
account or a third party account containing Assets held for the
benefit of the Customer. In addition, in the event that a contract
with an Eligible Foreign Custodian does not include any or all of the
terms described in (a) through (f) of this paragraph 15(b)(i), a
Material Term shall mean a
2
<PAGE>
term which, in the Bank's judgment, if not complied with, would cause
the contract not to provide the same or greater level of care and
protection for Customer's Assets than if the contract contained the
provisions described in (a) through (f) of this paragraph 15(b)(i).
(ii) exercise such reasonable care, prudence and diligence in
performing as Customer's Foreign Custody Manager as a person having
responsibility for the safekeeping of Assets would exercise;
(iii) in selecting an Eligible Foreign Custodian, first have
determined that Assets placed and maintained in the safekeeping of
such Eligible Foreign Custodian shall be subject to reasonable care,
based on the standards applicable to custodians in the relevant
market, after having considered all factors relevant to the
safekeeping of such Assets, including, without limitation, those
factors set forth in Rule 17f-5(c)(1)(i)-(iv);
(iv) determine that the written contract with the Eligible Foreign
Custodian (or, in the case of an Eligible Foreign Custodian that is a
Securities Depository or clearing agency, such contract, the rules or
established practices or procedures of the depository, or any
combination of the foregoing) requires that the Eligible Foreign
Custodian will provide reasonable care for Assets based on the
standards applicable to custodians in the relevant market.
(v) have established a system to monitor the continued
appropriateness of maintaining Assets with particular Eligible
Foreign Custodians based on the standards set forth herein and of the
governing contractual arrangements based on the standards set forth
in Rule 17f-5(c)(2), as it may be amended from time to time.
Subject to (b)(i)-(v) above, Bank is hereby authorized to place and maintain
Assets on behalf of Customer with Eligible Foreign Custodians pursuant to a
written contract which either contains the terms described in Rule
17f-5(c)(2)(i) or which, in lieu of any or all of the terms described in Rule
17f-5(c)(2)(i), contains such other provisions which the Bank determines will
provide in their entirety, the same or a greater level of care and protection
for the Customer's Assets as the provisions of Rule 17f-5(c)(2)(i) in their
entirety. The written contract shall be in such form as deemed appropriate by
Bank. In addition, with respect to Eligible Foreign Custodians that are
non-compulsory Securities Depositories, reliance may be had on such a
contract, the rules or established practices and procedures of such Depository
or any combination thereof.
3
<PAGE>
(c) Except as expressly provided herein, Customer shall be solely
responsible to assure that the maintenance of Assets hereunder complies with
the rules, regulations, interpretations and exemptive orders promulgated by or
under the authority of the SEC which are applicable to Fund's business or
which have been granted to Fund. Bank shall advise Customer of any exemptive
orders which it obtains which may have an impact on Bank's relationship with
Customer.
(d) Bank represents to Customer that it is a U.S. Bank as defined in
Rule 17f-5(a)(7). Customer represents to Bank that: (1) the Assets being
placed and maintained in Bank's custody are subject to the 1940 Act, as the
same may be amended from time to time; (2) its Board has determined that it is
reasonable to rely on Bank to perform as Customer's Foreign Custody Manager.
Nothing contained herein shall require Bank, on Customer's behalf, to make any
selection regarding countries in which Customer invests or to engage in any
monitoring of Customer's decision to invest in any particular country in which
Bank selects , contracts and monitors Eligible Foreign Custodians, as
Customer's Foreign Custody Manager pursuant to the Agreement.
(e) Bank shall provide to Customer such information as is specified
in Appendix 1-B hereto. Customer hereby acknowledges that: (i) such
information is solely designed to inform Customer of market conditions and
procedures, but is not intended to influence Customer's investment decisions;
and (ii) Bank has gathered the information from sources it considers reliable,
but that Bank shall have no responsibility for inaccuracies or incomplete
information except to the extent that Bank was negligent in selecting the
sources of such information.
2. Add the following after the first sentence of Section 3 of the
Agreement:
At the request of Customer, Bank may, but need not, add to Schedule A
an Eligible Foreign Custodian that is either a bank or a
non-Compulsory Depository where Bank has not acted as Foreign Custody
Manager with respect to the selection thereof. Bank shall notify
Customer in the event that it elects not to add any such entity.
3. Add the following language to the end of Section 3 of the
Agreement:
The term Subcustodian as used herein shall mean the following:
4
<PAGE>
(a) a "U.S. Bank," which shall mean a U.S. bank as defined in Rule
17f-5(a)(7); and (b) with respect to Securities for which the primary
market is outside the U.S. an "Eligible Foreign Custodian," shall mean
(i) a banking institution or trust company, incorporated or organized
under the laws of a country other than the United States, that is
regulated as such by that country's government or an agency thereof,
(ii) a majority-owned direct or indirect subsidiary of a U.S. Bank or
bank holding company which subsidiary is incorporated or organized
under the laws of a country other than the United States; (iii) a
Securities Depository or clearing agency (other than a Compulsory
Depository), incorporated or organized under the laws of a country
other than the United States, that acts as a system for the central
handling of securities or equivalent book-entries in that country and
that is regulated by a foreign financial regulatory authority as
defined under section 2(a)(50) of the 1940 Act, (iv) a Securities
Depository or clearing agency organized under the laws of a country
other than the United States that acts as a transnational system
("Transnational Depository") for the central handling of securities or
equivalent book-entries, and (v) any other entity that shall have been
so qualified by exemptive order, rule or other appropriate action of
the SEC.
The term Subcustodian as used in Section 12(a)(i) (except the last
sentence thereof) shall not include any Eligible Foreign Custodians
as to which Bank has not acted as Foreign Custody Manager, any
Compulsory Depository and any Transnational Depository.
4. Add the following after the word "administration" at the end of
Subsection 4(d)(i): "or, in the case of cash deposits, liens or rights in
favor of creditors of Subcustodian arising under bankruptcy, insolvency, or
similar laws".
5. Delete all of Subsection 4(e) after the word "located" in (ii)
thereof and add the word "and" between "Subcustodian" and "(ii)".
*********************
IN WITNESS WHEREOF, the parties have executed this Amendment as of
the date first above written.
Customer THE CHASE MANHATTAN BANK
5
<PAGE>
By: /s/ Michael P. Bishof By: /s/ Rosemary M. Stidmon
------------------------- --------------------------------
Name: Michael P. Bishof Name: Rosemary M. Stidmon
Title: Senior Vice President/ Title: Vice President
Treasurer
Date: Nov. 20, 1997 Date: Nov. 20, 1997
6
<PAGE>
APPENDIX A
Delaware Group Adviser Funds, Inc.
U.S. Growth Fund
Overseas Equity Fund
New Pacific Fund
Delaware Group Equity Funds I, Inc.
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc.
Blue Chip Fund
Quantum Fund
Delaware Group Equity Funds IV, Inc.
DelCap Fund
Capital Appreciation Fund
Delaware Group Equity Funds V, Inc.
Retirement Income Fund
Small Cap Value Fund
Delaware Pooled Trust, Inc.
The International Equity Portfolio
The International Fixed Income Portfolio
The Global Equity Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio
The Labor Select International Equity Portfolio
The Real Estate Investment Trust Portfolio
The Real Estate Investment Trust Portfolio II
The Emerging Markets Portfolio
Delaware Group Global & International Funds, Inc.
Emerging Markets Series
Global Assets Series
Global Bond Series
Global Equity Series
International Equity Series
International Small Cap Series
7
<PAGE>
APPENDIX A CON'T
Delaware Group Premium Fund, Inc.
Convertible Securities Series
Devon Series
Emerging Markets Series
Quantum Series
Strategic Income Series
Global Bond Series
DelCap Series
International Equity Series
Delaware Series
Value Series
Voyageur Mutual Funds III, Inc.
Tax-Efficient Equity Fund
Dated: November 20, 1997
8
<PAGE>
Appendix 1-A
COMPULSORY DEPOSITORIES
<TABLE>
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------------
Argentina Caja de Valores Equity, Corporate & Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Australia Austraclear Ltd. Corporate Debt, Money Market & Semi-Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
CHESS
(Clearing House Electronic Sub-register System) Equity
- --------------------------------------------------------------------------------------------------------------------------------
RITS
(Reserve Bank Information and Transfer System) Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Austria Oesterreichische Kontrolbank AG Equity, Corporate + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Belgium CIK Equity + Corporate Debt
(Caisse Interprofessionnelle de Depots et de
Virements de Titres)
- --------------------------------------------------------------------------------------------------------------------------------
Banque Nationale de Belgique Treasury Bills + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Brazil BOVESPA Equity
(Bolsa de Valores de Sao Paolo)
- --------------------------------------------------------------------------------------------------------------------------------
BVRJ Equity
(Bolsa de Valores de Rio de Janeiro)
- --------------------------------------------------------------------------------------------------------------------------------
Canada CDS Equity, Corporate + Government Debt
(Canadian Depository for Securities)
- --------------------------------------------------------------------------------------------------------------------------------
China, Shanghai SSCCRC Equity
(Shanghai Securities Central Clearing and
Registration Corp.)
- --------------------------------------------------------------------------------------------------------------------------------
China, Shenzhen SSCC Equity
(Shenzhen Securities Registration Co., Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
Czech Republic SCP Equity + Long-Term Government Debt
(Securities Center)
- --------------------------------------------------------------------------------------------------------------------------------
TKD
(Trh Kratkododich Dlluhopisu or Short-Term Treasury Bills + Money Market
Bond Market)
- --------------------------------------------------------------------------------------------------------------------------------
Denmark VP (Vaerdipapircentralen) Equity, Corporate + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Egypt Misr Clearing & Sec. Dep. Equity
- --------------------------------------------------------------------------------------------------------------------------------
Estonia EVK Equity
(Estonian Central Depository for Securities
Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
Euromarket Cedel & Euroclear Euro-Debt
- --------------------------------------------------------------------------------------------------------------------------------
Finland CSR Equity + Government Debt
(Central Share Registry Finland)
- --------------------------------------------------------------------------------------------------------------------------------
Helsinki Money Market Center Ltd. Money Market
- --------------------------------------------------------------------------------------------------------------------------------
France SICOVAM Equity + Corporate Debt.
(Banque de France)
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------------------------------------------------------
France SATURNE Government Debt.
(Banque de France)
- -------------------------------------------------------------------------------------------------------------------------------
Germany DKV Equity, Corporate + Government Debt
(Deutscher Kassenverein)
- --------------------------------------------------------------------------------------------------------------------------------
Greece Apothetirio Titlon A.E. Equity
- --------------------------------------------------------------------------------------------------------------------------------
Bank of Greece Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Hong Kong CCASS Equity
(Central Clearing and Settlement System)
- --------------------------------------------------------------------------------------------------------------------------------
CMU Corporate + Government Debt
(Central Moneymarkets Unit)
- --------------------------------------------------------------------------------------------------------------------------------
Hungary Keler Ltd. Equity + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Ireland CREST Equity
- --------------------------------------------------------------------------------------------------------------------------------
GSO Government Debt
(Gilt Settlement Office)
- --------------------------------------------------------------------------------------------------------------------------------
Israel TASE Clearing House Equity, Corporate + Government Debt
(Tel Aviv Stock Exchange Clearing House)
- --------------------------------------------------------------------------------------------------------------------------------
Italy Monte Titoli Equity + Corporate Debt
- --------------------------------------------------------------------------------------------------------------------------------
Bank of Italy Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Japan Bank of Japan Registered Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Latvia LCD Equity + Government Debt
(Latvian Central Depository)
- --------------------------------------------------------------------------------------------------------------------------------
Lebanon Midclear Equity
(Custodian and Clearing Center of Lebanon and
the Middle East)
- --------------------------------------------------------------------------------------------------------------------------------
Luxembourg Cedel Equity
- --------------------------------------------------------------------------------------------------------------------------------
Malaysia MCD Equity
(Malaysian Central Depository Snd Bhd)
- --------------------------------------------------------------------------------------------------------------------------------
Mauritius CDS Equity
(Central Depository System)
- --------------------------------------------------------------------------------------------------------------------------------
Mexico Indeval Equity, Corporate + Government Debt.
(Institucion para el Deposito de Valores)
- --------------------------------------------------------------------------------------------------------------------------------
Morocco Maroclear Equity + Corporate Debt
- --------------------------------------------------------------------------------------------------------------------------------
Bank Al'Maghrib Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Netherlands NECIGEF/KAS Associate NV Equity, Corp. + Govt. D
- --------------------------------------------------------------------------------------------------------------------------------
De Nederlandsche Bank N.V. Money Market
- --------------------------------------------------------------------------------------------------------------------------------
Netherlands NIEC Premium Bonds
(Nederlands Interpforessioneel Effectencentrum
B.V.)
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------------------------------------------------------
New Zealand Austraclear New Zealand Equity, Corporate + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Norway VPS Equity, Corporate + Government Debt
(Verdipapirsentralen)
- --------------------------------------------------------------------------------------------------------------------------------
Oman NONE
- --------------------------------------------------------------------------------------------------------------------------------
Pakistan CDC Equity
(Central Depository Company of Pakistan Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
Peru CAVALI Equity
(Caja de Valores)
- --------------------------------------------------------------------------------------------------------------------------------
Philippines PCD Equity
(Philippine Central Depository)
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------------------------------------------------------
Poland NDS Equity, Long-Term Government Debt + Vouchers
(National Securities Depository)
- --------------------------------------------------------------------------------------------------------------------------------
CRT Treasury-Bills
(Central Registry of Treasury-Bills)
- --------------------------------------------------------------------------------------------------------------------------------
Portugal Interbolsa Equity, Corporate + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Romania SNCDD - RASDAQ Equity
(National Company for Clearing, Settlement and
Depository for Securities)
- --------------------------------------------------------------------------------------------------------------------------------
Budapest Stock Exchange Registry Equity
- --------------------------------------------------------------------------------------------------------------------------------
National Bank of Romania Treasury-Bills
- --------------------------------------------------------------------------------------------------------------------------------
Russia MICEX GKO's
(Moscow Interbank Currency Exchange) (Gosudarstvennye Kratkosrochnye Obyazatelstva
[T-Bills])
OFZ's
(Obligatsyi Federalnogo Zaima [Federal Loan Bonds])s
- --------------------------------------------------------------------------------------------------------------------------------
Singapore CDP Equity + Corporate Debt and Malaysian equities
(Central Depository Pte. Ltd.) traded on CLOB
- --------------------------------------------------------------------------------------------------------------------------------
Monetary Authority of Singapore Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
Slovak Republic SCP Equity + Government Debt
(Stredisko Cennych Papiru)
- --------------------------------------------------------------------------------------------------------------------------------
National Bank of Slovakia Treasury-Bills
- --------------------------------------------------------------------------------------------------------------------------------
So. Africa CD Corporate + Government Debt
(Central Depository)
- --------------------------------------------------------------------------------------------------------------------------------
So. Korea KSD Equity, Corporate + Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
- --------------------------------------------------------------------------------------------------------------------------------
Spain SCLV Equity + Corporate Debt.
(Servicio de Compensacion y Liquidacion de
Valores)
- --------------------------------------------------------------------------------------------------------------------------------
CBEO Government Debt
(Central Book Entry Office)
- --------------------------------------------------------------------------------------------------------------------------------
Sri Lanka CDS Equity
(Central Depository System (Private) Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
<PAGE>
- --------------------------------------------------------------------------------------------------------------------------------
Sweden VPC Equity, Corporate + Government Debt
(Vardepapperscentralen AB)
- --------------------------------------------------------------------------------------------------------------------------------
Switzerland SEGA Equity, Corporate + Government Debt
(Schweizerische Effekten-Giro AG)
- --------------------------------------------------------------------------------------------------------------------------------
Taiwan TSCD Equity + Government Debt
(Taiwan Securities Central Depository Co.,
Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
Thailand TSDC Equity, Corporate + Government Debt
(Thailand Securities Depository Company Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
Tunisia STICODEVAM Equity
(Societe Tunisienne Interprofessionnelle pour
la Compensation et le Depot des Valeurs
Mobilieres)
- --------------------------------------------------------------------------------------------------------------------------------
Ministry of Finance Government Debt tradable on the stock exchange
(BTNBs)
- --------------------------------------------------------------------------------------------------------------------------------
Central Bank of Tunisia Government Debt not tradable on the stock exchange
(BTCs)
- --------------------------------------------------------------------------------------------------------------------------------
Turkey Takas Bank Equity + Corporate Debt
- --------------------------------------------------------------------------------------------------------------------------------
Central Bank of Turkey Government Debt
- --------------------------------------------------------------------------------------------------------------------------------
United Kingdom CREST Equity + Corp. Debt
- --------------------------------------------------------------------------------------------------------------------------------
CMO Sterling CDs & CP
(Central Moneymarket Office)
- --------------------------------------------------------------------------------------------------------------------------------
CGO Gilts
(Central Gilts Office)
- --------------------------------------------------------------------------------------------------------------------------------
United States DTC
(Depository Trust Company)
- --------------------------------------------------------------------------------------------------------------------------------
PTC Mortgage Back Debt
(Participants Trust Company)
- --------------------------------------------------------------------------------------------------------------------------------
Fed Book-Entry Government Debt.
- --------------------------------------------------------------------------------------------------------------------------------
Zambia LuSE Equity + Government Debt
(LuSE Central Shares Depository Ltd.)
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Appendix 1-B
Information Regarding Country Risk
1. To aid Customer's board in its determinations regarding Country
Risk, Bank shall furnish board annually and upon the initial placing of Assets
into a country the following information (check items applicable):
A Opinions of local counsel concerning:
___ i. Whether applicable foreign law would restrict the access afforded
Customer's independent public accountants to books and records
kept by an eligible foreign custodian located in that country.
___ ii. Whether applicable foreign law would restrict the Customer's
ability to recover its assets in the event of the bankruptcy of
an Eligible Foreign Custodian located in that country.
___ iii. Whether applicable foreign law would restrict the Customer's
ability to recover assets that are lost while under the control
of an Eligible Foreign Custodian located in the country.
B. Written information concerning:
___ i. The likelihood of expropriation, nationalization, freezes, or
confiscation of Customer's assets.
___ ii. Whether difficulties in converting Customer's cash and cash
equivalents to U.S. dollars are reasonably foreseeable.]
C. A market report with respect to the following topics:
(i) securities regulatory environment, (ii) foreign ownership
restrictions, (iii) foreign exchange, (iv) securities settlement
and registration, (v) taxation, and (vi) compulsory depositories
(including depository evaluation).
2. To aid Customer's board in monitoring Country Risk, Bank shall
furnish board the following additional information:
Market flashes, including with respect to changes in the information
in market reports.
<PAGE>
EX-99.B9FI
Exhibit 24(b)(9)(f)(i)
AMENDMENT NO. 4A
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
- --------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
1
<PAGE>
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Decatur Total Return Series
Delaware Series
Delchester Series
DelCap Series
Global Bond Series (New)
International Equity Series
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
2
<PAGE>
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
DMC Tax-Free Income Trust - Pennsylvania (doing business as Tax-Free
Pennsylvania Fund)
Dated as of: April 14, 1997
3
<PAGE>
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
--------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
By: /s/ Wayne A. Stork
--------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
DELAWARE POOLED TRUST, INC.
By: /s/ Wayne A. Stork
-------------------
Wayne A. Stork
President and
Chief Executive Officer
4
<PAGE>
EX-99.B9FII
Exhibit 24(b)(9)(f)(ii)
AMENDMENT NO. 5
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
1
<PAGE>
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
2
<PAGE>
Delaware Group Trend Fund, Inc.
DMC Tax-Free Income Trust-Pennsylvania (doing business as Tax-Free
Pennsylvania Fund)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
Dated as of May 1, 1997
4
<PAGE>
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
-------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
5
<PAGE>
EX-99.B9FIII
Exhibit 24(b)(9)(f)(iii)
AMENDMENT NO. 6
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
1
<PAGE>
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio
(New) The Real Estate Investment Trust Portfolio
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Tax-Free Pennsylvania Fund
2
<PAGE>
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group Trend Fund, Inc.
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
3
<PAGE>
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
Dated as of July 21, 1997
4
<PAGE>
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
--------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
--------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer
5
<PAGE>
EX-99.B9FIV
Exhibit 24(b)(9)(f)(iv)
AMENDMENT NO.7
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
1
<PAGE>
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New) The Fixed Income Portfolio The
Global Fixed Income Portfolio The High-Yield Bond Portfolio (New) The
International Equity Portfolio The International Fixed Income
Portfolio (New) The Labor Select International Equity Portfolio The
Limited-Term Maturity Portfolio (New) The Real Estate Investment
Trust Portfolio The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New) Florida Insured Tax Free Fund
(New) Florida Tax Free Fund (New) Kansas Tax Free Fund (New) Missouri
Insured Tax Free Fund (New) New Mexico Tax Free Fund (New) Oregon
Insured Tax Free Fund (New) Utah Tax Free Fund (New) Washington
Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of October 14, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/ David K. Downes
-------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/ Wayne A. Stork
-------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B9FV
Exhibit 24(b)(9)(f)(v)
AMENDMENT NO. 8
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT
Delaware Group Adviser Funds, Inc.
Corporate Income Fund (liquidated September 19, 1997)
Enterprise Fund (liquidated September 19, 1997)
Federal Bond Fund (liquidated September 19, 1997)
New Pacific Fund
U.S. Growth Fund
Overseas Equity Fund (formerly World Growth Fund)
Delaware Group Cash Reserve, Inc.
Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund
Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)
Delaware Group Equity Funds III, Inc. (formerly Trend)
Trend Fund
Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund
Delaware Group Equity Funds V, Inc. (formerly Value)
Small Cap Value Fund (formerly Value Fund)
Retirement Income Fund (New)
- ------------------
*Except as otherwise noted, all Portfolios included on this Schedule
A are Existing Portfolios for purposes of the compensation described on
Schedule B to that Fund Accounting Agreement between Delaware Service Company,
Inc. and the Delaware Group of Funds dated as of August 19, 1996
("Agreement"). All portfolios added to this Schedule A by amendment executed
by a Company on behalf of such Portfolio hereof shall be a New Portfolio for
purposes of Schedule B to the Agreement.
1
<PAGE>
Delaware Group Foundation Funds (New)
Balanced Portfolio (New)
Growth Portfolio (New)
Income Portfolio (New)
Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)
Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)
Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund
Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Large-Cap Value Equity Portfolio
(formerly The Defensive Equity Portfolio)
The Small/Mid-Cap Value Equity Portfolio (New)
(formerly The Defensive Equity Small/Mid-Cap Portfolio)
The Defensive Equity Utility Portfolio (deregistered January 14, 1997)
The Emerging Markets Portfolio (New)
The Intermediate Fixed Income Portfolio
(formerly The Fixed Income Portfolio)
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio
The Global Equity Portfolio (New)
The Real Estate Investment Trust Portfolio II (New)
The Diversified Core Fixed Income Portfolio (New)
The Aggregate Fixed Income Portfolio (New)
2
<PAGE>
Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series
Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Delaware Group Tax-Free Money Fund, Inc.
Delaware Group State Tax-Free Income Trust (formerly DMCT Tax-Free Income
Trust-Pennsylvania)
Tax-Free Pennsylvania Fund
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)
Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)
Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)
3
<PAGE>
Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)
Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)
Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)
Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)
Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)
Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)
4
<PAGE>
Dated as of December 18, 1997
DELAWARE SERVICE COMPANY, INC.
By: /s/David K. Downes
-------------------------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS III, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP FOUNDATION FUNDS
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP STATE TAX-FREE INCOME TRUST
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
By: /s/Wayne A. Stork
-------------------------------------------------------------
Wayne A. Stork
Chairman
5
<PAGE>
EX-99.B11
Exhibit 24(b)(11)
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 18 to the Registration Statement (Form N-1A) (No.
33-41034) of Delaware Group Global & International Funds, Inc. of our reports
dated January 5, 1998, included in the 1997 Annual Reports to shareholders.
/s/ Ernst & Young LLP
-----------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
February 2, 1998
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Global & International Funds, Inc.
We have audited the accompanying statements of net assets of Delaware Group
Global & International Funds, Inc. (International Equity Series, Global Assets
Series, Global Bond Series, and Emerging Markets Series) as of November 30,
1997, the related statements of operations for the year then ended, and the
statements of changes in net assets and the financial highlights for each of the
periods indicated therein. These financial statements and financial highlights
are the responsibility of the Fund's management. Our responsibility is to
express an opinion on these financial statements and financial highlights based
on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of November 30, 1997, by correspondence with the custodian
and brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audits provide a
reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of each
of the respective series of Delaware Group Global & International Funds, Inc. at
November 30, 1997, the results of their operations for the year then ended, and
the changes in their net assets and their financial highlights for each of the
periods indicated therein, in conformity with generally accepted accounting
principles.
/s/ Ernst & Young LLP
---------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
January 5, 1998
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Directors
Delaware Group Global & International Funds, Inc. - Global Equity Series
We have audited the accompanying statement of net assets of Delaware Group
Global & International Funds, Inc. Global Equity Series as of November 30, 1997,
and the related statement of operations, the statement of changes in net assets,
and the financial highlights for the period July 22, 1997 (commencement of
operations) to November 30, 1997. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.
We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of November 30, 1997, by correspondence with the custodian and brokers. An
audit also includes assessing the accounting principles used and significant
estimates made by management, as well as evaluating the overall financial
statement presentation. We believe that our audit provides a reasonable basis
for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Global & International Funds, Inc. - Global Equity Series at
November 30, 1997, and the results of its operations, the changes in its net
assets, and the financial highlights for the period July 22, 1997 (commencement
of operations) to November 30, 1997, in conformity with generally accepted
accounting principles.
/s/ Ernst & Young LLP
---------------------------
Ernst & Young LLP
Philadelphia, Pennsylvania
January 5, 1998
<PAGE>
EX-99.B15J
Exhibit 24(b)(15)(j)
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INTERNATIONAL SMALL CAP FUND A CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule l2b-l under the Investment Company Act of l940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the International
Small Cap Series (the "Series") on behalf of the International Small Cap Fund A
Class ("Class"), which Fund, Series and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
The Plan has been adopted prior to any public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. ("Delaware International") serves as the Series'
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the Series' shareholder servicing,
dividend disbursing and transfer agent. Delaware Distributors, L.P. (the
"Distributor") is the principal underwriter and national distributor for the
Series' shares, including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the Fund on behalf of the Series
("Distribution Agreement").
The Plan provides that:
l. The Fund shall pay to the Distributor a monthly fee not to exceed
0.30% (3/10 of l%) per annum of the Series' average daily net assets represented
by shares of the Class (the "Maximum Amount") as may be determined by the Fund's
Board of Directors from time to time. Such monthly fee shall be reduced by the
aggregate sums paid by the Fund on behalf of the Series to persons other than
<PAGE>
broker-dealers (the "Service Providers") who may, pursuant to servicing
agreements, provide to the Series services in the Series' marketing of shares of
the Class.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph l above to furnish, or cause or encourage others to furnish, services
and incentives in connection with the promotion, offering and sale of Class
shares and, where suitable and appropriate, the retention of Class shares by
shareholders.
(b) The Service Providers shall use the monies paid respectively to
them to reimburse themselves for the actual costs they have incurred in
confirming that their customers have received the Prospectus and Statement of
Additional Information, if applicable, and as a fee for (l) assisting such
customers in maintaining proper records with the Fund, (2)answering questions
relating to their respective accounts, and (3) aiding in maintaining the
investment of their respective customers in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under the Plan. The Service
Providers shall inform the Fund monthly and in writing of the amounts each
claims under the Plan; both the Distributor and the Service Providers shall
furnish the Board of Directors of the Fund with such other information as the
Board may reasonably request in connection with the payments made under the Plan
and the use thereof by the Distributor and the Service Providers, respectively,
in order to enable the Board to make an informed determination of the amount of
the Fund's payments and whether the Plan should be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund in writing of the commencement of the Plan (the "Commencement
Date"); thereafter, the Plan shall continue in effect for a period of more than
one year from the Commencement Date only so long as such continuance is
specifically approved at least annually by a vote of the Board of Directors of
the Fund, and of the non-interested Directors, cast in person at a meeting
called for the purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph l hereof without approval by the
shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the
<PAGE>
meaning of "interested person(s)" and "vote of a majority of the outstanding
voting securities," respectively, for the purposes of this Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
July 21, 1997
<PAGE>
EX-99.B15K
Exhibit 24(b)(15)(k)
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INTERNATIONAL SMALL CAP FUND B CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the International
Small Cap Series (the "Series") on behalf of the International Small Cap Fund B
Class (the "Class"), which Fund, Series and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
The Plan has been adopted prior to any public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. ("Delaware International") serves as the Series'
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the Series' shareholder servicing,
dividend disbursing and transfer agent. Delaware Distributors, L.P. (the
"Distributor") is the principal underwriter and national distributor for the
Series' shares, including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the Fund on behalf of the Series
("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in (a) above, the Fund
shall pay (i) to the Distributor for payment to dealers or others, or (ii)
directly to others, an amount not to exceed 0.25%
<PAGE>
(1/4 of 1%) per annum of the Series' average daily net assets represented by
shares of the Class, as a service fee pursuant to dealer or servicing
agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall
be used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective
customers in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the non-interested Directors, cast in person at a meeting called for the
purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the
amount to be spent for distribution pursuant to paragraph 1 hereof without
approval by the shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
<PAGE>
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
July 21, 1997
<PAGE>
EX-99.B15L
Exhibit 24(b)(15)(l)
DISTRIBUTION PLAN
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
INTERNATIONAL SMALL CAP SERIES
INTERNATIONAL SMALL CAP FUND C CLASS
The following Distribution Plan (the "Plan") has been adopted pursuant
to Rule 12b-1 under the Investment Company Act of 1940 (the "Act") by Delaware
Group Global & International Funds, Inc. (the "Fund"), for the International
Small Cap Series (the "Series) on behalf of the International Small Cap Fund C
Class (the "Class"), which Fund, Series and Class may do business under these or
such other names as the Board of Directors of the Fund may designate from time
to time. The Plan has been approved by a majority of the Board of Directors,
including a majority of the Directors who are not interested persons of the Fund
and who have no direct or indirect financial interest in the operation of the
Plan or in any agreements related thereto ("non-interested Directors"), cast in
person at a meeting called for the purpose of voting on such Plan. Such approval
by the Directors included a determination that in the exercise of reasonable
business judgment and in light of their fiduciary duties, there is a reasonable
likelihood that the Plan will benefit the Series and shareholders of the Class.
The Plan has been adopted prior to any public offering of the Class.
The Fund is a corporation organized under the laws of the State of
Maryland, is authorized to issue different series and classes of securities and
is an open-end management investment company registered under the Act. Delaware
International Advisers Ltd. ("Delaware International") serves as the Series'
investment adviser and manager pursuant to an Investment Management Agreement.
Delaware Service Company, Inc. serves as the Series' shareholder servicing,
dividend disbursing and transfer agent. Delaware Distributors, L.P. (the
"Distributor") is the principal underwriter and national distributor for the
Series' shares, including shares of the Class, pursuant to the Distribution
Agreement between the Distributor and the Fund on behalf of the Series
("Distribution Agreement").
The Plan provides that:
1. (a) The Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% (3/4 of 1%) per annum of the Series' average daily net assets
represented by shares of the Class as may be determined by the Fund's Board of
Directors from time to time.
(b) In addition to the amounts described in paragraph 1(a) above,
the Fund shall pay:
<PAGE>
(i) to the Distributor for payment to dealers or others or (ii) directly to
others, an amount not to exceed 0.25% (1/4 of 1%) per annum of the Series'
average daily net assets represented by shares of the Class, as a service fee
pursuant to dealer or servicing agreements.
2. (a) The Distributor shall use the monies paid to it pursuant to
paragraph 1(a) above to assist in the distribution and promotion of shares of
the Class. Payments made to the Distributor under the Plan may be used for,
among other things, preparation and distribution of advertisements, sales
literature and prospectuses and reports used for sales purposes, as well as
compensation related to sales and marketing personnel, and holding special
promotions. In addition, such fees may be used to pay for advancing the
commission costs to dealers with respect to the sale of Class shares.
(b) The monies to be paid pursuant to paragraph 1(b) above shall be
used to pay dealers or others for, among other things, furnishing personal
services and maintaining shareholder accounts, which services include confirming
that customers have received the Prospectus and Statement of Additional
Information, if applicable; assisting such customers in maintaining proper
records with the Fund; answering questions relating to their respective
accounts; and aiding in maintaining the investment of their respective customers
in the Class.
3. The Distributor shall report to the Fund at least monthly on the
amount and the use of the monies paid to it under paragraph 1(a) above. In
addition, the Distributor and others shall inform the Fund monthly and in
writing of the amounts paid under paragraph 1(b) above; both the Distributor and
any others receiving fees under the Plan shall furnish the Board of Directors of
the Fund with such other information as the Board may reasonably request in
connection with the payments made under the Plan and the use thereof by the
Distributor and others in order to enable the Board to make an informed
determination of the amount of the Fund's payments and whether the Plan should
be continued.
4. The officers of the Fund shall furnish to the Board of Directors of
the Fund, for their review, on a quarterly basis, a written report of the
amounts expended under the Plan and the purposes for which such expenditures
were made.
5. This Plan shall take effect at such time as the Distributor shall
notify the Fund of the commencement of the Plan (the "Commencement Date");
thereafter, the Plan shall continue in effect for a period of more than one year
from the Commencement Date only so long as such continuance is specifically
approved at least annually by a vote of the Board of Directors of the Fund, and
of the non-interested Directors, cast in person at a meeting called for the
purpose of voting on such Plan.
6. (a) The Plan may be terminated at any time by vote of a majority of
the non-interested Directors or by vote of a majority of the outstanding voting
securities of the Class.
(b) The Plan may not be amended to increase materially the amount to
be spent for distribution pursuant to paragraph 1 hereof without approval by the
shareholders of the Class.
7. All material amendments to this Plan shall be approved by the
non-interested Directors in the manner described in paragraph 5 above.
8. So long as the Plan is in effect, the selection and nomination of
the Fund's non-interested Directors shall be committed to the discretion of such
non-interested Directors.
<PAGE>
9. The definitions contained in Sections 2(a)(19) and 2(a)(42) of the
Act shall govern the meaning of "interested person(s)" and "vote of a majority
of the outstanding voting securities," respectively, for the purposes of this
Plan.
This Plan shall take effect on the Commencement Date, as previously
defined.
July 21, 1997
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B (INCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
THREE
YEARS
- ----------------
3
$10000(1-T) = $1,329.53
T= 9.96%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B (EXCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(l + T) = ERV
THREE
YEARS
-------
3
$1000(1 - T) = $1,359.53
T= 10.78%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.90
Initial Shares 84.034
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1994 84.034 $0.555 4.109 88.143
- -------------------------------------------------------------------------------
1995 88.143 $0.345 2.509 90.652
- -------------------------------------------------------------------------------
1996 90.652 $0.360 2.361 93.013
- -------------------------------------------------------------------------------
1997 93.013 $0.060 0.361 93.374
- -------------------------------------------------------------------------------
Ending Shares 93.374
Ending NAV x $14.56
---------------
$1,359.53
LESS CDSC $30.00
---------------
INVESTMENT RETURN $1,329.53
Total Return Performance
- -------------------------
Investment Return $1,329.53
Less Initial Investment $1,000.00
--------------
$329.53 / $1,000.00 x 100
Total Return: 32.95%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND B
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.90
Initial Shares 84.034
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1994 84.034 $0.555 4.109 88.143
- -------------------------------------------------------------------------------
1995 88.143 $0.345 2.509 90.652
- -------------------------------------------------------------------------------
1996 90.652 $0.360 2.361 93.013
- -------------------------------------------------------------------------------
1997 93.013 $0.060 0.361 93.374
- -------------------------------------------------------------------------------
Ending Shares 93.374
Ending NAV x $14.56
--------------
INVESTMENT RETURN $1,359.53
Total Return Performance
- --------------------------
Investment Return $1,359.53
Less Initial Investment $1,000.00
--------------
$359.53 / $1,000.00 x 100
Total Return: 35.95%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND C
TOTAL RETURN PERFORMANCE
LIFE OF FUND (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $12.24
Initial Shares 81.699
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 81.699 $0.365 2.436 84.135
- -------------------------------------------------------------------------------
1996 84.135 $0.360 2.193 86.328
- -------------------------------------------------------------------------------
1997 86.328 $0.060 0.336 86.664
- -------------------------------------------------------------------------------
Ending Shares 86.664
Ending NAV x $14.54
--------------
$1,260.09
LESS CDSC $0.00
INVESTMENT RETURN $1,260.09
Total Return Performance
- -------------------------
Investment Return $1,260.09
Less Initial Investment $1,000.00
-------------
$260.09 / $ 1,000.00 x 100
Total Return: 26.01%
<PAGE>
DELAWARE GROUP INTERNATIONAL EQUITY FUND C
TOTAL RETURN PERFORMANCE
THREE YEARS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $12.24
Initial Shares 81.699
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 81.699 $0.365 2.436 84.135
1996 84.135 $0.360 2.193 86.328
1997 86.328 $0.060 0.336 86.664
Ending Shares 86.664
Ending NAV x $14.54
------------
INVESTMENT RETURN $1,260.09
Total Return Performance
- -------------------------
Investment Return $1,260.09
Less Initial Investment $1,000.00
------------
$260.09 / $1,000.00 x 100
Total Return: 26.01%
<PAGE>
DELAWARE GROUP GLOBAL BOND C (INCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
LIFE
OF FUND
- -----------
2.00547945
$1000(l - T)= $1,137.01
T= 6.61%
<PAGE>
DELAWARE GROUP GLOBAL BOND C (EXCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
LIFE
OF FUND
- ------------
2.00547945
$1000(l - T)= $1,137.01
T= 6.61%
<PAGE>
DELAWARE GROUP GLOBAL BOND C
TOTAL RETURN PERFORMANCE
LIFE OF FUND (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.33
Initial Shares 88.261
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 88.261 $0.659 5.401 93.662
- -------------------------------------------------------------------------------
1996 93.662 $0.784 6.939 100.601
- -------------------------------------------------------------------------------
1997 100.601 $0.549 5.266 105.867
- -------------------------------------------------------------------------------
Ending Shares 105.867
Ending NAV x $10.74
--------------
$1,137.01
LESS CDSC $0.00
--------------
INVESTMENT RETURN $1,137.01
Total Return Performance
- ------------------------
Investment Return $1,137.01
Less Initial Investment $1,000.00
--------------
$137.01 / $1,000.00 x 100
Total Return: 13.70%
<PAGE>
DELAWARE GROUP GLOBAL BOND C
TOTAL RETURN PERFORMANCE
LIFE OF FUND (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.33
Initial Shares 88.261
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 88.261 $0.659 5.401 93.662
- -------------------------------------------------------------------------------
1996 93.662 $0.784 6.939 100.601
- -------------------------------------------------------------------------------
1997 100.601 $0.549 5.266 105.867
- -------------------------------------------------------------------------------
Ending Shares 105.867
Ending NAV x $10.74
------------
INVESTMENT RETURN $1,137.01
Total Return Performance
- -------------------------
Investment Return $1,137.01
Less Initial Investment $1,000.00
-------------
$137.01 / $1,000.00 x 100
Total Return: 13.70%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS C (INCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
LIFE
OF FUND
- ----------
2.00547945
$10000 (- T) = $1,276.03
T= 12.92%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS C (EXCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- ------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
LIFE
OF FUND
- -----------
2.00547945
$10000 (1 - T) = $1,276.03
T= 12.92%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS C
TOTAL RETURN PERFORMANCE
LIFE OF FUND (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.94
Initial Shares 83.752
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 83.752 $0.440 3.144 86.896
- -------------------------------------------------------------------------------
1996 86.896 $0.450 3.132 90.028
- -------------------------------------------------------------------------------
1997 90.028 $0.180 1.182 91.210
- -------------------------------------------------------------------------------
Ending Shares 91.210
Ending NAV x $13.99
---------------
$1,276.03
LESS CDSC $0.00
---------------
INVESTMENT RETURN $1,276.03
Total Return Performance
- ---------------------------
Investment Return $1,276.03
Less Initial Investment $1,000.00
--------------
$276.03 / $1,000.00 x 100
Total Return: 27.60%
<PAGE>
DELAWARE GROUP GLOBAL ASSETS C
TOTAL RETURN PERFORMANCE
LIFE OF FUND (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.94
Initial Shares 83.752
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1995 83.752 $0.440 3.144 86.896
- -------------------------------------------------------------------------------
1996 86.896 $0.450 3.132 90.028
- -------------------------------------------------------------------------------
1997 90.028 $0.180 1.182 91.210
- -------------------------------------------------------------------------------
Ending Shares 91.210
Ending NAV x $13.99
-----------
INVESTMENT RETURN $1,276.03
Total Return Performance
- --------------------------
Investment Return $1,276.03
Less Initial Investment $1,000.00
-----------
$276.03 / $1,000.00 x 100
Total Return: 27.60%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A (NAV)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
----------
1
$1000(1 - T) = $1,031.86
T = 3.19%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A (OFFER)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
--------
1
$1000(l - T) = $982.59
T = -1.74%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A
TOTAL RETURN PERFORMANCE
ONE YEAR (NAV)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.97
Initial Shares 100.301
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 100.301 $0.085 0.862 101.163
- -------------------------------------------------------------------------------
1997 101.163 $0.000 0.000 101.163
- -------------------------------------------------------------------------------
Ending Shares 101.163
Ending NAV x $10.20
---------------
INVESTMENT RETURN $1,031.86
Total Return Performance
- ------------------------
Investment Return $1,031.86
Less Initial Investment $1,000.00
---------------
$31.86 / $1,000.00 x 100
Total Return: 3.19%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A
TOTAL RETURN PERFORMANCE
ONE YEAR (OFFER)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $10.47
Initial Shares 95.511
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 95.511 $0.085 0.821 96.332
- -------------------------------------------------------------------------------
1997 96.332 $0.000 0.000 96.332
- -------------------------------------------------------------------------------
Ending Shares 96.332
Ending NAV x $10.20
------------
INVESTMENT RETURN $982.59
Total Return Performance
- -------------------------
Investment Return $982.59
Less Initial Investment $1,000.00
-----------
($17.41) / $ 1,000.00 x 100
Total Return: -1.74%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A
TOTAL RETURN PERFORMANCE
SIX MONTHS (NAV)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $12.00
Initial Shares 83.333
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.333 $0.000 0.000 83.333
- -------------------------------------------------------------------------------
Ending Shares 83.333
Ending NAV x $10.20
--------------
INVESTMENT RETURN $850.00
Total Return Performance
- ------------------------
Investment Return $850.00
Less Initial Investment $1,000.00
--------------
($150.00) / $1,000.00 x 100
Total Return: -15.00%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A
TOTAL RETURN PERFORMANCE
SIX MONTHS (OFFER)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $12.60
Initial Shares 79.365
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 79.365 $0.365 0.000 79.365
- -------------------------------------------------------------------------------
Ending Shares 79.365
Ending NAV x $10.20
------------
INVESTMENT RETURN $809.52
Total Return Performance
- -------------------------
Investment Return $809.52
Less Initial Investment $1,000.00
------------
($190.48) / $1,000.00 x 100
Total Return: -19.05%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A
TOTAL RETURN PERFORMANCE
NINE MONTHS (NAV)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.46
Initial Shares 87.260
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 87.260 $0.000 0.000 87.260
- -------------------------------------------------------------------------------
Ending ShareS 87.260
Ending NAV x $10.20
------------
INVESTMENT RETURN $890.05
Total Return Performance
- ----------
Investment Return $890.05
Less Initial Investment $1,000.00
------------
($109.95) / $1,000.00 x 100
Total Return: -11.00%
<PAGE>
DELAWARE GROUP EMERGING MARKETS A
TOTAL RETURN PERFORMANCE
NINE MONTHS (OFFER)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $12.03
Initial Shares 83.126
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.126 $0.000 0.000 83.126
- -------------------------------------------------------------------------------
Ending Shares 83.126
Ending NAV x $10.20
------------
INVESTMENT RETURN $847.89
Total Return Performance
- -------------------------
Investment Return $847.89
Less Initial Investment $1,000.00
------------
($152.11) / $1,000.00 x 100
Total Return: -15.21%
<PAGE>
DELAWARE GROUP EMERGING MARKETS INSTITUTIONAL
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
--------
1
$1000(1 - T) = $1,036.39
T = 3.64%
<PAGE>
DELAWARE GROUP EMERGING MARKETS INSTITUTIONAL
TOTAL RETURN PERFORMANCE
ONE YEAR
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.99
Initial Shares 100.100
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 100.100 $0.100 1.011 101.111
- -------------------------------------------------------------------------------
1997 101.111 $0.000 0.000 101.111
- -------------------------------------------------------------------------------
Ending Shares 101.111
Ending NAV x $10.25
--------------
INVESTMENT RETURN $1,036.39
Total Return Performance
- ------------------------
Investment Return $1,036.39
Less Initial Investment $1,000.00
------------
$36.39 / $1,000.00 x 100
Total Return: 3.64%
<PAGE>
DELAWARE GROUP EMERGING MARKETS INSTITUTIONAL
TOTAL RETURN PERFORMANCE
SIX MONTHS
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $12.04
Initial Shares 83.056
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.056 $0.000 0.000 83.056
- -------------------------------------------------------------------------------
Ending Shares 83.056
Ending NAV x $10.25
-------------
INVESTMENT RETURN $851.32
Total Return Performance
- ------------------------
Investment Return $851.32
Less Initial Investment $1,000.00
-------------
($148.68) / $1,000.00 x 100
Total Return: -14.87%
<PAGE>
DELAWARE GROUP EMERGING MARKETS INSTITUTIONAL
TOTAL RETURN PERFORMANCE
NINE MONTHS
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.48
Initial Shares 87.108
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 87.108 $0.000 0.000 87.108
- -------------------------------------------------------------------------------
Ending Shares 87.108
Ending NAV x $10.25
------------
INVESTMENT RETURN $892.86
Total Return Performance
- -------------------------
Investment Return $892.86
Less Initial Investment $1,000.00
------------
($107.14) / $1,000.00 x 100
Total Return: -10.71%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B (INCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
-------
1
$1000(l - T) = $984.83
T = -1.52%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B (EXCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P (1 + T) = ERV
ONE
YEAR
------
1
$1000(1-T) = $1,024.83
T = 2.48%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B
TOTAL RETURN PERFORMANCE
ONE YEAR (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.94
Initial Shares 100.604
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 100.604 $0.075 0.764 101.368
- -------------------------------------------------------------------------------
1997 101.368 $0.000 0.000 101.368
- -------------------------------------------------------------------------------
Ending Shares 101.368
Ending NAV x $10.11
--------------
$1,024.83
LESS CDSC $40.00
--------------
INVESTMENT RETURN $984.83
Total Return Performance
- ------------------------
Investment Return $984.83
Less Initial Investment $1,000.00
--------------
($15.17) / $1,000.00 x 100
Total Return: -1.52%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B
TOTAL RETURN PERFORMANCE
ONE YEAR (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.94
Initial Shares 100.604
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 100.604 $0.075 0.764 101.368
- -------------------------------------------------------------------------------
1997 101.368 $0.000 0.000 101.368
- -------------------------------------------------------------------------------
Ending Shares 101.368
Ending NAV x $10.11
-------------
INVESTMENT RETURN $1,024.83
Total Return Performance
- -----------------------
Investment Return $1,024.83
Less Initial Investment $1,000.00
------------
$24.83 / $1,000.00 x 100
Total Return: 2.48%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B
TOTAL RETURN PERFORMANCE
SIX MONTHS (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.94
Initial Shares 83.752
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.752 $0.000 0.000 83.752
- -------------------------------------------------------------------------------
Ending Shares 83.752
Ending NAV x $10.11
----------------
$846.73
LESS CDSC $33.87
----------------
INVESTMENT RETURN $812.86
Total Return Performance
- ------------------------
Investment Return $812.86
Less Initial Investment $1,000.00
---------------
($187.14) / $1,000.00 x 100
Total Return: -18.71%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B
TOTAL RETURN PERFORMANCE
SIX MONTHS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.94
Initial Shares 83.752
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.752 $0.000 0.000 83.752
Ending Shares 83.752
Ending NAV x $10.11
-----------
INVESTMENT RETURN $846.73
Total Return Performance
- ------------------------
Investment Return $846.73
Less Initial Investment $1,000.00
-----------
($153.27) / $1,000.00 x 100
Total Return: -15.33%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.43
Initial Shares 87.489
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 87.489 $0.000 0.000 87.489
- -------------------------------------------------------------------------------
Ending Shares 87.489
Ending NAV x $10.11
---------------
$884.51
LESS CDSC $35.38
---------------
INVESTMENT RETURN $849.13
Total Return Performance
- ------------------------
Investment Return $849.13
Less Initial Investment $1,000.00
---------------
($150.87) / $1,000.00 x 100
Total Return: -15.09%
<PAGE>
DELAWARE GROUP EMERGING MARKETS B
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.43
Initial Shares 87.489
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 87.489 $0.000 0.000 87.489
- -------------------------------------------------------------------------------
Ending Shares 87.489
Ending NAV x $10.11
-------------
INVESTMENT RETURN $884.51
Total Return Performance
- ------------------------
Investment Return $884.51
Less Initial Investment $1,000.00
-------------
($115.49) / $1,000.00 x 100
Total Return: -11.55%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C (INCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
- -------------------------------------------------------------------------------
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- ----------------
1
$1000(1 - T) = $1,014.83
T = 1.48%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C (EXCLUDING CDSC)
ANNUALIZED RATE OF RETURN
FOR FISCAL YEAR ENDING 1997
Average Annual Compounded Rate of Return:
n
P(1 + T) = ERV
ONE
YEAR
- ----------
1
$1000(1 - T) = $1,024.83
T = 2.48%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C
TOTAL RETURN PERFORMANCE
ONE YEAR (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.94
Initial Shares 100.604
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 100.604 $0.075 0.764 101.368
- -------------------------------------------------------------------------------
1997 101.368 $0.000 0.000 101.368
- -------------------------------------------------------------------------------
Ending Shares 101.368
Ending NAV x $10.11
---------------
$1,024.83
LESS CDSC $10.00
---------------
INVESTMENT RETURN $1,014.83
Total Return Performance
- ------------------------
Investment Return $1,014.83
Less Initial Investment $1,000.00
---------------
$14.83 / $1,000.00 x 100
Total Return: 1.48%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C
TOTAL RETURN PERFORMANCE
ONE YEAR (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.94
Initial Shares 100.604
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 100.604 $0.075 0.764 101.368
- -------------------------------------------------------------------------------
1997 101.368 $0.000 0.000 101.368
- -------------------------------------------------------------------------------
Ending Shares 101.368
Ending NAV x $10.11
------------
INVESTMENT RETURN $1,024.83
Total Return Performance
- ------------------------
Investment Return $1,024.83
Less Initial Investment $1,000.00
------------
$24.83 / $1,000.00 x 100
Total Return: 2.48%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C
TOTAL RETURN PERFORMANCE
SIX MONTHS (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.94
Initial Shares 83.752
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.52 $0.000 0.000 83.752
- -------------------------------------------------------------------------------
Ending Shares 83.752
Ending NAV x $10.11
---------------
$846.73
LESS CDSC $8.46
---------------
INVESTMENT RETURN $838.27
Total Return Performance
- ------------------------
Investment Return $838.27
Less Initial Investment $1,000.00
---------------
($161.73) / $1,000.00 x 100
Total Return: -16.17%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C
TOTAL RETURN PERFORMANCE
SIX MONTHS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.94
Initial Shares 83.752
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 83.752 $0.000 0.000 83.752
- -------------------------------------------------------------------------------
Ending Shares 83.752
Ending NAV x $10.11
------------
INVESTMENT RETURN $846.73
Total Return Performance
- ------------------------
Investment Return $846.73
Less Initial Investment $1,000.00
------------
($153.27) / $1,000.00 x 100
Total Return: -15.33%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C
TOTAL RETURN PERFORMANCE
NINE MONTHS (INCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.42
Initial Shares 87.566
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 87.566 $0.000 0.000 87.566
- -------------------------------------------------------------------------------
Ending Shares 87.566
Ending NAV x $10.11
----------------
$885.29
LESS CDSC $8.85
----------------
INVESTMENT RETURN $876.44
Total Return Performance
- ------------------------
Investment Return $876.44
Less Initial Investment $1,000.00
---------------
($123.56) / $1,000.00 X 100
Total Return: -12.36%
<PAGE>
DELAWARE GROUP EMERGING MARKETS C
TOTAL RETURN PERFORMANCE
NINE MONTHS (EXCLUDING CDSC)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $11.42
Initial Shares 87.566
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 87.566 $0.000 0.000 87.566
- -------------------------------------------------------------------------------
Ending Shares 87.566
Ending NAV x $10.11
-------------
INVESTMENT RETURN $885.29
Total Return Performance
- ------------------------
Investment Return $885.29
Less Initial Investment $1,000.00
------------
($114.71) / $1,000.00 x 100
Total Return: -11.47%
<PAGE>
DELAWARE GROUP GLOBAL EQUITY FUND A
TOTAL RETURN PERFORMANCE
LIFE OF FUND (AT NAV)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1996 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.23
---------------
INVESTMENT RETURN $968.23
Total Return Performance
- ----------------------------
Investment Return $968.23
Less Initial Investment $1,000.00
---------------
($31.77) / $1,000.00 x 100
Total Return: -3.18%
<PAGE>
DELAWARE GROUP GLOBAL EQUITY FUND A
TOTAL RETURN PERFORMANCE
LIFE OF FUND (AT OFFER)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $8.92
Initial Shares 112.108
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 112.108 $0.000 0.000 112.108
- -------------------------------------------------------------------------------
Ending Shares 112.108
Ending NAV x $8.23
------------
INVESTMENT RETURN $922.65
Total Return Performance
- ------------------------
Investment Return $922.65
Less Initial Investment $1,000.00
-----------
($77.35) / $1,000.00 x 100
Total Return: -7.74%
<PAGE>
DELAWARE GROUP GLOBAL EQUITY FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
LIFE OF FUND
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.23
--------------
INVESTMENT RETURN $968.23
Total Return Performance
- ------------------------
Investment Return $968.23
Less Initial Investment $1,000.00
---------------
($31.77) / $1,000.00 x 100
Total Return: -3.18%
<PAGE>
DELAWARE GROUP GLOBAL EQUITY FUND A
TOTAL RETURN PERFORMANCE
THREE MONTHS (AT OFFER)
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning OFFER $8.58
Initial Shares 116.550
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 116.550 $0.000 0.000 116.550
- -------------------------------------------------------------------------------
Ending Shares 116.550
Ending NAV x $8.23
--------------
INVESTMENT RETURN $959.21
Total Return Performance
- ------------------------
Investment Return $959.21
Less Initial Investment $1,000.00
-------------
($40.79) / $1,000.00 x 100
Total Return: -4.08%
<PAGE>
DELAWARE GROUP GLOBAL EQUITY FUND INSTITUTIONAL
TOTAL RETURN PERFORMANCE
THREE MONTHS
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.17
Initial Shares 122.399
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 122.399 $0.000 0.000 122.399
- -------------------------------------------------------------------------------
Ending Shares 122.399
Ending NAV x $8.23
----------------
INVESTMENT RETURN $1,007.34
Total Return Performance
- ------------------------
Investment Return $1,007.34
Less Initial Investment $1,000.00
---------------
$7.34 / $1,000.00 x 100
Total Return: 0.73%
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 021
<NAME> GLOBAL BOND FUND A CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 17,303,985
<INVESTMENTS-AT-VALUE> 17,120,520
<RECEIVABLES> 470,817
<ASSETS-OTHER> 135,967
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17,727,304
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 97,878
<TOTAL-LIABILITIES> 97,878
<SENIOR-EQUITY> 16,322
<PAID-IN-CAPITAL-COMMON> 17,854,646
<SHARES-COMMON-STOCK> 423,343
<SHARES-COMMON-PRIOR> 302,034
<ACCUMULATED-NII-CURRENT> (104,026)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 40,498
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (178,014)
<NET-ASSETS> 4,567,271
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,053,089
<OTHER-INCOME> 0
<EXPENSES-NET> 171,336
<NET-INVESTMENT-INCOME> 881,753
<REALIZED-GAINS-CURRENT> 119,653
<APPREC-INCREASE-CURRENT> (648,055)
<NET-CHANGE-FROM-OPS> 353,351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 305,700
<DISTRIBUTIONS-OF-GAINS> 12,933
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 251,836
<NUMBER-OF-SHARES-REDEEMED> 154,612
<SHARES-REINVESTED> 24,085
<NET-CHANGE-IN-ASSETS> 6,630,143
<ACCUMULATED-NII-PRIOR> (15,486)
<ACCUMULATED-GAINS-PRIOR> 41,730
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 289,684
<AVERAGE-NET-ASSETS> 4,396,493
<PER-SHARE-NAV-BEGIN> 11.480
<PER-SHARE-NII> 0.625
<PER-SHARE-GAIN-APPREC> (0.505)
<PER-SHARE-DIVIDEND> 0.770
<PER-SHARE-DISTRIBUTIONS> 0.040
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.790
<EXPENSE-RATIO> 1.25
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 022
<NAME> GLOBAL BOND FUND B CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 17,303,985
<INVESTMENTS-AT-VALUE> 17,120,520
<RECEIVABLES> 470,817
<ASSETS-OTHER> 135,967
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17,727,304
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 97,878
<TOTAL-LIABILITIES> 97,878
<SENIOR-EQUITY> 16,322
<PAID-IN-CAPITAL-COMMON> 17,854,646
<SHARES-COMMON-STOCK> 100,165
<SHARES-COMMON-PRIOR> 61,571
<ACCUMULATED-NII-CURRENT> (104,026)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 40,498
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (178,014)
<NET-ASSETS> 1,080,843
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,053,089
<OTHER-INCOME> 0
<EXPENSES-NET> 171,336
<NET-INVESTMENT-INCOME> 881,753
<REALIZED-GAINS-CURRENT> 119,653
<APPREC-INCREASE-CURRENT> (648,055)
<NET-CHANGE-FROM-OPS> 353,351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 63,377
<DISTRIBUTIONS-OF-GAINS> 2,428
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 65,290
<NUMBER-OF-SHARES-REDEEMED> 31,190
<SHARES-REINVESTED> 4,494
<NET-CHANGE-IN-ASSETS> 6,630,143
<ACCUMULATED-NII-PRIOR> (15,486)
<ACCUMULATED-GAINS-PRIOR> 41,730
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 289,684
<AVERAGE-NET-ASSETS> 1,026,835
<PER-SHARE-NAV-BEGIN> 11.490
<PER-SHARE-NII> 0.550
<PER-SHARE-GAIN-APPREC> (0.511)
<PER-SHARE-DIVIDEND> 0.699
<PER-SHARE-DISTRIBUTIONS> 0.040
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.790
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 023
<NAME> GLOBAL BOND FUND C CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 17,303,985
<INVESTMENTS-AT-VALUE> 17,120,520
<RECEIVABLES> 470,817
<ASSETS-OTHER> 135,967
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17,727,304
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 97,878
<TOTAL-LIABILITIES> 97,878
<SENIOR-EQUITY> 16,322
<PAID-IN-CAPITAL-COMMON> 17,854,646
<SHARES-COMMON-STOCK> 65,470
<SHARES-COMMON-PRIOR> 10,313
<ACCUMULATED-NII-CURRENT> (104,026)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 40,498
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (178,014)
<NET-ASSETS> 702,857
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,053,089
<OTHER-INCOME> 0
<EXPENSES-NET> 171,336
<NET-INVESTMENT-INCOME> 881,753
<REALIZED-GAINS-CURRENT> 119,653
<APPREC-INCREASE-CURRENT> (648,055)
<NET-CHANGE-FROM-OPS> 353,351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 31,300
<DISTRIBUTIONS-OF-GAINS> 424
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 55,133
<NUMBER-OF-SHARES-REDEEMED> 2,843
<SHARES-REINVESTED> 2,867
<NET-CHANGE-IN-ASSETS> 6,630,143
<ACCUMULATED-NII-PRIOR> (15,486)
<ACCUMULATED-GAINS-PRIOR> 41,730
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 289,684
<AVERAGE-NET-ASSETS> 531,910
<PER-SHARE-NAV-BEGIN> 11.440
<PER-SHARE-NII> 0.551
<PER-SHARE-GAIN-APPREC> (0.512)
<PER-SHARE-DIVIDEND> 0.699
<PER-SHARE-DISTRIBUTIONS> 0.040
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.740
<EXPENSE-RATIO> 1.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 024
<NAME> GLOBAL BOND FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 17,303,985
<INVESTMENTS-AT-VALUE> 17,120,520
<RECEIVABLES> 470,817
<ASSETS-OTHER> 135,967
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 17,727,304
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 97,878
<TOTAL-LIABILITIES> 97,878
<SENIOR-EQUITY> 16,322
<PAID-IN-CAPITAL-COMMON> 17,854,646
<SHARES-COMMON-STOCK> 1,043,224
<SHARES-COMMON-PRIOR> 582,436
<ACCUMULATED-NII-CURRENT> (104,026)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 40,498
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (178,014)
<NET-ASSETS> 11,278,455
<DIVIDEND-INCOME> 0
<INTEREST-INCOME> 1,053,089
<OTHER-INCOME> 0
<EXPENSES-NET> 171,336
<NET-INVESTMENT-INCOME> 881,753
<REALIZED-GAINS-CURRENT> 119,653
<APPREC-INCREASE-CURRENT> (648,055)
<NET-CHANGE-FROM-OPS> 353,351
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 651,174
<DISTRIBUTIONS-OF-GAINS> 23,842
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 504,713
<NUMBER-OF-SHARES-REDEEMED> 106,037
<SHARES-REINVESTED> 62,112
<NET-CHANGE-IN-ASSETS> 6,630,143
<ACCUMULATED-NII-PRIOR> (15,486)
<ACCUMULATED-GAINS-PRIOR> 41,730
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 111,059
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 289,684
<AVERAGE-NET-ASSETS> 9,066,531
<PER-SHARE-NAV-BEGIN> 11.520
<PER-SHARE-NII> 0.658
<PER-SHARE-GAIN-APPREC> (0.515)
<PER-SHARE-DIVIDEND> 0.813
<PER-SHARE-DISTRIBUTIONS> 0.040
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.810
<EXPENSE-RATIO> 0.95
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 041
<NAME> EMERGING MARKETS FUND A CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 19,140,344
<INVESTMENTS-AT-VALUE> 16,345,231
<RECEIVABLES> 588,990
<ASSETS-OTHER> 30,553
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 16,964,774
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 380,687
<TOTAL-LIABILITIES> 380,687
<SENIOR-EQUITY> 16,290
<PAID-IN-CAPITAL-COMMON> 18,546,973
<SHARES-COMMON-STOCK> 947,271
<SHARES-COMMON-PRIOR> 252,595
<ACCUMULATED-NII-CURRENT> (4,971)
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 822,146
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> (2,796,351)
<NET-ASSETS> 9,664,905
<DIVIDEND-INCOME> 269,109
<INTEREST-INCOME> 105,525
<OTHER-INCOME> 0
<EXPENSES-NET> 312,033
<NET-INVESTMENT-INCOME> 62,601
<REALIZED-GAINS-CURRENT> 757,185
<APPREC-INCREASE-CURRENT> (2,722,301)
<NET-CHANGE-FROM-OPS> (1,902,515)
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,696
<DISTRIBUTIONS-OF-GAINS> 20,222
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,427,852
<NUMBER-OF-SHARES-REDEEMED> 735,449
<SHARES-REINVESTED> 2,273
<NET-CHANGE-IN-ASSETS> 9,867,720
<ACCUMULATED-NII-PRIOR> 9,077
<ACCUMULATED-GAINS-PRIOR> 52,009
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 185,509
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 463,229
<AVERAGE-NET-ASSETS> 8,673,302
<PER-SHARE-NAV-BEGIN> 9.970
<PER-SHARE-NII> 0.062
<PER-SHARE-GAIN-APPREC> 0.253
<PER-SHARE-DIVIDEND> 0.010
<PER-SHARE-DISTRIBUTIONS> 0.075
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 10.200
<EXPENSE-RATIO> 2.00
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 042
<NAME> EMERGING MARKETS FUND B CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 19,140,344
<INVESTMENTS-AT-VALUE> 16,345,231
<RECEIVABLES> 588,990
<ASSETS-OTHER> 30,553
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 16,964,774
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
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<TOTAL-LIABILITIES> 380,687
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<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
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<NAME> EMERGING MARKETS FUND C CLASS
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<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
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<NAME> EMERGING MARKETS FUND INSTITUTIONAL CLASS
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<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
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<NUMBER> 031
<NAME> GLOBAL ASSETS FUND A CLASS
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 032
<NAME> GLOBAL ASSETS FUND B CLASS
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 033
<NAME> GLOBAL ASSETS FUND C CLASS
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 034
<NAME> GLOBAL ASSETS FUND INSTITUTIONAL CLASS
<S> <C>
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 051
<NAME> GLOBAL EQUITY FUND A CLASS
<S> <C>
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<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 052
<NAME> GLOBAL EQUITY FUND INSTITUTIONAL CLASS
<S> <C>
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<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 8,529
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 19,935
<AVERAGE-NET-ASSETS> 2,976,817
<PER-SHARE-NAV-BEGIN> 8.500
<PER-SHARE-NII> 0.056
<PER-SHARE-GAIN-APPREC> (0.326)
<PER-SHARE-DIVIDEND> 0.000
<PER-SHARE-DISTRIBUTIONS> 0.000
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 8.230
<EXPENSE-RATIO> 0.800
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 011
<NAME> INTERNATIONAL EQUITY FUND A CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 209,366,390
<INVESTMENTS-AT-VALUE> 224,169,482
<RECEIVABLES> 2,122,548
<ASSETS-OTHER> 2,025,738
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 228,317,768
<PAYABLE-FOR-SECURITIES> 677,193
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 313,856
<TOTAL-LIABILITIES> 991,049
<SENIOR-EQUITY> 155,148
<PAID-IN-CAPITAL-COMMON> 204,931,529
<SHARES-COMMON-STOCK> 7,675,281
<SHARES-COMMON-PRIOR> 6,092,588
<ACCUMULATED-NII-CURRENT> 5,057,793
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,394,928
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,787,321
<NET-ASSETS> 112,424,901
<DIVIDEND-INCOME> 5,237,404
<INTEREST-INCOME> 737,338
<OTHER-INCOME> 0
<EXPENSES-NET> 3,281,825
<NET-INVESTMENT-INCOME> 2,692,917
<REALIZED-GAINS-CURRENT> 6,169,700
<APPREC-INCREASE-CURRENT> (7,483,373)
<NET-CHANGE-FROM-OPS> 1,379,244
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 2,797,661
<DISTRIBUTIONS-OF-GAINS> 123,938
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 6,322,583
<NUMBER-OF-SHARES-REDEEMED> 4,933,746
<SHARES-REINVESTED> 193,856
<NET-CHANGE-IN-ASSETS> 91,168,655
<ACCUMULATED-NII-PRIOR> 2,985,419
<ACCUMULATED-GAINS-PRIOR> 182,113
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,412,913
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,294,643
<AVERAGE-NET-ASSETS> 108,272,135
<PER-SHARE-NAV-BEGIN> 14.640
<PER-SHARE-NII> 0.220
<PER-SHARE-GAIN-APPREC> 0.245
<PER-SHARE-DIVIDEND> 0.435
<PER-SHARE-DISTRIBUTIONS> 0.020
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 14.650
<EXPENSE-RATIO> 1.700
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 012
<NAME> INTERNATIONAL EQUITY FUND B CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 209,366,390
<INVESTMENTS-AT-VALUE> 224,169,482
<RECEIVABLES> 2,122,548
<ASSETS-OTHER> 2,025,738
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 228,317,768
<PAYABLE-FOR-SECURITIES> 677,193
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 313,856
<TOTAL-LIABILITIES> 991,049
<SENIOR-EQUITY> 155,148
<PAID-IN-CAPITAL-COMMON> 204,931,529
<SHARES-COMMON-STOCK> 2,192,139
<SHARES-COMMON-PRIOR> 747,288
<ACCUMULATED-NII-CURRENT> 5,057,793
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,394,928
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,787,321
<NET-ASSETS> 31,914,063
<DIVIDEND-INCOME> 5,237,404
<INTEREST-INCOME> 737,338
<OTHER-INCOME> 0
<EXPENSES-NET> 3,281,825
<NET-INVESTMENT-INCOME> 2,692,917
<REALIZED-GAINS-CURRENT> 6,169,700
<APPREC-INCREASE-CURRENT> (7,483,373)
<NET-CHANGE-FROM-OPS> 1,379,244
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 314,247
<DISTRIBUTIONS-OF-GAINS> 15,415
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,317,692
<NUMBER-OF-SHARES-REDEEMED> 1,893,676
<SHARES-REINVESTED> 20,835
<NET-CHANGE-IN-ASSETS> 91,168,655
<ACCUMULATED-NII-PRIOR> 2,985,419
<ACCUMULATED-GAINS-PRIOR> 182,113
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,412,913
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,294,643
<AVERAGE-NET-ASSETS> 22,524,557
<PER-SHARE-NAV-BEGIN> 14.560
<PER-SHARE-NII> 0.114
<PER-SHARE-GAIN-APPREC> 0.246
<PER-SHARE-DIVIDEND> 0.340
<PER-SHARE-DISTRIBUTIONS> 0.020
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 14.560
<EXPENSE-RATIO> 2.400
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 013
<NAME> INTERNATIONAL EQUITY FUND C CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 209,366,390
<INVESTMENTS-AT-VALUE> 224,169,482
<RECEIVABLES> 2,122,548
<ASSETS-OTHER> 2,025,738
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 228,317,768
<PAYABLE-FOR-SECURITIES> 677,193
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 313,856
<TOTAL-LIABILITIES> 991,049
<SENIOR-EQUITY> 155,148
<PAID-IN-CAPITAL-COMMON> 204,931,529
<SHARES-COMMON-STOCK> 812,230
<SHARES-COMMON-PRIOR> 131,320
<ACCUMULATED-NII-CURRENT> 5,057,793
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,394,928
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,787,321
<NET-ASSETS> 11,810,719
<DIVIDEND-INCOME> 5,237,404
<INTEREST-INCOME> 737,338
<OTHER-INCOME> 0
<EXPENSES-NET> 3,281,825
<NET-INVESTMENT-INCOME> 2,692,917
<REALIZED-GAINS-CURRENT> 6,169,700
<APPREC-INCREASE-CURRENT> (7,483,373)
<NET-CHANGE-FROM-OPS> 1,379,244
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 67,804
<DISTRIBUTIONS-OF-GAINS> 2,682
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 1,288,076
<NUMBER-OF-SHARES-REDEEMED> 611,809
<SHARES-REINVESTED> 4,643
<NET-CHANGE-IN-ASSETS> 91,168,655
<ACCUMULATED-NII-PRIOR> 2,985,419
<ACCUMULATED-GAINS-PRIOR> 182,113
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,412,913
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,294,643
<AVERAGE-NET-ASSETS> 6,697,222
<PER-SHARE-NAV-BEGIN> 14.540
<PER-SHARE-NII> 0.114
<PER-SHARE-GAIN-APPREC> 0.246
<PER-SHARE-DIVIDEND> 0.340
<PER-SHARE-DISTRIBUTIONS> 0.020
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 14.540
<EXPENSE-RATIO> 2.400
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<TABLE> <S> <C>
<ARTICLE> 6
<CIK> 0000875610
<NAME> DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
<SERIES>
<NUMBER> 014
<NAME> INTERNATIONAL EQUITY FUND INSTITUTIONAL CLASS
<S> <C>
<PERIOD-TYPE> YEAR
<FISCAL-YEAR-END> NOV-30-1997
<PERIOD-END> NOV-30-1997
<INVESTMENTS-AT-COST> 209,366,390
<INVESTMENTS-AT-VALUE> 224,169,482
<RECEIVABLES> 2,122,548
<ASSETS-OTHER> 2,025,738
<OTHER-ITEMS-ASSETS> 0
<TOTAL-ASSETS> 228,317,768
<PAYABLE-FOR-SECURITIES> 677,193
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 313,856
<TOTAL-LIABILITIES> 991,049
<SENIOR-EQUITY> 155,148
<PAID-IN-CAPITAL-COMMON> 204,931,529
<SHARES-COMMON-STOCK> 4,835,180
<SHARES-COMMON-PRIOR> 2,325,203
<ACCUMULATED-NII-CURRENT> 5,057,793
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 2,394,928
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 14,787,321
<NET-ASSETS> 71,177,036
<DIVIDEND-INCOME> 5,237,404
<INTEREST-INCOME> 737,338
<OTHER-INCOME> 0
<EXPENSES-NET> 3,281,825
<NET-INVESTMENT-INCOME> 2,692,917
<REALIZED-GAINS-CURRENT> 6,169,700
<APPREC-INCREASE-CURRENT> (7,483,373)
<NET-CHANGE-FROM-OPS> 1,379,244
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1,209,385
<DISTRIBUTIONS-OF-GAINS> 46,296
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 3,519,724
<NUMBER-OF-SHARES-REDEEMED> 1,096,146
<SHARES-REINVESTED> 86,399
<NET-CHANGE-IN-ASSETS> 91,168,655
<ACCUMULATED-NII-PRIOR> 2,985,419
<ACCUMULATED-GAINS-PRIOR> 182,113
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 1,412,913
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 3,294,643
<AVERAGE-NET-ASSETS> 51,595,268
<PER-SHARE-NAV-BEGIN> 14.710
<PER-SHARE-NII> 0.267
<PER-SHARE-GAIN-APPREC> 0.238
<PER-SHARE-DIVIDEND> 0.475
<PER-SHARE-DISTRIBUTIONS> 0.020
<RETURNS-OF-CAPITAL> 0.000
<PER-SHARE-NAV-END> 14.720
<EXPENSE-RATIO> 1.400
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0
</TABLE>
<PAGE>
EX-99.B18A
Exhibit 24(b)(18)(a)
The Delaware Group of Funds
Multiple Class Plan Pursuant to Rule 18f-3
This Multiple Class Plan (the "Plan") has been adopted by a
majority of the Board of Directors of each of the investment companies listed
on Appendix A as may be amended from time to time (each individually a "Fund,"
and collectively, the "Funds"), including a majority of the Directors who are
not interested persons of each Fund, pursuant to Rule 18f-3 under the
Investment Company Act of 1940, as amended (the "Act"). The Board of each Fund
has determined that the Plan, including the allocation of expenses, is in the
best interests of the Fund as a whole, each series of shares offered by such
Fund (individually and collectively the "Series") where the Fund offers its
shares in multiple series, and each class of shares offered by the Fund or
Series, as relevant. The Plan sets forth the provisions relating to the
establishment of multiple classes of shares for each Fund and, if relevant,
its Series. To the extent that a subject matter set forth in this Plan is
covered by a Fund's Articles of Incorporation or By-Laws, such Articles of
Incorporation or By-Laws will control in the event of any inconsistencies with
descriptions contained in this Plan.
The term "Portfolio," when used in this Plan in the context
of a Fund that offers only a single series of shares, shall be a reference to
the Fund, and when used in the context of a Fund that offers multiple series
of shares, shall be a reference to each series of such Fund.
CLASSES
- -------
1. Appendix A to this Plan describes the classes to be
issued by each Portfolio and identifies the names of such classes.
FRONT-END SALES CHARGE
- ----------------------
2. Class A shares carry a front-end sales charge as
described in the Funds' relevant prospectuses; and Class B, Class
<PAGE>
C and Institutional Class shares are sold without a front-end sales charge.
CONTINGENT DEFERRED SALES CHARGE
- --------------------------------
3. Class A shares are not subject to a contingent deferred
sales charge ("CDSC"), except as described in the Fund's relevant prospectus.
4. Class B shares redeemed within six years of their
purchase shall be assessed a CDSC at the following rate: (i) 4.00% if shares
are redeemed within two years of purchase; (ii) 3.00% if shares are redeemed
during the third or fourth year following purchase; (iii) 2.00% if shares are
redeemed during the fifth year following purchase; (iv) 1.00% if shares are
redeemed during the sixth year following purchase; and (vi) 0% thereafter.
5. Class C shares redeemed within twelve months of their
purchase shall be assessed a CDSC at the rate of 1.00% of the lesser of (i)
the net asset value at the time of redemption, or (ii) the original net asset
value at the time of purchase.
6. The CDSC for each class is waived in certain
circumstances, as described in the Funds' relevant prospectuses. Shares that
are subject to a CDSC age one month at the end of the month in which the
shares were purchased, regardless of the specific date during the month that
the shares were purchased.
7. Institutional Class shares are not subject to a CDSC.
RULE 12b-1 PLANS
- ----------------
8. In accordance with the Rule 12b-1 Plan for the Class A
shares of each Portfolio, the Fund shall pay to Delaware Distributors, L.P.
(the "Distributor") a monthly fee not to exceed 0.30% per annum of such
Portfolio's average daily net assets represented by Class A shares as may be
determined by the Fund's Board of Directors from time to time. The monthly fee
shall be reduced by the aggregate sums paid by or on behalf of such Portfolio
to persons other than broker-dealers (the "Service Providers") pursuant to
servicing agreements.
9. In accordance with the Rule 12b-1 Plan for the Class B
shares of each Portfolio, the Fund shall pay to the Distributor a monthly fee
not to exceed 0.75% per annum of such
-2-
<PAGE>
Portfolio's average daily net assets represented by Class B shares as may be
determined by the Fund's Board of Directors from time to time. In addition to
these amounts, the Fund shall pay (i) to the Distributor for payment to
dealers or others, or (ii) directly to others, an amount not to exceed 0.25%
per annum of such Portfolio's average daily net assets represented by Class B
shares, as a service fee pursuant to dealer or servicing agreements.
10. In accordance with the Rule 12b-1 Plan for the Class C
shares of each Portfolio, the Fund shall pay to the Distributor a monthly fee
not to exceed 0.75% per annum of such Portfolio's average daily net assets
represented by Class C shares as may be determined by the Fund's Board of
Directors from time to time. In addition to these amounts, the Fund shall pay
(i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such Portfolio's average
daily net assets represented by Class C shares, as a service fee pursuant to
dealer or servicing agreements.
11. A Rule 12b-1 Plan has not been adopted for the
Institutional Class shares of any Portfolio.
ALLOCATION OF EXPENSES
- ----------------------
12. The Fund shall allocate to each class of shares of a
Portfolio any fees and expenses incurred by the Fund in connection with the
distribution or servicing of such class of shares under a Rule 12b-1 Plan, if
any, adopted for such class. In addition, the Fund reserves the right, subject
to approval by the Fund's Board of Directors, to allocate fees and expenses of
the following nature to a particular class of shares of a Portfolio (to the
extent that such fees and expenses actually vary among each class of shares or
vary by types of services provided to each class of shares of the Portfolio):
(i) transfer agency and other recordkeeping costs;
(ii) Securities and Exchange Commission and blue sky
registration or qualification fees;
(iii) printing and postage expenses related to printing
and distributing class specific materials, such as
shareholder reports, prospectuses and proxies to
current shareholders of a particular class or to
regulatory authorities with respect to such class
of shares;
(iv) audit or accounting fees or expenses relating
solely to such class;
-3-
<PAGE>
(v) the expenses of administrative personnel and
services as required to support the shareholders of
such class;
(vi) litigation or other legal expenses relating solely
to such class of shares;
(vii) Directors' fees and expenses incurred as a result
of issues relating solely to such class of shares;
and
(viii) other expenses subsequently identified and
determined to be properly allocated to such class
of shares.
13. Except for any expenses that are allocated to a
particular class as described in paragraph 11 above, all expenses incurred by
a Portfolio will be allocated to each class of shares of such Portfolio on the
basis of the net asset value of each such class in relation to the net asset
value of the Portfolio.
ALLOCATION OF INCOME AND GAINS
- ------------------------------
14. Income and realized and unrealized capital gains and
losses of a Portfolio will be allocated to each class of shares of such
Portfolio on the basis of the net asset value of each such class in relation
to the net asset value of the Portfolio.
CONVERSIONS
- -----------
15. (a) Except for shares acquired through a reinvestment of
dividends or distributions, Class B shares held for eight years after purchase
are eligible for automatic conversion into Class A shares of the same
Portfolio in accordance with the terms described in the relevant prospectus.
Class B shares acquired through a reinvestment of dividends or distributions
will convert into Class A shares of the same Portfolio pro rata with the Class
B shares that were not acquired through the reinvestment of dividends and
distributions.
(b) The automatic conversion feature of Class B
shares shall be suspended at any time that the Board of Directors of the Fund
determines that there is not available a reasonably satisfactory opinion of
counsel to the effect that (i) the assessment of the higher fee under the
Fund's Rule 12b-1 Plan for Class B does not result in the Fund's dividends or
distributions constituting a preferential dividend under the Internal Revenue
Code of 1986, as amended, and (ii) the conversion of Class B shares into Class
A shares does not constitute a taxable event under federal income tax law. In
addition, the Board of
-4-
<PAGE>
Directors of a Fund may suspend the automatic conversion feature by
determining that any other condition to conversion set forth in the relevant
prospectus, as amended from time to time, is not satisfied.
(c) The Board of Directors of a Fund may also
suspend the automatic conversion of Class B shares if it determines that
suspension is appropriate to comply with the requirements of the Act, or any
rule or regulation issued thereunder, relating to voting by Class B
shareholders on the Fund's Rule 12b-1 Plan for Class A or, in the alternative,
the Board of Directors may provide Class B shareholders with alternative
conversion or exchange rights.
16. Class A, Class C and Institutional Class shares do not
have a conversion feature.
EXCHANGES
- ---------
17. Exchanges are permitted between Class A Shares and
Institutional Class Shares of a Portfolio or of any other Portfolio in the
Delaware Group funds; Class B shares of a Portfolio may only be exchanged for
Class B shares of any other Portfolio in the Delaware Group; Class C shares of
a Portfolio may only be exchanged for Class C shares of any other Portfolio in
the Delaware Group. All exchanges are subject to the eligibility and minimum
purchase requirements set forth in the Funds' prospectuses. Exchanges cannot
be made between open-end and closed-end funds within the Delaware Group.
18. Each class will vote separately with respect to the Rule
12b-1 Plan related to that class; provided, however, that Class B shares of a
Portfolio may vote on any proposal to materially increase the fees to be paid
by the Fund under the Rule 12b-1 Plan for the Class A shares of the same
Portfolio.
19. On an ongoing basis, the Directors, pursuant to their
fiduciary responsibilities under the Act and otherwise, will monitor the
Portfolio for the existence of any material conflicts between the interests of
all the classes of shares offered by such Portfolio. The Directors, including
a majority of the Directors who are not interested persons of the Fund, shall
take such action as is reasonably necessary to eliminate any such conflict
that may develop. The Manager and the Distributor shall be responsible for
alerting the Board to any material conflicts that arise.
20. As described more fully in the Funds' relevant
prospectuses, broker-dealers that sell shares of a Portfolio will be
compensated differently depending on which class of shares the investor
selects.
-5-
<PAGE>
21. Each Fund reserves the right to increase, decrease or
waive the CDSC imposed on any existing or future class of shares of a
Portfolio within the ranges permissible under applicable rules and regulations
of the Securities and Exchange Commission (the "SEC") and the rules of the
National Association of Securities Dealers, Inc. (the "NASD"), as such rules
may be amended or adopted from time to time. Each Fund may in the future alter
the terms of the existing classes of such Portfolio or create new classes in
compliance with applicable rules and regulations of the SEC and the NASD.
22. All material amendments to this Plan must be approved by
a majority of the Directors of each Fund affected by such amendments,
including a majority of the Directors who are not interested persons of the
Fund.
Effective as of September 18, 1997
-6-
<PAGE>
EX-99.B18AI
Exhibit 24(b)(18)(a)(i)
APPENDIX A
List of Funds and Their Classes
-------------------------------
1. Delaware Group Equity Funds I, Inc.
Delaware Fund
Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class
Devon Fund
Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class
2. Delaware Group Equity Funds II, Inc.
Decatur Income Fund
Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class
Decatur Total Return Fund
Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class
Blue Chip Fund (Added February 24, 1997)
Blue Chip Fund A Class
Blue Chip Fund B Class
Blue Chip Fund C Class
Blue Chip Fund Institutional Class
<PAGE>
Quantum Fund (Added February 24, 1997)
Quantum Fund A Class
Quantum Fund B Class
Quantum Fund C Class
Quantum Fund Institutional Class
3. Delaware Group Equity Funds III, Inc.
Trend Fund
Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class
4. Delaware Group Equity Funds V, Inc.
Value Fund
Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class
Retirement Income Fund (Added November 29, 1996)
Retirement Income Fund A Class
Retirement Income Fund B Class
Retirement Income Fund C Class
Retirement Income Fund Institutional Class
5. Delaware Group Equity Funds IV, Inc.
DelCap Fund
DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class
Capital Appreciation Fund (Added November 29, 1996)
Capital Appreciation Fund A Class
Capital Appreciation Fund B Class
Capital Appreciation Fund C Class
Capital Appreciation Fund Institutional Class
6. Delaware Group Global & International Funds, Inc.
-8-
<PAGE>
International Equity Series
International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class
Global Bond Series
Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class
Global Assets Series
Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class
Emerging Markets Series (Added May 1, 1996)
Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class
International Small Cap Series (Added July 21, 1997)
International Small Cap Fund A Class
International Small Cap Fund B Class
International Small Cap Fund C Class
International Small Cap Fund Institutional Class
Global Equity Series (Added July 21, 1997)
Global Equity Fund A Class
Global Equity Fund B Class
Global Equity Fund C Class
Global Equity Fund Institutional Class
7. Delaware Group Income Funds, Inc.
Strategic Income Fund (Added September 30, 1996)
Strategic Income Fund A Class
Strategic Income Fund B Class
Strategic Income Fund C Class
Strategic Income Fund Institutional Class
-9-
<PAGE>
8. Delaware Pooled Trust, Inc.
The Real Estate Investment Trust Portfolio (Added
October 14, 1997)
REIT Fund A Class
REIT Fund B Class
REIT Fund C Class
REIT Fund Institutional Class
<PAGE>
EX-99.B19B
Exhibit 24(b)(19)(b)
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees of the
Delaware Group Funds listed on Exhibit A to this Power of Attorney, hereby
constitutes and appoints Wayne A. Stork, W. Thacher Longstreth and Walter P.
Babich and any one of them acting singly, his true and lawful
attorneys-in-fact, in his name, place, and stead, to execute and cause to be
filed with the Securities and Exchange Commission and other federal or state
government agency or body, such registration statements, and any and all
amendments thereto as either of such designees may deem to be appropriate
under the Securities Act of 1933, as amended, the Investment Company Act of
1940, as amended, and all other applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
this 1st day of May, 1997.
/s/Thomas F. Madison
- --------------------
Thomas F. Madison
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
<PAGE>
POWER OF ATTORNEY
The undersigned, a member of the Boards of Directors/Trustees of the
Delaware Group Funds listed on Exhibit A to this Power of Attorney, hereby
constitutes and appoints Wayne A. Stork, W. Thacher Longstreth and Walter P.
Babich and any one of them acting singly, his true and lawful
attorneys-in-fact, in his name, place, and stead, to execute and cause to be
filed with the Securities and Exchange Commission and other federal or state
government agency or body, such registration statements, and any and all
amendments thereto as either of such designees may deem to be appropriate
under the Securities Act of 1933, as amended, the Investment Company Act of
1940, as amended, and all other applicable federal and state securities laws.
IN WITNESS WHEREOF, the undersigned has executed this instrument as of
this 1st day of May, 1997.
/s/Jeffrey J. Nick
- ------------------
Jeffrey J. Nick
<PAGE>
POWER OF ATTORNEY
EXHIBIT A
DELAWARE GROUP FUNDS
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
