<PAGE>
DELAWARE(SM)
INVESTMENTS
-----------
Delaware International Equity Fund
Delaware Global Equity Fund
Delaware Emerging Markets Fund
Delaware Global Bond Fund
International Diversification
2000 SEMI-ANNUAL REPORT
(International Diversification Artwork)
<PAGE>
A TRADITION OF SOUND INVESTING SINCE 1929
TABLE OF CONTENTS
Letter to Shareholders 1
Delaware International
Equity Fund
Portfolio
Management Review 3
Performance Summary 5
Delaware Global Equity Fund
Portfolio
Management Review 6
Performance Summary 8
Delaware Emerging Markets Fund
Portfolio
Management Review 9
Performance Summary 11
Delaware Global Bond Fund
Portfolio
Management Review 12
Performance Summary 14
Financial Statements
Statements of Net Assets 15
Statements of Operations 23
Statements of Changes in
Net Assets 24
Financial Highlights 26
Notes to Financial
Statements 42
<PAGE>
A Commitment To Our Investors
Experienced
o Our seasoned investment professionals average more than 15 years' experience.
o We began managing investments in 1929 and opened our first mutual fund in
1938. Over the past 70 years, we have weathered a full range of economic and
market environments.
Disciplined
o We follow strict investment policies and clear buy/sell guidelines.
o We strive to balance risk and reward in order to provide sound investment
alternatives within any given asset class.
Consistent
o We clearly articulate our investment policies and follow them consistently.
o Our commitment to consistency has earned us the confidence of discriminating
institutional and individual investors to manage over $45 billion in assets as
of June 30, 2000.
Comprehensive
o We offer more than 70 mutual funds in these asset classes.
o Large-cap equity o High-yield bonds
o Mid-cap equity o Investment grade bonds
o Small-cap equity o Municipal bonds (23 single-state funds)
o International equity o International fixed-income
o Balanced
o Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
Dear Shareholder
July 10, 2000
Recap of Events - Over the past six months, we have seen a continuation of the
improvements in overseas and emerging markets as economies around the world
continued their recovery from the difficulties of 1998. As in the U.S.,
international market performance was strongly momentum-driven, with stocks in
the technology and telecommunications sectors providing the bulk of the
performance for much of the period.
Amid this technology exuberance, the big Y2K story was that the new millennium
arrived with a yawn, rather than a headache or global catastrophe, as some had
feared. Post-Y2K relief helped fuel continued strong growth in world markets
early in 2000. This was especially true for technology stocks.
The bull-run persisted through the month of February. Then in late March, the
investment environment changed. Rising interest rates in the U.S. and
uncertainty as to whether or not the valuations of technology stocks were
sustainable triggered a sell-off in technology stocks. This led to a broadening
of stock markets, as investors seemed to rediscover the value in so-called "old
economy" stocks. This emphasis on old economy stocks was short-lived, however.
In April and May, investors rotated in and out of various market sectors, and no
single sector maintained leadership for very long.
Delaware International Equity Fund delivered a +0.96% return (Class A shares at
net asset value with distributions reinvested) for the six-month period ended
May 31, 2000. For much of the period our value style of investing ran counter to
the momentum-driven markets.
Delaware Global Equity Fund had a return of -2.98% for the period (Class A
shares at net asset value with distributions reinvested). The Fund was likewise
hurt during the period by its value style.
Delaware Emerging Markets Fund had a return of +0.35% for the period (Class A
shares at net asset value with distributions reinvested). The Fund invested
successfully in technology in Asia, but performance was pulled down by
cyclicals.
Delaware Global Bond Fund had a return of -4.00% for the period (Class A shares
at net asset value with distributions reinvested), underperforming the Salomon
Smith Barney World Government Bond Index and the Lipper Global Income Fund
Average during a difficult period in the international bond markets.
1
<PAGE>
Outlook - While we are currently seeing a good deal of volatility in markets
worldwide, we believe Delaware's global and international funds are well
positioned to benefit from a continued broadening of the market, especially if
investors renew their appreciation of earnings and valuations as the keys to
stock appreciation. We thank you for your continued confidence in Delaware
Investments.
Sincerely,
/s/ Wayne A. Stork /s/ David K. Downes
---------------------------------- ----------------------------------------
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
Total Return
For Period Ended May 31, 2000 Six Months
--------------------------------------------------------------------------------
Delaware International Equity Fund Class A +0.96%
Morgan Stanley EAFE Index +0.73%
Lipper International Equity Funds Average (719 funds) +2.27%
--------------------------------------------------------------------------------
Delaware Global Equity Fund Class A -2.98%
Morgan Stanley Capital International World Index +2.05%
Lipper Global Equity Fund Average (270 funds) +5.59%
--------------------------------------------------------------------------------
Delaware Emerging Markets Fund Class A +0.35%
Morgan Stanley Capital International Emerging Markets Free Index +0.18%
Lipper Emerging Markets Funds Average (195 funds) +2.76%
--------------------------------------------------------------------------------
Delaware Global Bond Fund Class A -4.00%
Salomon Smith Barney World Government Bond Index -2.58%
Lipper Global Income Fund Average (123 funds) -0.94%
--------------------------------------------------------------------------------
All performance shown above is at net asset value without the effect of sales
charges and assumes reinvestment of dividends and capital gains. Performance
information for all Fund classes can be found on pages 5, 8, 11 and 14. The
Morgan Stanley Capital International EAFE Index is an unmanaged composite of
European, Asian and Far East mutual funds. The unmanaged Morgan Stanley Capital
International World Index, Morgan Stanley Emerging Markets Free Index and
Salomon Smith Barney World Government Bond Index measure broad international
market performance. The Lipper categories represent the average returns of
global and international mutual funds tracked by Lipper Analytical (Source:
Lipper Analytical Services, Inc.). You cannot invest directly in an index. Past
performance does not guarantee future results.
(International Diversification
Artwork)
2
<PAGE>
Delaware International Equity Fund
PORTFOLIO MANAGEMENT REVIEW
Clive A. Gillmore
Senior Portfolio Manager & Director
Delaware International Advisers, Ltd.
Nigel G. May
Senior Portfolio Manager & Director
Delaware International Advisers, Ltd.
July 10, 2000
The Fund's Results
Delaware International Equity Fund invests primarily in developed countries,
concentrating on stocks of Western Europe and select Pacific Rim nations that
meet the Fund's value standards. Value stocks are those that appear to be
selling for less than their true worth and are considered to have strong
prospects for future growth.
We consider Delaware International Equity Fund to be a core international fund,
and therefore we strive to manage the risks involved with international
investing. We select stocks by comparing the inflation-adjusted value of a
stock's expected income with its current price. We supplement this approach with
company-specific research and extensive analysis to help identify factors that
may increase or decrease the value of stocks in specific countries.
Portfolio Highlights
The first five months of 2000 were a continuation of the record economic
expansion in the United States. For the most part, European markets closely
tracked the performance of their counterparts in the United States. Volatility
was a key component during the period with a relatively small number of stocks
in each market providing the majority of returns. The technology sector was the
principal driving force with telecommunications and Internet-related companies
enjoying strength. Our value style of investing made it difficult for the Fund
to participate in this rally, as we believe many of the better performing
companies are overvalued.
The markets did an about face in March. In the U.S., the Nasdaq Composite Index
tumbled amid fears of rising interest rates and concerns that the high
valuations of technology stocks were unsustainable. European markets, which can
be highly sensitive to U.S. interest rates and changes in the Nasdaq Composite
Index, experienced similar volatility.
From March through May of this year, the market's attention shifted to
valuations and earnings. This shift benefited your Fund as investors found value
in many of our holdings. During the period we took the opportunity to trim
certain holdings in order to purchase new stocks, which we believed had recently
become more reasonably valued.
3
<PAGE>
In Europe, we benefited from our holdings in the French and German markets,
particularly Alcatel and Seimens. In Spain, a number of strong companies are
benefiting from the government's deregulation and liberalization of the economy.
We continue to see good value in the U.K. market, where we have a higher
percentage of holdings compared to our benchmark. However, the U.K. market
negatively impacted performance by underperforming during the past six months
amid concerns over interest rates and the effect of electronic commerce on
traditional retailers and manufacturers.
The U.S. dollar remained strong against the euro and we expect it to stay that
way until the U.S. economy shows clear signs of slowdown. The outlook for Europe
remains positive, and we are encouraged by the recent broadening of the markets.
Japan continues to experience trouble as continued weakness in consumer
sentiment, the fragility of the banking sector and uncertain policies of a new
prime minister are hurdles that will be difficult to overcome in the near term.
We have historically kept your Fund's investments in Japanese stocks smaller
than the weighting of such stocks in the EAFE Index. We continue to believe that
many Japanese stocks are overpriced.
Australia continues to enjoy strong non-inflationary economic growth and our
outlook for company earnings remains positive as valuations there remain good.
Outlook
In our opinion, continued strength in the U.S. economy makes it likely that
interest rates will continue to rise in the near term. We have reduced our
holdings of some telecommunication positions during the period. We are looking
to the out-of-favor utility and retail sectors as we believe there are
attractively priced opportunities there. We will also be reviewing what we
believe are several good opportunities among European financial companies.
(International Diversfication
Artwork)
4
<PAGE>
FUND BASICS
Fund Objective
The Fund seeks to achieve
long-term growth without undue
risk to principal.
Total Fund Assets
$253.55 million
Number of Holdings
51
Fund Start Date
October 31, 1991
Your Fund Management
Clive A. Gillmore is a graduate of the University of Warwick and completed the
London Business School Investment program. Mr. Gillmore began his career at
Legal and General Investment Management, which is the asset management division
of Legal and General Assurance Society Ltd., a large U.K. life and pension
company. He joined Delaware in 1990 after eight years of investment experience.
His most recent position prior to joining Delaware was Pacific Basin analyst and
senior portfolio manager at Hill Samuel Investment Advisers Ltd.
Nigel G. May is a graduate of Sidney Sussex College, Cambridge. He joined
Delaware in 1991, assuming portfolio management responsibilities and sharing
analytical responsibilities for continental Europe. Mr. May had previously been
with Hill Samuel Investment Management Group for five years.
Nasdaq Symbols
Class A DEGIX
Class B DEIEX
Class C DEGCX
DELAWARE INTERNATIONAL EQUITY FUND PERFORMANCE
Average Annual Total Returns
Through May 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 10/31/91)
Excluding Sales Charge +9.09% +9.23% +4.64%
Including Sales Charge +8.34% +7.95% -1.36%
--------------------------------------------------------------------------------
Class B (Est. 9/6/94)
Excluding Sales Charge +6.76% +8.48% +3.88%
Including Sales Charge +6.64% +8.19% -1.12%
--------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding Sales Charge +8.69% - +3.95%
Including Sales Charge +8.69% - +2.95%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charges assume either that contingent deferred sales
charges were not applied or the investment was not redeemed. Class A share
results, excluding sales charge, assume that the front-end sales charge was not
imposed. Past performance is not a guarantee of future results.
Class A shares have a 5.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
deferred sales charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
The average annual total returns for the lifetime, five-year and one-year
periods ended May 31, 2000 for Delaware International Equity Fund Institutional
Class were +9.37%, +9.54% and +4.89%, respectively. The Institutional Class was
originally made available without sales charges only to certain eligible
institutional accounts on October 31, 1991.
Nasdaq Symbol Institutional Class: DEQIX.
5
<PAGE>
Delaware Global Equity Fund
PORTFOLIO MANAGEMENT REVIEW
Elizabeth A. Desmond
Senior Portfolio Manager & Director
Delaware International Advisers Ltd.
Robert L. Arnold
Vice President/Senior Portfolio Manager
Delaware Management Company
July 10, 2000
The Fund's Results
Using an international investing approach similar to that of Delaware
International Equity Fund, we look for companies that are reasonably valued and
offer strong potential for future earnings growth. We include a significant
portion of U.S. equities within the portfolio. For the six months ended May 31,
2000, Delaware Global Equity Fund returned -2.98% (Class A shares at net asset
value with dividends reinvested).
Portfolio Highlights
Despite the strength of the U.S. stock market during the latter part of 1999,
Delaware Global Equity Fund generally lagged its benchmark, the Morgan Stanley
Capital International (MSCI) World Index. We attribute this partially to our
value approach, which limited our investments in the technology sector and
growth related stocks. We believed stocks in these sectors were overvalued.
During that period, we maintained substantial positions in the United Kingdom
and Australia because this is where we perceived the best value. Although we
maintained a significant exposure to the U.S., our position was lower than our
benchmarks as we believed the U.S. market offered less value than the European
and Asian markets.
The U.S. stock market was also in the midst of a rising interest rate cycle,
increasing the potential for slowdown or increased volatility in the coming
months.
We held a small position in Japan, largely because we believed most Japanese
equities were very overvalued. Although Japan's economy was showing some minor
signs of recovery, government spending and exports grew in the fourth quarter,
while consumer spending and investments fell.
Consistent with the struggling U.S. stock market, the first few months of 2000
proved challenging for the Fund as well. Following the same course as last year,
investor interest continued to be focused in the telecommunications and
technology sectors. Based on our value analysis, we believed investors were
already paying lofty prices for these issues and therefore we minimized our
investments in those areas.
(International Diversification
Artwork)
6
<PAGE>
The market's activity during this period reinforced our commitment to our value
strategy. The U.S. stock market Indexes, most notably the Dow and the Nasdaq
Composite have been losing ground since March. This was due to valuation and
earnings concerns, as well as interest rate hikes and inflation fears. This
strengthened our belief that, at this time, technology and some growth stocks
are overvalued and do not fit our investment discipline. This is not to say that
we can't find value within these sectors at times; but right now, it's quite a
challenge.
Outlook
We plan to continue to focus our fundamental research on undervalued companies
which we believe will unlock their potential over the next three to five years.
We believe there are attractively priced opportunities in the out-of-favor
retail and utilities sectors. These sectors, and value stocks in general, have
already shown signs of increased strength this year. We are also looking at a
number of opportunities among European financial companies. We will be keeping
an eye on Japan, where we expect our exposure to remain low in light of
valuation concerns for those issues. We will likely maintain considerable
exposure to the United Kingdom, and to selected Continental European, Australian
and New Zealand companies, which in the past have served the portfolio well.
7
<PAGE>
FUND BASICS
Fund Objective
The Fund seeks long-term total return by investing in U.S. and foreign
securities that the Fund's management believes will provide the potential for
capital appreciation and income.
Total Fund Assets
$12.95 million
Number of Holdings
66
Fund Start Date
December 27, 1994
Your Fund Management
Elizabeth A. Desmond is a graduate of Wellesley College and the master's program
in East Asian studies at Stanford University. She joined Delaware in 1991 and is
a Chartered Financial Analyst.
Robert L. Arnold holds a B.S. from Carnegie Mellon University and earned an MBA
from the University of Chicago. Prior to joining Delaware in 1992, he was
involved in strategic analysis assignments at Chemical Banking Corporation.
Nasdaq Symbols
Class A DEGAX
Class B DGABX
Class C DGACX
DELAWARE GLOBAL EQUITY FUND PERFORMANCE
Average Annual Total Returns
Through May 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 12/27/94)
Excluding Sales Charge +10.49% +8.97% -3.28%
Including Sales Charge +9.30% +7.69% -8.82%
--------------------------------------------------------------------------------
Class B (Est. 12/27/94)
Excluding Sales Charge +9.72% +8.21% -3.95%
Including Sales Charge +9.60% +7.92% -8.53%
--------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding Sales Charge +7.16% - -3.97%
Including Sales Charge +7.16% - -4.88%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charges assume either that contingent deferred sales
charges were not applied or the investment was not redeemed. Class A share
results, excluding sales charge, assume that the front-end sales charge was not
imposed. Past performance is not a guarantee of future results.
Class A shares have a 5.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
deferred sales charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
A voluntary expense limitation was in effect for all classes of Delaware Global
Equity Fund during the periods shown. Performance would have been lower if the
expense limitation was not in effect.
The average annual total returns for the lifetime, five-year and one-year
periods ended May 31, 2000 for Delaware Global Equity Fund Institutional Class
were +10.83%, +9.31% and -2.97%, respectively. The Institutional Class was
originally made available without sales charges only to certain eligible
institutional accounts on December 27, 1994.
Nasdaq Symbol Institutional Class: DGAIX.
(International Diversification
Artwork)
8
<PAGE>
Delaware Emerging Markets Fund
PORTFOLIO MANAGEMENT REVIEW
Clive A. Gillmore
Senior Portfolio Manager & Director
Delaware International Advisers Ltd.
Robert Akester
Senior Portfolio Manager
Delaware International Advisers Ltd.
July 10, 2000
The Fund's Results
As in the developed markets, the primary interest of emerging market investors
in recent months has been in technology, telecommunications and media stocks. As
most of these stocks were priced at levels so high they failed to pass our value
screening, it was difficult for the Fund to match its benchmark's return in this
period. An analysis of the Morgan Stanley Capital International (MSCI) Emerging
Markets Free Index's return shows that the top ten contributors to return were
all from the technology, telecommunications and media sectors.
Delaware Emerging Markets Fund returned +0.35% (Class A shares at net asset
value with distributions reinvested) for the six months ended May 31, 2000. The
Fund enjoyed positive returns after the first two months of 2000, only to give
the gains back in March when the Fund fell 3.63%. Though the Fund had low or
neutral exposure to the market sectors that performed the worst in March, some
of our individual holdings performed poorly during the volatile month,
contributing to our decline.
Our technology holdings provided the greatest positive impact on performance. We
were able to find technology stocks with attractive valuations in Asia, India,
Taiwan and Thailand.
Some of the biggest disappointments for the Fund during the period were natural
resource stocks, especially in South Africa, where profit taking took its toll
after very good relative performance in 1999.
Portfolio Highlights
Latin American markets performed will over the period, and we continue to favor
Brazil, where inflation has finally been reigned in and we see good value.
In European emerging markets, however, positive returns of the core markets were
partially offset by declines in Greece and Turkey.
South Africa also posted a negative return for the period, although we still
think the outlook there is positive. Exporters, such as Sasol, a synthetic
petroleum manufacturer, should be able to benefit from the undervalued rand.
Currency played a bigger part in the cases of the weak markets than in the
strong ones. For example, currency declines relative to the U.S. dollar affected
approximately one-third of the markets in the MSCI Emerging Markets Free Index
and contributed to the poor performance of Greece, Turkey and South Africa
(Source: Bloomberg).
9
<PAGE>
Towards the end of the year, MSCI is likely to alter the weightings of the
Europe, Australasia, Far East Index, which generally measures performance in the
developed markets. The resulting cash flows could have an influence on market
valuations. Our strategy uses the index weights as a starting point rather than
a guiding force. Although we are mindful of the technical issues related to
changes in indexes, our asset allocation decisions will still be driven mainly
by our fundamental analysis of individual countries and companies.
Outlook
We have a positive outlook for economic growth throughout the world for the next
year. We expect the fact that emerging markets remain undervalued compared to
developed markets to help support security prices in emerging markets. The
differences in valuation from one region of the world to another have narrowed
over the past year. As a result we believe country allocation and individual
stock selection will become somewhat more important in the months ahead.
(International Diversification
Artwork)
10
<PAGE>
FUND BASICS
Fund Objective
The Fund seeks long-term
capital appreciation.
Total Fund Assets
$17.11 million
Number of Holdings
74
Fund Start Date
June 10, 1996
Your Fund Management
Clive A. Gillmore is a graduate of the University of Warwick and completed the
London Business School Investment program. Mr. Gillmore began his career at
Legal and General Investment Management, which is the asset management division
of Legal and General Assurance Society Ltd., a large U.K. life and pension
company. He joined Delaware in 1990 after eight years of investment experience.
His most recent position prior to joining Delaware was Pacific Basin analyst and
senior portfolio manager at Hill Samuel Investment Advisers Ltd.
Robert Akester holds a B.S. 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. Akester joined Delaware in 1996 and has more than 30
years of investment experience.
Nasdaq Symbols
Class A DEMAX
Class B DEMBX
Class C DEMCX
DELAWARE EMERGING MARKETS FUND PERFORMANCE
Average Annual Total Returns
Through May 31, 2000 Lifetime Three Years One Year
--------------------------------------------------------------------------------
Class A (Est. 6/10/96)
Excluding Sales Charge -3.17% -10.08% +13.29%
Including Sales Charge -4.60% -11.83% +6.71%
--------------------------------------------------------------------------------
Class B (Est. 6/10/96)
Excluding Sales Charge -3.82% -10.70% +12.47%
Including Sales Charge -4.50% -11.54% +7.47%
--------------------------------------------------------------------------------
Class C (Est. 6/10/96)
Excluding Sales Charge -3.85% -10.74% +12.49%
Including Sales Charge -3.85% -10.74% +11.49%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charges assume either that contingent deferred sales
charges were not applied or the investment was not redeemed. Class A share
results, excluding sales charge, assume that the front-end sales charge was not
imposed. Past performance is not a guarantee of future results.
Class A shares have a 5.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
deferred sales charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
A voluntary expense limitation was in effect for all classes of Delaware
Emerging Markets Fund during the periods shown. Performance would have been
lower if the expense limitation was not in effect.
The average annual total returns for the lifetime, three-year and one-year
periods ended May 31, 2000 for Delaware Emerging Markets Fund Institutional
Class were -2.82%, -9.80%, and +13.81%, respectively. The Institutional Class
was originally made available without sales charges only to certain eligible
institutional accounts on June 10, 1996.
Nasdaq Symbol Institutional Class: DEMIX
11
<PAGE>
Delaware Global Bond Fund
PORTFOLIO MANAGEMENT REVIEW
Christopher A. Moth
Senior Portfolio Manager & Director
Delaware International Advisers Ltd.
Joanna Bates
Senior Portfolio Manager
Delaware International Advisers Ltd.
July 10, 2000
The Fund's Results
The past six months have been a difficult time for investors in international
bonds. In general, bond markets have again been negative during the period, as
global bond markets continue to take a back seat to global equities. Returns for
U.S.-based international bond investors were further hampered by the continued
strength of the dollar against most currencies. The Delaware Global Bond Fund
returned -4.00% for the six-month period ended May 31, 2000.
The euro continues to confound expectations that the new currency would be
strong, and fell in value over the period. In our opinion, the euro is
exceptionally undervalued, and we believe it has strong potential to rise over
the coming months.
Portfolio Highlights
The Fund maintained a substantial exposure to North American markets,
particularly the U.S. bond market. Our U.S. holdings boosted the Fund's
performance due to the strength of the U.S. dollar. In addition, we hold bonds
of companies largely in dynamic market sectors, such as technology and
telecommunications, which had strong performance during the period.
The Fund held a smaller percentage in Europe than our benchmark, with holdings
in euro zone countries such as Greece and Poland, where we found good value. We
continued to have sizeable investments in New Zealand.
The Fund does not have any holdings in Japan as we believe the fundamentals in
the Japanese bond markets are unfavorable.
Investing in foreign bonds involves currency risk, and the Fund's performance
was hurt during the period by the fluctuations of some foreign currencies.
American investors measure their results in U.S. dollars. International currency
changes can add or subtract from U.S. returns. We attempt to reduce currency
risk by holding bonds denominated in currencies that appear undervalued. For
example, as of May 31, 2000, we held bonds denominated in the South African
rand, which we viewed as inexpensive and having the potential to rise in value.
12
<PAGE>
We expect to continue to limit the Fund's exposure to interest rate risk by
maintaining a relatively short average effective duration. We held the duration
of your Fund shorter than the Salomon Smith Barney World Government Bond Index
due to our belief that inflation could begin to increase in both the U.S. and
abroad. We plan to maintain a somewhat more conservative position for Delaware
Global Bond Fund in the coming months in order to preserve capital if interest
rates rise and prices fall. Duration is a measure of a bond or bond fund's
sensitivity to changes in interest rates. The longer the duration, the more the
bond's price will change for a given increase or decrease in interest rates.
Outlook
The prospect for improving world growth in the year ahead is encouraging for
both developed and emerging markets. In many cases emerging markets depend on
exports of manufactured goods or commodities to the developed world. Even in
countries where commodity companies are relatively small parts of a country's
index, demand for oil, minerals or food may have a powerful influence on the
health of the economy as a whole. We are optimistic and believe there are many
signs indicating a potentially strong close to the year 2000.
13
<PAGE>
FUND BASICS
Fund Objective
The Fund seeks to achieve current
income consistent with preservation
of principal.
Total Fund Assets
$14.25 million
Number of Holdings
35
Fund Start Date
December 27, 1994
Your Fund Management
Christopher A. Moth graduated from City University of London and joined Delaware
in 1992. He previously worked at the Guardian Royal Exchange, where he was
responsible for technical analysis, quantitative models, and projections.
Joanna Bates is a graduate of London University and joined Delaware in 1997.
Previously, she was the Associate Director of Fixed Interest at Hill Samuel
Investment Management.
Nasdaq Symbols
Class A DGBAX
Class B DGBBX
Class C DGBCX
DELAWARE GLOBAL BOND FUND PERFORMANCE
Average Annual Total Returns
Through May 31, 2000 Lifetime Five Years One Year
--------------------------------------------------------------------------------
Class A (Est. 12/27/94)
Excluding Sales Charge +5.60% +4.37% -6.69%
Including Sales Charge +4.65% +3.36% -11.16%
--------------------------------------------------------------------------------
Class B (Est. 12/27/94)
Excluding Sales Charge +4.88% +3.65% -7.30%
Including Sales Charge +4.74% +3.34% -10.88%
--------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding Sales Charge +1.97% - -7.33%
Including Sales Charge +1.97% - -8.23%
--------------------------------------------------------------------------------
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share values will fluctuate so that shares, when
redeemed, may be worth more or less than their original cost. Class B and C
results excluding sales charges assume either that contingent deferred sales
charges were not applied or the investment was not redeemed. Class A share
results, excluding sales charge, assume that the front-end sales charge was not
imposed. Past performance is not a guarantee of future results.
Class A shares have a 4.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
deferred sales charge of up to 4% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
A voluntary expense limitation was in effect for all classes of Delaware Global
Bond Fund during the periods shown. Performance would have been lower if the
expense limitation was not in effect.
The average annual total returns for the lifetime, five-year and one-year
periods ended May 31, 2000 for Delaware Global Bond Fund Institutional Class
were +5.90%, +4.69% and -6.44%, respectively. The Institutional Class was
originally made available without sales charges only to certain eligible
institutional accounts on December 27, 1994.
Nasdaq Symbol Institutional Class: DGBIX
14
<PAGE>
Statement of Net Assets
DELAWARE INTERNATIONAL EQUITY FUND
Market
Number of Value
May 31, 2000 (Unaudited) Shares (US $)
--------------------------------------------------------------------------------
Common Stock - 97.43%
Australia - 10.90%
Amcor ...................................... 1,087,000 $ 3,128,212
CSR ........................................ 1,956,874 4,514,195
+Foster's Brewing Group ..................... 2,995,165 7,285,619
+National Australia Bank .................... 652,918 9,730,129
Orica ...................................... 578,300 2,344,486
*Paperlinx .................................. 362,333 628,953
-----------
27,631,594
-----------
Belgium - 1.33%
+Electrabel ................................. 14,679 3,376,847
-----------
3,376,847
-----------
France - 12.70%
+Alcatel .................................... 166,155 9,195,304
+Compagnie de Saint Gobain .................. 35,975 5,019,263
+Societe Generale ........................... 156,472 9,031,800
Total Fina Class B ......................... 56,791 8,951,734
-----------
32,198,101
-----------
Germany - 9.06%
Bayer ...................................... 143,090 5,555,212
+Bayerische Hypo-und Vereinsbank ............ 77,800 4,980,830
Continental ................................ 94,500 1,732,975
+RWE ........................................ 161,000 5,829,826
Siemens .................................... 33,300 4,863,587
-----------
22,962,430
-----------
Hong Kong - 3.91%
Hong Kong Electric ......................... 1,168,000 3,912,195
Jardine Matheson Holdings Limited .......... 632,287 2,693,543
Wharf Holdings ............................. 1,843,514 3,312,162
-----------
9,917,900
-----------
Japan - 13.45%
Canon ...................................... 166,000 7,647,071
Eisai ...................................... 177,000 3,813,876
Hitachi .................................... 489,000 6,058,569
+Kinki Coca-Cola Bottling ................... 134,000 1,705,025
Matsushita Electric ........................ 310,000 7,327,484
West Japan Railway ......................... 1,789 7,560,093
-----------
34,112,118
-----------
Malaysia - 0.78%
Oriental Holdings .......................... 320,000 720,009
Sime Darby ................................. 966,000 1,250,732
-----------
1,970,741
-----------
<PAGE>
Market
Number of Value
Shares (US $)
--------------------------------------------------------------------------------
Common Stock (continued)
Netherlands - 8.08%
Elsevier .................................... 452,000 $ 4,243,600
ING Groep ................................... 95,100 5,689,896
Koninklijke Vopak ........................... 69,680 1,593,207
+Royal Dutch Petroleum ....................... 110,280 6,795,729
Unilever .................................... 42,714 2,170,546
-----------
20,492,978
-----------
New Zealand - 2.55%
+Carter Holt Harvey .......................... 880,300 709,050
+Telecom Corporation of New Zealand .......... 1,638,920 5,760,397
-----------
6,469,447
-----------
Singapore - 0.64%
Overseas Chinese Banking .................... 287,000 1,614,546
-----------
1,614,546
-----------
Spain - 6.04%
Banco Santander Central
Hispanoamericano .......................... 709,132 6,955,491
Iberdrola ................................... 169,000 2,160,754
+*Telefonica .................................. 301,338 6,186,921
-----------
15,303,166
-----------
United Kingdom - 27.99%
Bass ........................................ 533,607 5,848,654
BG .......................................... 872,000 5,216,228
Blue Circle Industries ...................... 1,145,254 7,309,531
Boots ....................................... 728,500 6,078,592
British Airways ............................. 1,161,570 6,304,879
Cable & Wireless ............................ 420,400 7,018,768
GKN ......................................... 532,800 7,375,551
Great Universal Stores ...................... 861,600 5,324,957
Halifax ..................................... 478,952 4,700,977
PowerGen .................................... 385,000 2,522,099
Rio Tinto ................................... 294,524 4,328,469
Taylor Woodrow .............................. 2,190,825 4,986,256
Unigate ..................................... 869,000 3,949,133
-----------
70,964,094
-----------
Total Common Stock (cost $215,031,851) ...... 247,013,962
-----------
15
<PAGE>
Statement of Net Assets (continued)
Market
Principal Value
Delaware International Equity Fund Amount (US $)
--------------------------------------------------------------------------------
Repurchase Agreements - 0.62%
With Chase Manhattan 6.33% 6/1/00
(dated 5/31/00, collateralized by $544,000
U.S. Treasury Notes 5.875% due 11/15/04,
market value $530,205). ........................... $517,000 $ 517,000
With J.P. Morgan Securities 6.33% 6/1/00
(dated 5/31/00, collateralized by $205,000 U.S.
Treasury Notes 6.50% due 5/31/01, market value
$204,811 and $144,000 U.S. Treasury Notes 6.625%
due 6/30/01, market value $147,479, and $32,000
U.S. Treasury Notes 6.50% due 8/31/01, market
value $32,409, and $159,000 U.S. Treasury Notes
6.375% due 9/30/01, market value $160,331) ........ 534,000 534,000
With PaineWebber 6.33% 6/1/00
(dated 5/31/00, collateralized by $205,000
U.S. Treasury Notes 5.00% due 4/30/01,
market value $203,077 and $130,000
U.S. Treasury Notes 6.25% due 1/31/02,
market value $132,260 and $205,000
U.S. Treasury Notes 7.25% due 5/15/04,
market value $210,175) ............................ 534,000 534,000
------------
Total Repurchase Agreements
(cost $1,585,000) ................................. 1,585,000
------------
Total Market Value of Securities - 98.05%
(cost $216,616,851) ............................... $248,598,962
Receivables and Other Assets
Net of Liabilities - 1.95% ........................ 4,946,256
------------
Net Assets Applicable to 16,061,618 Shares
Outstanding - 100.00% ............................. $253,545,218
============
Net Asset Value - Delaware International
Equity Fund A Class
($89,144,937 / 5,649,214 shares) .................. $15.78
------
Net Asset Value - Delaware International
Equity Fund B Class
($33,057,221 / 2,104,009 shares) .................. $15.71
------
Net Asset Value - Delaware International
Equity Fund C Class
($12,758,565 / 812,911 shares) .................... $15.69
------
Net Asset Value - Delaware International
Equity Fund Institutional Class
($118,584,495 / 7,495,484 shares) ................. $15.82
------
<PAGE>
Components of Net Assets at May 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ................ $200,809,180
Undistributed net investment income ** .............. 874,722
Accumulated net realized gain
on investments .................................... 19,853,951
Net unrealized appreciation of investments
and foreign currencies ............................ 32,007,365
------------
Total net assets .................................... $253,545,218
============
------------
*Non-income producing security for the six months ended May 31, 2000.
**Undistributed net investment income includes net realized gains (losses) on
foreign currencies. Net realized gains (losses) on foreign currencies are
treated as net investment income in accordance with provisions of the Internal
Revenue Code.
+Security is partially or fully on loan.
Net Asset Value and Offering Price Per Share -
Delaware International Equity Fund
Net asset value A Class (A) .......................... $15.78
Sales charge (5.75% of offering price or
6.08% of the amount invested
per share) (B) ..................................... 0.96
------
Offering price ....................................... $16.74
======
-----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
16
<PAGE>
Statement of Net Assets (continued)
DELAWARE GLOBAL EQUITY FUND
Market
Number of Value
May 31, 2000 (Unaudited) Shares (US $)
--------------------------------------------------------------------------------
Common Stock - 98.92%
Australia - 7.32%
Amcor ....................................... 45,600 $ 131,230
CSR ......................................... 91,750 211,653
Foster's Brewing Group ...................... 92,839 225,827
National Australia Bank ..................... 17,488 260,615
Orica ....................................... 22,800 92,433
*Paperlinx ................................... 15,200 26,385
----------
948,143
----------
Belgium - 1.84%
Electrabel .................................. 1,035 238,098
----------
238,098
----------
France - 7.45%
Compagnie de Saint Gobain ................... 1,720 239,976
Societe Generale ............................ 6,716 387,658
Total Fina Class B .......................... 2,138 337,004
----------
964,638
----------
Germany - 8.99%
Bayer ....................................... 7,300 283,409
Bayerische Hypo-und Vereinsbank ............. 5,190 332,269
RWE ......................................... 8,820 319,373
Siemens ..................................... 1,570 229,304
----------
1,164,355
----------
Hong Kong - 2.79%
Hong Kong Electric .......................... 44,000 147,377
Jardine Matheson Holdings Limited ........... 28,627 121,951
Wharf Holdings .............................. 51,028 91,680
----------
361,008
----------
Japan - 4.69%
Canon ....................................... 5,000 230,333
Eisai ....................................... 5,000 107,737
Matsushita Electric ......................... 6,000 141,822
West Japan Railway .......................... 30 126,776
----------
606,668
----------
Malaysia - 1.45%
Sime Darby .................................. 145,300 188,128
----------
188,128
----------
Netherlands - 4.85%
Elsevier .................................... 23,650 222,038
Koninklijke Vopak ........................... 3,370 77,056
Royal Dutch Petroleum ....................... 5,340 329,064
----------
628,158
----------
New Zealand - 2.65%
Carter Holt Harvey .......................... 114,300 92,065
Telecom Corporation of New Zealand .......... 71,376 250,869
----------
342,934
----------
Singapore - 0.61%
Overseas Chinese Banking .................... 14,000 78,758
----------
78,758
----------
<PAGE>
Market
Number of Value
Shares (US $)
--------------------------------------------------------------------------------
Common Stock (continued)
South Africa - 1.43%
Sanlam ........................................ 88,700 $ 95,827
Sasol ......................................... 13,600 89,268
----------
185,095
----------
Spain - 2.72%
Iberdrola ..................................... 9,100 116,348
*Telefonica .................................... 11,483 235,763
----------
352,111
----------
United Kingdom - 22.25%
Associated British Food ....................... 25,960 173,171
Bass .......................................... 22,392 245,430
Blue Circle Industries ........................ 53,056 338,628
Boots ......................................... 32,700 272,848
British Airways ............................... 27,152 147,378
Cable & Wireless .............................. 18,200 303,857
GKN ........................................... 23,700 328,079
Glaxo Wellcome ................................ 8,820 248,615
Halifax ....................................... 15,100 148,208
PowerGen ...................................... 25,900 169,668
Rio Tinto ..................................... 19,732 289,991
Taylor Woodrow ................................ 94,700 215,535
----------
2,881,408
----------
United States - 29.88%
ALLTEL ........................................ 2,700 176,681
Aon ........................................... 7,200 252,900
AT&T .......................................... 3,900 135,281
Avon Products ................................. 5,500 227,219
Bank of America ............................... 3,618 201,025
Bank of New York .............................. 4,300 201,831
Baxter International .......................... 2,700 179,550
Block (H&R) ................................... 4,500 138,938
Bristol-Myers Squibb .......................... 4,100 225,756
Chase Manhattan ............................... 2,000 149,375
Chevron ....................................... 2,100 194,119
Compaq Computers .............................. 7,400 194,250
Computer Associates International ............. 2,700 139,050
Exxon Mobil ................................... 2,400 199,950
Federal National Mortgage ..................... 3,100 186,388
Intel ......................................... 1,400 174,475
International Business Machine ................ 1,800 193,163
International Paper ........................... 3,595 125,151
McGraw-Hill ................................... 3,800 195,463
Minnesota Mining & Manufacturing .............. 2,600 222,950
Worldcom ...................................... 4,100 154,263
----------
3,867,778
----------
Total Common Stock (cost $12,850,985) ......... 12,807,280
----------
17
<PAGE>
Statement of Net Assets (continued)
Market
Number of Value
Delaware Global Equity Fund Shares (US $)
--------------------------------------------------------------------------------
Preferred Stock - 0.20%
United States - 0.20%
Sealed Air ........................................... 475 $ 25,769
-----------
Total Preferred Stock (cost $25,769) ................. 25,769
-----------
Principal
Amount
------
Repurchase Agreements - 0.40%
With Chase Manhattan 6.33% 6/1/00
(dated 5/31/00, collateralized by $18,000
U.S. Treasury Notes 5.875% due 11/15/04,
market value $17,395). ............................ $17,000 17,000
With J.P. Morgan Securities 6.33% 6/1/00
(dated 5/31/00, collateralized by $7,000 U.S.
Treasury Notes 6.50% due 5/31/01, market value
$6,719 and $5,000 U.S. Treasury Notes 6.625% due
6/30/01, market value $4,838 and $1,000 U.S.
Treasury Notes 6.50% due 8/31/01, market value
$1,063 and $5,000 U.S. Treasury Notes 6.375% due
9/30/01, market value $5,260) ..................... 17,500 17,500
With PaineWebber 6.33% 6/1/00
(dated 5/31/00, collateralized by $7,000
U.S. Treasury Notes 5.00% due 4/30/01,
market value $6,662 and $4,000
U.S. Treasury Notes 6.25% due 1/31/02,
market value $4,339 and $7,000
U.S. Treasury Notes 7.25% due 5/15/04,
market value $6,895). ............................. 17,500 17,500
-----------
Total Repurchase Agreements
(cost $52,000) .................................... 52,000
-----------
Total Market Value of Securities - 99.52%
(cost $12,928,754) ................................ $12,885,049
Receivables and Other Assets
Net of Liabilities - 0.48% ........................ 62,364
-----------
Net Assets Applicable to 1,061,484 Shares
Outstanding - 100.00% ............................. $12,947,413
===========
Net Asset Value - Delaware Global Equity Fund
A Class ($5,892,155 / 482,177 shares) ............. $12.22
------
Net Asset Value - Delaware Global Equity Fund
B Class ($4,160,896 / 341,556 shares) ............. $12.18
------
Net Asset Value - Delaware Global Equity Fund
C Class ($1,935,748 / 159,563 shares) ............. $12.13
------
Net Asset Value - Delaware Global Equity Fund
Institutional Class
($958,614 / 78,188 shares) ........................ $12.26
------
<PAGE>
Components of Net Assets at May 31, 2000:
Shares of beneficial interest
(unlimited authorization - no par) ............... $12,669,886
Distributions in excess of net
investment income** .............................. (4,276)
Accumulated net realized gain
on investments ................................... 327,000
Net unrealized depreciation of investments
and foreign currencies ........................... (45,197)
-----------
Total net assets .................................... $12,947,413
===========
-----------
*Non-income producing security for the six months ended May 31, 2000.
**Distributions in excess of net investment income includes net realized gains
(losses) on foreign currencies. Net realized gains (losses) on foreign
currencies are treated as net investment income in accordance with provisions
of the Internal Revenue Code.
Net Asset Value and Offering Price Per Share -
Delaware Global Equity Fund
Net asset value A Class (A) ......................... $12.22
Sales charge (5.75% of offering price or
6.14% of amount invested
per share) (B) ................................... 0.75
------
Offering price ...................................... $12.97
======
------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
18
<PAGE>
Statement of Net Assets (continued)
DELAWARE EMERGING MARKETS FUND
------------------------------
Market
Number of Value
May 31, 2000 (Unaudited) Shares (US $)
--------------------------------------------------------------------------------
Common Stock - 93.49%
Argentina - 1.47%
Central Puerto Class B .............................. 80,000 $ 122,416
Transportadora de Gas del Sur Class B ............... 83,600 128,761
----------
251,177
----------
Brazil - 19.01%
Aracruz Celulose ADR ................................ 20,250 339,188
Centrais Electricas de Santa Catarina ............... 309,000 91,405
Centrais Electricas de Santa Catarina GDR ........... 1,000 29,581
Companhia Energetica de Minas Gerais ................ 3,300,000 50,978
Companhia Energetica de Minas
Gerais ADR ........................................ 9,239 142,721
Companhia Paranaense de Energia
Copel ADR ......................................... 46,532 375,164
Gerdau Metalurgica .................................. 23,420,000 500,345
Gerdau Metalurgica .................................. 554,036 9,712
Petroleo Brasileiro ................................. 1,973,161 459,377
Renner Participacoes ................................ 4,100,000 8,310
Rossi Residencial ADR ............................... 24,800 27,171
Telecomunicacoes de Minas Gerias .................... 9,300,000 303,122
Telecomunicacoes do Parana .......................... 1,241,334 344,772
Uniao de Bancos Brasileiros ......................... 16,999,000 405,071
Usinas Siderurgicas de Minas Gerais ................. 24,600 107,806
Usinas Siderurgicas de Minas Gerais ADR ............. 13,370 58,591
----------
3,253,314
----------
Chile - 2.63%
A.F.P. Provida ADR .................................. 16,300 339,244
Empresa Nacional Electricidad ADR ................... 9,343 110,364
----------
449,608
----------
China - 6.36%
*Beijing Capital International Airport ............... 900,000 140,909
*China Steel ......................................... 29,146 429,175
Guangdong Kelon Electric Holdings ................... 285,000 140,813
Guangshen Railway ................................... 2,162,000 199,768
Shenzhen Expressway ................................. 1,628,400 177,630
----------
1,088,295
----------
Croatia - 1.35%
Zagrebacka Banka GDR ................................ 13,740 230,145
----------
230,145
----------
Egypt - 0.81%
*Paints and Chemicals Industries GDR ................. 62,000 137,950
----------
137,950
----------
Estonia - 1.87%
AS Eesti Telekom GDR ................................ 8,329 165,747
*Eesti Uhispank GDR .................................. 30,044 153,976
----------
319,723
----------
Greece - 1.54%
*Hellenic Telecommunciation ADR ...................... 21,783 262,757
----------
262,757
----------
<PAGE>
Market
Number of Value
Shares (US $)
--------------------------------------------------------------------------------
Common Stock (continued)
Hong Kong - 0.78%
Hengan International Group .......................... 596,000 $ 133,086
----------
133,086
----------
Hungary - 1.74%
Gedeon Richter GDR .................................. 5,100 297,075
----------
297,075
----------
India - 8.23%
*Gas Authority of India GDR .......................... 35,566 198,280
*ICICI GDR ........................................... 13,983 272,669
*India Fund .......................................... 26,560 325,360
Larsen & Toubro GDR ................................. 8,800 78,980
Mahanagar Telephone Nigam GDR ....................... 21,520 220,042
Videsh Sanchar Nigam GDR ............................ 2,161 33,712
Videsh Sanchar Nigam GDR ............................ 17,916 279,490
----------
1,408,533
----------
Indonesia - 0.30%
*PT United Tractors .................................. 77,000 50,663
----------
50,663
----------
Israel - 3.99%
Bank Hapoalim ....................................... 110,500 317,887
ECI Telecom ......................................... 13,476 365,537
----------
683,424
----------
Malaysia - 7.91%
*Leader Universal Holdings ........................... 615,000 234,674
Petronas Dagangan ................................... 337,000 383,121
Public Finance ...................................... 105,000 116,607
Resorts World ....................................... 82,000 256,793
Sime Darby .......................................... 280,000 362,531
----------
1,353,726
----------
Mexico - 4.32%
Alfa Class A ........................................ 55,015 148,963
Cemex ............................................... 83,343 353,178
*Grupo Minsa ADR ..................................... 13,000 53,625
*Grupo Minsa Class C ................................. 117,000 58,808
Vitro ADR ........................................... 35,800 125,300
----------
739,874
----------
Peru - 2.63%
Banco de Credito del Peru Class C ................... 132,825 64,460
Creditcorp .......................................... 11,825 104,947
Telefonica del Peru ADR ............................. 19,700 280,725
----------
450,132
----------
Russia - 2.42%
Gazprom ADR ......................................... 4,200 26,355
Gazprom ADR ......................................... 5,000 31,375
Lukoil ADR .......................................... 6,500 356,720
----------
414,450
----------
South Africa - 14.51%
ABSA Group .......................................... 85,138 311,480
*Kersaf Investments .................................. 63,812 217,437
Iscor ............................................... 186,827 418,149
19
<PAGE>
Statement of Net Assets (continued)
Market
Number of Value
May 31, 2000 (Unaudited) Shares (US $)
--------------------------------------------------------------------------------
Common Stock (continued)
South Africa (continued)
*Network Healthcare .................................. 1,343,418 $ 173,469
Sanlam .............................................. 343,500 371,098
Sappi ............................................... 64,100 478,221
Sasol ............................................... 78,200 513,293
-----------
2,483,147
-----------
South Korea - 1.28%
Pohang Iron & Steel ................................. 2,860 219,533
-----------
219,533
-----------
Taiwan - 3.61%
Yageo GDR ........................................... 38,000 332,500
Yageo GDR ........................................... 32,634 285,548
-----------
618,048
-----------
Thailand - 5.44%
*Bangkok Bank ........................................ 93,800 110,656
Electricity Generating Public Company ............... 366,100 336,171
*Hana Microelectronics ............................... 48,600 371,891
*Thai Reinsurance .................................... 129,000 111,873
-----------
930,591
-----------
Turkey - 1.29%
*Efes Sinai Yatirim Holdings ADR ..................... 4,490 114,944
*Efes Sinai Yatirim Holdings Class B ................. 8,261,890 105,736
-----------
220,680
-----------
Total Common Stock (cost $19,872,693) ............... 15,995,931
-----------
Principal
Amount
---------
Repurchase Agreements - 7.89%
With Chase Manhattan 6.33% 6/1/00
(dated 5/31/00, collateralized by $464,000
U.S. Treasury Notes 5.875% due 11/15/04,
market value $451,594) ............................ $440,000 440,000
With J.P. Morgan Securities 6.33% 6/1/00
(dated 5/31/00, collateralized by $175,000
U.S. Treasury Notes 6.50% due 5/31/01,
market value $174,445 and $122,000
U.S. Treasury Notes 6.625% due 6/30/01,
market value $125,613 and $27,000
U.S. Treasury Notes 6.50% due 8/31/01,
market value $27,604 and $136,000
U.S. Treasury Notes 6.375% due 9/30/01,
market value $136,560). ........................... 455,000 455,000
With PaineWebber 6.33% 6/1/00
(dated 5/31/00, collateralized by $175,000
U.S. Treasury Notes 5.00% due 4/30/01,
market value $172,968 and $112,000
U.S. Treasury Notes 6.25% due 1/31/02,
market value $112,650 and $175,000
U.S. Treasury Notes 7.25% due 5/15/04,
market value $179,014). ........................... 455,000 455,000
-----------
Total Repurchase Agreements
(cost $1,350,000) ................................. 1,350,000
-----------
<PAGE>
--------------------------------------------------------------------------------
Total Market Value of Securities - 101.38%
(cost $21,222,693) ................................ $17,345,931
Liabilities Net of Receivables and
Other Assets - (1.38%) ............................ (236,006)
-----------
Net Assets Applicable to 2,151,082 Shares
Outstanding - 100.00% ............................. $17,109,925
===========
Net Asset Value - Delaware Emerging Markets
Fund A Class ($8,318,861 / 1,043,121 shares) ...... $7.97
-----
Net Asset Value - Delaware Emerging Markets
Fund B Class ($3,836,522 / 485,461 shares) ........ $7.90
-----
Net Asset Value - Delaware Emerging Markets
Fund C Class ($1,791,233 / 226,938 shares) ........ $7.89
Net Asset Value - Delaware Emerging Markets -----
Fund Institutional Class
($3,163,309 / 395,562 shares) ..................... $8.00
-----
Components of Net Assets at May 31, 2000:
Shares of beneficial interest (unlimited
authorization - no par ) .......................... $23,156,593
Distributions in excess of net
investment income** ............................... (26,871)
Accumulated net realized loss on investments ......... (2,141,759)
Net unrealized depreciation of investments and
foreign currencies ................................ (3,878,038)
-----------
Total net assets ..................................... $17,109,925
===========
----------
*Non-income producing security for the six months ended May 31, 2000.
**Distributions in excess of net investment income includes net realized gains
(losses) on foreign currencies. Net realized gains (losses) on foreign
currencies are treated as net investment income in accordance with provisions
of the Internal Revenue Code.
ADR - American Depository Receipt
GDR - Global Depository Receipt
Net Asset Value and Offering Price Per Share -
Delaware Emerging Markets Fund
Net asset value A Class (A) .......................... $7.97
Sales charge (5.75% of offering price or 6.15%
of the amount invested per share) (B) ............. 0.49
-----
Offering price ....................................... $8.46
=====
----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $50,000 or more.
See accompanying notes
20
<PAGE>
Statement of Net Assets (continued)
Delaware Global Bond Fund
-------------------------
Market
Principal Value
May 31, 2000 (Unaudited) Amount* (US $)
-----------------------------------------------------------------------------
Bonds - 94.82%
Australia - 8.87%
New South Wales Treasury
6.50% 5/1/06 .............................. AUD 1,000,000 $ 569,715
New South Wales Treasury
8.00% 3/1/08 .............................. 500,000 309,556
Queensland Treasury Global
6.50% 6/14/05 ............................. 400,000 228,297
Queensland Treasury Global
8.00% 8/14/01 ............................. 270,000 157,194
----------
1,264,762
----------
Austria - 3.64%
Republic of Austria 7.25% 5/3/07 ............. DEM 1,000,000 518,605
----------
518,605
----------
Belgium - 3.65%
Kingdom of Belgium
5.75% 9/28/10 ............................. EUR 550,000 520,012
----------
520,012
----------
Canada - 5.04%
Government of Canada
5.25% 9/1/03 .............................. CAD 100,000 64,948
10.25% 3/15/14 ............................ 100,000 92,145
Ontario Hydro
5.60% 6/2/08 .............................. 300,000 189,486
10.00% 3/19/01 ............................ 300,000 206,492
Ontario Province 6.25% 12/3/08 ............... NZD 400,000 165,669
----------
718,740
----------
Finland - 6.98%
Finnish Government
5.00% 4/25/09 ............................. EUR 1,100,000 995,059
----------
995,059
----------
Germany - 11.35%
Deutschland Republic
6.00% 7/4/07 .............................. EUR 350,000 340,193
6.25% 1/4/24 .............................. 700,000 713,376
Depfa Pfandbriefbank
5.625% 2/7/03 ............................. 600,000 563,310
----------
1,616,879
----------
Japan - 2.41%
Japan Highway 7.875% 9/27/02 ................. CAD 500,000 343,702
----------
343,702
----------
Korea - 1.31%
Korea Electric Power
6.375% 12/1/03 ............................ US$ 200,000 186,250
----------
186,250
----------
<PAGE>
Market
Principal Value
Amount* (US $)
-----------------------------------------------------------------------------
Bonds (continued)
Netherlands - 7.34%
Baden Wurt L - Finance
6.625% 8/20/03 ............................ DEM 675,000 $ 332,424
Netherlands Government
5.75% 1/15/04 ............................. EUR 750,000 713,236
-----------
1,045,660
-----------
New Zealand - 12.54%
New Zealand Government
6.00% 11/15/11 ............................ NZD 1,300,000 551,693
7.00% 7/15/09 ............................. 200,000 91,576
8.00% 4/15/04 ............................. 900,000 424,118
8.00% 11/15/06 ............................ 900,000 432,232
10.00% 3/15/02 ............................ 600,000 287,441
-----------
1,787,060
-----------
Norway - 0.58%
Kingdom of Norway
8.375% 1/27/03 ............................ CAD 120,000 83,374
-----------
83,374
-----------
Portugal - 4.54%
Portugese Government
5.375% 6/23/08 ............................ EUR 700,00 646,677
-----------
646,677
-----------
South Africa - 3.88%
Republic of South Africa
12.50% 1/15/02 ............................ ZAR 2,000,000 287,250
13.00% 8/31/10 ............................ 2,000,000 265,394
-----------
552,644
-----------
Supranational - 2.41%
International Bank Reconstruction &
Development 5.25% 1/12/09 ................. US$ 400,000 343,980
-----------
343,980
-----------
United Kingdom - 5.13%
Halifax 5.625% 7/23/07 ....................... DEM 1,550,000 730,617
-----------
730,617
-----------
United States - 15.15%
Federal National Mortgage Association
5.75% 9/5/00 .............................. AUD 500,000 285,157
KFW International Finance
6.50% 12/28/01 ............................ CAD 120,000 79,965
U.S.Treasury Inflation Index Notes
3.375% 1/15/07 ............................ US$ 428,440 408,180
3.625% 1/15/08 ............................ 630,252 607,203
U.S. Treasury Notes 5.75% 8/15/03 ............ 800,000 778,976
-----------
2,159,481
-----------
Total Bonds (cost $15,403,234) ............... 13,513,502
==========
21
<PAGE>
Statement of Net Assets (continued)
Market
Value
Delaware Global Bond Fund (US $)
--------------------------------------------------------------------------------
Total Market Value of Securities - 94.82%
(cost $15,403,234) ........................ $13,513,502
Receivables and Other Assets
Net of Liabilities - 5.18% ................ 737,995
-----------
Net Assets Applicable to 1,510,931
Shares Outstanding - 100.00% .............. $14,251,497
===========
Net Asset Value - Delaware Global Bond
Fund A Class
($2,484,168 / 263,317 shares) ............. $9.43
-----
Net Asset Value - Delaware Global Bond
Fund B Class
($934,649 / 99,075 shares) ................ $9.43
-----
Net Asset Value - Delaware Global Bond
Fund C Class
($517,327 / 55,158 shares) ................ $9.38
-----
Net Asset Value - Delaware Global Bond
Fund Institutional Class
($10,315,353 / 1,093,381 shares) .......... $9.43
-----
-----------------------------------------------------------------------------
Components of Net Assets at May 31, 2000:
Shares of beneficial interest (unlimited
authorization - no par ) .................. $16,861,811
Distributions in excess of net investment
income ** ................................. (414,043)
Accumulated net realized loss
on investments ............................ (318,831)
Net unrealized depreciation of investments
and foreign currencies .................... (1,877,440)
-----------
Total net assets ............................. $14,251,497
===========
----------
* Principal amount is stated in the currency in which each bond is denominated.
AUD - Australian Dollar
CAD - Canadian Dollar
DEM - German Deutsche Mark
EUR - European Monetary Unit
NZD - New Zealand Dollar
US$ - U.S. Dollar
ZAR - South African Rand
**Distributions in excess of net investment income includes net realized gains
(losses) on foreign currencies. Net realized gains (losses) on foreign
currencies are treated as net investment income in accordance with provisions
of the Internal Revenue Code.
Net Asset Value And Offering Price Per Share -
Delaware Global Bond Fund
Net asset value A Class (A) .................. $9.43
Sales charge (4.75% of offering price or 4.98%
of the amount invested per share) (B) ..... 0.47
-----
Offering price ............................... $9.90
=====
----------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See the current prospectus for purchases of $100,000 or more.
See accompanying notes
22
<PAGE>
Statements of Operations
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Equity Markets Bond
Six Months Ended May 31, 2000 (Unaudited) Fund Fund Fund Fund
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Investment Income:
Interest ............................................ $ 226,883 $ 3,975 $ 47,357 $ 532,075
Dividends ........................................... 4,278,982 211,330 323,930 -
Foreign tax withheld ................................ (373,020) (15,686) (13,046) -
----------- ---------- -------- --------
4,132,845 199,619 358,241 532,075
----------- ---------- -------- --------
Expenses:
Management fees ..................................... 1,121,974 62,302 116,954 57,857
Dividend disbursing and transfer agent fees and
expenses ......................................... 389,260 65,910 55,922 15,394
Distribution expense ................................ 708,858 43,982 43,453 14,074
Reports and statements to shareholders .............. 148,800 8,700 5,400 4,500
Registration fees ................................... 35,200 34,385 6,600 11,700
Custodian fees ...................................... 92,225 2,300 11,346 5,700
Accounting and administration ....................... 53,446 3,091 3,794 2,649
Professional fees ................................... 51,466 3,150 2,175 300
Taxes (other than taxes on income) .................. 12,700 670 - 120
Trustees' fees ...................................... 3,776 606 629 475
Amortization of organization expenses ............... - 813 1,835 181
Other ............................................... 26,015 3,612 1,847 2,005
----------- ---------- -------- --------
2,643,720 229,521 249,955 114,955
Less expenses absorbed or waived .................... - (71,627) (42,944) (23,432)
Less expenses paid indirectly ....................... (3,034) (168) (4,561) (177)
----------- ---------- -------- --------
Total expenses ...................................... 2,640,686 157,726 202,450 91,346
----------- ---------- -------- --------
Net Investment Income ............................... 1,492,159 41,893 155,791 440,729
----------- ---------- -------- --------
Net Realized and Unrealized Gain (Loss)
On Investments and Foreign Currencies:
Net realized gain (loss) on:
Investments ......................................... 20,386,215 495,526 185,123 (192,811)
Foreign currencies ............................... (148,699) (8,610) (23,719) (558,902)
----------- ---------- -------- --------
Net realized gain (loss) ............................ 20,237,516 486,916 161,404 (751,713)
Net change in unrealized appreciation /
depreciation of investments and foreign
currencies ....................................... (17,913,032) (1,029,657) (436,409) (284,851)
----------- ---------- -------- --------
Net Realized and Unrealized Gain (Loss)
on Investments and Foreign Currencies ............ 2,324,484 (542,741) (275,005) (1,036,564)
----------- ---------- -------- --------
Net Increase (Decrease) in Net Assets Resulting
from Operations .................................. $ 3,816,643 ($500,848) ($119,214) ($595,835)
=========== ========== ======== ========
</TABLE>
See accompanying notes
23
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Delaware
International Equity Global Equity
Fund Fund
-----------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
5/31/00 11/30/99 5/31/00 11/30/99
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income .............................. $ 1,492,159 $ 3,632,525 $ 41,893 $ 113,522
Net realized gain (loss) on investments
and foreign currencies .......................... 20,237,516 9,105,915 486,916 751,390
Net change in unrealized appreciation/depreciation
of investments and foreign currencies ........... (17,913,032) 16,263,978 (1,029,657) (355,190)
------------ ------------ ----------- -----------
Net increase (decrease) in net assets resulting
from operations ................................. 3,816,643 29,002,418 (500,848) 509,722
------------ ------------ ----------- -----------
Distributions to Shareholders from:
Net investment income:
A Class ......................................... (1,382,086) (1,890,091) (40,742) (67,715)
B Class ......................................... (387,910) (333,763) (15,971) (23,379)
C Class ......................................... (153,951) (146,074) (8,148) (13,394)
Institutional Class ............................. (1,703,355) (2,985,813) (7,475) (14,292)
Net realized gain on investments:
A Class ......................................... (2,022,871) - (301,101) (366,425)
B Class ......................................... (734,747) - (206,833) (270,108)
C Class ......................................... (291,602) - (105,447) (168,225)
Institutional Class ............................. (2,285,334) - (49,836) (131,263)
------------ ------------ ----------- -----------
(8,961,856) (5,355,741) (735,553) (1,054,801)
------------ ------------ ----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
A Class ......................................... 124,557,320 527,399,231 1,492,731 3,054,871
B Class ......................................... 3,554,969 37,781,353 527,277 1,137,247
C Class ......................................... 19,763,110 146,537,454 199,425 447,132
Institutional Class ............................. 36,627,154 73,156,798 258,757 303,024
Net asset value of shares issued upon reinvestment
of distributions from net investment income and
net realized gain on investments:
A Class ......................................... 3,202,070 1,753,906 331,496 426,759
B Class ......................................... 1,053,722 309,017 206,619 270,356
C Class ......................................... 430,304 86,965 101,506 170,283
Institutional Class ............................. 3,975,582 2,979,145 57,311 76,155
------------ ------------ ----------- -----------
193,164,231 790,003,869 3,175,122 5,885,827
------------ ------------ ----------- -----------
Cost of shares repurchased:
A Class ......................................... (136,856,148) (561,503,159) (2,746,166) (3,251,609)
B Class ......................................... (7,654,669) (40,944,362) (1,233,041) (1,586,409)
C Class ......................................... (21,606,819) (147,929,924) (793,728) (1,305,309)
Institutional Class ............................. (34,402,476) (136,509,520) (492,166) (1,667,350)
------------ ------------ ----------- -----------
(200,520,112) (886,886,965) (5,265,101) (7,810,677)
------------ ------------ ----------- -----------
Increase (decrease) in net assets derived from
capital share transactions ...................... (7,355,881) (96,883,096) (2,089,979) (1,924,850)
------------ ------------ ----------- -----------
Net Increase (Decrease) in Net Assets .............. (12,501,094) (73,236,419) (3,326,380) (2,469,929)
Net Assets:
Beginning of period ................................ 266,046,312 339,282,731 16,273,793 18,743,722
------------ ------------ ----------- -----------
End of period ...................................... $253,545,218 $266,046,312 $12,947,413 $16,273,793
============ ============ =========== ===========
</TABLE>
See accompanying notes
24
<PAGE>
Statements of Changes in Net Assets (continued)
<TABLE>
<CAPTION>
Delaware Delaware
Emerging Markets Global Bond
Fund Fund
-----------------------------------------------------------------------------------------------------------
Six Months Year Six Months Year
Ended Ended Ended Ended
5/31/00 11/30/99 5/31/00 11/30/99
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income .............................. $ 155,791 $ 119,221 $ 440,729 $ 1,049,926
Net realized gain (loss) on investments and foreign
currencies ...................................... 161,404 (852,704) (751,713) (315,549)
Net change in unrealized appreciation/depreciation
of investments and foreign currencies ........... (436,409) 3,549,936 (284,851) (1,409,629)
----------- ----------- ----------- -----------
Net increase (decrease) in net assets resulting
from operations ................................. (119,214) 2,816,453 (595,835) (675,252)
----------- ----------- ----------- -----------
Distributions to Shareholders from:
Net investment income:
A Class ......................................... (119,720) (58,679) (62,048) (186,455)
B Class ......................................... (32,820) (3,872) (17,373) (67,827)
C Class ......................................... (15,861) (1,386) (7,764) (27,524)
Institutional Class ............................. (48,251) (15,279) (192,281) (580,647)
Net realized gain on investments:
A Class ......................................... - - - (44,575)
B Class ......................................... - - - (17,576)
C Class ......................................... - - - (5,593)
Institutional Class ............................. - - - (124,376)
----------- ----------- ----------- -----------
(216,652) (79,216) (279,466) (1,054,573)
----------- ----------- ----------- -----------
Capital Share Transactions:
Proceeds from shares sold:
A Class ......................................... 2,733,347 3,894,494 773,435 1,340,305
B Class ......................................... 1,257,842 1,854,696 92,049 1,194,675
C Class ......................................... 2,496,329 730,055 52,584 473,390
Institutional Class ............................. 1,164,774 2,210,948 1,663,000 3,361,887
Net asset value of shares issued upon reinvestment
of distributions from net investment income and
net realized gain on investments:
A Class ......................................... 115,515 54,297 42,009 167,600
B Class ......................................... 31,672 3,519 16,358 78,826
C Class ......................................... 15,681 1,323 7,397 32,145
Institutional Class ............................. 48,251 15,279 191,838 682,713
----------- ----------- ----------- -----------
7,863,411 8,764,611 2,838,670 7,331,541
----------- ----------- ----------- -----------
Cost of shares repurchased:
A Class ......................................... (2,166,702) (3,043,824) (2,085,303) (1,873,705)
B Class ......................................... (1,042,058) (1,322,303) (746,271) (647,325)
C Class ......................................... (2,254,524) (303,935) (192,418) (296,153)
Institutional Class ............................. (795,915) (1,103,300) (2,626,052) (4,193,867)
----------- ----------- ----------- -----------
(6,259,199) (5,773,362) (5,650,044) (7,011,050)
----------- ----------- ----------- -----------
Increase (decrease) in net assets derived from
capital share transactions ...................... 1,604,212 2,991,249 (2,811,374) 320,491
----------- ----------- ----------- -----------
Net Increase (Decrease) in Net Assets .............. 1,268,346 5,728,486 (3,686,675) (1,409,334)
Net Assets:
Beginning of period ................................ 15,841,579 10,113,093 17,938,172 19,347,506
----------- ----------- ----------- -----------
End of period ...................................... $17,109,925 $15,841,579 $14,251,497 $17,938,172
=========== =========== =========== ===========
</TABLE>
See accompanying notes
25
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware International Equity Fund A Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................... $16.150 $15.330 $14.650 $14.640 $12.190 $11.920
Income from investment operations:
Net investment income(2) ............................. 0.090 0.174 0.273 0.220 0.490 0.297
Net realized and unrealized gain on investments
and foreign currencies ............................. 0.082 0.881 0.957 0.245 2.385 0.628
---------------------------------------------------------------------
Total from investment operations ..................... 0.172 1.055 1.230 0.465 2.875 0.925
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ................. (0.220) (0.235) (0.395) (0.435) (0.280) (0.185)
Distributions from net realized gain on investments .. (0.322) none (0.155) (0.020) (0.145) (0.470)
---------------------------------------------------------------------
Total dividends and distributions .................... (0.542) (0.235) (0.550) (0.455) (0.425) (0.655)
---------------------------------------------------------------------
Net asset value, end of period .......................... $15.780 $16.150 $15.330 $14.650 $14.640 $12.190
=====================================================================
Total return(3) ......................................... 0.96% 6.97% 8.75% 3.27% 24.22% 8.17%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $89,145 $99,671 $122,609 $112,425 $89,177 $62,251
Ratio of expenses to average net assets .............. 1.99% 1.86% 1.70% 1.70% 1.85% 2.07%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............ 1.99% 1.86% 1.70% 1.71% 1.95% 2.07%
Ratio of net investment income to average net assets . 1.14% 1.10% 1.80% 1.46% 3.70% 2.57%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly . 1.14% 1.10% 1.80% 1.45% 3.60% 2.57%
Portfolio turnover ................................... 15% 3% 5% 8% 9% 21%
</TABLE>
-------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
26
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware International Equity Fund B Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $16.090 $15.280 $14.560 $14.560 $12.130 $11.900
Income from investment operations:
Net investment income(2) .............................. 0.034 0.063 0.168 0.114 0.398 0.278
Net realized and unrealized gain on investments
and foreign currencies .............................. 0.078 0.877 0.962 0.246 2.377 0.567
---------------------------------------------------------------------
Total from investment operations ...................... 0.112 0.940 1.130 0.360 2.775 0.845
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.170) (0.130) (0.255) (0.340) (0.200) (0.145)
Distributions from net realized gain on investments ... (0.322) none (0.155) (0.020) (0.145) (0.470)
---------------------------------------------------------------------
Total dividends and distributions ..................... (0.492) (0.130) (0.410) (0.360) (0.345) (0.615)
---------------------------------------------------------------------
Net asset value, end of period ........................... $15.710 $16.090 $15.280 $14.560 $14.560 $12.130
=====================================================================
Total return(3) .......................................... 0.59% 6.21% 8.03% 2.54% 23.38% 7.46%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $33,057 $36,997 $37,775 $31,914 $10,878 $3,471
Ratio of expenses to average net assets ............... 2.69% 2.56% 2.40% 2.40% 2.55% 2.77%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............. 2.69% 2.56% 2.40% 2.41% 2.65% 2.77%
Ratio of net investment income to average net assets .. 0.44% 0.40% 1.10% 0.76% 3.00% 1.87%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly .. 0.44% 0.40% 1.10% 0.75% 2.90% 1.87%
Portfolio turnover .................................... 15% 3% 5% 8% 9% 21%
</TABLE>
-----------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
27
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware International Equity Fund C Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months 11/29/95(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $16.070 $15.260 $14.540 $14.540 $12.190 $12.240
Income (loss) from investment operations:
Net investment income(3) .............................. 0.034 0.063 0.167 0.114 0.400 none
Net realized and unrealized gain (loss) on investments
and foreign currencies .............................. 0.078 0.877 0.963 0.246 2.375 (0.050)
------------------------------------------------------------------
Total from investment operations ...................... 0.112 0.940 1.130 0.360 2.775 (0.050)
------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.170) (0.130) (0.255) (0.340) (0.280) none
Distributions from net realized gain on investments ... (0.322) none (0.155) (0.020) (0.145) none
------------------------------------------------------------------
Total dividends and distributions ..................... (0.492) (0.130) (0.410) (0.360) (0.425) none
------------------------------------------------------------------
Net asset value, end of period ........................... $15.690 $16.070 $15.260 $14.540 $14.540 $12.190
==================================================================
Total return(4) .......................................... 0.65% 6.22% 8.04% 2.54% 23.39% (5)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $12,759 $14,369 $14,076 $11,811 $1,909 $5
Ratio of expenses to average net assets ............... 2.69% 2.56% 2.40% 2.40% 2.55% (5)
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............. 2.69% 2.56% 2.40% 2.41% 2.65% (5)
Ratio of net investment income to average net assets .. 0.44% 0.40% 1.10% 0.76% 3.00% (5)
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly .. 0.44% 0.40% 1.10% 0.75% 2.90% (5)
Portfolio turnover .................................... 15% 3% 5% 8% 9% (5)
</TABLE>
------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and total return for this relatively short period are not
meaningful.
See accompanying notes
28
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware International Equity Fund Institutional Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $16.190 $15.370 $14.720 $14.710 $12.240 $11.970
Income from investment operations:
Net investment income(2) .............................. 0.113 0.222 0.318 0.267 0.530 0.323
Net realized and unrealized gain on investments
and foreign currencies .............................. 0.079 0.880 0.962 0.238 2.405 0.637
---------------------------------------------------------------------
Total from investment operations ...................... 0.192 1.102 1.280 0.505 2.935 0.960
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.240) (0.282) (0.475) (0.475) (0.320) (0.220)
Distributions from net realized gain on investments ... (0.322) none (0.155) (0.020) (0.145) (0.470)
---------------------------------------------------------------------
Total dividends and distributions ..................... (0.562) (0.282) (0.630) (0.495) (0.465) (0.690)
---------------------------------------------------------------------
Net asset value, end of period ........................... $15.820 $16.190 $15.370 $14.720 $14.710 $12.240
=====================================================================
Total return(3) .......................................... 1.08% 7.26% 9.10% 3.55% 24.68% 8.46%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $118,584 $115,009 $164,823 $71,177 $34,194 $11,660
Ratio of expenses to average net assets ............... 1.69% 1.56% 1.40% 1.40% 1.55% 1.77%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............. 1.69% 1.56% 1.40% 1.41% 1.65% 1.77%
Ratio of net investment income to average net assets .. 1.44% 1.40% 2.10% 1.76% 4.00% 2.87%
Ratio of net investment income to average net assets prior
to expense limitation and expenses paid indirectly .. 1.44% 1.40% 2.10% 1.75% 3.90% 2.87%
Portfolio turnover .................................... 15% 3% 5% 8% 9% 21%
</TABLE>
--------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
See accompanying notes
29
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Equity Fund A Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months 12/27/94(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..................... $13.220 $13.600 $14.050 $13.310 $11.900 $10.000
Income from investment operations:
Net investment income(3) .............................. 0.054 0.130 0.289 0.437 0.493 0.301
Net realized and unrealized gain (loss) on investments
and foreign currencies .............................. (0.431) 0.290 0.826 0.843 1.572 1.839
---------------------------------------------------------------------
Total from investment operations ...................... (0.377) 0.420 1.115 1.280 2.065 2.140
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................. (0.073) (0.120) (0.335) (0.490) (0.385) (0.240)
Distributions from net realized gain on investments ... (0.550) (0.680) (1.230) (0.050) (0.270) none
---------------------------------------------------------------------
Total dividends and distributions ..................... (0.623) (0.800) (1.565) (0.540) (0.655) (0.240)
---------------------------------------------------------------------
Net asset value, end of period ........................... $12.220 $13.220 $13.600 $14.050 $13.310 $11.900
=====================================================================
Total return(4) .......................................... (2.98%) 3.17% 8.83% 9.91% 18.17% 21.48%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............... $5,892 $7,386 $7,329 $6,939 $11,878 $3,122
Ratio of expenses to average net assets ............... 1.86% 1.85% 1.55% 1.25% 1.25% 1.25%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............. 2.84% 2.32% 1.99% 2.16% 2.72% 7.55%
Ratio of net investment income to average net assets .. 0.86% 0.97% 2.17% 3.24% 4.13% 4.75%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ............................ (0.12%) 0.50% 1.73% 2.33% 2.66% (1.55%)
Portfolio turnover .................................... 33% 29% 90% 74% 34% 57%
</TABLE>
------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios and total return have been
annualized.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1997, 1998, and 1999 was based on the average shares
outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
30
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Equity Fund B Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 12/27/94(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $13.190 $13.600 $14.040 $13.300 $11.880 $10.000
Income from investment operations:
Net investment income (3) .............................. 0.011 0.036 0.197 0.342 0.379 0.212
Net realized and unrealized gain (loss) on investments
and foreign currencies ................................. (0.428) 0.294 0.813 0.848 1.606 1.848
----------------------------------------------------------------------
Total from investment operations ....................... (0.417) 0.330 1.010 1.190 1.985 2.060
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ................... (0.043) (0.060) (0.220) (0.400) (0.295) (0.180)
Distributions from net realized gain on investments .... (0.550) (0.680) (1.230) (0.050) (0.270) none
----------------------------------------------------------------------
Total dividends and distributions ...................... (0.593) (0.740) (1.450) (0.450) (0.565) (0.180)
----------------------------------------------------------------------
Net asset value, end of period ............................ $12.180 $13.190 $13.600 $14.040 $13.300 $11.880
======================================================================
Total return (4) .......................................... (3.37%) 2.56% 7.97% 9.18% 17.32% 20.73%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $4,161 $5,044 $5,397 $4,445 $4,796 $613
Ratio of expenses to average net assets ................ 2.56% 2.55% 2.25% 1.95% 1.95% 1.95%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .............. 3.54% 3.02% 2.69% 2.86% 3.42% 8.25%
Ratio of net investment income to average net assets ... 0.16% 0.27% 1.47% 2.54% 3.43% 4.05%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ............................. (0.82%) (0.20%) 1.03% 1.63% 1.96% (2.25%)
Portfolio turnover ..................................... 33% 29% 90% 74% 34% 57%
</TABLE>
--------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios and total return have been
annualized.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1997, 1998, and 1999 was based on the average shares
outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
See accompanying notes
31
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Equity Fund C Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 11/29/95(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $13.140 $13.550 $13.990 $13.250 $11.890 $11.940
Income (loss) from investment operations:
Net investment income (3) .............................. 0.011 0.036 0.197 0.341 0.446 none
Net realized and unrealized gain (loss) on investments
and foreign currencies ................................. (0.428) 0.294 0.813 0.849 1.534 (0.050)
----------------------------------------------------------------------
Total from investment operations ....................... (0.417) 0.330 1.010 1.190 1.980 (0.050)
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ................... (0.043) (0.060) (0.220) (0.400) (0.350) none
Distributions from net realized gain on investments .... (0.550) (0.680) (1.230) (0.050) (0.270) none
----------------------------------------------------------------------
Total dividends and distributions ...................... (0.593) (0.740) (1.450) (0.450) (0.620) none
----------------------------------------------------------------------
Net asset value, end of period ............................ $12.130 $13.140 $13.550 $13.990 $13.250 $11.890
======================================================================
Total return (4) .......................................... (3.38%) 2.57% 8.00% 9.21% 17.33% (5)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................ $1,936 $2,614 $3,391 $3,094 $1,185 $5
Ratio of expenses to average net assets ................ 2.56% 2.55% 2.25% 1.95% 1.95% (5)
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .............. 3.54% 3.02% 2.69% 2.86% 3.42% (5)
Ratio of net investment income to average net assets ... 0.16% 0.27% 1.47% 2.54% 3.43% (5)
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ............................. (0.82%) (0.20%) 1.03% 1.63% 1.96% (5)
Portfolio turnover .................................... 33% 29% 90% 74% 34% (5)
</TABLE>
--------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1997, 1998, and 1999 was based on the average shares
outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management
believes that such ratios and total return for this relatively short period
are not meaningful.
See accompanying notes
32
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Equity Fund Institutional Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 12/27/94(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $13.250 $13.610 $14.100 $13.340 $11.930 $10.000
Income from investment operations:
Net investment income (3) ............................... 0.073 0.170 0.329 0.478 0.567 0.473
Net realized and unrealized gain (loss) on investments
and foreign currencies .................................. (0.430) 0.300 0.816 0.857 1.533 1.697
----------------------------------------------------------------------
Total from investment operations ........................ (0.357) 0.470 1.145 1.335 2.100 2.170
----------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................... (0.083) (0.150) (0.405) (0.525) (0.420) (0.240)
Distributions from net realized gain on investments ..... (0.550) (0.680) (1.230) (0.050) (0.270) none
----------------------------------------------------------------------
Total dividends and distributions ....................... (0.633) (0.830) (1.635) (0.575) (0.690) (0.240)
----------------------------------------------------------------------
Net asset value, end of period ............................. $12.260 $13.250 $13.610 $14.100 $13.340 $11.930
======================================================================
Total return (4) ........................................... (2.89%) 3.63% 9.07% 10.34% 18.38% 21.88%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $958 $1,229 $2,627 $2,310 $2,203 $2,191
Ratio of expenses to average net assets ................. 1.56% 1.55% 1.25% 0.95% 0.95% 0.95%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............... 2.54% 2.02% 1.69% 1.86% 2.42% 7.25%
Ratio of net investment income to average net assets .... 1.16% 1.27% 2.47% 3.54% 4.43% 5.05%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly .............................. 0.18% 0.80% 2.03% 2.63% 2.96% (1.25%)
Portfolio turnover ...................................... 33% 29% 90% 74% 34% 57%
</TABLE>
--------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1997, 1998, and 1999 was based on the average shares
outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value.
See accompanying notes
33
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Emerging Markets Fund A Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 6/10/96(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $8.050 $6.530 $10.200 $9.970 $10.000
Income (loss) from investment operations:
Net investment income (loss) (3) ........................ 0.084 0.081 0.129 0.062 0.018
Net realized and unrealized gain (loss) on investments
and foreign currencies .................................. (0.044) 1.509 (3.174) 0.253 (0.048)
--------------------------------------------------------
Total from investment operations ........................ 0.040 1.590 (3.045) 0.315 (0.030)
--------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................... (0.120) (0.070) (0.020) (0.010) none
Distributions from net realized gain on investments ..... none none (0.605) (0.075) none
--------------------------------------------------------
Total dividends and distributions ....................... (0.120) (0.070) (0.625) (0.085) none
--------------------------------------------------------
Net asset value, end of period ............................. $7.970 $8.050 $ 6.530 $10.200 $9.970
========================================================
Total return (4) ........................................... 0.35% 24.74% (31.66%) 3.19% (0.30%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $8,319 $7,815 $5,584 $9,665 $2,518
Ratio of expenses to average net assets ................. 1.95% 1.95% 1.96% 2.00% 2.00%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ............... 2.50% 2.99% 3.91% 3.02% 4.10%
Ratio of net investment income
(loss) to average net assets .......................... 1.87% 1.15% 1.58% 0.52% 0.17%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly .............................. 1.37% 0.11% (0.37%) (0.50%) (1.93%)
Portfolio turnover ...................................... 27% 17% 47% 65% 36%
</TABLE>
--------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
See accompanying notes
34
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Emerging Markets Fund B Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months 6/10/96(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............................. $7.960 $6.440 $10.110 $ 9.940 $10.000
Income (loss) from investment operations:
Net investment income (loss)(3) ................................ 0.050 0.029 0.070 (0.020) (0.051)
Net realized and unrealized gain (loss) on
investments and foreign currencies ........................... (0.040) 1.501 (3.135) 0.265 (0.009)
---------------------------------------------------------
Total from investment operations ............................... 0.010 1.530 (3.065) 0.245 (0.060)
---------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ........................... (0.070) (0.010) none none none
Distributions from net realized gain on investments ............ none none (0.605) (0.075) none
---------------------------------------------------------
Total dividends and distributions .............................. (0.070) (0.010) (0.605) (0.075) none
---------------------------------------------------------
Net asset value, end of period .................................... $7.900 $7.960 $ 6.440 $10.110 $ 9.940
=========================================================
Total return(4) ................................................... 0.04% 23.81% (32.11%) 2.48% (0.60%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $3,837 $3,671 $2,528 $3,484 $282
Ratio of expenses to average net assets ......................... 2.70% 2.70% 2.70% 2.70% 2.70%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ....................... 3.20% 3.69% 4.61% 3.72% 4.80%
Ratio of net investment income (loss)
to average net assets ......................................... 1.12% 0.40% 0.84% (0.18%) (0.53%)
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ...................................... 0.62% (0.59%) (1.07%) (1.20%) (2.63%)
Portfolio turnover .............................................. 27% 17% 47% 65% 36%
</TABLE>
-------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
See accompanying notes
35
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Emerging Markets Fund C Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months 6/10/96(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............................. $7.950 $6.430 $10.110 $9.940 $10.000
Income (loss) from investment operations:
Net investment income (loss)(3) ................................ 0.050 0.029 0.068 (0.019) (0.051)
Net realized and unrealized gain (loss) on
investments and foreign currencies ........................... (0.040) 1.501 (3.143) 0.264 (0.009)
---------------------------------------------------------
Total from investment operations ............................... 0.010 1.530 (3.075) 0.245 (0.060)
---------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ........................... (0.070) (0.010) none none none
Distributions from net realized gain on investments ............ none none (0.605) (0.075) none
---------------------------------------------------------
Total dividends and distributions .............................. (0.070) (0.010) (0.605) (0.075) none
---------------------------------------------------------
Net asset value, end of period .................................... $7.890 $7.950 $ 6.430 $10.110 $ 9.940
=========================================================
Total return(4) ................................................... 0.03% 23.85% (32.21%) 2.48% (0.60%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $1,791 $1,565 $884 $1,519 $199
Ratio of expenses to average net assets ......................... 2.70% 2.70% 2.70% 2.70% 2.70%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ....................... 3.20% 3.69% 4.61% 3.72% 4.80%
Ratio of net investment income (loss)
to average net assets ......................................... 1.12% 0.40% 0.84% (0.18%) (0.53%)
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ...................................... 0.62% (0.59%) (1.07%) (1.20%) (2.63%)
Portfolio turnover .............................................. 27% 17% 47% 65% 36%
</TABLE>
-------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
See accompanying notes
36
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Emerging Markets Fund Institutional Class
-----------------------------------------------------------------------------------------------------------------------------------
Six Months 6/10/96(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .............................. $8.080 $6.550 $10.250 $ 9.990 $10.000
Income (loss) from investment operations:
Net investment income (loss)(3) ................................ 0.095 0.099 0.151 0.098 0.047
Net realized and unrealized gain (loss) on
investments and foreign currencies ........................... (0.035) 1.521 (3.191) 0.262 (0.057)
---------------------------------------------------------
Total from investment operations ............................... 0.060 1.620 (3.040) 0.360 (0.010)
---------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ........................... (0.140) (0.090) (0.055) (0.025) none
Distributions from net realized gain on investments ............ none none (0.605) (0.075) none
---------------------------------------------------------
Total dividends and distributions .............................. (0.140) (0.090) (0.660) (0.100) none
---------------------------------------------------------
Net asset value, end of period .................................... $8.000 $8.080 $ 6.550 $10.250 $ 9.990
=========================================================
Total return(4) ................................................... 0.57% 25.24% (31.55%) 3.64% (0.10%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) ......................... $3,163 $2,791 $1,117 $1,916 $3,717
Ratio of expenses to average net assets ......................... 1.70% 1.70% 1.70% 1.70% 1.70%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ....................... 2.20% 2.69% 3.61% 2.72% 3.80%
Ratio of net investment income (loss)
to average net assets ......................................... 2.12% 1.40% 1.84% 0.82% 0.47%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ...................................... 1.62% 0.41% (0.07%) (0.20%) (1.63%)
Portfolio turnover .............................................. 27% 17% 47% 65% 36%
</TABLE>
-------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information was based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value.
See accompanying notes
37
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Bond Fund A Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 12/27/94(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $10.000 $10.940 $10.790 $11.480 $11.230 $10.000
Income (loss) from investment operations:
Net investment income(3) ................................ 0.272 0.560 0.595 0.625 0.755 0.659
Net realized and unrealized gain (loss)
on investments and foreign currencies ................. (0.667) (0.935) (0.015) (0.505) 0.730 1.171
---------------------------------------------------------------------
Total from investment operations ........................ (0.395) (0.375) 0.580 0.120 1.485 1.830
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income .................... (0.175) (0.460) (0.400) (0.770) (0.875) (0.600)
Distributions from net realized gain on
investments .......................................... none (0.105) (0.030) (0.040) (0.360) none
---------------------------------------------------------------------
Total dividends and distributions ....................... (0.175) (0.565) (0.430) (0.810) (1.235) (0.600)
---------------------------------------------------------------------
Net asset value, end of period ............................ $ 9.430 $10.000 $10.940 $10.790 $11.480 $11.230
=====================================================================
Total return(4) ........................................... (4.00%) (3.50%) 5.47% 1.24% 14.35% 18.79%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................. $2,484 $3,944 $4,684 $4,567 $3,467 $889
Ratio of expenses to average net assets ................. 1.30% 1.30% 1.25% 1.25% 1.25% 1.25%
Ratio of expenses to average net assets prior to
expense limitation and expenses paid indirectly ....... 1.60% 1.54% 1.59% 2.04% 5.00% 12.34%
Ratio of net investment income to average net assets .... 5.60% 5.34% 5.58% 5.76% 6.82% 7.70%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly .............................. 5.30% 5.10% 5.24% 4.97% 3.07% (3.39%)
Portfolio turnover ........................................ 60% 90% 93% 76% 42% 98%
</TABLE>
-------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(4) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value and does not reflect the impact of a sales charge.
See accompanying notes
38
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Bond Fund B Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 12/27/94(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $10.000 $10.930 $10.790 $11.490 $11.230 $10.000
Income (loss) from investment operations:
Net investment income(3) ................................. 0.238 0.487 0.520 0.550 0.679 0.565
Net realized and unrealized gain (loss)
on investments and foreign currencies ................... (0.668) (0.927) (0.020) (0.511) 0.735 1.205
------- ------- ------- ------- ------- -------
Total from investment operations ......................... (0.430) (0.440) 0.500 0.039 1.414 1.770
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.140) (0.385) (0.330) (0.699) (0.794) (0.540)
Distributions from net realized gain on investments ...... none (0.105) (0.030) (0.040) (0.360) none
------- ------- ------- ------- ------- -------
Total dividends and distributions ........................ (0.140) (0.490) (0.360) (0.739) (1.154) (0.540)
------- ------- ------- ------- ------- -------
Net asset value, end of period .............................. $ 9.430 $10.000 $10.930 $10.790 $11.490 $11.230
======= ======= ======= ======= ======= =======
Total return(4) ............................................. (4.34%) (4.01%) 4.59% 0.48% 13.51% 18.23%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $ 935 $ 1,646 $ 1,188 $ 1,081 $ 707 $ 115
Ratio of expenses to average net assets .................... 2.00% 2.00% 1.95% 1.95% 1.95% 1.95%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .................. 2.30% 2.24% 2.29% 2.74% 5.70% 13.04%
Ratio of net investment income to average net assets ....... 4.90% 4.64% 4.88% 5.06% 6.12% 7.00%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ................................. 4.60% 4.40% 4.54% 4.27% 2.37% (4.09%)
Portfolio turnover ......................................... 60% 90% 93% 76% 42% 98%
</TABLE>
----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
39
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Bond Fund C Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 11/29/95(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $9.940 $10.880 $10.740 $11.440 $11.240 $11.330
Income (loss) from investment operations:
Net investment income(3) ................................. 0.238 0.487 0.521 0.551 0.680 none
Net realized and unrealized gain (loss)
on investments and foreign currencies ................... (0.658) (0.937) (0.021) (0.512) 0.719 (0.036)
------ ------- ------- ------- ------- -------
Total from investment operations ......................... (0.420) (0.450) 0.500 0.039 1.399 (0.036)
------ ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ..................... (0.140) (0.385) (0.330) (0.699) (0.839) (0.054)
Distributions from net realized gain on investments ...... none (0.105) (0.030) (0.040) (0.360) none
------ ------- ------- ------- ------- -------
Total dividends and distributions ........................ (0.140) (0.490) (0.360) (0.739) (1.199) (0.054)
------ ------- ------- ------- ------- -------
Net asset value, end of period .............................. $9.380 $ 9.940 $10.880 $10.740 $11.440 $11.240
====== ======= ======= ======= ======= =======
Total return(4) ............................................. (4.27%) (4.21%) 4.71% 0.49% 13.51% (5)
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................... $ 517 $ 681 $539 $703 $118 $5
Ratio of expenses to average net assets .................... 2.00% 2.00% 1.95% 1.95% 1.95% (5)
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly .................. 2.30% 2.24% 2.29% 2.74% 5.70% (5)
Ratio of net investment income to average net assets ....... 4.90% 4.64% 4.88% 5.06% 6.12% (5)
Ratio of net investment income to average
net assets prior to expense limitation and
expenses paid indirectly ................................. 4.60% 4.40% 4.54% 4.27% 2.37% (5)
Portfolio turnover ......................................... 60% 90% 93% 76% 42% (5)
</TABLE>
----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
(5) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management believes
that such ratios and total return for this relatively short period are not
meaningful.
See accompanying notes
40
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Global Bond Fund Institutional Class
------------------------------------------------------------------------------------------------------------------------------------
Six Months 12/27/94(2)
Ended Year Ended to
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $ 9.990 $10.930 $10.810 $11.520 $11.270 $10.000
Income (loss) from investment operations:
Net investment income(3) ................................ 0.287 0.592 0.627 0.658 0.788 0.782
Net realized and unrealized gain (loss)
on investments and foreign currencies .................. (0.664) (0.937) (0.017) (0.515) 0.732 1.088
------- ------- ------- ------- ------ -------
Total from investment operations ........................ (0.377) (0.345) 0.610 0.143 1.520 1.870
------- ------- ------- ------- ------ -------
Less dividends and distributions:
Dividends from net investment income .................... (0.183) (0.490) (0.460) (0.813) (0.910) (0.600)
Distributions from net realized gain on investments ..... none (0.105) (0.030) (0.040) (0.360) none
------- ------- ------- ------- ------ -------
Total dividends and distributions ....................... (0.183) (0.595) (0.490) (0.853) (1.270) (0.600)
------- ------- ------- ------- ------ -------
Net asset value, end of period ............................. $ 9.430 $ 9.990 $10.930 $10.810 $11.520 $11.270
======= ======= ======= ======= ====== =======
Total return(4) ............................................ (3.83%) (3.31%) 5.88% 1.45% 14.68% 19.21%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................... $10,315 $11,668 $12,937 $11,278 $6,707 $ 897
Ratio of expenses to average net assets ................... 1.00% 1.00% 0.95% 0.95% 0.95% 0.95%
Ratio of expenses to average net assets prior to expense
limitation and expenses paid indirectly ................. 1.30% 1.24% 1.29% 1.74% 4.70% 12.04%
Ratio of net investment income to average net assets ...... 5.90% 5.64% 5.88% 6.06% 7.12% 8.00%
Ratio of net investment income (loss) to average
net assets prior to expense limitation and
expenses paid indirectly ................................ 5.60% 5.40% 5.54% 5.27% 3.37% (3.09%)
Portfolio turnover ........................................ 60% 90% 93% 76% 42% 98%
</TABLE>
----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) Per share information for the six months ended May 31, 2000 and the years
ended November 30, 1996, 1997, 1998, and 1999 was based on the average
shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value.
See accompanying notes
41
<PAGE>
Notes to Financial Statements
May 31, 2000 (Unaudited)
--------------------------------------------------------------------------------
Delaware Group Global & International Funds (the "Trust") is organized as a
Delaware business trust under a certificate of trust dated November 23, 1999,
and offers five funds: the Delaware International Equity Fund, the Delaware
Global Equity Fund, the Delaware Emerging Markets Fund, the Delaware Global Bond
Fund, and the Delaware International Small Cap Fund. These financial statements
and the related notes pertain to the Delaware International Equity Fund, the
Delaware Global Equity Fund, the Delaware Emerging Markets Fund and the Delaware
Global Bond Fund (the "Fund" or collectively as the "Funds"). The Delaware
International Equity Fund is registered as a diversified open-end investment
company, and the Delaware Global Equity Fund, the Delaware Emerging Markets Fund
and the Delaware Global Bond Fund, are registered as non-diversified open-end
investment companies, under the Investment Company Act of 1940, as amended. Each
Fund offers four classes of shares. The A Class carries a maximum front-end
sales charge of 5.75% for all Funds except the Delaware Global Bond Fund, which
is a maximum of 4.75%. The B Class carries a back-end deferred sales charge, the
C Class carries a level load sales charge and the Institutional Class has no
sales charge.
The investment objective of each Fund is as follows:
Delaware International Equity Fund: To seek long-term growth without undue risk
to principal. It does so by investing primarily in international equity
securities with the potential for capital appreciation and income.
Delaware Global Equity Fund: To seek long-term total return. It does so by
investing primarily in equity securities, including U.S. and foreign stocks,
with the potential for capital appreciation and income.
Delaware Emerging Markets Fund: To seek long-term capital appreciation. It does
so by investing primarily in equity securities of issuers located or operating
in emerging market countries.
Delaware Global Bond Fund: To seek current income consistent with the
preservation of principal. It does so by investing primarily in foreign and U.S.
bonds that may also provide the potential for capital appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with accounting principles
generally accepted in the United States and are consistently followed by the
Trust.
Security Valuation - All domestic equity securities are valued at the last
quoted sales price as of the regular close of the New York Stock Exchange (NYSE)
on the valuation date. If on a particular day an equity security does not trade,
then the mean between the bid and asked prices will be used. Securities not
traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Securities listed on a foreign exchange are
valued at the last quoted sales price before each Fund is valued. Long-term debt
securities are valued by an independent pricing service and such prices are
believed to reflect the fair value of such securities. Money market instruments
<PAGE>
--------------------------------------------------------------------------------
having less than 60 days to maturity are valued at amortized cost, which
approximates market value. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the Fund's Board of Trustees.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from accounting
principles generally accepted in the United States.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
each Fund on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Repurchase Agreements - Each Fund may invest in a pooled cash account along with
other members of the Delaware Investments Family of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. government. The respective collateral is held by each
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is 102% collateralized. However, in the
event of default or bankruptcy by the counterparty to the agreement, realization
of the collateral may be subject to legal proceedings.
Foreign Currency Transactions - Transactions denominated in foreign currencies
are recorded at the prevailing exchange rates on the valuation date. The value
of all assets and liabilities denominated in foreign currencies are translated
into U.S. dollars at the exchange rate of such currencies against the U.S.
dollar daily. Transaction gains or losses resulting from changes in exchange
rates during the reporting period or upon settlement of the foreign currency
transaction are reported in operations for the current period. It is not
practical to isolate that portion of both realized and unrealized gains and
losses on investments in equity securities in the statement of operations that
result from fluctuations in foreign currency exchange rates. The Funds do
isolate that portion of gains and losses on investments in debt securities,
which are due to changes in the foreign currency exchange rate from that which
are due to changes in the market prices of debt securities. The Funds report
certain foreign currency related transactions as components of realized gains
(losses) for financial reporting purposes, whereas such components are treated
as ordinary income (loss) for federal income tax purposes.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
42
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
1. Significant Accounting Policies (continued)
Other - Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. Foreign dividends are also recorded on the
ex-dividend date or as soon after the ex-dividend date that the Funds are aware
of such dividends, net of all non-rebatable tax withholdings. Withholding taxes
on foreign dividends have been provided for in accordance with the Funds
understanding of the applicable country's tax rules and rates. Original issue
discounts are accreted to interest income over the lives of the respective
securities. Each Fund declares and pays dividends from capital gains, if any,
annually and from net investment income, if any, as follows: the Delaware Global
Bond Fund quarterly, and the Delaware International Equity Fund, the Delaware
Global Equity Fund, and the Delaware Emerging Markets Fund annually.
Certain expenses of the Funds are paid through commission arrangements with
brokers. These transactions are done subject to best execution. Each Fund may
receive earnings credits from its custodian when positive cash balances are
maintained, which are used to offset custody fees. The expenses paid under the
above arrangement are included in their respective expense captions on the
Statement of Operations with the corresponding expense offset shown as "expenses
paid indirectly". The amount of these expenses and credits for the period ended
May 31, 2000 are as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Fund Equity Fund Markets Fund Bond Fund
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Commission Reimbursements ........... $3,034 $168 $ 215 $177
Earnings Credits .................... - - 4,346 -
</TABLE>
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, each Fund
pays Delaware International Advisers Ltd. (DIAL), the Investment Manager, an
annual fee based on its net assets.
Following are the management fees as a percentage of average daily net assets:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Fund Equity Fund Markets Fund Bond Fund
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C> <C>
On the first $500 million ........... 0.85% 0.85% 1.25% 0.75%
On the next $500 million ............ 0.80% 0.80% 1.20% 0.70%
On the next $1.5 billion ............ 0.75% 0.75% 1.15% 0.65%
In excess of $2.5 billion ........... 0.70% 0.70% 1.10% 0.60%
</TABLE>
DIAL has entered into a sub-advisory agreement with Delaware Management Company
(DMC), an affiliate, with respect to the management of the Delaware Global
Equity Fund's investments in U.S. securities. DMC receives 25% of the management
fee paid to DIAL for managing the U.S. securities portion of the Delaware Global
Equity Fund.
DIAL has elected to waive its fees and reimburse each Fund to the extent that
annual operating expenses, exclusive of taxes, interest, brokerage commissions,
extraordinary expenses and distribution expenses, exceed 1.55% for each class of
the Delaware Global Equity Fund, 1.70% for each class of the Delaware Emerging
Markets Fund and 1.00% for each class of the Delaware Global Bond Fund, of the
average daily net assets for each Fund through January 31, 2001.
The Trust has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent and accounting and administrative
services. Each Fund pays DSC a monthly fee based on the number of shareholder
accounts, shareholder transactions and average net assets, subject to certain
minimums.
43
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates (continued)
On May 31, 2000, the Funds had liabilities payable to affiliates as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Fund Equity Fund Markets Fund Bond Fund
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Investment management fee payable to DIAL ............ $179,978 - $10,702 $4,822
Dividend disbursing, transfer agent, accounting fees
and other expenses payable to DSC ................. 72,408 $11,159 10,204 3,637
Other expenses payable to DMC and affiliates ......... 47,279 49 445 -
</TABLE>
Pursuant to the Distribution Agreement, each Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DIAL and DMC, an annual fee not
to exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Classes, respectively. DDLP has elected
to waive its fees to ensure that the annual fee received from the Delaware
Emerging Markets Fund A Class does not exceed 0.25% of the average daily net
assets. For the six months ended May 31, 2000, DDLP earned commissions on sales
of the A Class shares for each Fund as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Fund Equity Fund Markets Fund Bond Fund
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
$12,715 $2,212 $3,648 $498
</TABLE>
Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.
3. Investments
During the six months ended May 31, 2000, each Fund made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments as follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Fund Equity Fund Markets Fund Bond Fund
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Purchases ............................................ $18,655,060 $2,355,630 $4,651,640 $4,132,025
Sales ................................................ 36,902,015 5,217,517 2,280,726 6,990,993
</TABLE>
The cost of investments for federal income tax purposes approximates cost for
book purposes. At May 31, 2000, the aggregate cost of securities and unrealized
appreciation (depreciation) for federal income tax purposes for each Fund was as
follows:
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware
International Global Emerging Global
Equity Fund Equity Fund Markets Fund Bond Fund
------------- ----------- ------------ ---------
<S> <C> <C> <C> <C>
Cost of investments .................................. $216,616,851 $12,928,754 $21,222,693 $15,403,234
============ =========== =========== ===========
Aggregate unrealized appreciation .................... 57,898,874 1,683,082 1,536,096 32,436
Aggregate unrealized depreciation .................... (25,916,763) (1,726,787) (5,412,858) (1,922,169)
------------ ----------- ----------- -----------
Net unrealized appreciation (depreciation) ........... 31,982,110 (43,705) (3,876,763) (1,889,733)
============ =========== =========== ===========
</TABLE>
For federal income tax purposes, the Funds had the following capital loss
carryforwards at May 31, 2000, which may be carried forward and applied against
future gains:
<TABLE>
<CAPTION>
Year of Year of
Expiration Expiration
2006 2007 Total
---------- ---------- -----
<S> <C> <C> <C>
Delaware Emerging Markets Fund ....................... $1,188,491 $829,324 $2,017,815
Delaware Global Bond Fund ............................ - 139,057 139,057
</TABLE>
44
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
4. Capital Shares
Transactions in capital shares were as follows:
<TABLE>
<CAPTION>
Delaware Delaware
International Equity Fund Global Equity Fund
------------------------- --------------------------
Six Months Year Ended Six Months Year Ended
Ended 5/31/00 11/30/99 Ended 5/31/00 1/30/99
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Shares sold:
A Class ......................................... 7,805,425 33,398,322 119,099 229,260
B Class ......................................... 226,124 2,455,859 42,402 85,012
C Class ......................................... 1,233,273 9,364,208 16,105 33,512
Institutional Class ............................. 2,305,200 4,633,814 20,640 22,319
Shares issued upon reinvestment of distributions
from net investment income and net realized
gain on investments:
A Class ......................................... 196,326 114,367 26,001 32,898
B Class ......................................... 62,032 20,438 16,205 20,899
C Class ......................................... 26,450 5,755 7,993 13,217
Institutional Class ............................. 243,451 192,795 4,485 5,855
----------- ----------- --------- --------
12,098,281 50,185,558 252,930 442,972
----------- ----------- --------- --------
Shares repurchased:
A Class ......................................... (8,856,245) (35,339,072) (221,796) (242,326)
B Class ......................................... (483,820) (2,649,551) (99,464) (120,242)
C Class ......................................... (1,340,778) (9,398,225) (63,538) (97,899)
Institutional Class ............................. (2,157,507) (8,445,453) (39,714) (128,316)
----------- ----------- --------- --------
(12,505,350) (55,832,301) (424,512) (588,783)
----------- ----------- --------- --------
Net increase (decrease) ......................... (407,069) (5,646,743) (171,582) (145,811)
=========== =========== ========= ========
</TABLE>
<TABLE>
<CAPTION>
Delaware Delaware
Emerging Markets Fund Global Bond Fund
------------------------- --------------------------
Six Months Year Ended Six Months Year Ended
Ended 5/31/00 11/30/99 Ended 5/31/00 1/30/99
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C>
Shares Sold:
A Class ......................................... 302,873 535,345 78,633 127,716
B Class ......................................... 138,003 261,161 9,322 111,137
C Class ......................................... 275,341 103,080 5,332 44,496
Institutional Class ............................. 132,194 320,785 170,941 317,159
Shares issued upon reinvestment of distributions
from net investment income and net realized
gain on investments:
A Class ......................................... 13,023 9,187 4,303 15,919
B Class ......................................... 3,594 599 1,658 7,490
C Class ......................................... 1,780 225 762 3,081
Institutional Class ............................. 5,434 2,585 19,669 65,051
----------- ----------- --------- --------
872,242 1,232,967 290,620 692,049
----------- ----------- --------- --------
Shares repurchased:
A Class ......................................... (243,754) (429,070) (214,196) (177,317)
B Class ......................................... (117,323) (193,250) (76,567) (62,611)
C Class ......................................... (246,889) (44,042) (19,427) (28,620)
Institutional Class ............................. (87,460) (148,543) (265,300) (397,705)
----------- ----------- --------- --------
(695,426) (814,905) (575,490) (666,253)
----------- ----------- --------- --------
Net increase (decrease) ......................... 176,816 418,062 (284,870) 25,796
=========== =========== ========= ========
</TABLE>
45
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
5. Lines of Credit
The Funds along with certain other funds in the Delaware Investments Family of
Funds (the "Participants"), participate in a $683,500,000 revolving line of
credit facility to be used for temporary or emergency purposes as an additional
source of liquidity to fund redemptions of investor shares. The Participants are
charged an annual commitment fee, which is allocated across the Participants on
the basis of each Fund's allocation of the entire facility. The Participants may
borrow up to a maximum of one-third of their net assets under the agreement. No
amount was outstanding at May 31, 2000, or at any time during the period.
6. Foreign Exchange Contracts
A Fund will generally enter into forward foreign currency exchange contracts and
forward foreign cross currency exchange contracts as a way of managing foreign
exchange rate risk. A Fund may enter into these contracts to fix the U.S. dollar
value of a security that it has agreed to buy or sell for the period between the
date the trade was entered into and the date the security is delivered and paid
for. A Fund may also use these contracts to hedge the U.S. dollar value of
securities it already owns denominated in foreign currencies.
Forward foreign currency exchange contracts and forward foreign cross currency
exchange contracts are valued at the mean between the bid and asked prices of
the contracts and are marked-to-market daily. Interpolated values are derived
when the settlement date of the contract is an interim date for which quotations
are not available. The change in market value is recorded as an unrealized gain
or loss. When the contract is closed, a realized gain or loss equal to the
difference between the value of the contract at the time it was opened and the
value at the time it was closed is recorded.
The use of forward foreign currency exchange contracts and forward foreign cross
currency exchange contracts do not eliminate fluctuations in the underlying
prices of the securities, but do establish a rate of exchange that can be
achieved in the future. Although forward foreign currency exchange contracts
limit the risk of loss due to a decline in the value of the hedged currency,
they also limit any potential gain that might result should the value of the
currency increase. In addition, a Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.
The following forward foreign currency exchange contracts were outstanding at
May 31, 2000:
<TABLE>
<CAPTION>
Unrealized
Contracts to In Exchange Settlement Appreciation
Deliver For Date (Depreciation)
------------ ----------- ---------- --------------
<S> <C> <C> <C> <C> <C>
Delaware International Equity Fund ................. GBP 254,517 EUR 408,928 6/1/00 ($531)
</TABLE>
EUR - European Monetary Unit
GBP - British Pound
7. Market and Credit Risk
Some countries in which the Trust may invest require governmental approval for
the repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if there is a deterioration in a
country's balance of payments or for other reasons, a country may impose
temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially smaller,
less liquid and more volatile than the major securities markets in the United
States. Consequently, acquisition and disposition of securities by the Trust may
be inhibited. In addition, a significant proportion of the aggregate market
value of equity securities listed on the major securities exchanges in emerging
markets are held by a smaller number of investors. This may limit the number of
shares available for acquisition or disposition by the Trust.
The Trust may invest in high-yield fixed income securities which carry ratings
of BB or lower by S&P and/or Ba or lower by Moody's. Investments in these higher
yielding securities may be accompanied by a greater degree of credit risk than
higher rated securities. Additionally, lower rated securities may be more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.
With the exception of the Delaware Emerging Markets Fund each Fund may invest up
to 10% of its total assets in illiquid securities which may include securities
with contractual restrictions on resale, and other securities which may not be
readily marketable. The Delaware Emerging Markets Fund may invest up to 15% in
such securities. Securities exempt from registration pursuant to Rule 144A under
the Securities Act of 1933, as amended, may be determined to be liquid or
illiquid based on factors set by the Board of Trustees. The relative illiquidity
of some of these securities may adversely affect each Fund's ability to dispose
of such securities in a timely manner and at a fair price when it is necessary
to liquidate such securities.
46
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
8. Securities Lending
The Delaware International Equity Fund may participate, along with other funds
in the Delaware Investments Family of Funds, in a Securities Lending Agreement
("Lending Agreement"). Security loans made pursuant to the Lending Agreement are
required at all times to be secured by U.S. Treasury obligations and/or cash
collateral at least equal to 100% of the market value of securities issued in
the U.S. and 105% of the market value of securities issued outside of the U.S.
Cash collateral received is invested in fixed income securities, with a weighted
average maturity not to exceed 90 days, rated in one of the top two tiers by
Standard & Poor's Ratings Group or Moody's Investors Service, Inc. or repurchase
agreements collateralized by such securities. However, in the event of default
or bankruptcy by the lending agent, realization and/or retention of the
collateral may be subject to legal proceedings. In the event that the borrower
fails to return loaned securities and collateral received is insufficient to
cover the value of loaned securities and provided such collateral is not the
result of investment losses, the lending agent has agreed to pay the amount of
the shortfall to the Fund, or at the discretion of the lending agent, replace
the loaned securities. The market value of the securities on loan and the
related collateral received at May 31, 2000 were as follows:
<TABLE>
<CAPTION>
Income
Market value Market earned for
of securities value of the six months
on loan collateral ended 5/31/00*
------------- ---------- --------------
<S> <C> <C> <C>
Delaware International Equity Fund .......... $49,567,565 $52,377,894 $76,712
</TABLE>
* Included in interest income in the Statement of Operations.
47
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
------------------------------------
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
<TABLE>
<CAPTION>
<S> <C> <C>
Growth of Capital International and Global Tax-Exempt Income
o Technology and Innovation o Emerging Markets Fund o National High-Yield
Fund o New Pacific Fund Municipal Bond Fund
o Select Growth Fund o Overseas Equity Fund o Tax-Free USA Fund
o Trend Fund o International Equity Fund o Tax-Free Insured Fund
o Growth Opportunities Fund* o Global Equity Fund o Tax-Free USA
o Small Cap Value Fund o Global Bond Fund Intermediate Fund
o U.S. Growth Fund * o State Tax-Free Funds*
o Tax-Efficient Equity Fund Current Income
o Social Awareness Fund o Delchester Fund Stability of Principal
o High-Yield o Cash Reserve
Total Return Opportunities Fund o Tax-Free Money Fund
o Blue Chip Fund o Strategic Income Fund
o Devon Fund o Corporate Bond Fund Asset Allocation
o Growth and Income Fund o Extended Duration o Foundation Funds
o Decatur Equity Bond Fund Growth Portfolio
Income Fund o American Government Balanced Portfolio
o REIT Fund Bond Fund Income Portfolio
o Balanced Fund o U.S. Government
Securities Fund
o Limited-Term
</TABLE> Government Fund
*Formerly known as DelCap Fund.
**Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, Montana, North Dakota, New Jersey,
New Mexico, New York, Oregon, Pennsylvania and Wisconsin. Insured and
intermediate bond funds are available in selected states.
(C)Delaware Distributors, L.P.
48
<PAGE>
DELAWARE(SM) For Shareholders
INVESTMENTS 1.800.523.1918
---------------------
Philadelphia o London For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This semi-annual report is for the information of Delaware International Equity
Fund, Delaware Global Equity Fund, Delaware Emerging Markets Fund and Delaware
Global Bond Fund, but it may be used with prospective investors when preceded or
accompanied by a current prospectus for Delaware International Equity Fund,
Delaware Global Equity Fund, Delaware Emerging Markets Fund and Delaware Global
Bond Fund and the Delaware Investments Performance Update for the most recently
completed calendar quarter. The prospectus sets forth details about charges,
expenses, investment objectives and operating policies of each Fund. You should
read the prospectus carefully before you invest. The figures in this report
represent past results which are not a guarantee of future results. The return
and principal value of an investment in each Fund will fluctuate so that shares,
when redeemed, may be worth more or less than their original cost.
<TABLE>
<CAPTION>
-------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BOARD OF TRUSTEES Charles E. Peck Investment Manager and Sub-Adviser
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman National Distributor
Citadel Constructors, Inc. AFFILIATED OFFICERS Delaware Distributors, L.P.
King of Prussia, PA Philadelphia, PA
Charles E. Haldeman, Jr.
David K. Downes President and Chief Executive Officer Shareholder Servicing, Dividend
President and Chief Executive Officer Delaware Management Holdings, Inc. Disbursing and Transfer Agent
Delaware Investments Family of Funds Philadelphia, PA Delaware Service Company, Inc.
Philadelphia, PA Philadelphia, PA
Richard J. Flannery
John H. Durham Executive Vice President 1818 Market Street
Private Investor and General Counsel Philadelphia, PA 19103-3682
Horsham, PA Delaware Investments Family of Funds
Philadelphia, PA
Anthony D. Knerr
Consultant, Anthony Knerr & Associates Bruce D. Barton
New York, NY President and Chief Executive Officer
Delaware Distributors, L.P.
Ann R. Leven Philadelphia, PA
Former Treasurer, National Gallery of Art
Washington, DC
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
(3344) Printed in the USA
SA-034 [5/00] PP 7/00 (J6032)
