<PAGE>
DELAWARE(SM)
INVESTMENTS
---------------------
Philadelphia o London
Delaware International Equity Fund
Delaware Global Equity Fund
Delaware Overseas Equity Fund
Delaware Emerging Markets Fund
Delaware New Pacific Fund
Delaware Global Bond Fund
Class A o Class B o Class C
Prospectus February 1, 2000
International and Global Funds
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
<PAGE>
Table of contents
.................................................................
Fund profiles page 2
Delaware International Equity Fund 2
Delaware Global Equity Fund 4
Delaware Overseas Equity Fund 7
Delaware Emerging Markets Fund 9
Delaware New Pacific Fund 12
Delaware Global Bond Fund 14
.................................................................
How we manage the Funds page 16
Our investment strategies 16
The securities we typically invest in 21
The risks of investing in the Funds 28
.................................................................
Who manages the Funds page 32
Investment managers and sub-advisers 32
Portfolio managers 32
Fund administration (Who's who) 35
.................................................................
About your account page 36
Investing in the Funds 36
Choosing a share class 36
How to reduce your sales charge 38
How to buy shares 39
Retirement plans 40
How to redeem shares 41
Account minimums 42
Special services 42
Dividends, distributions and taxes 44
.................................................................
Certain management considerations page 45
.................................................................
Financial highlights page 46
1
<PAGE>
Profile: Delaware International Equity Fund
What is the Fund's goal?
Delaware International Equity Fund seeks long-term growth without undue risk
to principal. Although the Fund will strive to achieve its goal, there is no
assurance that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
foreign equity securities that provide the potential for capital appreciation
and income. At least 65% of the Fund's total assets will be invested in equity
securities of issuers from at least three foreign countries. An issuer is
considered to be from the country where it is located, where the majority of its
assets are located or where it generates the majority of its operating income.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower than,
or in line with the level of inflation. We then estimate what we think the
value of those anticipated future dividends would be worth if they were being
paid today. We believe this gives us an estimate of the stock's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. This Fund will be affected primarily by
declines in stock prices, which can be caused by a drop in foreign stock markets
or poor performance in specific industries or companies. Because the Fund
invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
currency valuations, political instability, economic instability, and lax
accounting and regulatory standards. For a more complete discussion of risk,
please turn to page 28.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
How has Delaware International Equity Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Class A)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
10.74% 17.83% 6.57% 11.27% -5.54% 19.92% 2.19% 9.17% 8.01% -2.81%
1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
</TABLE>
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past eight calendar years, as well as the average annual returns of all shares
for the one- and five-year periods and since inception, if applicable. The
Fund's past performance is not necessarily an indication of how it will perform
in the future. The returns reflect voluntary expense caps, if any, in effect
during the periods. The returns would be lower without the voluntary caps. There
is no longer a cap in place for this Fund.
During the periods illustrated in this bar chart, Class A's highest quarterly
return was 13.35% for the quarter ended December 31, 1998 and its lowest
quarterly return was -13.72% for the quarter ended September 30, 1998.
The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above or in the bar
chart. If this fee were included, the returns would be less than those shown.
The average annual returns shown in the table on page 3 do include the sales
charge.
2
<PAGE>
How has Delaware International Equity Fund performed? (continued)
- --------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/99
<TABLE>
<CAPTION>
CLASS A B C Morgan Stanley
Capital International
(Inception 10/31/91) (Inception 9/6/94) (Inception 11/29/95) (if redeemed)* EAFE Index
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
1 year 7.21% 7.98% 11.92% 27.30%
5 years 10.33% 10.59% N/A 13.15%
Lifetime** 9.64% 8.54% 11.41% 11.06%
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley
Capital International EAFE (Europe, Australia, Far East) Index. You should
remember that unlike the Fund, the index is unmanaged and doesn't reflect the
costs of operating a mutual fund, such as the costs of buying, selling and
holding the securities.
*If shares were not redeemed, the returns for Class B would be 12.98%, 10.86%
and 8.67%, respectively, for the one-year, five-year and lifetime periods.
Returns for Class C would be 12.92% and 11.41% respectively, for the one-year
and lifetime periods.
**The Morgan Stanley Capital International EAFE Index return shown is for the A
Class lifetime period. The Index returns for Class B and Class C lifetime
periods were 12.28% and 14.38% respectively. Maximum sales charges are
included in the Fund returns above.
<TABLE>
<CAPTION>
What are Delaware International Equity
Fund's fees and expenses? CLASS A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid directly Maximum sales charge (load) imposed on
from your investments when you buy or sell purchases as a percentage of offering price 5.75% none none
shares of the Fund.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 2%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees(4) 0.85% 0.85% 0.85%
deducted from the Fund's assets.
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.75% 0.75% 0.75%
Total operating expenses 1.90% 2.60% 2.60%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
CLASS(6) A B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you
compare the cost of investing in the 1 year $757 $263 $763 $263 $363
Fund to the cost of investing in other
mutual funds with similar investment 3 years $1,138 $808 $1,108 $808 $808
objectives. We show the cumulative
amount of Fund expenses on a 5 years $1,542 $1,380 $1,580 $1,380 $1,380
hypothetical investment of $10,000
with an annual 5% return over the 10 years $2,669 $2,764 $2,764 $2,934 $2,934
time shown.(5) This is an example
only, and does not represent future
expenses, which may be greater or
less than those shown here.
</TABLE>
(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will be imposed on
redemptions made within two years of purchase. Additional Class A purchase
options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are
available.
(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) Reflects a new management fee which became effective on April 15, 1999.
(5) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.
(6) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.
3
<PAGE>
Profile: Delaware Global Equity Fund
What is the Fund's goal?
Delaware Global Equity Fund seeks long-term total return. Although the Fund
will strive to achieve its goal, there is no assurance that it will.
What are the Fund's main investment strategies?
The Fund invests primarily in U.S. and foreign equity securities that provide
the potential for capital appreciation and income. Under normal circumstances,
we will invest at least 65% of the Fund's total assets in equity securities from
at least three different countries, one of which may be the United States. An
issuer is considered to be from the country where it is located, where the
majority of its assets are located or where it generates the majority of its
operating income.
To determine how much of the Fund's assets to allocate to international stocks
and how much to U.S. stocks, we compare the potential total return of each asset
class in the context of our expectations for inflation, economic growth and
political stability in various regions.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower than,
or in line with the level of inflation. We then estimate what we think the
value of those anticipated future dividends would be worth if they were being
paid today. We believe this gives us an estimate of the stock's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. This Fund will be affected primarily by
declines in stock prices, which can be caused by a drop in the stock market or
poor performance in specific industries or companies. Because the Fund invests
in foreign securities, it will be affected by international investment risks
related to currency valuations, political instability, economic instability and
lax accounting and regulatory standards.
The Fund is considered "non-diversified" under federal laws that regulate mutual
funds. That means the Fund may allocate more of its net assets to investments in
single securities than a "diversified" fund. Thus, adverse effects on the Fund's
investments may affect a larger portion of its overall assets and subject the
Fund to greater risks. For a more complete discussion of risk, please turn to
page 28.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
4
<PAGE>
How has Delaware Global Equity Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Class A)
24.73% 15.50% 11.04% 8.54% 5.91%
1995 1996 1997 1998 1999
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past five calendar years, as well as the average annual returns of all shares
for the one-and five-year periods and since inception, if applicable. The Fund's
past performance is not necessarily an indication of how it will perform in the
future. The returns reflect voluntary expense caps. The returns would be lower
without the voluntary caps. On July 21, 1998, the Fund's name was changed from
Global Assets Fund to Global Equity Fund and the Fund's investment focus changed
from a mix of foreign and U.S. stocks and bonds to primarily foreign and U.S.
stocks.
During the periods illustrated in this bar chart, Class A's highest quarterly
return was 11.24%% for the quarter ended December 31, 1998 and its lowest
quarterly return was -9.60% for the quarter ended September 30, 1998.
The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above or in the bar
chart. If this fee were included, the returns would be less than those shown.
The average annual returns in the table shown below do include the sales charge.
Average annual returns for periods ending 12/31/99
<TABLE>
<CAPTION>
CLASS A B C Morgan Stanley
Capital International
(if redeemed)* (if redeemed)* World Index
(Inception 12/27/94) (Inception 12/27/94) (Inception 11/29/95)
<S> <C> <C> <C> <C>
1 year -0.21% 0.20% 4.14% 25.34%
5 years 11.62% 11.92% N/A 20.25%
Lifetime** 11.57% 11.99% 9.76% 20.25%
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley
Capital International World Index. You should remember that unlike the Fund, the
index is unmanaged and doesn't reflect the costs of operating a mutual fund,
such as the costs of buying, selling and holding the securities.
*If shares were not redeemed, the returns for Class B would be 5.20%, 12.17%
and 12.12%, respectively, for the one-year, five-year and lifetime periods.
Returns for Class C would be 5.14% and 9.76% respectively, for the one-year
and lifetime periods.
**The Morgan Stanley Capital International World Index return shown is for the
Class A and Class B lifetime period. The Index return for Class C lifetime
period was 20.41%. Maximum sales charges are included in the Fund returns in
the table.
5
<PAGE>
<TABLE>
<CAPTION>
What are Delaware Global Equity Fund's
fees and expenses? CLASS A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid directly from Maximum sales charge (load) imposed on
your investments when you buy or sell shares purchases as a percentage of offering price 5.75% none none
of the Fund.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 5%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are deducted Management fees(4) 0.85% 0.85% 0.85%
from the Fund's assets.
Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 1.21% 1.21% 1.21%
Total annual fund operating expenses 2.36% 3.06% 3.06%
Fee waivers and payments(5) (0.51%) (0.51%) (0.51%)
Net expenses 1.85% 2.55% 2.55%
</TABLE>
<TABLE>
<CAPTION>
CLASS(7) A B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you compare 1 year $752 $258 $758 $258 $358
the cost of investing in the Fund to the cost 3 years $1,223 $897 $1,197 $897 $897
of investing in other mutual funds with similar 5 years $1,719 $1,562 $1,762 $1,562 $1,562
investment objectives. We show the cumulative 10 years $3,079 $3,175 $3,175 $3,338 $3,338
amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return
over the time shown.(6) This is an example only,
and does not represent future expenses, which
may be greater or less than those shown here.
</TABLE>
(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will be imposed on
redemptions made within two years of purchase. Additional Class A purchase
options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are
available.
(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) Reflects a new management fee which became effective April 1, 1999.
(5) The investment manager has contracted to waive fees and pay expenses through
January 31, 2001 in order to prevent total operating expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees) from
exceeding 1.55% of average daily net assets.
(6) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. This example reflects the net operating
expenses with expense waivers for the one-year period and the total
operating expenses without expense waivers for years two through 10.
(7) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.
6
<PAGE>
Profile: Delaware Overseas Equity Fund
What is the Fund's goal?
Delaware Overseas Equity Fund seeks to maximize total return (capital
appreciation and income). Although the Fund will strive to achieve its
goal, there is no assurance that it will.
What are the Fund's main investment strategies? We invest primarily in foreign
equity securities which we believe offer capital appreciation potential. We may
invest in companies that are located in established or developing countries;
however we limit our investments in companies located in developing countries.
In determining what portion of Delaware Overseas Equity Fund's assets should be
allocated to a particular country, we consider: how weak or strong the country's
currency is, the country's prospects for economic growth compared to other
countries, expected levels of inflation, political environment and the range of
investment opportunities available in the country.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower than,
or in line with the level of inflation. We then estimate what we think the
value of those anticipated future dividends would be worth if they were being
paid today. We believe this gives us an estimate of the stock's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease, sometimes rapidly
and unpredictably, according to changes in the value of the Fund's investments.
These fluctuations can be even more pronounced for funds like Delaware Overseas
Equity Fund, which invests in developing countries. This Fund will be affected
primarily by declines in stock prices, which can be caused by a drop in foreign
stock markets or poor performance in specific industries or companies. Because
the Fund invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
changes in currency valuations, political instability, economic instability, and
lax accounting and regulatory standards. For a more complete discussion of risk,
please turn to page 28.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
<PAGE>
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past six calendar years, as well as average annual returns of all shares for the
one- and five-years and since inception. The Fund's past performance does not
necessarily indicate how it will perform in the future. The returns reflect
voluntary expense caps. The returns would be lower without the voluntary caps.
During the periods illustrated in this bar chart, Class A's highest quarterly
return was 11.93% for the quarter ended December 31, 1999 and its lowest
quarterly return was -13.70% for the quarter ended September 30, 1999.
The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above or in the bar
chart. If this fee were included, the returns would be less than those shown.
The average annual returns in the table shown on page 8 do include the sales
charge.
How has Delaware Overseas Equity Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Class A)
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C> <C>
4.21% 11.10% 9.53% 1.76% -6.74% 25.62%
1994 1995 1996 1997 1998 1999
</TABLE>
7
-----
<PAGE>
<TABLE>
<CAPTION>
How has Delaware Overseas Equity Fund performed? (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/99
CLASS A B C Morgan Stanley
Capital International
(if redeemed)* (if redeemed)* EAFE Index
(Inception 12/3/93) (Inception 3/29/94) (Inception 5/10/94)
<S> <C> <C> <C> <C>
1 year 18.38% 19.65% 23.77% 27.30%
5 years 6.46% 6.73% 6.94% 13.15%
Lifetime** 5.87% 5.49% 5.73% 12.29%
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley
Capital International EAFE Index. You should remember that unlike the Fund,
the index is unmanaged and doesn't reflect the actual costs of operating a
mutual fund, such as the costs of buying, selling and holding the securities.
*If shares were not redeemed, the returns for Class B would be 24.65%, 6.96%
and 5.59%, respectively, for the one-year, five-year and lifetime periods,
respectively. Returns for Class C would be 24.77%, 6.94%, and 5.73% for the
one-year, five-year and lifetime periods, respectively.
**Morgan Stanley Capital International EAFE Index returns are for Class A
lifetime. Index returns for Class B and Class C lifetimes were 12.17% and
11.81%, respectively. Maximum sales charges are included in the Fund returns
above.
<TABLE>
<CAPTION>
What are Delaware Overseas Equity Fund's
fees and expenses?
CLASS A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid directly from Maximum sales charge (load) imposed on
your investments when you buy or sell shares purchases as a percentage of offering price 5.75% none none
of the Fund.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 5%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are deducted Management fees(4) 0.85% 0.85% 0.85%
from the Fund's assets. Distribution and service (12b-1) fees 0.30%(5) 1.00% 1.00%
Other expenses 4.12% 4.12% 4.12%
Total operating expenses(6) 5.27% 5.97% 5.97%
</TABLE>
<TABLE>
<CAPTION>
CLASS(8) A B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you compare 1 year $1,071 $594 $1,094 $594 $694
the cost of investing in the Fund to the 3 years $2,059 $1,765 $2,065 $1,765 $1,765
cost of investing in other mutual funds with 5 years $3,042 $2,913 $3,113 $2,913 $2,913
similar investment objectives. We show the 10 years $5,475 $5,567 $5,567 $5,688 $5,688
cumulative amount of Fund expenses on a
hypothetical investment of $10,000 with an
annual 5% return over the time shown.(7) This
is an example only, and does not represent
future expenses, which may be greater or
less than those shown here.
</TABLE>
<PAGE>
(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will be imposed on
redemptions made within two years of purchase. Additional Class A purchase
options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are
available.
(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) Reflects a new management fee which became effective on April 1, 1999.
(5) Prior to May 6, 1996, 12b-1 Plan expenses for Class A shares were 0.35%.
Beginning May 6, 1996, those expenses were reduced to 0.30%.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(6) The investment manager has agreed to Fund expenses including voluntary expense caps in effect through October
waive fees and pay expenses through 31, 2000
October 31, 2000 in order to prevent
total operating expenses (excluding any CLASS A B C
taxes, interest, brokerage fees,
extraordinary expenses and 12b-1 fees) Management fees 0.00% 0.00% 0.00%
from exceeding 1.70% of average daily
net assets. The fees and expenses shown Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
in the table above do not reflect this
voluntary expense cap. The table to the Other expenses 1.70% 1.70% 1.70%
right shows operating expenses,
reflecting the manager's current fee Total operating expenses 2.00% 2.70% 2.70%
waivers and payments.
</TABLE>
(7) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show. In addition, the example does not assume the voluntary expense
limitation discussed in footnote 6.
(8) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.
8
- -----
<PAGE>
Profile: Delaware Emerging Markets Fund
What is the Fund's goal?
Delaware Emerging Markets Fund seeks long-term capital appreciation.
Although the Fund will strive to achieve its goal, there is no
assurance that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
equity securities of issuers from emerging foreign countries. Under normal
market conditions, at least 65% of the Fund's total assets will be invested in
equity securities of issuers from at least three different countries whose
economies are considered to be emerging or developing.
We may invest up to 35% of the Fund's net assets in fixed-income securities
issued by companies in emerging countries or by foreign governments, their
agents, instrumentalities or political sub-divisions. We may invest in
fixed-income securities that are denominated in the currencies of emerging
market countries. All of these may be high-yield, high risk fixed-income
securities.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower than,
or in line with the level of inflation. We then estimate what we think the
value of those anticipated future dividends would be worth if they were being
paid today. We believe this gives us an estimate of the stock's true value.
Because many of the countries in which the Fund invests are emerging
countries, there may be less information available for us to use in making
this analysis than is available for more developed countries.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease, sometimes rapidly
and unpredictably, according to changes in the value of the Fund's investments.
These fluctuations can be even more pronounced for funds like Delaware Emerging
Markets Fund, which invests in emerging countries. This Fund will be affected
primarily by declines in stock prices, which can be caused by a drop in foreign
stock markets or poor performance in specific industries or companies. The value
of the Fund's investments and, therefore, the price of the Fund's shares may be
more volatile than investments in more developed markets. Because the Fund
invests in international securities in developing countries as well as
established countries, it will be affected by international investment risks
related to currency valuations, political instability, economic instability, or
lax accounting and regulatory standards.
The Fund may invest up to 35% of its net assets in high-yield, high risk foreign
fixed-income securities, which are subject to substantial risks, particularly
during periods of economic downturns or rising interest rates.
The Fund is considered "non-diversified" under federal laws that regulate mutual
funds. This means the Fund may allocate more of its net assets to investments in
single securities than a "diversified" fund. Thus, adverse effects on the Fund's
investments may affect a larger portion of its overall assets and subject the
Fund to greater risks. For a more complete discussion of risk, please turn to
page 28.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
9
-----
<PAGE>
How has Delaware Emerging Markets Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Class A)
1.33% -36.40% 54.48%
1997 1998 1999
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past three calendar years, as well as the average annual returns of all shares
for the one-year period and since inception. The Fund's past performance is not
necessarily an indication of how it will perform in the future. The returns
reflect voluntary expense caps in effect during the periods. The returns would
be lower without the voluntary caps.
During the periods illustrated in this bar chart, Class A's highest quarterly
return was 25.52% for the quarter ended June 30, 1999 and its lowest quarterly
return was -26.03% for the quarter ended June 30, 1998.
The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above or in the chart. If
this fee were included, the returns would be less than those shown. The average
annual returns in the table shown below do include the sales charge.
Average annual returns for periods ending 12/31/99
<TABLE>
<CAPTION>
CLASS A B C Morgan Stanley
Capital International
Emerging Markets
(if redeemed)* (if redeemed)* Free Index
<S> <C> <C> <C> <C>
1 year 45.50% 48.56% 52.39% 66.41%
Lifetime -1.43% -1.22% -0.47% 1.47%
(Inception 6/10/96)
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley Capital
International Emerging Markets Free Index. You should remember that unlike the
Fund, the index is unmanaged and doesn't reflect the costs of operating a mutual
fund, such as the costs of buying, selling and holding the securities.
*If shares were not redeemed, the returns for Class B would be 53.56% and
-0.44%, respectively, for the one-year and lifetime periods. Returns for Class
C would be 53.39% and -0.47%, respectively, for the one-year and lifetime
periods.
10
- -----
<PAGE>
<TABLE>
<CAPTION>
What are Delaware Emerging Markets
Fund's fees and expenses? CLASS A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid directly from Maximum sales charge (load) imposed on
your investments when you buy or sell purchases as a percentage of offering price 5.75% none none
shares of the Fund.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 5%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees 1.25% 1.25% 1.25%
deducted from the Fund's assets.
Distribution and service (12b-1) fees 0.30%(4) 1.00% 1.00%
Other expenses 1.44% 1.44% 1.44%
Total operating expenses 2.99% 3.69% 3.69%
Fee waivers and payments(5) (0.99%) (0.99%) (0.99%)
Net expenses 2.00% 2.70% 2.70%
</TABLE>
<TABLE>
<CAPTION>
CLASS(7) A B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you 1 year $766 $273 $773 $273 $373
compare the cost of investing in the Fund 3 years $1,359 $1,038 $1,338 $1,038 $1,038
to the cost of investing in other mutual 5 years $1,975 $1,823 $2,023 $1,823 $1,823
funds with similar investment 10 years $3,627 $3,723 $3,723 $3,878 $3,878
objectives. We show the cumulative amount
of Fund expenses on a hypothetical
investment of $10,000 with an annual 5%
return over the time shown.(6) This is an
example only, and does not represent future
expenses, which may be greater or less than
those shown here.
</TABLE>
(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will be imposed on
redemptions made within two years of purchase. Additional Class A purchase
options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are
available.
(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) The distributor has agreed to waive a portion of 12b-1 fees from February 1,
1998 through May 31, 2000 in order to prevent these fees from exceeding
0.25% of average daily net assets.
(5) The investment manager has contracted to waive fees and pay expenses through
January 31, 2001 in order to prevent total operating expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees) from
exceeding 1.70% of average daily net assets.
(6) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. This example reflects the net operating
expenses with expense waivers for the one-year period and the total
operating expenses without expense waivers for years two through 10.
(7) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.
11
-----
<PAGE>
Profile: Delaware New Pacific Fund
What is the Fund's goal?
Delaware New Pacific Fund seeks to maximize long-term capital
appreciation. Although the Fund will strive to achieve its goal, there
is no assurance that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
stocks of companies of all sizes that are located in or have their principal
business activities in countries located in the Pacific Basin, such as
Australia, China, Hong Kong, Japan, Korea, Malaysia, Philippines, Singapore and
Taiwan. The Fund may invest in both established and developing countries. Under
normal circumstances we will invest at least 65% of the Fund's net assets in
Pacific Basin countries.
In selecting stocks for the portfolio, we look for companies that can benefit
from future economic growth in the region. We evaluate both individual companies
and individual countries to determine how much of the portfolio should be
allocated to companies located there. When evaluating individual companies, we
consider the growth prospects for the company and its industry, the financial
strength of the company and the quality of its management. We also consider
whether the stock appears overvalued or undervalued compared to other stocks in
the market or in its industry.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease, sometimes rapidly
and unpredictably, according to changes in the value of the Fund's investments.
These fluctuations can be even more pronounced for funds like Delaware New
Pacific Fund that invests in developing countries. This Fund will be affected
primarily by declines in stock prices, which can be caused by a drop in foreign
stock markets or poor performance in specific industries or companies. Because
the Fund invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
changes in currency valuations, political instability, economic instability, and
lax accounting and regulatory standards. For a more complete discussion of risk,
please turn to page 28.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
<PAGE>
How has Delaware New Pacific Fund performed?
- --------------------------------------------------------------------------------
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past six calendar years, as well as average annual returns of all shares for the
one- and five-year periods and since inception. The Fund's past performance does
not necessarily indicate how it will perform in the future. The returns reflect
voluntary expense caps. The returns would be lower without the voluntary caps.
During the periods illustrated in this bar chart, Class A's highest quarterly
return was 26.98% for the quarter ended December 31, 1999 and its lowest
quarterly return was -26.10% for the quarter ended December 31, 1997.
The maximum Class A sales charge of 5.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above or in the bar
chart. If this fee were included, the returns would be less than those shown.
The average annual returns shown in the table on page 13 do include the sales
charge.
How has Delaware New Pacific Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Class A)
- -11.02% -3.75% 7.72% -31.85% -22.24% 74.47%
1994 1995 1996 1997 1998 1999
12
- -----
<PAGE>
How has Delaware New Pacific Fund performed? (continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Average annual returns for periods ending 12/31/99
CLASS A B C Morgan Stanley
(if redeemed)* (if redeemed)* Pacific Index
(Inception 12/3/93) (Inception 3/29/94) (Inception 5/10/94)
<S> <C> <C> <C> <C>
1 year 64.29% 68.29% 72.10% 57.96%
5 years -2.01% -1.87% -1.54% 2.70%
Lifetime** -2.27% -1.47% -1.77% 4.35%
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley
Pacific Index. You should remember that unlike the Fund, the index is unmanaged
and doesn't reflect the costs of operating a mutual fund, such as the costs of
buying, selling and holding the securities.
*If shares were not redeemed, the returns for Class B would be 73.29%,-1.48%,
-1.31%, for the one-year, five-year and lifetime periods, respectively.
Returns for Class C would be 73.10%, -1.54% and -1.77% for the one-year
five-year and lifetime periods, respectively.
**The Morgan Stanley Pacific Index return is for Class A lifetime period. The
Index returns for Class B and Class C lifetime periods were 3.13% and 2.00%,
respectively. Maximum sales charges are included in the Fund returns above.
What are Delaware New Pacific Fund's fees
and expenses?
<TABLE>
<CAPTION>
CLASS A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid directly from Maximum sales charge (load) imposed on
your investments when you buy or sell purchases as a percentage of offering price 5.75% none none
shares of the Fund.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 5%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees(4) 0.85% 0.85% 0.85%
deducted from the Fund's assets.
Distribution and service (12b-1) fees 0.30%(5) 1.00% 1.00%
Other expenses 1.44% 1.44% 1.44%
Total operating expenses(6) 2.59% 3.29% 3.29%
</TABLE>
<TABLE>
<CAPTION>
CLASS(8) A B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you 1 year $822 $332 $832 $332 $432
compare the cost of investing in the Fund
to the cost of investing in other mutual 3 years $1,334 $1,013 $1,313 $1,013 $1,013
funds with similar investment objectives.
We show the cumulative amount of Fund 5 years $1,871 $1,717 $1,917 $1,717 $1,717
expenses on a hypothetical investment of
$10,000 with an annual 5% return over the 10 years $3,331 $3,427 $3,427 $3,585 $3,585
time shown.(7) This is an example only, and
does not represent future expenses, which
may be greater or less than those shown
here.
</TABLE>
<PAGE>
(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will be imposed on
redemptions made within two years of purchase. Additional Class A purchase
options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are
available.
(2) If you redeem Class B shares during the first year after you buy them, you
will pay a contingent deferred sales charge of 5%, which declines to 4%
during the second year, 3% during the third and fourth years, 2% during the
fifth year, 1% during the sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) Reflects a new management fee which became effective on April 1, 1999.
(5) Prior to May 6, 1996, 12b-1 Plan expenses for Class A shares were 0.35%.
Beginning May 6, 1996, those expenses were reduced to 0.30%.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
(6) The investment manager has agreed to Fund expenses including voluntary expense caps in effect through October 31, 2000
waive fees and pay expenses through CLASS A B C
October 31, 2000 in order to prevent
total operating expenses (excluding Management fees 0.56% 0.56% 0.56%
any taxes, interest, brokerage fees,
extraordinary expenses and 12b-1 Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
fees) from exceeding 2.00% of average
daily net assets. The fees and Other expenses 1.44% 1.44% 1.44%
expenses shown in the table do not
reflect this voluntary expense cap. Total operating expenses 2.30% 3.00% 3.00%
The table to the right shows
operating expenses, reflecting the
manager's current fee waivers and
payments.
</TABLE>
(7) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show. The example does not reflect the voluntary expense cap discussed in
footnote 5.
(8) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.
13
-----
<PAGE>
Profile: Delaware Global Bond Fund
What is the Fund's goal?
Delaware Global Bond Fund seeks to achieve current income consistent with
preservation of principal. Although the Fund will strive to achieve its goal,
there is no assurance that it will.
What are the Fund's main investment strategies? Delaware Global Bond Fund
invests primarily in fixed-income securities that may also provide the potential
for capital appreciation. The Fund is a global fund. Therefore, at least 65% of
the Fund's total assets will be invested in fixed-income securities of issuers
from at least three different countries, one of which may be the United States.
An issuer is considered to be from the country where it is located, where the
majority of its assets are or where it generates the majority of its operating
income.
In selecting investments for the Fund,
o We strive to identify fixed-income securities that provide high income
potential.
o In order to compare the value of different fixed-income securities, even those
issued in different countries, we look at the value of anticipated future
interest and principal payments, taking into consideration what we think the
inflation rate in that country will be. We then estimate what we think the
value of those anticipated future payments would be worth if they were being
paid today. We believe this gives us an estimate of a bond's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. These fluctuations can be even more
pronounced for funds like Delaware Global Bond Fund, which invests in developing
countries. The Fund's investments normally decrease when there are declines in
bond prices, which can be caused by a drop in the bond market, an adverse change
in interest rates or an adverse situation affecting the issuer of the bond.
Because the Fund invests in international securities in both established and
developing countries, it will be affected by international investment risks
related to currency valuations, political instability, economic instability, or
lax accounting and regulatory standards. The Fund may invest in high-yield, high
risk foreign fixed-income securities, which are subject to substantial risks,
particularly during periods of economic downturns or rising interest rates.
The Fund is considered "non-diversified" under federal laws that regulate mutual
funds. This means the Fund may allocate more of its net assets to investments in
single securities than a "diversified" fund. Thus, adverse effects on the Fund's
investments may affect a larger portion of its overall assets and subject the
Fund to greater risks. For a more complete discussion of risk, please turn to
page 28.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
<PAGE>
How has Delaware Global Bond Fund performed?
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
This bar chart and table can help you Year-by-year total return (Class A)
evaluate the risks of investing in the
Fund. We show how returns for the
Fund's Class A shares have varied over
the past five calendar years, as well
as the average annual returns of all
shares for the one-and five-year
periods, and since inception, if
applicable. The Fund's past
performance is not necessarily an
indication of how it will perform in
the future. The returns reflect
voluntary expense caps. The returns
would be lower without the voluntary
caps.
During the periods illustrated in this
bar chart, Class A's highest quarterly
return was 5.82% for the quarter ended
September 30, 1995 and its lowest
quarterly return was -2.95% for the
quarter ended March 31, 1997.
The maximum Class A sales charge of
4.75%, which is normally deducted when
you purchase shares, is not reflected
in the total returns above or in the 20.87% 11.87% 0.67% 7.30% -3.82%
bar chart. If this fee were included, 1995 1996 1997 1998 1999
the returns would be less than those
shown. The average annual returns in
the table shown on page 15 do include
the sales charge.
</TABLE>
14
<PAGE>
How has Delaware Global Bond Fund performed? (continued)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/99
CLASS A B C Salomon Smith Barney
(if redeemed)* (if redeemed)* World Government
Bond Index
- ---------------------------------------------------------------------------------------------------------------------------
(Inception 12/27/94) (Inception 12/27/94) (Inception 11/29/95)
<S> <C> <C> <C> <C>
1 year -8.41% -8.12% -5.46% -5.07%
5 years 5.99% 6.00% N/A 5.90%
Lifetime** 5.98% 6.14% 3.34% 6.08%
</TABLE>
The Fund's returns are compared to the performance of the Salomon Smith
Barney World Government Bond Index. You should remember that unlike the Fund,
the index is unmanaged and doesn't reflect the costs of operating a mutual fund,
such as the costs of buying, selling and holding the securities.
*If shares were not redeemed, the returns for Class B would be -4.42%%, 6.31%%
and 6.29% respectively, for the one-year, five-year and lifetime periods.
Returns for Class C would be -4.54% and 3.34%, respectively, for the one-year
and lifetime periods.
**The Salomon Smith Barney World Government Bond Index return shown is for Class
A and Class B lifetime period. The Index return for Class C lifetime period
was 2.68%. Maximum sales charges are included in the Fund returns above.
<TABLE>
<CAPTION>
What are Delaware Global Bond Fund's
fees and expenses? CLASS A B C
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Sales charges are fees paid Maximum sales charge (load) imposed on
directly from your investments purchases as a percentage of offering price 4.75% none none
when you buy or sell shares
of the Fund. Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 4%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
- ----------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses Management fees 0.75% 0.75% 0.75%
are deducted from the
Fund's assets. Distribution and service (12b-1) fees 0.30% 1.00% 1.00%
Other expenses 0.49% 0.49% 0.49%
Total annual fund operating expenses 1.54% 2.24% 2.24%
Fee waivers and payments(4) (0.24%) (0.24%) (0.24%)
Net expenses 1.30% 2.00% 2.00%
</TABLE>
<TABLE>
<CAPTION>
CLASS(6) A B B C C
(if redeemed) (if redeemed)
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
This example is intended to help you 1 year $601 $203 $603 $203 $303
compare the cost of investing in the
Fund to the cost of investing in other 3 years $916 $677 $977 $677 $677
mutual funds with similar investment
objectives. We show the cumulative 5 years $1,253 $1,178 $1,378 $1,178 $1,178
amount of Fund expenses on a
hypothetical investment of $10,000 10 years $2,203 $2,380 $2,380 $2,556 $2,556
with an annual 5% return over the time
shown.(5) This is an example only, and
does not represent future expenses,
which may be greater or less than
those shown here.
</TABLE>
<PAGE>
(1) A purchase of Class A shares at $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will be imposed on
redemptions made within two years of purchase. Additional Class A purchase
options that involve a contingent deferred sales charge may be permitted
from time to time and will be disclosed in the Prospectus if they are
available.
(2) If you redeem Class B shares within two years of purchase, you will pay a
contingent deferred sales charge of 4%, which declines to 3% during the
third and fourth years, 2% during the fifth year, 1% during the sixth year,
and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) The investment manager has contracted to waive fees and pay expenses through
January 31, 2001 in order to prevent total operating expenses (excluding any
taxes, interest, brokerage fees, extraordinary expenses and 12b-1 fees) from
exceeding 1% of average daily net assets.
(5) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. This example reflects the net operating
expenses with expense waivers for the one-year period and the total
operating expenses without expense waivers for years two through 10.
(6) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.
15
<PAGE>
How we manage the Funds
Our investment strategies
We research individual companies and analyze economic and market conditions,
seeking to identify the securities or market sectors that we think are the best
investments for a particular Fund. Following are descriptions of how the
portfolio managers pursue the Funds' investment goals.
The investment objective of each Fund described in this Prospectus is
non-fundamental. This means the Board of Trustees may change the objective
without obtaining shareholder approval. If an objective were changed, we would
notify shareholders before the change became effective.
Delaware International Equity Fund
Delaware International Equity Fund seeks long-term growth without undue risk to
principal. We invest primarily in equity securities, including common stocks,
which provide the potential for capital appreciation and income. Our strategy
would commonly be described as a value strategy. That is, we strive to purchase
stocks that are selling for less than their true value. In order to estimate
what a security's true value is, we evaluate its future income potential, taking
into account the impact both currency fluctuations and inflation might have on
that income stream. We then determine what that income would be worth if paid
today. That helps us decide what we think the security is worth today. We then
compare our estimate of the security's value to its current price to determine
if it is a good value.
We use income as an indicator of value because we believe it allows us to
compare securities across different sectors and different countries--all using
one measurement standard. We can even use this analysis to compare stocks to
bonds.
We may purchase securities in any foreign country, developed or emerging;
however, we currently anticipate investing in Australia, Belgium, Canada,
Finland, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands,
New Zealand, Singapore, Spain, Switzerland and the United Kingdom. This is a
representative list; the Fund may also invest in countries not listed here. We
may invest more than 25% of the Fund's total assets in the securities of issuers
located in the same country.
We generally maintain a long-term focus in the Fund, seeking companies that we
believe will perform well over the next three to five years.
We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.
How to use
this glossary
This glossary includes definitions of investment terms used throughout the
Prospectus. If you would like to know the meaning of an investment term that is
not explained in the text please check the glossary.
<TABLE>
<CAPTION>
Glossary A-C | Amortized cost Average maturity
| ----------------------------------------------------------------------------------------------------
<S> <C> <C>
Amortized cost is a method used to value a An average of when the individual bonds and
fixed-income security that starts with the other debt securities held in a portfolio
face value of the security and then adds or will mature.
subtracts from that value depending on
whether the purchase price was greater or
less than the value of the security at
maturity. The amount greater or less than the
par value is divided equally over the time
remaining until maturity.
</TABLE>
16
<PAGE>
Delaware Global Equity Fund
Delaware Global Equity Fund seeks long-term total return. We invest in U.S. and
foreign equity securities, including common stocks, that provide the potential
for capital appreciation and income. We invest primarily in developed markets;
however, we may purchase securities in emerging markets. We may invest more than
25% of the Fund's total assets in the securities of issuers located in the same
country.
To determine how much of the Fund's assets to allocate to international stocks
and how much to U.S. stocks, we compare the potential total return of each asset
class in the context of our expectations for inflation, economic growth and
political stability in various regions.
In selecting foreign stocks for the Fund, we follow the same investment strategy
as Delaware International Equity Fund. We generally look for securities that are
undervalued based on our analysis of their future income stream.
The Fund may also seek to achieve growth by investing up to 35% of its assets in
income producing debt securities such as U.S. or foreign government bonds or
corporate bonds. As a general policy, the Fund only invests in debt securities
when we believe they offer better long-term potential returns with less risk
than investments in equity securities. We apply our analysis of future income
potential to both stocks and bonds in order to decide whether any portion of the
portfolio should be allocated to bonds.
Delaware Overseas Equity Fund
Delaware Overseas Equity Fund seeks to maximize total return. Under normal
circumstances, we will invest at least 65% of the value of Delaware Overseas
Equity Fund's total assets in securities of issuers located in at least three
foreign countries. However, we may invest more than 25% of the Fund's total
assets in the securities of issuers located in the same country.
The Fund will emphasize established companies, although it may invest in
companies of varying sizes as measured by assets, sales and market
capitalization. The Fund may invest in securities of issuers located in a
variety of different foreign countries including: Australia, Austria, Belgium,
Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, India,
Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New
Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland,
Thailand and the United Kingdom. This is a representative list; the Fund may
also invest in countries not listed here.
Our strategy for Delaware Overseas Equity Fund can best be described as a value
strategy. We use the same income-oriented evaluation process to identify
attractive undervalued stocks in a variety of countries and regions. To increase
the Fund's return potential and also add further diversification opportunities,
we may invest up to 40% of the Fund's assets in securities of companies located
in emerging market countries or in government securities of emerging market
countries.
<TABLE>
<CAPTION>
Bond Bond ratings Capital
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
A debt security, like an IOU, issued Independent evaluations of The amount of
by a company, municipality or creditworthiness, ranging from Aaa/AAA money you invest.
government agency. In return for (highest quality) to D (lowest
lending money to the issuer, a bond quality). Bonds rated Baa/BBB or
buyer generally receives fixed better are considered investment
periodic interest payments and grade. Bonds rated Ba/BB or lower are
repayment of the loan amount on a commonly known as junk bonds. See also
specified maturity date. A bond's Nationally recognized statistical
price changes prior to maturity and is rating organization.
inversely related to current interest
rates. When interest rates rise, bond
prices fall, and when interest rates
fall, bond prices rise.
</TABLE>
17
<PAGE>
How we manage the Funds (continued)
In deciding how much of the portfolio to allocate to emerging markets, we
consider both the total return potential of those markets and the expected level
of risk.
We may invest up to 5% of the Fund's assets in securities of issuers that have
been in continuous operation for less than three years.
Delaware Emerging Markets Fund
Delaware Emerging Markets Fund seeks long-term capital appreciation. The Fund
may invest in a broad range of equity securities, including common stocks. Our
primary emphasis will be on the stocks of companies located in or having their
principal business in an emerging country.
We consider an "emerging country" to be any country that is:
o generally recognized to be an emerging or developing country by the
international financial community, including the World Bank and the
International Finance Corporation;
o classified by the United Nations as developing; or
o included in the International Finance Corporation Free Index or the Morgan
Stanley Capital International Emerging Markets Free Index.
Developing or emerging countries include almost every nation in the world except
the United States, Canada, Japan, Australia, New Zealand and most nations
located in Western and Northern Europe. A representative list of the countries
where we may invest includes: Argentina, Botswana, Brazil, Chile, China,
Colombia, Czech Republic, Estonia, Ghana, Greece, Hong Kong, Hungary, India,
Indonesia, Ivory Coast, Jamaica, Jordan, Kenya, Korea, Latvia, Lithuania,
Malaysia, Mauritius, Mexico, Morocco, Nigeria, Pakistan, Peru, the Philippines,
Poland, Portugal, Russia, Slovenia, South Africa, Sri Lanka, Taiwan, Thailand,
Turkey, Venezuela and Zimbabwe. We may invest in other countries, particularly
as markets in other emerging countries develop. We may invest more than 25% of
the Fund's total assets in the securities of issuers located in the same
country.
In deciding whether a company is from an emerging country, we evaluate publicly
available information and question individual companies to determine if the
company meets one of the following criteria:
o the principal trading market for the company's securities is in a country
that is emerging;
o the company generates 50% or more of its annual revenue from operations in
emerging countries, even though the company's securities are traded in an
established market or in a combination of emerging and established markets;
o the company is organized under the laws of an emerging market country and has
a principal office in an emerging country.
<TABLE>
<CAPTION>
C-C | Capital appreciation Capital gains distributions Commission Compounding
| ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An increase in the value Payments to mutual fund shareholders The fee an investor pays to a Earnings on an
of an investment. of profits (realized gains) from the financial adviser for investment's
sale of a fund's portfolio securities. investment advice and help in previous earnings.
Usually paid once a year; may be buying or selling mutual
either short-term gains or long-term funds, stocks, bonds or other
gains. securities.
</TABLE>
18
<PAGE>
Currently, investing in many emerging countries is not feasible or may involve
significant political risks. We focus our investments in emerging countries
where we consider the economies to be developing strongly and where the markets
are becoming more sophisticated. In deciding where to invest we place particular
emphasis on factors such as economic conditions (including growth trends,
inflation rates and trade balances), regulatory and currency controls,
accounting standards and political and social conditions. We believe investment
opportunities may result from an evolving long-term trend favoring
market-oriented economies, a trend that may particularly benefit countries
having developing markets.
When we evaluate individual companies we strive to apply a value-oriented
selection process, similar to what we use for Delaware International Equity
Fund, Delaware Global Equity Fund and Delaware Overseas Equity Fund. However, in
emerging markets, more of the return is expected to come from capital
appreciation rather than income. Thus, there is greater emphasis on the
manager's assessment of the company's future growth potential.
The Fund may invest up to 35% of its net assets in high-yield, high risk foreign
fixed-income securities. This typically includes so-called Brady Bonds.
Delaware New Pacific Fund
Delaware New Pacific Fund seeks to maximize long-term capital appreciation.
It invests primarily in equity securities of companies domiciled or having their
principal business activities in countries located in the Pacific Basin.
The Fund will invest in companies of varying sizes, measured by assets, sales
and market capitalization. When we evaluate individual companies, we consider
the growth prospects for the company and its industry, the financial strength of
the company and the quality of its management. We also look at whether the stock
appears overvalued or undervalued compared to other stocks in the market or its
industry.
While the Fund will generally have investments in companies located in at least
three different countries or regions, the Fund may from time to time have
investments in only one or a few countries or regions. We may invest more than
25% of the Fund's total assets in the securities of issuers located in the same
country.
The Fund may invest up to 35% of its assets in securities of U.S. issuers. In
addition, the Fund may invest in short-term debt instruments to meet anticipated
day-to-day operating expenses and liquidity requirements.
The Fund may invest up to 5% of its assets in the securities of issuers that
have been in continuous operation for less than three years.
<TABLE>
<CAPTION>
Consumer Price Index (CPI) Contingent deferred sales charge (CDSC) Corporate bond Currency exchange rates
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Measurement of U.S. inflation; Fee charged by some mutual A debt security issued The price at which one
represents the price of a funds when shares are redeemed by a corporation. country's currency can
basket of commonly purchased (sold back to the fund) within See Bond. be converted into
goods. a set number of years; an another's. This exchange
alternative method for rate varies almost daily
investors to compensate a according to a wide
financial adviser for advice range of political,
and service, rather than an economic, and other
up-front commission. factors.
</TABLE>
19
<PAGE>
How we manage the Funds (continued)
Delaware Global Bond Fund
Delaware Global Bond Fund seeks current income consistent with the preservation
of principal. We invest primarily in fixed-income securities that may also
provide the potential for capital appreciation.
We may invest in:
o foreign and U.S. government securities;
o debt obligations of foreign and U.S. companies;
o debt securities of supranational entities;
o securities of issuers in emerging market countries, including Brady Bonds,
which tend to be of lower quality and more speculative than securities of
developed country issuers; and
o zero-coupon bonds.
At the time this Prospectus was prepared we anticipated that for increased
safety, a large percentage of Global Bond Fund's assets would be invested in
securities of supranational entities and in U.S. and foreign government
securities.
While the Fund may purchase securities of issuers in any foreign country,
developed or emerging, we currently anticipate investing in Australia, Belgium,
Canada, France, Germany, Hong Kong, Japan, Malaysia, the Netherlands, Singapore,
Spain, Switzerland and the United Kingdom, as well as Indonesia, Korea, New
Zealand, the Philippines, South Africa, Taiwan and Thailand. This is a
representative list; we may also invest in other countries. More than 25% of the
Fund's total assets may be invested in the securities of issuers located in the
same country.
Generally, the value of fixed-income securities rises when interest rates
decline and declines when interest rates rise. The value of your investment in
the Fund will be affected by changes in interest rates. We generally keep the
average weighted maturity of the portfolio in the five-to-ten year range.
However, if we anticipate a declining interest rate environment, we may extend
the average weighted maturity past ten years or if we anticipate a rising rate
environment, we may shorten the average weighted maturity to less than five
years.
<TABLE>
<CAPTION>
D-F | Depreciation Diversification Dividend distribution Duration
| -------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A decline in an The process of spreading Payments to mutual fund A measurement of a
investment's value. investments among a shareholders of fixed-income
number of different dividends passed along investment's price
securities, asset from the fund's volatility. The larger
classes or investment portfolio of securities. the number, the greater
styles to reduce the the likely price change
risks of investing. for a given change in
interest rates.
</TABLE>
20
<PAGE>
The securities we typically invest in
Stocks offer investors the potential for capital appreciation, and may pay
dividends as well. Fixed-income securities offer the potential for greater
income payments than stocks, and also may provide capital appreciation. The
following chart provides a brief description of the securities that the Funds
may invest in. The Funds can hold securities denominated in any currency. Please
see the Statement of Additional Information for additional descriptions of these
as well as other investments.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Common stocks: Delaware International Equity Fund, Delaware Global Equity Fund, Delaware Overseas Equity Delaware Global
Securities that Fund, Delaware Emerging Markets Fund and Delaware New Pacific Fund will invest their Bond Fund
represent shares assets in common stocks, some of which will be dividend-paying stocks. typically does
of ownership in not invest in
a corporation. common stocks.
Stockholders
participate in
the corporation's
profits and
losses,
proportionate to
the number of
shares they own.
Corporate bonds: Although not a principal Delaware Overseas Delaware Emerging Delaware New Delaware Global
Debt obligations strategy of the Funds, for Equity Fund may Markets Fund may Pacific Fund Bond Fund may
issued by U.S. or temporary defensive purposes, invest up to 40% of invest in corporate generally does invest in
foreign Delaware International Equity its assets in obligations issued not invest in corporate bonds,
corporations. Fund and Delaware Global developing country by emerging country corporate generally those
Equity Fund may invest all or corporate and companies. These bonds. rated A or
a substantial portion of their government bonds bonds may be high better by S&P
respective assets in corporate although it risk, fixed-income or Moody's or if
obligations. generally does not securities. unrated,
intend to do so. See determined
All corporate debt will be "Foreign government Although not a to be of
rated AA or better by S&P and securities" on principal strategy comparable
Aa or better by Moody's, or if page 22. of the Fund, for quality. The
unrated, determined to be of temporary defensive Fund
comparable quality. purposes, the Fund may also invest
may invest all or a in high-yield,
substantial portion high risk
of its assets in emerging markets
corporate corporate bonds.
obligations rated AA
or better by S&P and
Aa or better by
Moody's, or if
unrated, determined
to be of comparable
quality.
Delaware Global
Equity Fund may
seek to achieve
growth by
investing up to
35% of its assets
in debt
securities,
including
corporate bonds.
Generally, Delaware
Global Equity
Fund will invest
in debt securities
when we believe
they offer better
long-term potential
returns with less
risk than equity
investments.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Expense ratio Financial adviser Fixed-income securities
- ---------------------------------------------------------------------------------------------------
<S> <C> <C>
A mutual fund's total Financial professional (e.g., With fixed-income securities,
operating expenses, expressed broker, banker, accountant, the money you originally
as a percentage of its total planner or insurance agent) invested is paid back at a
net assets. Operating expenses who analyzes clients' finances pre-specified maturity date.
are the costs of running a and prepares personalized These securities, which
mutual fund, including programs to meet objectives. include government, corporate
management fees, offices, or municipal bonds, as well as
staff, equipment and expenses money market securities,
related to maintaining the typically pay a fixed rate of
fund's portfolio of securities return (often referred to as
and distributing its shares. interest). See Bond.
They are paid from the fund's
assets before any earnings are
distributed to shareholders.
</TABLE>
21
<PAGE>
How we manage the Funds (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Foreign government Although not a principal Delaware Overseas We may invest a Delaware New Delaware Global Bond
securities: Debt strategy of the Funds, for Equity Fund may portion of Delaware Pacific Fund Fund will generally
obligations issued temporary defensive purposes, invest up to 40% of Emerging Markets generally does invest in securities
by a government Delaware International Equity its assets in Fund's assets in not invest in issued by foreign
other than the Fund and Delaware Global developing country foreign governmental foreign governments, their
United States or by Equity Fund may invest all or corporate and securities issued by government agencies,
an agency, a substantial portion of their government bonds emerging or securities. instrumentalities or
instrumentality or respective assets in high combined although it developing political
political quality debt obligations of generally does not countries, which may subdivisions that
subdivision of such foreign governments, their intend to do so. be lower rated, are rated AAA or AA
governments. agencies, instrumentalities including securities by S&P or Aaa or Aa
and political sub-divisions. rated below by Moody's or, if
investment grade. unrated, considered
Delaware Global to be of comparable
Equity Fund may seek Although not a quality. We may
to achieve growth by principal strategy invest a portion of
investing up to 35% of the Fund, for the Fund's assets in
of its assets in temporary defensive foreign governmental
foreign governmental purposes, the Fund securities issued by
debt securities. may invest in high emerging countries,
Generally, Delaware quality debt which may be lower
Global Equity Fund obligations of rated, including
will invest in debt foreign governments, securities rated
securities when we their agencies, below investment
believe they offer instrumentalities grade.
better long-term and political
potential returns sub-divisions.
with less risk than
equity investments.
U.S. government Although not a principal strategy of the Funds, for temporary Delaware New Delaware Global Bond
securities: defensive purposes Delaware International Equity Fund, Delaware Global Pacific Fund Fund may invest a
Securities issued or Equity Fund, Delaware Overseas Equity Fund and Delaware Emerging generally does significant portion
guaranteed by the Markets Fund may invest in U.S. government securities. not invest in of its assets in
U.S. government or U.S. government U.S. government
issued by an agency securities. securities. It will
or instrumentality invest only in U.S.
of the U.S. government
government. obligations,
including bills,
notes and bonds that
are issued or
guaranteed as to the
payment of principal
and interest by the
U.S. government and
securities of U.S.
government agencies
or instrumentalities
that are backed by
the full faith and
credit of the United
States.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Inflation Investment goal Management fee Market capitalization
I-M --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The increase in the The objective, such The amount paid by a The value of a
cost of goods and as long-term capital mutual fund to the corporation
services over time. growth or high investment adviser determined by
U.S. inflation is current income, that for management multiplying the
frequently measured a mutual fund services, expressed current market price
by changes in the pursues. as an annual of a share of common
Consumer Price Index percentage of the stock by the number
(CPI). fund's average daily of shares held by
net assets. shareholders. A
corporation with one
million shares
outstanding and the
market price per
share of $10 has a
market
capitalization of
$10 million.
</TABLE>
22
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Investment company Each Fund may hold investment Delaware Overseas Delaware Emerging Delaware New Delaware Global
securities: In some company securities if we Equity Fund may not Markets Fund may Pacific Fund Bond Fund may hold
countries, believe the country offers hold investment hold open-end and may not hold closed-end
investments by U.S. good investment opportunities. company securities. closed-end investment investment company
mutual funds are Both Funds would generally investment company company securities.
generally made by hold closed-end investment securities. Please securities.
purchasing shares of companies, but Delaware Global see Delaware
investment companies Equity Fund may also hold International Equity
that in turn invest open-end investment companies. Fund and Delaware
in the securities of These investments involve an Global Equity Fund
such countries. indirect payment of a portion for a complete
of the expenses of the other explanation.
investment companies,
including their advisory fees.
Foreign currency Although the Funds value their assets daily in U.S. dollars, they do not intend to convert their
transactions: A holdings of foreign currencies into U.S. dollars on a daily basis. Each Fund will, however, from
forward foreign time to time, purchase or sell foreign currencies and/or engage in forward foreign currency exchange
currency exchange transactions. Each Fund may conduct its foreign currency transactions on a cash basis at the rate
contract involves an prevailing in the foreign currency exchange market or through a forward foreign currency exchange
obligation to contract or forward contract.
purchase or sell a
specific currency on A Fund may use forward contracts for defensive hedging purposes to attempt to protect the value of
a fixed future date the Fund's current security or currency holdings. It may also use forward contracts if it has agreed
at a price that is to sell a security and wants to "lock-in" the price of that security, in terms of U.S. dollars.
set at the time of Investors should be aware of the costs of currency conversion. The Funds will not use forward
the contract. contracts for speculative purposes.
The future date may
be any number of
days from the date
of the contract as
agreed by the
parties involved.
American Depositary Each Fund may invest in sponsored and unsponsored ADRs, EDRs and GDRs, generally This is not a
Receipts (ADRs), focusing on those whose underlying securities are issued by foreign entities. principal strategy
European Depositary for Delaware
Receipts (EDRs), and To determine whether to purchase a security in a foreign market or through Global Bond Fund.
Global Depositary depositary receipts, we evaluate the price levels, the transaction costs, taxes
Receipts (GDRs): and administrative costs involved with each security to identify the most
ADRs are receipts efficient choice.
issued by a U.S.
depositary (usually
a U.S. bank) and
EDRs and GDRs are
receipts issued by a
depositary outside
of the U.S. (usually
a non-U.S. bank or
trust company or a
foreign branch of a
U.S. bank).
Depositary receipts
represent an
ownership interest
in an underlying
security that is
held by the
depositary.
Generally, the
holder of the
depositary receipt
is entitled to all
payments of
interest, dividends
or capital gains
that are made on the
underlying security.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Maturity Morgan Stanley Capital International EAFE Morgan Stanley Capital International
(Europe, Australia, Far East) Index Emerging Markets Free Index
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
The length of time until a The Morgan Stanley Capital The Morgan Stanley
bond issuer must repay the International EAFE Index is an International Emerging Markets
underlying loan principal to international index including Free Index is a U.S. dollar
bondholders. stocks traded on 16 exchanges denominated index comprised of
in Europe, Australia and the stocks of countries with below
Far East, weighted by average per capita GDP as
capitalization. defined by the World Bank,
foreign ownership
restrictions, a tax regulatory
environment, and greater
perceived market risk than in
the developed countries.
Within this index, MSCI aims
to capture an aggregate of 60%
of local market
capitalization.
</TABLE>
23
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Supranational The Funds do not invest in these entities. We anticipate
entities: Debt investing a large
securities of percentage of
supranational Delaware Global
entities may be Bond Fund's assets
denominated in any in debt securities
currency. These of supranational
securities are entities.
typically of
high-grade quality.
A supranational
entity is an entity
established or
financially
supported by the
national governments
of one or more
countries to promote
reconstruction or
development. The
International Bank
for Reconstruction
and Development
(more commonly known
as the World Bank)
would be one example
of a supranational
entity.
Zero coupon bonds: Delaware Delaware Global Equity Fund Delaware Emerging Delaware New Delaware Global
Zero coupon bonds International Equity and Delaware Overseas Equity Markets Fund may Pacific Fund Bond Fund may
are debt obligations Fund typically does Fund do not invest in these invest in zero does not invest invest in zero
that do not entitle not invest in these securities. coupon bonds. in these coupon bonds.
the holder to any securities. securities.
periodic payments of
interest before
maturity or a
specified date when
the securities begin
paying current
interest. Therefore,
they are issued and
traded at a discount
from their face
amounts or par
value. The market
prices of zero
coupon bonds are
generally more
volatile than the
market prices of
securities that pay
interest
periodically and are
likely to respond to
changes in interest
rates to a greater
degree than do
non-zero coupon
securities having
similar maturities
and credit quality.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Morgan Stanley Capital Morgan Stanley
International World Index Pacific Index NASD Regulation, Inc. (NASD)
M-P ----------------------------------------------------------------------------------
<S> <C> <C> <C>
The Morgan Stanley A total return A self-regulating
Capital index, reported in organization,
International World U.S. dollars, based consisting of
Index is an on share prices and brokerage firms
international index reinvested gross (including
that includes stocks dividends of distributors of
traded in Europe, approximately 500 mutual funds), that
Australia, the Far companies (only is responsible for
East, plus the U.S., those securities overseeing the
Canada and South deemed sufficiently actions of its
Africa, weighted by liquid for trading members.
capitalization. by investors) from
the following 6
countries:
Australia, Hong
Kong, Japan,
Malaysia, New
Zealand and
Singapore.
</TABLE>
24
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Brady Bonds: These Delaware International Equity Fund, Delaware Emerging Delaware New Pacific Delaware Global
are debt securities Delaware Global Equity Fund and Delaware Markets Fund may Fund does not invest Bond Fund may
issued under the Overseas Equity Fund do not invest in invest in Brady in Brady Bonds. Brady Bonds.
framework of the these securities. Bonds. We believe Please see
Brady Plan, an that the economic Delaware Emerging
initiative for reforms undertaken Markets Fund to
debtor nations to by countries in the left for a
restructure their connection with the complete
outstanding external issuance of Brady explanation.
indebtedness Bonds can make the
(generally, debt of countries
commercial bank that have issued or
debt). Brady Bonds have announced plans
tend to be of lower to issue these bonds
quality and more a viable opportunity
speculative than for investment.
securities of
developed country
issuers.
High-yield, high Delaware International Equity Fund, Delaware Emerging Delaware New Pacific Delaware Global
risk fixed-income Delaware Global Equity Fund and Delaware Markets Fund may Fund does not invest Bond Fund may
securities: Overseas Equity Fund do not invest in invest up to 35% of in these securities. invest a portion
Securities that are these securities. its net assets, in of its assets in
rated lower than BBB high-yield, high these securities.
by S&P or Baa by risk foreign
Moody's, or if fixed-income
unrated, of equal securities.
quality. These
securities may be
issued by companies
or governments of
emerging or
developing
countries, which may
be less
creditworthy. The
risk that these
companies or
governments may not
be able to make
interest or
principal payments
is substantial.
Restricted We may invest in privately placed securities that are eligible for resale only among certain institutional
securities: buyer swithout registration, including Rule 144A Securities.
Privately placed
securities whose
resale is restricted
under securities
law.
Illiquid securities: Delaware International Equity Fund, Delaware Emerging Delaware New Pacific Fund and
Securities that Delaware Global Equity Fund and Delaware Markets Fund may Delaware Global Bond Fund may
cannot be sold or Overseas Equity Fund may invest up to invest up to 15% of invest up to 10% of net assets
disposed of in the 10% of net assets in illiquid net assets in in illiquid securities.
ordinary course of securities. illiquid securities.
business, within
seven days, at
approximately the
price at which a
fund has valued
them.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Nationally recognized statistical rating
organization (NRSRO) Net asset value (NAV) Preferred stock
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A company that assesses the credit quality The daily dollar value of one Preferred stock has preference
of bonds, commercial paper, preferred mutual fund share. Equal to a over common stock in the
and common stocks and municipal short-term fund's net assets divided by payment of dividends and
issues, rating the probability that the the number of shares liquidation of assets.
issuer of the debt will meet the scheduled outstanding. Preferred stocks also often
interest payments and repay the principal. pay dividends at a fixed rate
Ratings are published by such companies as and are sometimes convertible
Moody's Investors Service, Inc. (Moody's), into common stock.
Standard & Poor's Ratings Group (S&P),
Duff & Phelps, Inc. (Duff), and Fitch IBCA,
Inc. (Fitch).
</TABLE>
25
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Repurchase Typically, we use repurchase agreements as a short-term investment for a Fund's cash position. In
agreements: An order to enter into these repurchase agreements, a Fund must have collateral of at least 102% of the
agreement between a repurchase price. The Funds will only enter into repurchase agreements in which the collateral is
buyer, such as a composed of U.S. government securities.
fund, and a seller
of securities in
which the seller
agrees to buy the
securities back
within a specified
time at the same
price the buyer paid
for them, plus an
amount equal to an
agreed upon interest
rate. Repurchase
agreements are often
viewed as equivalent
to cash.
Other securities: Delaware Delaware Global Delaware Overseas Delaware Delaware New Delaware Global
Each Fund is International Equity Fund may Equity Fund may Emerging Pacific Fund Bond Fund may
permitted to invest Equity Fund invest in invest in all types Markets Fund may invest in invest in futures
in other securities may invest in preferred of securities with may invest all types of and options. The
that are listed preferred stocks, stocks, equity in preferred securities Fund may also
here. More convertible convertible characteristics, stocks, with equity invest in interest
information about securities, securities, including trust or securities, characteristics, rate swaps.
these securities can warrants, warrants, limited partnership warrants, including trust
be found in the futures and futures and interests, preferred convertible or limited
Statement of options. options. stocks, rights, futures and partnership
Additional warrants and options. interests,
Information. convertible preferred stocks,
securities. The Fund rights and
may hold futures and warrants and
options. The Fund convertible
may also invest in securities. The
swaps. Fund may hold
futures and
options. The
Fund may also
invest in swaps.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Price-to-earnings
ratio Principal Prospectus Redeem
P-S --------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A measure of a Amount of money you The official To cash in your
stock's value invest (also called offering document shares by selling
calculated by capital). Also that describes a them back to the
dividing the current refers to a bond's mutual fund, mutual fund.
market price of a original face value, containing
share of stock by due to be repaid at information required
its annual earnings maturity. by the SEC, such as
per share. A stock investment
selling for $100 per objectives,
share with annual policies, services
earnings per share and fees.
of $5 has a P/E of
20.
</TABLE>
26
<PAGE>
Portfolio turnover Each Fund (other than Delaware New Pacific Fund) anticipates
that its annual portfolio turnover will be less than 100%. A turnover rate of
100% would occur if a Fund sold and replaced securities valued at 100% of its
net assets within one year. High turnover in a Fund could result in additional
brokerage commissions to be paid by the Fund and higher tax liability for the
Fund.
Borrowing from banks Each Fund may borrow money as a temporary measure for
extraordinary or emergency purposes or to facilitate redemptions. A Fund will
not borrow money in excess of one-third of the value of its net assets.
Securities lending Each Fund may loan up to one-quarter (one-third, in the case
of Delaware New Pacific Fund and Delaware Overseas Equity Fund) of its assets to
qualified broker/dealers or institutional investors to generate additional
income for the Fund. All such loans will be secured by collateral.
Purchasing securities on a when-issued or delayed delivery basis Delaware New
Pacific Fund and Delaware Overseas Equity Fund may buy or sell securities on a
when-issued or delayed delivery basis; that is, paying for securities before
delivery or taking delivery at a later date. Each Fund will designate cash or
securities in amounts sufficient to cover its obligations, and will value the
designated assets daily.
Temporary defensive positions For temporary defensive purposes, Delaware
International Equity Fund, Delaware Global Equity Fund and Delaware Emerging
Markets Fund may each invest all or a substantial portion of their assets in
high quality debt instruments of foreign governments, the U.S. government, or
foreign or U.S. companies. Also, for temporary defensive purposes, Delaware
Overseas Equity Fund may invest a substantial portion of its assets in cash or
cash equivalent investments or in U.S. securities, and Delaware New Pacific Fund
may invest up to 100% of its assets in money market instruments, cash or cash
equivalents. To the extent that a Fund does so, the Fund may be unable to meet
its investment objective.
<TABLE>
<CAPTION>
Salomon Smith Barney World Government SEC (Securities and
Risk Sales charge Bond Index Exchange Commission)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Generally defined as Charge on the purchase or The World Government Bond Index Federal agency established
variability of value; also redemption of fund shares sold is a market-capitalization by Congress to administer
credit risk, inflation risk, through financial advisers. weighted benchmark that tracks the laws governing the
currency and interest rate May vary with the amount the performance of the 18 securities industry,
risk. Different investments invested. Typically used to Government bond markets of including mutual fund
involve different types and compensate advisers for advice Australia, Austria, Belgium, companies.
degrees of risk. and service provided. Canada, Denmark, Finland,
France, Germany, Ireland, Italy,
Japan, the Netherlands,
Portugal, Spain, Sweden,
Switzerland, the United Kingdom
and the United States.
</TABLE>
27
<PAGE>
How we manage the Funds (continued)
The risks of investing in the Funds
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in a Fund you should
carefully evaluate the risks. An investment in the Funds typically provides the
best results when held for a number of years. The following are the chief risks
you assume when investing in the Funds. Please see the Statement of Additional
Information for further discussion of these risks and other risks not discussed
here.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Market risk is the We maintain a long-term investment approach and focus on stocks we believe can appreciate over an extended
risk that all or a time frame regardless of interim market fluctuations. In deciding what portion of a Fund's portfolio should
majority of the be invested in any individual country, we evaluate a variety of factors, including opportunities and risks
securities in a relative to other countries.
certain market--like
the stock or bond In addition, for For temporary Same as for For temporary As part of Delaware
market--or in a temporary defensive defensive purposes Delaware defensive Global Bond Fund's
certain country or purposes, the Funds may Delaware Overseas International purposes, principal investment
region will decline in invest all or a Equity Fund may Equity Fund Delaware New strategy, the Fund
value because of substantial portion of invest a substantial and Delaware Pacific Fund may invest in
factors such as their assets in high portion of its Global Equity may invest securities that
economic conditions, quality debt assets in cash or Fund as up to 100% of generally have
future expectations or instruments of foreign cash equivalent explained its assets in relatively less
investor confidence. governments, the U.S. investments or in to the left. money market market risk.
government, (including U.S. securities. instruments,
their agencies and cash or cash
instrumentalities) or equivalents.
foreign or U.S.
companies.
Industry and security We typically hold a number of different securities in a variety of sectors in order to minimize the impact
risk is the risk that that a poorly performing security would have on a Fund. This risk is more significant for Delaware Global
the value of Equity Fund, Delaware Emerging Markets Fund and Delaware Global Bond Fund, which are non-diversified funds.
securities in a
particular industry or
the value of an
individual stock or
bond will decline
because of changing
expectations for the
performance of that
industry or for the
individual company
issuing the stock or
bond.
Interest rate risk is Delaware International Equity Fund, Delaware Global Equity Fund, Delaware Overseas Interest rate risk
the risk that Equity Fund, Delaware New Pacific Fund and Delaware Emerging Markets Fund are is a significant
securities, generally less affected by interest rate risk because they typically hold a smaller risk for Delaware
particularly bonds amount of fixed-income securities than Delaware Global Bond Fund. Global Bond Fund. In
with longer an attempt to manage
maturities, will interest rate risk,
decrease in value if we adjust the Fund's
interest rates rise. average weighted
maturity based on
our view of interest
rates. The Fund's
average weighted
maturity will
generally be in the
five-to-ten year
range. When we
anticipate that
interest rates will
decline, we may
extend the average
maturity beyond ten
years and when we
anticipate that
interest rates will
rise, we may shorten
the average maturity
to less than five
years.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Additional
S-V Share classes Signature guarantee Standard deviation Information (SAI)
--------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Different classifications Certification by a bank, A measure of an The document serving as
of shares; mutual fund brokerage firm or other investment's volatility; "Part B" of a fund's
share classes offer a financial institution for mutual funds, measures prospectus that
variety of sales charge that a customer's how much a fund's total provides more detailed
choices. signature is valid; return has typically information about the
signature guarantees can varied from its historical fund's organization,
be provided by members average. investments, policies
of the STAMP program. and risks.
</TABLE>
28
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Currency risk is the Each Fund may try to hedge its currency risk by purchasing foreign currency exchange contracts. If a Fund
risk that the value agrees to purchase or sell foreign securities at a pre-set price on a future date, the Fund attempts to
of a fund's protect the value of a security it owns from future changes in currency rates. If a Fund has agreed to
investments may be purchase or sell a security, it may also use foreign currency exchange contracts to "lock-in" the security's
negatively affected price in terms of U.S. dollars or another applicable currency. Each Fund may use forward currency exchange
by changes in contracts only for defensive or protective measures, not to enhance portfolio returns. However, there is no
foreign currency assurance that such a strategy will be successful.
exchange rates.
Adverse changes in
exchange rates may
reduce or eliminate
any gains produced by
investments that are
denominated in foreign
currencies and may
increase any losses.
Small company risk is These Funds typically These Funds may invest in small companies and would be Delaware Global Bond
the risk that prices focus their investment subject to this risk. We typically hold a number of Fund does not invest
of smaller companies in larger companies. different stocks in order to reduce the impact that one in small companies.
may be more volatile small company stock would have on the Funds. This risk
than larger companies is more significant for Delaware Emerging Markets Fund,
because of limited which is a non-diversified fund.
financial resources or
dependence on narrow
product lines.
Political risk is the We evaluate the political situations in the countries where we invest and take into account any potential
risk that countries or risks before we select securities for the portfolio. However, there is no way to eliminate political risk
the entire region when investing internationally.
where we invest may
experience political
instability. This may
cause greater
fluctuation in the
value and liquidity of
our investments due to
changes in currency
exchange rates,
governmental seizures
or nationalization of
assets.
Emerging market risk Delaware International Delaware Overseas Equity Fund, Delaware Emerging Markets Fund, Delaware New
is the possibility Equity Fund and Pacific Fund and Delaware Global Bond Fund are subject to this risk. Striving to
that the risks Delaware Global Equity manage this risk, the portfolio managers carefully screen securities within
associated with Fund, to the limited emerging markets and attempt to consider material risks associated with an
international extent that they individual company or bond issuer. We cannot eliminate emerging market risk and
investing will be invest in emerging consequently encourage shareholders to invest in these Funds only if they have a
greater in emerging markets, are subject long-term time horizon, over which the potential of individual securities is
markets than in more to this risk. more likely to be realized.
developed foreign
markets because, among
other things, emerging
markets may have less
stable political and
economic environments.
- ------------------------------------------------------------------------------------------------------------------------------------
<CAPTION>
Uniform Gift to Minors Act and
Stock Total return Uniform Transfers to Minors Act Volatility
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
An investment that An investment performance Federal and state laws The tendency of an investment to go up or down in
represents a share measurement, expressed as that provide a simple way value by different magnitudes. Investments that
of ownership a percentage, based on to transfer property to a generally go up or down in value in relatively
(equity) in a the combined earnings minor with special tax small amounts are considered "low volatility"
corporation. Stocks from dividends, capital advantages. investments, whereas those investments that
are often referred gains and change in price generally go up or down in value in relatively
to as "equities." over a given period. large amounts are considered "high volatility"
investments.
</TABLE>
29
<PAGE>
How we manage the Funds (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inefficient market The Funds will attempt to reduce these risks by investing in a number of different countries, and noting
risk is the risk that trends in the economy, industries and financial markets.
foreign markets may Delaware Global Bond
be less liquid, have Fund will also
greater price perform credit
volatility, less analysis in an
regulation and higher attempt to reduce
transaction costs these risks.
than U.S. markets.
Information risk is We conduct fundamental research on the companies we invest in rather than relying solely on information
the risk that foreign available through financial reporting. We believe this will help us to better uncover any potential
companies may be weaknesses in individual companies.
subject to different
accounting, auditing
and financial
reporting standards
than U.S. companies.
There may be less
information available
about foreign issuers
than domestic issuers.
Furthermore,
regulatory oversight
of foreign issuers may
be less stringent or
less consistently
applied than in the
United States.
Non-diversified fund Delaware Delaware Global Delaware Delaware Emerging Delaware New Delaware Global Bond
risk is the risk that International Equity Fund will Overseas Equity Markets Fund is a Pacific Fund Fund is a
non-diversified Equity Fund not be Fund is a non-diversified is a non-diversified
funds are believed to is a diversified diversified fund, fund, the same as diversified fund, the same as
be subject to greater diversified under the 1940 and is not Delaware Global fund, and is Delaware Global
risks because adverse fund, and is Act. subject to this Equity Fund. Please not subject Equity Fund. Please
effects on their not subject Non-diversified risk. see the full to this risk. see the full
security holdings may to this risk. investment explanation to the explanation under
affect a larger companies left under Delaware Delaware Global
portion of their have the Global Equity Fund. Equity Fund to the
overall assets. flexibility to left.
invest as much
as 50% of their
assets in as
few as two issuer
with no single
issuer accounting
for more than
25% of the
portfolio. The
remaining 50%
of the
portfolio must
be diversified
so that no more
than 5% of a
fund's assets is
invested in the
securities of a
single issuer.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
30
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Foreign government and This is not a significant risk for Delaware Delaware Emerging This is not a The Fund is subject
supranational International Equity Fund, Delaware Global Markets Fund is significant to this risk and
securities risks Equity Fund or Delaware Overseas Equity Fund. subject to this risk risk for will attempt to
relate to the ability and will attempt to Delaware New limit this risk by
of a foreign limit this risk by Pacific Fund. performing credit
government or performing credit analysis on the
government related analysis on the issuer of each
issuer to make timely issuer of each security purchased.
payments on its security purchased. The Fund attempts to
external debt The Fund attempts to reduce the risks
obligations. reduce this risk by associated with
limiting the portion investing in foreign
of net assets that governments by
may be invested in focusing on bonds
these securities. rated within the two
The Fund also highest rating
compares the categories.
risk-reward
potential of foreign
government
securities being
considered to that
offered by equity
securities to
determine whether to
allocate assets to
equity or
fixed-income
investments.
Credit risk of This is not a significant risk for Delaware Delaware Emerging This is not a Delaware Global Bond
high-yield, high risk International Equity Fund, Delaware Global Markets Fund may significant Fund may invest a
fixed-income securities Equity Fund or Delaware Overseas Equity Fund. invest up to 35% of risk for portion of its
relates to securities its net assets in Delaware New assets in these
rated lower than BBB high-yield, high Pacific Fund. securities. Please
by S&P and Baa by risk foreign see the complete
Moody's are considered fixed-income explanation under
to be of poor standing securities. We Delaware Emerging
and predominantly intend to limit our Markets Fund to the
speculative as to the investment in any left.
issuer's ability to single lower rated
repay interest and bond, which can help
principal. These bonds to reduce the effect
are often issued by of an individual
less creditworthy default on the Fund.
companies or by highly We also intend to
leveraged (indebted) limit our overall
firms, which are holdings of bonds in
generally less able this category. Such
than more financially limitations may not
stable firms to make protect the Fund
scheduled payments of from widespread bond
interest and defaults brought
principal. The risks about by a sustained
posed by bonds issued economic downturn or
under such from price declines
circumstances are that might result
substantial. from changes in the
quality ratings of
individual bonds.
Transaction costs Each of the Funds is subject to this risk. We strive to monitor transaction costs and to choose an
risk relates to the efficient trading strategy for the Funds.
costs of buying,
selling and holding
foreign securities,
including brokerage,
tax and custody costs,
may be higher than
those involved in
domestic transactions
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Who manages the Funds
Investment managers
and sub-advisers
Delaware International Advisers Ltd. makes investment decisions for Delaware
International Equity Fund, Delaware Global Equity Fund, Delaware Emerging
Markets Fund and Delaware Global Bond Fund, manages the Funds' business affairs
and provides daily administrative services. Delaware International Advisers Ltd.
is affiliated with Delaware Management Company, a series of Delaware Management
Business Trust, which is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc.
Delaware Management Company is the sub-adviser to Delaware Global Equity Fund.
Delaware Management Company manages the U.S. securities portion of Delaware
Global Equity Fund's portfolio under the overall supervision of Delaware
International Advisers Ltd. and furnishes Delaware International Advisers with
investment recommendations, asset allocation advice, research and other
investment services regarding U.S. securities.
Delaware Overseas Equity Fund and Delaware New Pacific Fund are managed by
Delaware Management Company. Delaware International Advisers Ltd. is Delaware
Overseas Equity Fund's sub-adviser and AIB Govett, Inc. is Delaware New Pacific
Fund's sub-adviser. The sub-advisers are responsible for day-to-day management
of the Fund's assets. Delaware Management Company administers the Funds' affairs
and has ultimate responsibility for all investment advisory services for the
Funds. Delaware Management Company also supervises the sub-adviser's
performance.
For the services they provided, the manager and sub-advisers, where applicable,
were paid an aggregate fee by each Fund for the last fiscal year as follows:
<TABLE>
<CAPTION>
Investment management fees
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
As a percentage of
average daily net assets 0.81% 0.34%* none* 0.28%* 0.22%* 0.51%*
</TABLE>
*Reflects a waiver of fees by the manager.
Portfolio
managers
Delaware International Equity Fund
Clive A. Gillmore and Nigel G. May have primary responsibility for making
day-to-day investment decisions for Delaware International Equity Fund. In
making investment decisions for the Fund, Mr. Gillmore and Mr. May regularly
consult with a fourteen member international equity team.
Clive A. Gillmore, Deputy Managing Director, Senior Portfolio Manager and
Director of Delaware International Advisers Ltd., has been the senior portfolio
manager for Delaware International Equity Fund since its inception. A graduate
f the University of Warwick and having begun his career at Legal and General
Investment Management, Mr. Gillmore joined Delaware International in 1990 after
eight years of investment experience. His most recent position prior to joining
Delaware International was as a Pacific Basin equity analyst and senior
portfolio manager for Hill Samuel Investment Management Ltd. Mr. Gillmore
completed the London Business School Investment program.
32
<PAGE>
Nigel G. May, Senior Portfolio Manager and Director of Delaware International
Advisers Ltd., is a graduate of Sidney Sussex College, Cambridge. Mr. May joined
Mr. Gillmore as Co-Manager of the Fund on December 22, 1997. He joined Delaware
International in 1991, assuming portfolio-management responsibilities and
sharing analytical responsibilities for continental Europe. He previously had
been with Hill Samuel Investment Management Ltd. for five years.
Delaware Global Equity Fund
Elizabeth A. Desmond has primary responsibility for making day-to-day investment
decisions for Delaware Global Equity Fund. Robert L. Arnold makes investment
decisions for the U.S. equity portion of the Fund.
Elizabeth A. Desmond, Senior Portfolio Manager and Director of Delaware
International Advisers Ltd., has been the portfolio manager for the Fund since
July 21, 1998. Ms. Desmond is a graduate of Wellesley College and the masters
program in East Asian studies at Stanford University. After working for the
Japanese government for two years, she began her investment career as a Pacific
Basin investment manager with Shearson Lehman Global Asset Management. Prior to
joining Delaware International in the spring of 1991, she was a Pacific Basin
equity analyst and senior portfolio manager at Hill Samuel Investment Management
Ltd. Ms. Desmond is a CFA charterholder.
Robert L. Arnold, Vice President/Senior Portfolio Manager of the Fund, has been
managing the U.S. equity portion of the Fund since July 21, 1998. Prior to that
time he managed other Delaware Investments mutual funds and was a financial
analyst focusing on the financial services industry including banks, thrifts,
insurance companies and consumer finance companies. Mr. Arnold holds a BS from
Carnegie Mellon University and earned an MBA from the University of Chicago. He
began his investment career as a management consultant with Arthur Young in
Philadelphia. Prior to joining Delaware Investments in March 1992, Mr. Arnold
was a planning analyst with Chemical Bank in New York.
Delaware Overseas Equity Fund
Clive Gillmore and Robert Akester have had primary responsibility for making
day-to-day investment decisions for Delaware Overseas Equity Fund since
September 15, 1997. Please see Delaware International Equity Fund for a
description of Mr. Gillmore's business experience.
Robert Akester, Senior Portfolio Manager of Delaware International Advisers
Ltd., joined Delaware International Advisers Ltd. in 1996. Mr. Akester, who
began his investment career in 1969, was most recently a Director of Hill Samuel
Investment Management Ltd., which he joined in 1985. His prior experience
included working as a Senior Analyst and head of the Southeast Asian Research
team at James Capel, and as a Fund Manager at Prudential Assurance Co., Ltd. Mr.
Akester holds a BS in Statistics and Economics from University College, London
and is an associate of the Institute of Actuaries, with a certificate in Finance
and Investment.
33
<PAGE>
Who manages the Funds (continued)
Delaware Emerging Markets Fund
Clive Gillmore also has primary responsibility for making day-to-day investment
decisions for Emerging Markets Fund (please see Delaware International Equity
Fund for a description of Mr. Gillmore's business experience). In making
investment decisions for Delaware Emerging Markets Fund, Mr. Gillmore regularly
consults with a fourteen member international equity team, including co-managers
Robert Akester and Joshua H. Brooks. (Please see Delaware Overseas Equity Fund
for a description of Mr. Akester's business experience). Mr. Gillmore has been
managing the Fund since its inception.
Joshua H. Brooks, Senior Portfolio Manager of Delaware International Advisers
Ltd., holds a bachelor's degree from Yale University and an MBA from The London
Business School. He began his investment career with Delaware Investments in
1991. Prior to joining the investment team in London, he was based in
Philadelphia with responsibilities that included equity market analysis and
acting as liaison with Delaware International.
Delaware New Pacific Fund
Jane Pickard has had primary responsibility for making day-to-day investment
decisions for the Fund since November 12, 1997. Ms. Pickard graduated in law
from Edinburgh University. She joined Barclays de Zoete Wedd Securities Limited
in 1991, where she initially worked as a specialist in structured debt products,
moving into the Pacific Rim equity division in 1992. She remained there until
1995 when she moved to IAI International where she had responsibility for
Pacific Region investment for U.S. institutional and retail funds. Ms. Pickard
joined AIB Govett Asset Management, an affiliate of AIB Govett, Inc., in 1996.
Delaware Global Bond Fund
Christopher A. Moth and Joanna Bates have primary responsibility for making
day-to-day investment decisions for Delaware Global Bond Fund. In making
investment decisions for Delaware Global Bond Fund, Mr. Moth and Ms. Bates
regularly consult with David G. Tilles.
Christopher A. Moth, Senior Portfolio Manager, Director and Head of Investment
Strategy of Delaware International Advisers Ltd., is a graduate of The City
University, London. He joined Delaware International in 1992. He previously
worked at the Guardian Royal Exchange where he was responsible for technical
analysis, quantitative models and projections. Mr. Moth has been awarded the
certificate in Finance and Investment from the Institute of Actuaries in London.
Mr. Moth became Co-Manager of the Fund in January 1997.
Joanna Bates, Senior Portfolio Manager, Credit and Emerging Markets of Delaware
International Advisers Ltd., is a graduate of London University. She joined the
Fixed Income team at Delaware International in June 1997. Prior to that she was
Associate Director, Fixed Interest at Hill Samuel Investment Management Ltd.
which she joined in 1990. She had previously worked at Fidelity International
and Save & Prosper as a fund manager and analyst for global bond markets. Ms.
Bates is an associate of the Institute of Investment Management and Research.
Ms. Bates became Co-Manager of the Fund in July 1999.
David G. Tilles, Managing Director and Chief Investment Officer of Delaware
International Advisers Ltd., was educated at the Sorbonne, Warwick University
and Heidelberg University. Prior to joining Delaware International in 1990 as
Managing Director and Chief Investment Officer, he spent 16 years with Hill
Samuel Investment Management Ltd. in London, serving in a number of investment
capacities. His most recent position prior to joining Delaware International was
Chief Investment Officer of Hill Samuel Investment Management Ltd.
34
<PAGE>
Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Board of Trustees
Investment managers The Funds Custodian
Delaware International Advisers Ltd. The Chase Manhattan Bank
Third Floor 80 Cheapside 4 Chase Metrotech Center
London, England EC2V 6EE Brooklyn, NY 11245
Delaware Management Company Distributor Service agent
One Commerce Square Delaware Distributors, L.P. Delaware Service Company, Inc.
Philadelphia, PA 19103 1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
Sub-advisers
Delaware Management Company Financial advisers
Delaware International Advisers Ltd. Shareholders
AIB Govett, Inc.
250 Montgomery St., Suite 1200
San Francisco, CA 94104
Portfolio managers
(see page 32 for details)
</TABLE>
Board of Trustees A mutual fund is governed by a Board of Trustees which has
oversight responsibility for the management of the fund's business affairs.
Trustees establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the Board of Trustees must be independent of the fund's
investment manager and distributor. These independent fund trustees, in
particular, are advocates for shareholder interests.
Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.
Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.
Portfolio managers Portfolio managers are employed by the
investment manager or sub-adviser to make investment decisions for individual
portfolios on a day-to-day basis.
Custodian Mutual funds are legally required to protect their portfolio
securities and most funds place them with a qualified bank custodian who
segregates fund securities from other bank assets.
Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASD) rules governing mutual fund sales practices.
Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.
Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.
Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect trustees. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.
35
<PAGE>
About your account
Investing in
the Funds
You can choose from a number of share classes for each Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.
Choosing a share class
Class
A
o Class A shares have an up-front sales charge of up to 5.75% that you pay
when you buy the shares. Class A shares of Delaware Global Bond Fund have
an up-front sales charge of up to 4.75%. The offering price for Class A
shares includes the front-end sales charge.
o If you invest $50,000 or more ($100,000 or more for Delaware Global Bond
Fund), your front-end sales charge will be reduced.
o You may qualify for other reduced sales charges, as described in "How to
reduce your sales charge," and under certain circumstances the sales charge
may be waived; please see the Statement of Additional Information.
o Class A shares are also subject to an annual 12b-1 fee no greater than
0.30% (0.35% for Delaware New Pacific Fund) of average daily net assets,
which is lower than the 12b-1 fee for Class B and Class C shares.
o Class A shares generally are not subject to a contingent deferred sales
charge except in the limited circumstances described in the table below.
Class A sales charges
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware International Equity, Delaware Global |
Equity, Delaware Overseas Equity, Delaware | Delaware Global Bond
Emerging Markets, Delaware New Pacific |
- ------------------------------------------------------------------------------------------------------------------------------------
Sales charge Sales charge Dealer's | Sales charge Sales charge Dealer's
as % of as % of commission | as % of as % of commission as
Amount of offering amount as % of | offering price amount % of offering
purchase price invested offering price | invested price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> | <C> <C> <C>
Less than $50,000 5.75% 6.10% 5.00% | 4.75% 4.99% 4.00%
|
$50,000 but |
under $100,000 4.75% 4.99% 4.00% | 4.75% 4.99% 4.00%
|
$100,000 but |
under $250,000 3.75% 3.90% 3.00% | 3.75% 3.90% 3.00%
|
$250,000 but |
under $500,000 2.50% 2.56% 2.00% | 2.50% 2.56% 2.00%
|
$500,000 but |
under $1,000,000 2.00% 2.04% 1.60% | 2.00% 2.04% 1.60%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
As shown below, there is no front-end sales charge when you purchase $1 million
or more of Class A shares. However, if your financial adviser is paid a
commission on your purchase, you will have to pay a limited contingent deferred
sales charge of 1% if you redeem these shares within the first year after your
purchase and 0.50% if you redeem them within the second year unless a specific
waiver of the charge applies.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Sales charge as Sales charge as Dealer's commission as
Amount of purchase % of offering price % of amount invested % of offering price
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1 million up to $5 million none none 1.00%
Next $20 million
Up to $25 million none none 0.50%
Amount over $25 million none none 0.25%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
36
<PAGE>
Class
B
o Class B shares have no up-front sales charge, so the full amount of your
purchase is invested in a Fund. However, you will pay a contingent deferred
sales charge if you redeem your shares within six years after you buy them.
o If you redeem Class B shares during the first year after you buy them, the
shares will be subject to a contingent deferred sales charge of 5%. The
contingent deferred sales charge is 4% during the second year, 3% during
the third and fourth years, 2% during the fifth year, 1% during the sixth
year, and 0% thereafter. For Delaware Global Bond Fund Class B, the
contingent deferred sales charge is 4% during the first two years, 3%
during the third and fourth years after your purchase, 2% during the fifth
year, 1% during the sixth year, and 0% thereafter.
o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.
o For approximately eight years after you buy your Class B shares, they are
subject to annual 12b-1 fees no greater than 1% of average daily net
assets, of which 0.25% are service fees paid to the distributor, dealers or
others for providing services and maintaining accounts.
o Because of the higher 12b-1 fees, Class B shares have higher expenses and
any dividends paid on these shares are lower than dividends on Class A
shares.
o Approximately eight years after you buy them, Class B shares automatically
convert into Class A shares with a 12b-1 fee of no more than 0.30% (0.35%
for Delaware New Pacific Fund). Conversion may occur as late as three
months after the eighth anniversary of purchase, during which time Class
B's higher 12b-1 fees apply.
o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.
Class
C
o Class C shares have no up-front sales charge, so the full amount of your
purchase is invested in a Fund. However, you will pay a contingent deferred
sales charge of 1% if you redeem your shares within 12 months after you buy
them.
o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.
o Class C shares are subject to an annual 12b-1 fee which may not be greater
than 1% of average daily net assets, of which 0.25% are service fees paid
to the distributor, dealers or others for providing services and
maintaining shareholder accounts.
o Because of the higher 12b-1 fees, Class C shares have higher expenses and
pay lower dividends than Class A shares.
o Unlike Class B shares, Class C shares do not automatically convert into
another class.
o You may purchase any amount less than $1,000,000 of Class C shares at any
one time. The limitation on maximum purchases varies for retirement plans.
Each share class of the Funds has adopted a separate 12b-1 plan that allows it
to pay distribution fees for the sales and distribution of its shares. Because
these fees are paid out of a Fund's assets on an ongoing basis, over time these
fees will increase the cost of your investment and may cost you more than paying
other types of sales charges.
37
<PAGE>
About your account (continued)
How to reduce your sales charge
We offer a number of ways to reduce or eliminate the sales charge on shares.
Please refer to the Statement of Additional Information for detailed information
and eligibility requirements. You can also get additional information from your
financial adviser. You or your financial adviser must notify us at the time you
purchase shares if you are eligible for any of these programs.
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------
Share class
Program How it works A B C
- ----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Letter of Intent Through a Letter of X Although the Letter of Intent and Rights of
Intent you agree to Accumulation do not apply to the purchase of Class
invest a certain amount B and C shares, you can combine your purchase of
in Delaware Investments Class A shares with your purchase of Class B and C
Funds (except money shares to fulfill your Letter of Intent or qualify
market funds with no for Rights of Accumulation.
sales charge) over a
13-month period to
qualify for reduced
front-end sales charges.
Rights of You can combine your X
Accumulation holdings or purchases of
all funds in the
Delaware Investments
family (except money
market funds with no
sales charge) as well as
the holdings and
purchases of your spouse
and children under 21 to
qualify for reduced
front-end sales charges.
Reinvestment of Up to 12 months after For Class A, you For Class B, your Not available
redeemed shares you redeem shares, you will not have to account will be
can reinvest the pay an additional credited with the
proceeds with no front-end sales contingent deferred
additional sales charge. charge. sales charge you
previously paid on
the amount you are
reinvesting. Your
schedule for
contingent deferred
sales charges and
conversion to Class
A will not start
over again; it will
pick up from the
point at which you
redeemed your
shares.
Simple IRA, SEP These investment plans X There is no reduction in sales charges for Class B
IRA, SARSEP, may qualify for reduced or Class C shares for group purchases by
Prototype Profit sales charges by retirement plans.
Sharing, Pension, combining the purchases
401(k), SIMPLE of all members of the
401(k), 403(b)(7), group. Members of these
and 457 Retirement groups may also qualify
Plans to purchase shares
without a front-end
sales charge and may
qualify for a waiver of
any contingent deferred
sales charges.
- ----------------------------------------------------------------------------------------------------------------------------
</TABLE>
38
<PAGE>
How to buy shares
(GRAPHIC SYMBOL OF ADVISER OMITTED)
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.
(GRAPHIC SYMBOL OF ENVELOPE OMITTED)
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.
(GRAPHIC SYMBOL OF WIRE OMITTED)
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.
(GRAPHIC SYMBOL OF EXCHANGE OMITTED)
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the
Shareholder Service Center at 800.523.1918.
(GRAPHIC SYMBOL OF DELAPHONE OMITTED)
Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawareinvestments.com. For more
information about how to sign up for these services, call our Shareholder
Service Center at 800.523.1918.
39
<PAGE>
About your account (continued)
How to buy shares (continued)
Once you have completed an application, you can open an account with an initial
investment of $1,000 and make additional investments at any time for as little
as $100. If you are buying shares in an IRA or Roth IRA, under the Uniform Gifts
to Minors Act or the Uniform Transfers to Minors Act, or through an Automatic
Investing Plan, the minimum purchase is $250, and you can make additional
investments of only $25. The minimum for an Education IRA is $500. The minimums
vary for retirement plans other than IRAs, Roth IRAs or Education IRAs.
The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a
business day, you will pay that day's closing share price which is based on a
Fund's net asset value. If we receive your order after the close of regular
trading, you will pay the next business day's price. A business day is any day
that the New York Stock Exchange is open for business. We reserve the right to
reject any purchase order.
We determine each Fund's net asset value (NAV) per share at the close of regular
trading of the New York Stock Exchange each business day that the Exchange is
open. We calculate this value by adding the market value of all the securities
and assets in a Fund's portfolio, deducting all liabilities, and dividing the
resulting number by the number of shares outstanding. The result is the net
asset value per share. Foreign securities, currencies and other assets
denominated in foreign currencies are translated into U.S. dollars at the
exchange rate of these currencies against the U.S. dollar, as provided by an
independent pricing service. We price securities and other assets for which
market quotations are available at their market value. We price fixed-income
securities on the basis of valuations provided to us by an independent pricing
service that uses methods approved by the Board of Trustees. Any fixed-income
securities that have a maturity of less than 60 days we price at amortized cost.
For all other securities, we use methods approved by the Board of Trustees that
are designed to price securities at their fair market value.
Retirement plans
In addition to being an appropriate investment for your Individual Retirement
Account (IRA), Roth IRA and Education IRA, shares in the Funds may be suitable
for group retirement plans. You may establish your IRA account even if you are
already a participant in an employer-sponsored retirement plan. For more
information on how shares in these Funds can play an important role in your
retirement planning or for details about group plans, please consult your
financial adviser, or call 800.523.1918.
40
<PAGE>
How to redeem shares
(GRAPHIC SYMBOL OF ADVISER OMITTED)
Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.
(GRAPHIC SYMBOL OF ENVELOPE OMITTED)
By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of more than
$50,000, you must include a signature guarantee for each owner. Signature
guarantees are also required when redemption proceeds are going to an address
other than the address of record on an account.
(GRAPHIC SYMBOL OF TELEPHONE OMITTED)
By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.
(GRAPHIC SYMBOL OF WIRE OMITTED)
By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, a bank wire fee may be deducted from
your proceeds. Bank information must be on file before you request a wire
redemption.
(GRAPHIC SYMBOL OF DELAPHONE OMITTED)
Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawareinvestments.com. For more information about
how to sign up for these services, call our Shareholder Service Center at
800.523.1918.
41
<PAGE>
About your account (continued)
How to redeem shares
(continued)
If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.
When you send us a properly completed request to redeem or exchange shares,
before the close of regular trading on the New York Stock Exchange (normally
4:00 p.m. Eastern Time) you will receive the net asset value as determined on
the business day we receive your request. We will deduct any applicable
contingent deferred sales charges. You may also have to pay taxes on the
proceeds from your sale of shares. We will send you a check, normally the next
business day, but no later than seven days after we receive your request to sell
your shares. If you purchased your shares by check, we will wait until your
check has cleared, which can take up to 15 days, before we send your redemption
proceeds.
If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares--not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.
Account minimum
If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for IRAs, Uniform Gift to Minors Act accounts or
accounts with automatic investing plans, $500 for Education IRAs) for three or
more consecutive months, you will have until the end of the current calendar
quarter to raise the balance to the minimum. If your account is not at the
minimum by the required time, you will be charged a $9 fee for that quarter and
each quarter after that until your account reaches the minimum balance. If your
account does not reach the minimum balance, your Fund may redeem your account
after 60 days' written notice to you.
Special services
To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
<S> <C>
Automatic The Automatic Investing Plan allows you to make regular
Investing Plan monthly or quarterly investments directly from your checking
account.
Direct Deposit With Direct Deposit you can make additional investments
through payroll deductions, recurring government or private
payments such as social security or direct transfers from
your bank account.
Wealth Builder Option With the Wealth Builder Option you can arrange automatic
monthly exchanges between your shares in one or more
Delaware Investments funds. Wealth Builder exchanges are
subject to the same rules as regular exchanges (see below)
and require a minimum monthly exchange of $100 per fund.
</TABLE>
42
<PAGE>
Special services
(continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
<S> <C>
Dividend Through our Dividend Reinvestment Plan, you can have your
Reinvestment Plan distributions reinvested in your account or the same share
class in another fund in the Delaware Investments family.
The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales
charge or to a contingent deferred sales charge. Under most
circumstances, you may reinvest dividends only into like
classes of shares.
Exchanges You can exchange all or part of your shares for shares of
the same class in another Delaware Investments fund without
paying a sales charge and without paying a contingent
deferred sales charge at the time of the exchange. However,
if you exchange shares from a money market fund that does
not have a sales charge you will pay any applicable sales
charges on your new shares. When exchanging Class B and
Class C shares of one fund for similar shares in other
funds, your new shares will be subject to the same
contingent deferred sales charge as the shares you
originally purchased. The holding period for the CDSC will
also remain the same, with the amount of time you held your
original shares being credited toward the holding period of
your new shares. You don't pay sales charges on shares that
you acquired through the reinvestment of dividends. You may
have to pay taxes on your exchange. When you exchange
shares, you are purchasing shares in another fund so you
should be sure to get a copy of the fund's prospectus and
read it carefully before buying shares through an exchange.
MoneyLine(SM) Through our MoneyLine(SM) On Demand Service, you or your
On Demand Service financial adviser may transfer money between your Fund
account and your predesignated bank account by telephone
request. This service is not available for retirement plans,
except for purchases into IRAs. MoneyLine has a minimum
transfer of $25 and a maximum transfer of $50,000. Delaware
Investments does not charge a fee for this service; however,
your bank may assess one.
MoneyLine(SM) Through our MoneyLine(SM) Direct Deposit Service you can have
Direct Deposit $25 or more in dividends and distributions deposited
Service directly to your bank account. Delaware Investments does not
charge a fee for this service; however, your bank may assess
one. This service is not available for retirement plans.
Systematic Through our Systematic Withdrawal Plan you can arrange a
Withdrawal Plan regular monthly or quarterly payment from your account made
to you or someone you designate. If the value of your
account is $5,000 or more, you can make withdrawals of at
least $25 monthly, or $75 quarterly. You may also have your
withdrawals deposited directly to your bank account through
our MoneyLine Direct Deposit Service.
</TABLE>
43
<PAGE>
About your account (continued)
Dividends, distributions
and taxes
Dividends, if any, are paid quarterly for Delaware International Equity Fund,
Delaware Global Equity Fund and Delaware Global Bond Fund and annually for
Delaware Overseas Equity Fund, Delaware New Pacific Fund and Delaware Emerging
Markets Fund. Any capital gains are distributed annually. We automatically
reinvest all dividends and any capital gains, unless you tell us otherwise.
Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from these Funds is the same whether you
reinvest your dividends or receive them in cash. Distributions from a Fund's
long-term capital gains are taxable as capital gains, while distributions from
short-term capital gains and net investment income are generally taxable as
ordinary income. Any capital gains may be taxable at different rates depending
on the length of time the Fund held the assets. In addition, you may be subject
to state and local taxes on distributions.
We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
44
<PAGE>
Certain management considerations
Year 2000
As with other mutual funds, financial and business organizations and individuals
around the world, the Funds could be adversely affected if the computer systems
used by their service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." Each Fund has taken steps to obtain satisfactory
assurances that its major service providers have taken steps reasonably designed
to address the Year 2000 Problem on the computer systems that the service
providers use. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the business of the Funds. The
portfolio managers and investment professionals of the Funds consider Year 2000
compliance (including, but not limited to, any or all of the following: impact
on business, cost of compliance plan review and contingency planning, and vendor
compliance) in the securities selection and investment process. However, there
can be no guarantees that, even with their due diligence efforts, they will be
able to predict the effect of Year 2000 on any company or the performance of its
securities.
Investments by fund of funds
Delaware International Equity Fund, Delaware Emerging Markets Fund, Delaware New
Pacific Fund and Delaware Global Bond Fund accept investments from the series
portfolios of Delaware Group Foundation Funds, a fund of funds. From time to
time, a Fund may experience large investments or redemptions due to allocations
or rebalancings by Foundation Funds. While it is impossible to predict the
overall impact of these transactions over time, there could be adverse effects
on portfolio management. For example, the Fund may be required to sell
securities or invest cash at times when it would not otherwise do so. These
transactions could also have tax consequences if sales of securities result in
gains, and could also increase transactions costs or portfolio turnover. The
manager will monitor transactions by Foundation Funds and will attempt to
minimize any adverse effects on each Fund and Foundation Funds as a result of
these transactions.
Fund companies
The Funds are separate series of the investment companies shown below.
Delaware Group Global & International Funds
Delaware International Equity Fund
Delaware Global Equity Fund
Delaware Emerging Markets Fund
Delaware Global Bond Fund
Delaware Group Adviser Funds
Delaware Overseas Equity Fund
Delaware New Pacific Fund
45
-----
<PAGE>
Financial Highlights
Class A
- --------------------------------------------------------------------------------
The Financial highlights tables are intended to help you understand a Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with each Fund's financial statements, is included in the
Fund's annual report, which is available upon request by calling 800.523.1918.
Information for Delaware Overseas Equity Fund and Delaware New Pacific Fund for
the fiscal periods ended on or before October 31, 1996 has been audited by the
Funds' previous independent auditors.
<TABLE>
<CAPTION>
Year Ended
Delaware International 11/30
Equity Fund 1999 1998 1997 1996 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.330 $14.650 $14.640 $12.190 $11.920
Income (loss) from investment operations:
Net investment income(2) 0.174 0.273 0.220 0.490 0.297
Net realized and unrealized gain (loss) on
investments and foreign currencies 0.881 0.957 0.245 2.385 0.628
------- ------- ------- ------- -------
Total from investment operations 1.055 1.230 0.465 2.875 0.925
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (0.235) (0.395) (0.435) (0.280) (0.185)
Distributions from net realized gain
on investments none (0.155) (0.020) (0.145) (0.470)
------- ------- ------- ------- -------
Total dividends and distributions (0.235) (0.550) (0.455) (0.425) (0.655)
------- ------- ------- ------- -------
Net asset value, end of period $16.150 $15.330 $14.650 $14.640 $12.190
======= ======= ======= ======= =======
Total return(3) 6.97% 8.75% 3.27%(5) 24.22%(5) 8.17%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $99,671 $122,609 $112,425 $89,177 $62,251
Ratio of expenses to average net assets 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 1.86% 1.70% 1.71% 1.95% 2.07%
Ratio of net investment income to
average net assets 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 1.10% 1.80% 1.45% 3.60% 2.57%
Portfolio turnover 3% 5% 8% 9% 21%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Date of commencement of trading; ratios have been annualized but total
return has not been annualized.
(2) Per share information for 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.
(4) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management
believes that such ratios and total return for this relatively short period
are not meaningful.
(5) Total return reflects expense limitations in effect during the period.
<TABLE>
<CAPTION>
How to read the Net realized and unrealized gain (loss) on investments
Financial highlights Net investment income and foreign currencies
--------------------------------------------------------------------------------
<S> <C> <C>
Net investment A realized gain on investments occurs when we sell an
income includes investment at a profit, while a realized loss on
dividend and investments occurs when we sell an investment at a
interest income loss. When an investment increases or decreases in
earned from a fund's value but we do not sell it, we record an unrealized
securities; it is gain or loss. The amount of realized gain per share
after expenses have that we pay to shareholders is listed under "Less
been deducted. dividends and distributions-Distributions from net
realized gain on investments." Realized and unrealized
gain (loss) on foreign currencies represent changes in
the U.S. dollar value of assets (including investments)
and liabilities denominated in foreign currencies as a
result of changes in foreign currency exchange rates.
</TABLE>
46
- -----
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- ----------------------------------------------------------------------------------------------------------------------------------
Period
Year ended Year Ended 11/29/95(1)
11/30 11/30 through
1999 1998 1997 1996 1995 1999 1998 1997 1996 11/30/95
- ------------------------------------------------------------------- -------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$ 15.280 $ 14.560 $ 14.560 $12.130 $ 11.900 $15.260 $14.540 $14.540 $12.190 $12.240
0.063 0.168 0.114 0.398 0.278 0.063 0.167 0.114 0.400 none
0.877 0.962 0.246 2.377 0.567 0.877 0.963 0.246 2.375 (0.050)
- -------- -------- -------- ------- -------- ------- ------- ------- ------- -------
0.940 1.130 0.360 2.775 0.845 0.940 1.130 0.360 2.775 (0.050)
- -------- -------- -------- ------- -------- ------- ------- ------- ------- -------
(0.130) (0.255) (0.340) (0.200) (0.145) (0.130) (0.255) (0.340) (0.280) none
none (0.155) (0.020) (0.145) (0.470) none (0.155) (0.020) (0.145) none
- -------- -------- -------- ------- -------- ------- ------- ------- ------- -------
(0.130) (0.410) (0.360) (0.345) (0.615) (0.130) (0.410) (0.360) (0.425) none
- -------- -------- -------- ------- -------- ------- ------- ------- ------- -------
$ 16.090 $ 15.280 $ 14.560 $14.560 $ 12.130 $16.070 $15.260 $14.540 $14.540 $12.190
======== ======== ======== ======= ======== ======= ======= ======= ======= =======
6.21% 8.03% 2.54%(5) 23.38%(5) 7.46% 6.22% 8.04% 2.54%(5) 23.39%(5) (4)
$ 36,997 $ 37,775 $ 31,914 $10,878 $ 3,471 $14,369 $14,076 $11,811 $ 1,909 $ 5
2.56% 2.40% 2.40% 2.55% 2.77% 2.56% 2.40% 2.40% 2.55% (4)
2.56% 2.40% 2.41% 2.65% 2.77% 2.56% 2.40% 2.41% 2.65% (4)
0.40% 1.10% 0.76% 3.00% 1.87% 0.40% 1.10% 0.76% 3.00% (4)
0.40% 1.10% 0.75% 2.90% 1.87% 0.40% 1.10% 0.75% 2.90% (4)
3% 5% 8% 9% 21% 3% 5% 8% 9% (4)
Ratio of expenses to
Net asset value (NAV) Total return Net assets average net assets
- ---------------------------------------------------------------------------------------------
This is the value of This represents the Net assets represent The expense ratio is
a mutual fund share, rate that an the total value of the percentage of
calculated by investor would have all the assets in a net assets that a
dividing the net earned or lost on an fund's portfolio, fund pays annually
assets by the number investment in a less any for operating
of shares fund. In calculating liabilities, that expenses and
outstanding. this figure for the are attributable to management fees.
financial highlights that class of the These expenses
table, we include fund. include accounting
applicable fee and administration
waivers, exclude expenses, services
front-end and for shareholders,
contingent deferred and similar
sales charges, and expenses.
assume the
shareholder has
reinvested all
dividends and
realized gains.
</TABLE>
47
-----
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Class A
- --------------------------------------------------------------------------------------------------------------------
Period
12/27/94(1)
through
Delaware Global Equity Fund 1999 1998 1997 1996 11/30/95
- --------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.600 $ 14.050 $ 13.310 $ 11.900 $ 10.000
Income (loss) from investment operations:
Net investment income(3) 0.130 0.289 0.437 0.493 0.301
Net realized and unrealized gain (loss) on
investments and foreign currencies 0.290 0.826 0.843 1.572 1.839
------- ---------- ---------- ----------- ----------
Total from investment operations 0.420 1.115 1.280 2.065 2.140
------- ---------- ---------- ----------- ----------
Less dividends and distributions:
Dividends from net investment income (0.120) (0.335) (0.490) (0.385) (0.240)
Distributions from net realized gain
on investments (0.680) (1.230) (0.050) (0.270) none
------- ---------- ---------- ----------- ----------
Total dividends and distributions (0.800) (1.565) (0.540) (0.655) (0.240)
------- ---------- ---------- ----------- ----------
Net asset value, end of period $13.220 $ 13.600 $ 14.050 $ 13.310 $ 11.900
======= ========== ========== =========== ==========
Total return(4) 3.17% 8.83% 9.91% 18.17% 21.48%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 7,386 $ 7,329 $ 6,939 $ 11,878 $ 3,122
Ratio of expenses to average net assets 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 2.32% 1.99% 2.16% 2.72% 7.55%
Ratio of net investment income to
average net assets 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 0.50% 1.73% 2.33% 2.66% (1.55%)
Portfolio turnover 29% 90% 74% 34% 57%
</TABLE>
(1) Date of commencement of trading; ratios and total return have been
annualized.
(2) Date of commencement of trading.
(3) Per share information for 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. Total return
also reflects expense limitations in effect during the period.
(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.
<TABLE>
<CAPTION>
How to read the Ratio of net investment income to
Financial highlights average net assets Portfolio turnover rate
(continued) ---------------------------------------------------------------------------
<S> <C> <C>
We determine this ratio by dividing net This figure tells you the
investment income by average net assets. amount of trading activity in
a fund's portfolio. For
example, a fund with a 50%
turnover has bought and sold
half of the value of its total
investment portfolio during
the stated period.
</TABLE>
48
- -----
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
Period Period
12/27/94(1) Year Ended 11/29/95(2)
through 11/30 through
1999 1998 1997 1996 11/30/95 1999 1998 1997 1996 11/30/95
- -------------------------------------------------------------------- --------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$13.600 $14.040 $13.300 $ 11.880 $10.000 $13.550 $13.990 $13.250 $11.890 $11.940
0.036 0.197 0.342 0.379 0.212 0.036 0.197 0.341 0.446 none
0.294 0.813 0.848 1.606 1.848 0.294 0.813 0.849 1.534 (0.050)
- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------
0.330 1.010 1.190 1.985 2.060 0.330 1.010 1.190 1.980 (0.050)
- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------
(0.060) (0.220) (0.400) (0.295) (0.180) (0.060) (0.220) (0.400) (0.350) none
(0.680) (1.230) (0.050) (0.270) none (0.680) (1.230) (0.050) (0.270) none
- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------
(0.740) (1.450) (0.450) (0.565) (0.180) (0.740) (1.450) (0.450) (0.620) none
- ------- ------- ------- -------- ------- ------- ------- ------- ------- -------
$13.190 $13.600 $14.040 $ 13.300 $11.880 $13.140 $13.550 $13.990 $13.250 $11.890
======= ======= ======= ======== ======= ======= ======= ======= ======= =======
2.56% 7.97% 9.18% 17.32% 20.73% 2.57% 8.00% 9.21% 17.33% (5)
$ 5,044 $ 5,397 $ 4,445 $ 4,796 $ 613 $ 2,614 $ 3,391 $ 3,094 $ 1,185 $ 5
2.55% 2.25% 1.95% 1.95% 1.95% 2.55% 2.25% 1.95% 1.95% (5)
3.02% 2.69% 2.86% 3.42% 8.25% 3.02% 2.69% 2.86% 3.42% (5)
0.27% 1.47% 2.54% 3.43% 4.05% 0.27% 1.47% 2.54% 3.43% (5)
(0.20%) 1.03% 1.63% 1.96% (2.25%) (0.20%) 1.03% 1.63% 1.96% (5)
29% 90% 74% 34% 57% 29% 90% 74% 34% (5)
</TABLE>
49
-----
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Class A
- -----------------------------------------------------------------------------------------------------------------------
Year Ended
10/31
Delaware Overseas Equity Fund 1999(1) 1998(1) 1997(1) 1996(2) 1995
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.950 $12.520 $12.390 $11.400 $11.000
Income (loss) from investment operations:
Net investment income (loss) 0.075 0.091 (0.060) (0.060) 0.010
Net realized and unrealized gain (loss) on
investments and foreign currencies 0.870 (1.501) 0.960 1.073 0.400
------ ------ ------- ------- -------
Total from investment operations 0.945 (1.410) 0.900 1.013 0.410
------ ------ ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (0.695) (0.520) (0.440) (0.023) (0.010)
Distributions from net realized gain
on investments (1.370) (1.640) (0.330) none none
------ ------ ------- ------- -------
Total dividends and distributions (2.065) (2.160) (0.770) (0.023) (0.010)
------ ------ ------- ------- -------
Net asset value, end of period $7.830 $8.950 $12.520 $12.390 $11.400
====== ====== ======= ======= =======
Total return(3) 13.86%(4) (12.95%)(4) 7.74% 8.90%4 3.81%4
Ratios and supplemental data:
Net assets, end of period (000 omitted) $2,285 $2,034 $10,868 $14,886 $13,018
Ratio of expenses to average net assets 1.85% 1.83% 1.80% 1.82% 1.85%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly 5.31% 3.75% N/A 2.60% 2.96%
Ratio of net investment income (loss)
to average net assets 0.95% 0.93% (0.45%) (0.51%) 0.00%
Ratio of net investment loss to average
net assets prior to expense limitation
and expenses paid indirectly (2.51%) (0.99%) N/A (1.29%) (1.11%)
Portfolio turnover 7% 87% 18% 21% 9%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average shares outstanding method has been applied for per share
information.
(2) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(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.
(4) Total return reflects expense limitations in effect during the period.
50
- -----
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
Year Ended Year Ended
10/31 10/31
1999(1) 1998(1) 1997(1) 1996(2) 1995 1999(1) 1998(1) 1997(1) 1996(2) 1995
- ----------------------------------------------------------------- -------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$8.030 $11.540 $11.560 $10.710 $10.400 $ 8.040 $ 11.550 $11.580 $10.730 $10.430
0.017 0.033 (0.140) (0.060) (0.020) 0.017 0.033 (0.140) (0.060) (0.060)
0.753 (1.383) 0.890 0.930 0.350 0.763 (1.383) 0.880 0.930 0.390
- ------ -------- ------- ------- ------- -------- -------- ------ ------- ------
0.770 (1.350) 0.750 0.870 0.330 0.780 (1.350) 0.740 0.870 0.330
- ------ -------- ------- ------- ------- -------- -------- ------ ------- ------
(0.640) (0.520) (0.440) (0.020) (0.020) (0.640) (0.520) (0.440) (0.020) (0.030)
(1.370) (1.640) (0.330) none none (1.370) (1.640) (0.330) none none
- ------ -------- ------- ------- ------- -------- -------- ------ ------- ------
(2.010) (2.160) (0.770) (0.020) (0.020) (2.010) (2.160) (0.770) (0.020) (0.030)
- ------ -------- ------- ------- ------- -------- -------- ------ ------- ------
$6.790 $ 8.030 $11.540 $11.560 $10.710 $ 6.810 $ 8.040 $11.550 $11.580 $10.730
====== ======== ======= ======= ======= ======= ======== ======= ======= =======
12.98%(4) (13.66%)(4) 6.95% 8.16%(4) 3.19%(4) 13.08%(4) (13.67%)(4) 6.85% 8.15%(4) 3.16%(4)
$1,018 $1,166 $1,450 $1,208 $ 1,183 $209 $179 $159 $112 $43
2.55% 2.53% 2.50% 2.50% 2.50% 2.55% 2.53% 2.50% 2.50% 2.50%
6.01% 4.45% N/A 3.28% 3.61% 6.01% 4.45% N/A 3.28% 3.61%
0.25% 0.23% (1.16%) (1.19%) (0.57%) 0.25% 0.23% (1.16%) (1.19%) (0.62%)
(3.21%) (1.69%) N/A (1.97%) (1.68%) (3.21%) (1.69%) N/A (1.97%) (1.73%)
7% 87% 18% 21% 9% 7% 87% 18% 21% 9%
- ----------------------------------------------------------------- -------------------------------------------------------------
</TABLE>
51
-----
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Class A
- ----------------------------------------------------------------------------------------------------------
Period
Year Ended 6/10/96(1)
11/30 through
Delaware Emerging Markets Fund 1999 1998 1997 11/30/96
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $6.530 $10.200 $9.970 $10.000
Income (loss) from investment operations:
Net investment income (loss)(2) 0.081 0.129 0.062 0.018
Net realized and unrealized gain (loss)
on investments and foreign currencies 1.509 (3.174) 0.253 (0.048)
------ ------ ------- ------
Total from investment operations 1.590 (3.045) 0.315 (0.030)
------ ------ ------- ------
Less dividends and distributions:
Dividends from net investment income (loss) (0.070) (0.020) (0.010) none
Distributions from net realized gain
on investments none (0.605) (0.075) none
------ ------ ------- ------
Total dividends and distributions (0.070) (0.625) (0.085) none
------ ------ ------- ------
Net asset value, end of period $8.050 $6.530 $10.200 $9.970
====== ====== ======= ======
Total return(3) 24.74% (31.66%) 3.19% (0.30%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $7,815 $5,584 $9,665 $2,518
Ratio of expenses to average net assets 1.95% 1.96% 2.00% 2.00%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly 2.99% 3.91% 3.02% 4.10%
Ratio of net investment income (loss)
to average net assets 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 0.11% (0.37%) (0.50%) (1.93%)
Portfolio turnover 17% 47% 65% 36%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
(1) Date of commencement of trading; ratios have been annualized but total
return has not been annualized.
(2) Per share information 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. Total return
reflects expense limitations in effect during the period.
52
- -----
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
Period Period
Year Ended 6/10/96(1) Year Ended 6/10/96(1)
11/30 through 11/30 through
1999 1998 1997 11/30/96 1999 1998 1997 11/30/96
- -------------------------------------------------- ---------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
$6.440 $10.110 $ 9.940 $10.000 $6.430 $10.110 $ 9.940 $10.000
0.029 0.070 (0.020) (0.051) 0.029 0.068 (0.019) (0.051)
1.501 (3.135) 0.265 (0.009) 1.501 (3.143) 0.264 (0.009)
- ------ -------- ------- --------- ------ -------- ------- --------
1.530 (3.065) 0.245 (0.060) 1.530 (3.075) 0.245 (0.060)
- ------ -------- ------- --------- ------ -------- ------- --------
0.010 none none none (0.010) none none none
none (0.605) (0.075) none none (0.605) (0.075) none
- ------ -------- ------- --------- ------ -------- ------- --------
0.010 (0.605) (0.075) none (0.010) (0.605) (0.075) none
- ------ -------- ------- --------- ------ -------- ------- --------
$7.960 $ 6.440 $10.110 $ 9.940 $7.950 $ 6.430 $10.110 $ 9.940
====== ======== ======= ========= ====== ======== ======= ========
23.81% (32.11%) 2.48% (0.60%) 23.85% (32.21%) 2.48% (0.60%)
$3,671 $2,528 $3,484 $282 $1,565 $884 $1,519 $199
2.70% 2.70% 2.70% 2.70% 2.70% 2.70% 2.70% 2.70%
3.69% 4.61% 3.72% 4.80% 3.69% 4.61% 3.72% 4.80%
0.40% 0.84% (0.18%) (0.53%) 0.40% 0.84% (0.18%) (0.53%)
(0.59%) (1.07%) (1.20%) (2.63%) (0.59%) (1.07%) (1.20%) (2.63%)
17% 47% 65% 36% 17% 47% 65% 36%
- -------------------------------------------------- ---------------------------------------------
</TABLE>
53
-----
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Class A
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
10/31
Delaware New Pacific Fund 1999(1) 1998(1) 1997(1) 1996(2) 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of year $4.590 $7.320 $9.420 $8.710 $10.440
Income (loss) from investment operations:
Net investment income (loss) (0.039) 0.008 (0.010) (0.050) (0.050)
Net realized and unrealized gain (loss) on
investments and foreign currencies 2.709 (2.683) (1.940) 0.769 (1.390)
------- ------- ------- ------- -------
Total from investment operations 2.670 (2.675) (1.950) 0.719 (1.440)
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (loss) none (0.055) (0.150) (0.009) none
Distributions from net realized gain
on investments none none none none (0.290)
------- ------- ------- ------- -------
Total dividends and distributions none (0.055) (0.150) (0.009) (0.290)
------- ------- ------- ------- -------
Net asset value, end of year $7.260 $4.590 $7.320 $9.420 $ 8.710
======= ======= ======= ======= =======
Total return(3) 58.52% (36.85%) (21.15%) 8.26% (13.99%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $12,113 $5,887 $7,144% $11,752 $10,353
Ratio of expenses to average net assets 1.96% 1.90% 1.80% 1.82% 1.85%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly 2.57% 3.23% 1.86% 2.77% 3.73%
Ratio of net investment income (loss)
to average net assets (0.65%) 0.15% (0.08%) (0.41%) (0.60%)
Ratio of net investment loss to average
net assets prior to expense limitation
and expenses paid indirectly (1.26%) (1.18%) (0.14%) (1.36%) (2.48%)
Portfolio turnover 90% 188% 178% 163% 163%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average shares outstanding method has been applied for per share
information.
(2) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(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. Total return
also reflects expense limitations in effect during the period.
54
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- -------------------------------------------------------------------- -----------------------------------------------------------
Year Ended Year Ended
10/31 10/31
1999(1) 1998(1) 1997(1) 1996(2) 1995 1999(1) 1998(1) 1997(1) 1996(2) 1995
- -------------------------------------------------------------------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$4.660 $7.470 $9.680 $9.010 $10.860 $4.550 $7.320 $9.490 $8.830 $10.660
(0.081) (0.031) (0.080) (0.050) (0.100) (0.082) (0.029) (0.080) (0.050) (0.080)
2.741 (2.724) (1.980) 0.730 (1.460) 2.682 (2.686) (1.940) 0.718 (1.460)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
2.660 (2.755) (2.060) 0.680 (1.560) 2.600 (2.715) (2.020) 0.668 (1.540)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
none (0.055) (0.150) (0.010) none none (0.055) (0.150) (0.008) none
none none none none (0.290) none none none none (0.290)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
none (0.055) (0.150) (0.010) (0.290) none (0.055) (0.150) (0.008) (0.290)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
$7.320 $4.660 $7.470 $9.680 $ 9.010 $7.150 $4.550 $7.320 $9.490 $8.830
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
57.08% (37.05%) (21.72%) 7.54% (14.56%) 57.14% (37.18%) (21.85%) 7.58% (14.57%)
$5,654 $2,236 $2,534 $562 $573 $1,093 $130 $129 $44 $17
2.66% 2.60% 2.50% 2.50% 2.50% 2.66% 2.60% 2.50% 2.50% 2.50%
3.27% 3.93% 2.56% 3.45% 4.38% 3.27% 3.93% 2.56% 3.45% 4.38%
(1.35%) (0.55%) (0.77%) (1.09%) (1.20%) (1.35%) (0.55%) (0.77%) (1.09%) (1.02%)
(1.96%) (1.88%) (0.83%) (2.04%) (3.08%) (1.96%) (1.88%) (0.83%) (2.04%) (2.90%)
90% 188% 178% 163% 163% 90% 188% 178% 163% 163%
- -------------------------------------------------------------------- -----------------------------------------------------------
</TABLE>
55
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Class A
- ------------------------------------------------------------------------------------------------------------------------------------
Period
Year Ended 12/27/94(1)
11/30 through
Delaware Global Bond Fund 1999 1998 1997 1996 11/30/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.940 $10.790 $11.480 $11.230 $10.000
Income (loss) from investment operations:
Net investment income(2) 0.560 0.595 0.625 0.755 0.659
Net realized and unrealized gain (loss) on
investments and foreign currencies (0.935) (0.015) (0.505) 0.730 1.171
------- ------- ------- ------- -------
Total from investment operations (0.375) 0.580 0.120 1.485 1.830
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (0.460) (0.400) (0.770) (0.875) (0.600)
Distributions from net realized gain
on investments (0.105) (0.030) (0.040) (0.360) none
------- ------- ------- ------- -------
Total dividends and distributions (0.565) (0.430) (0.810) (1.235) (0.600)
------- ------- ------- ------- -------
Net asset value, end of period $10.000 $10.940 $10.790 $11.480 $11.230
======= ======= ======= ======= =======
Total return(3) (3.50%) 5.47% 1.24% 14.35% 18.79%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $3,944 $4,684 $4,567 $3,467 $889
Ratio of expenses to average net assets 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 1.54% 1.59% 2.04% 5.00% 12.34%
Ratio of net investment income (loss)
to average net assets 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 5.10% 5.24% 4.97% 3.07% (3.39%)
Portfolio turnover 90% 93% 76% 42% 98%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Date of commencement of trading.
(2) Per share information for 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. Total return
also reflects expense limitations in effect during the period.
(4) The ratios of expenses and net investment income to average net assets,
portfolio turnover and total return have been omitted as management
believes that such ratios and total return for this relatively short period
are not meaningful.
56
<PAGE>
<TABLE>
<CAPTION>
Class B Class C
- -------------------------------------------------------------------- -----------------------------------------------------------
Period Period
Year Ended 12/27/94(1) Year Ended 1 1/29/95(1)
11/30 through 11/30 through
1999 1998 1997 1996 11/30/95 1999 1998 1997 1996 11/30/95
- -------------------------------------------------------------------- -----------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
$10.930 $10.790 $11.490 $11.230 $10.000 $10.880 $10.740 $11.440 $11.240 $11.330
0.487 0.520 0.550 0.679 0.565 0.487 0.521 0.551 0.680 none
(0.927) (0.020) (0.511) 0.735 1.205 (0.937) (0.021) (0.512) 0.719 (0.036)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(0.440) 0.500 0.039 1.414 1.770 (0.450) 0.500 0.039 1.399 (0.036)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(0.385) (0.330) (0.699) (0.794) (0.540) (0.385) (0.330) (0.699) (0.839) (0.054)
(0.105) (0.030) (0.040) (0.360) none (0.105) (0.030) (0.040) (0.360) none
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
(0.490) (0.360) (0.739) (1.154) (0.540) (0.490) (0.360) (0.739) (1.199) (0.054)
------- ------- ------- ------- ------- ------- ------- ------- ------- -------
$10.000 $10.930 $10.790 $11.490 $11.230 $ 9.940 $10.880 $10.740 $11.440 $11.240
======= ======= ======= ======= ======= ======= ======= ======= ======= =======
(4.01%) 4.59% 0.48% 13.51% 18.23% (4.21%) 4.71% 0.49% 13.51% (4)
$1,646 $1,188 $1,081 $707 $115 $681 $539 $703 $118 $ 5
2.00% 1.95% 1.95% 1.95% 1.95% 2.00% 1.95% 1.95% 1.95% (4)
2.24% 2.29% 2.74% 5.70% 13.04% 2.24% 2.29% 2.74% 5.70% (4)
4.64% 4.88% 5.06% 6.12% 7.00% 4.64% 4.88% 5.06% 6.12% (4)
4.40% 4.54% 4.27% 2.37% (4.09%) 4.40% 4.54% 4.27% 2.37% (4)
90% 93% 76% 42% 98% 90% 93% 76% 42% (4)
- -------------------------------------------------------------------- -----------------------------------------------------------
</TABLE>
57
<PAGE>
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the Funds' shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Funds' performance during the report
period. You can find more detailed information about the Funds in the current
Statements of Additional Information, which we have filed electronically with
the Securities and Exchange Commission (SEC) and which is legally a part of this
Prospectus. If you want a free copy of a Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in these funds, you can write to us at 1818 Market Street, Philadelphia, PA
19103-3682, or call toll-free 800.523.1918. You may also obtain additional
information about each of the Funds from your financial adviser.
You can find reports and other information about each Fund EDGAR database on the
on the SEC web site (http://www.sec.gov), or you can get copies of this
information, after payment of a duplicating fee, by e-mailing the SEC at
[email protected] or by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-0102. Information about the Funds, including their
Statement of Additional Information, can be reviewed and copied at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
You can get information on the public reference room by calling the SEC at
202.942.8090.
Web site
www.delawareinvestments.com
E-mail
[email protected]
Shareholder Service Center
800.523.1918
Call the Shareholder Service Center:
Monday to Friday, 8 a.m. to 8 p.m. Eastern time:
oFor fund information; literature; price, yield and performance figures.
oFor information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions;
telephone redemptions and telephone exchanges.
Delaphone Service
800.362.FUND (800.362.3863)
oFor convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.
Delaware Group Global & International Funds
Investment Company Act file number: 811-6324
Delaware Group Adviser Funds
Investment Company Act file number: 811-7972
DELAWARE(SM)
INVESTMENTS
- -----------
Philadelphia o London
P-034 [--] PP 02/00
<PAGE>
Delaware International
Equity Fund
Delaware Global
Equity Fund
Delaware Overseas
Equity Fund
Delaware New
Pacific Fund
Delaware Emerging
Markets Fund
Delaware Global
Bond Fund
Fund Symbols
CUSIP NASDAQ
----- ------
Delaware International Equity Fund
- ----------------------------------
Class A 245914106 DEGIX
Class B 245914700 DEIEX
Class C 245914858 DEGCX
Delaware Global Equity Fund
- ---------------------------
Class A 245914304 DEGAX
Class B 245914809 DGABX
Class C 245914874 DGACX
Delaware Overseas Equity Fund
- -----------------------------
Class A 245917885 DEWGX
Class B 245917877 DEWBX
Class C 245917869 DEWCX
Delaware New Pacific Fund
- -------------------------
Class A 245917844 DENPX
Class B 245917836 DENBX
Class C 245917828 DENCX
Delaware Emerging Markets Fund
- ------------------------------
Class A 245914841 DEMAX
Class B 245914833 DEMBX
Class C 245914825 DEMCX
Delaware Global Bond Fund
- -------------------------
Class A 245914205 DGBAX
Class B 245914882 DGBBX
Class C 245914866 DCBCX
<PAGE>
GRAPHIC OMITTED
International and Global Funds
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
Delaware International
Equity Fund
Delaware Global
Equity Fund
Delaware Overseas
Equity Fund
Delaware Emerging
Markets Fund
Delaware New
Pacific Fund
Delaware Global
Bond Fund
Institutional Class
Prospectus February 1, 2000
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this Prospectus, and any
representation to the contrary is a criminal offense.
<PAGE>
Table of contents
.................................................................
Fund profiles page 2
Delaware International Equity Fund 2
Delaware Global Equity Fund 4
Delaware Overseas Equity Fund 6
Delaware Emerging Markets Fund 8
Delaware New Pacific Fund 10
Delaware Global Bond Fund 12
.................................................................
How we manage the Funds page 14
Our investment strategies 14
The securities we typically invest in 19
The risks of investing in the Funds 26
.................................................................
Who manages the Funds page 30
Investment managers and subadvisers 30
Portfolio managers 30
Fund administration (Who's who) 33
.................................................................
About your account page 34
Investing in the Funds 34
How to buy shares 35
How to redeem shares 37
Account minimum 38
Exchanges 38
Dividends, distributions and taxes 38
.................................................................
Certain management considerations page 39
.................................................................
Financial highlights page 40
1
<PAGE>
Profile: Delaware International Equity Fund
What is the Fund's goal?
Delaware International Equity Fund seeks long-term growth without undue risk
to principal. Although the Fund will strive to achieve its goal, there is no
assurance that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
foreign equity securities that provide the potential for capital appreciation
and income. At least 65% of the Fund's total assets will be invested in equity
securities of issuers from at least three foreign countries. An issuer is
considered to be from the country where it is located, where the majority of its
assets are located or where it generates the majority of its operating income.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower than,
or in line with the level of inflation. We then estimate what we think the
value of those anticipated future dividends would be worth if they were being
paid today. We believe this gives us an estimate of the stock's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. This Fund will be affected primarily by
declines in stock prices, which can be caused by a drop in foreign stock markets
or poor performance in specific industries or companies. Because the Fund
invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
currency valuations, political instability, economic instability, and lax
accounting and regulatory standards. For a more complete discussion of risk,
please turn to page 26.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
2
<PAGE>
How has Delaware International Equity Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Institutional Class)
-1.36% 24.80% 2.03% 11.75% 20.61% 4.61% 9.35% 14.04%
1992 1993 1994 1995 1996 1997 1998 1999
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past eight calendar years, as well as the average annual returns of
these shares for the one- and five-year periods and since inception. The Fund's
Institutional Class commenced operations on November 9, 1992. Return information
for the Class for the periods prior to the time the Class commenced operations
is calculated by taking the performance of The Fund's Class A and eliminating
all sales charges that apply to Class A shares. However, for those periods,
Class A 12b-1 payments were not eliminated, and performance would have been
affected if this adjustment had been made. The returns reflect voluntary expense
caps, if any, in effect during the periods. The returns would be lower without
the voluntary caps. There is no longer a cap in place for this Fund. The Fund's
past performance is not necessarily an indication of how it will perform in the
future.
During the periods illustrated in the bar chart, the Institutional Class'
highest quarterly return was 13.53% for the quarter ended December 31, 1998 and
its lowest quarterly return was -13.69% for the quarter ended September 30,
1998.
<TABLE>
<CAPTION>
Average annual returns for periods ending 12/31/99
- --------------------------------------------------------------------------------------------------------------
Institutional Morgan Stanley
Class Capital International
EAFE Index
- --------------------------------------------------------------------------------------------------------------
(Inception 10/31/91)
<S> <C> <C>
1 year 14.04% 27.30%
5 years 11.94% 13.15%
Lifetime 10.72% 14.94%
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley Capital
International EAFE (Europe, Australia, Far East) Index. You should remember that
unlike the Fund, the index is unmanaged and doesn't reflect the costs of
operating a mutual fund, such as the costs of buying, selling and holding the
securities.
<PAGE>
What are Delaware International Equity
Fund's fees and expenses?
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges directly Maximum sales charge (load) imposed on
from your investments when you buy or purchases as a percentage of offering price none
sell shares of the Institutional Class.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange fees(1) none
- --------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees(2) 0.85%
deducted from the Fund's assets.
Distribution and service (12b-1) fees none
Other expenses 0.75%
Total operating expenses 1.60%
- --------------------------------------------------------------------------------------------------------------
This example is intended to help you 1 year $163
compare the cost of investing in the
Fund to the cost of investing in other 3 years $505
mutual funds with similar investment
objectives. We show the cumulative 5 years $891
amount of Fund expenses on a
hypothetical investment of $10,000 with 10 years $1,900
an annual 5% return over the time
shown.(3) This is an example only, and
does not represent future expenses,
which may be greater or less than those
shown here.
</TABLE>
(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) Reflects a newmanagement fee which became effective on April 15, 1999.
(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.
3
<PAGE>
Profile: Delaware Global Equity Fund
What is the Fund's goal?
Delaware Global Equity Fund seeks long-term total return. Although the Fund
will strive to achieve its goal, there is no assurance that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
U.S. and foreign equity securities that provide the potential for capital
appreciation and income. Under normal circumstances, we will invest at least 65%
of the Fund's total assets in equity securities from at least three different
countries, one of which may be the United States. An issuer is considered to be
from the country where it is located, where the majority of its assets are
located or where it generates the majority of its operating income.
To determine how much of the Fund's assets to allocate to international stocks
and how much to U.S. stocks, we compare the potential total return of each asset
class in the context of our expectations for inflation, economic growth and
political stability in various regions.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower than,
or in line with the level of inflation. We then estimate what we think the
value of those anticipated future dividends would be worth if they were being
paid today. We believe this gives us an estimate of the stock's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. This Fund will be affected primarily by
declines in stock prices, which can be caused by a drop in the stock market or
poor performance in specific industries or companies. Because the Fund invests
in foreign securities, it will be affected by international investment risks
related to currency valuations, political instability, economic instability and
lax accounting and regulatory standards.
The Fund is considered "non-diversified" under federal laws that regulate mutual
funds. That means the Fund may allocate more of its net assets to investments in
single securities than a "diversified" fund. Thus, adverse effects on the Fund's
investments may affect a larger portion of its overall assets and subject the
Fund to greater risks. For a more complete discussion of risk, please turn to
page 26.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
4
<PAGE>
How has Delaware Global Equity Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Institutional Class)
25.08% 15.80% 11.43% 8.85% 6.29%
1995 1996 1997 1998 1999
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past five calendar years, as well as the average annual returns of
these shares for the one-year and five-year periods and since inception. The
Fund's past performance is not necessarily an indication of how it will perform
in the future. The returns reflect voluntary expense caps. The returns would be
lower without the voluntary caps. On July 21, 1998, the Fund's name was changed
from Global Assets Fund to Global Equity Fund and the Fund's investment focus
changed from a mix of foreign and U.S. stocks and bonds to primarily foreign and
U.S. stocks.
During the periods illustrated in this bar chart, the Institutional Class'
highest quarterly return was 11.31% for the quarter ended December 31, 1998 and
its lowest quarterly return was -9.52% for the quarter ended September 30, 1998.
<TABLE>
<CAPTION>
Average annual returns for periods ending 12/31/99
- ------------------------------------------------------------------------------------------------------------------------
Institutional Morgan Stanley
Class Capital International
World Index
- ------------------------------------------------------------------------------------------------------------------------
(Inception 12/27/94)
<S> <C> <C>
1 year 6.29% 25.34%
5 years 13.31% 20.25%
Lifetime 13.24% 20.25%
</TABLE>
The Fund's returns are compared to the performance of the Morgan Stanley Capital
International World Index. You should remember that unlike the Fund, the index
is unmanaged and doesn't reflect the costs of operating a mutual fund, such as
the costs of buying, selling and holding the securities.
<PAGE>
What are Delaware Global Equity Fund's
fees and expenses?
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges directly Maximum sales charge (load) imposed on
from your investments when you buy or purchases as a percentage of offering price none
sell shares of the Institutional Class.
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange fees(1) none
- ---------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees(2) 0.85%
deducted from the Fund's assets.
Distribution and service (12b-1) fees none
Other expenses 1.21%
Total annual fund operating expenses 2.06%
Fee waivers and payments(3) (0.51%)
Net expenses 1.55%
- ---------------------------------------------------------------------------------------------------------------
This example is intended to help you 1 year $158
compare the cost of investing in the
Fund to the cost of investing in other 3 years $597
mutual funds with similar investment
objectives. We show the cumulative 5 years $1,062
amount of Fund expenses on a
hypothetical investment of $10,000 with 10 years $2,349
an annual 5% return over the time
shown(4). This is an example only, and
does not represent future expenses,
which may be greater or less than those
shown here.
</TABLE>
(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) Reflects a new management fee which became effective on April 1, 1999.
(3) The investment manager has contracted to waive fees and pay expenses through
January 31, 2001 in order to prevent total operating expenses (excluding any
taxes, interest, brokerage fees and extraordinary expenses) from exceeding
1.55% of average daily net assets.
(4) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. This example reflects the net operating
expenses with expense waivers for the one-year period and the total
operating expenses without expense waivers for years two through 10.
5
<PAGE>
Profile: Delaware Overseas Equity Fund
What is the Fund's goal?
Delaware Overseas Equity Fund seeks to maximize total return (capital
appreciation and income). Although the Fund will strive to achieve its
goal, there is no assurance that it will.
What are the Fund's main investment strategies? We invest primarily in foreign
equity securities which we believe offer capital appreciation potential. We may
invest in companies that are located in established or developing countries;
however we limit our investments in companies located in developing countries.
In determining what portion of Delaware Overseas Equity Fund's assets should be
allocated to a particular country, we consider: how weak or strong the country's
currency is, the country's prospects for economic growth compared to other
countries, expected levels of inflation, political environment and the range of
investment opportunities available in the country.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower
than, or in line with the level of inflation. We then estimate what we
think the value of those anticipated future dividends would be worth if
they were being paid today. We believe this gives us an estimate of the
stock's true value.
o We generally prefer to purchase securities in countries where the currency
is undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine
whether a particular currency is overvalued or undervalued by comparing the
amount of goods and services that a dollar will buy in the United States to
the amount of foreign currency required to buy the same amount of goods and
services in another country. When the dollar buys less, the foreign
currency may be overvalued, and when the dollar buys more, the foreign
currency may be undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease, sometimes rapidly
and unpredictably, according to changes in the value of the Fund's investments.
These fluctuations can be even more pronounced for funds like Delaware Overseas
Equity Fund, which invests in developing countries. This Fund will be affected
primarily by declines in stock prices, which can be caused by a drop in foreign
stock markets or poor performance in specific industries or companies. Because
the Fund invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
changes in currency valuations, political instability, economic instability, and
lax accounting and regulatory standards. For a more complete discussion of risk,
please turn to page 26.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
<PAGE>
How has Delaware Overseas Equity Fund performed?
- --------------------------------------------------------------------------------
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past five calendar years, as well as average annual returns for the
one-year and five-year period since inception. The Fund's past performance does
not necessarily indicate how it will perform in the future. The returns reflect
voluntary expense caps. The returns would be lower without the voluntary caps.
During the periods illustrated in this bar chart, the Institutional Class'
highest quarterly return was 11.84% for the quarter ended December 31, 1999 and
its lowest quarterly return was -13.73% for the quarter ended September 30,
1998.
Year-by-year total return (Institutional Class)
10.19% 9.88% 2.02% -6.59% 25.92%
1995 1996 1997 1998 1999
Average annual returns for periods ending 12/31/99
Morgan Stanley
Capital International
Institutional Class EAFE Index
- --------------------------------------------------------------------------------
(Inception 2/3/94)
1 year 25.92% 27.30%
5 years 7.76% 13.15%
Lifetime 6.31% 11.13%
The Fund's returns are compared to the performance of the Morgan Stanley Capital
International EAFE Index. You should remember that unlike the Fund, the index is
unmanaged and doesn't reflect the actual costs of operating a mutual fund, such
as the costs of buying, selling and holding the securities.
What are Delaware Overseas Equity Fund's
fees and expenses?
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges Maximum sales charge (load) imposed on
directly from your investments purchases as a percentage of offering price none
when you buy or sell shares of Maximum contingent deferred sales charge (load)
the Institutional Class. as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange fees(1) none
- ----------------------------------------------------------------------------------------------------------
Annual fund operating expenses Management fees(2) 0.85%
are deducted from the Fund's assets. Distribution and service (12b-1) fees none
Other expenses 4.12%
Total operating expenses(3) 4.97%
- ----------------------------------------------------------------------------------------------------------
This example is intended to help 1 year $497
you compare the cost of investing 3 years $1,492
in the Fund to the cost of 5 years $2,487
investing in other mutual funds 10 years $4,977
with similar investment objectives.
We show the cumulative amount of
Fund expenses on a hypothetical
investment of $10,000 with an
annual 5% return over the time
shown.(4) This is an example only,
and does not represent future
expenses, which may be greater or
less than those shown here.
</TABLE>
<PAGE>
<TABLE>
<S> <C>
(1) Exchanges are subject to the requirements of each fund in the Delaware Investments family. A front-end sales
charge may apply if you exchange your shares into a fund that has a front-end sales charge.
(2) Reflects a new management fee which became effective on April 1, 1999.
(3) The investment manager has agreed to waive fees and pay expenses through October 31, 2000 in order to prevent
total operating expenses (excluding any taxes, interest, brokerage fees and extraordinary expenses) from
exceeding 1.70% of average daily net assets. The fees and expenses shown in the table above do not reflect this
voluntary expense cap. The table to the right shows operating expenses, reflecting the manager's current fee
waivers and payments.
(4) The Fund's actual rate of return may Fund expenses including voluntary expense caps in effect through
be greater or less than the hypothetical October 31, 2000
5% return we use here. Also, this Management fees 0.00%
example assumes that the Fund's total Distribution and service (12b-1) fees none
operating expenses remain unchanged in Other expenses 1.70%
each of the periods we show. Total operating expenses 1.70%
In addition, the example does not assume
the voluntary expense limitation discussed
in footnote (3).
</TABLE>
7
<PAGE>
Profile: Delaware Emerging Markets Fund
What is the Fund's goal?
Delaware Emerging Markets Fund seeks long-term capital appreciation. Although
the Fund will strive to achieve its goal, there is no assurance that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
equity securities of issuers from emerging foreign countries. Under normal
market conditions, at least 65% of the Fund's total assets will be invested in
equity securities of issuers from at least three different countries whose
economies are considered to be emerging or developing.
We may invest up to 35% of the Fund's net assets in fixed-income securities
issued by companies in emerging countries or by foreign governments, their
agents, instrumentalities or political sub-divisions. We may invest in
fixed-income securities that are denominated in the currencies of emerging
market countries. All of these may be high-yield, high risk fixed-income
securities.
In selecting investments for the Fund,
o We strive to identify well managed companies that are undervalued based on
such factors as assets, earnings, dividends or growth potential.
o In order to compare the value of different stocks, we consider whether the
future dividends on a stock are expected to increase faster than, slower
than, or in line with the level of inflation. We then estimate what we
think the value of those anticipated future dividends would be worth if
they were being paid today. We believe this gives us an estimate of the
stock's true value. Because many of the countries in which the Fund invests
are emerging countries, there may be less information available for us to
use in making this analysis than is available for more developed countries.
o We generally prefer to purchase securities in countries where the currency
is undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine
whether a particular currency is overvalued or undervalued by comparing the
amount of goods and services that a dollar will buy in the United States to
the amount of foreign currency required to buy the same amount of goods and
services in another country. When the dollar buys less, the foreign
currency may be overvalued, and when the dollar buys more, the foreign
currency may be undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease, sometimes rapidly
and unpredictably, according to changes in the value of the Fund's investments.
These fluctuations can be even more pronounced for funds like Delaware Emerging
Markets Fund, which invests in emerging countries. This Fund will be affected
primarily by declines in stock prices, which can be caused by a drop in foreign
stock markets or poor performance in specific industries or companies. The value
of the Fund's investments and, therefore, the price of the Fund's shares may be
more volatile than investments in more developed markets. Because the Fund
invests in international securities in developing countries as well as
established countries, it will be affected by international investment risks
related to currency valuations, political instability, economic instability, or
lax accounting and regulatory standards.
The Fund may invest up to 35% of its net assets in high-yield, high risk foreign
fixed-income securities, which are subject to substantial risks, particularly
during periods of economic downturns or rising interest rates.
The Fund is considered "non-diversified" under federal laws that regulate mutual
funds. This means the Fund may allocate more of its net assets to investments in
single securities than a "diversified" fund. Thus, adverse effects on the Fund's
investments may affect a larger portion of its overall assets and subject the
Fund to greater risks. For a more complete discussion of risk, please turn to
page 26.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
8
<PAGE>
How has Delaware Emerging Markets Fund performed?
- --------------------------------------------------------------------------------
Year-by-year total return (Institutional Class)
1.58% -36.19% 55.16%
1997 1998 1999
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past three calendar years, as well as the average annual returns of
these shares for the one-year period and since inception. The Fund's past
performance is not necessarily an indication of how it will perform in the
future. The returns reflect voluntary expense caps in effect during the periods.
The returns would be lower without the voluntary caps.
During the periods illustrated in this bar chart, the Institutional Class'
highest quarterly return was 25.48% for the quarter ended June 30, 1999 and its
lowest quarterly return was -25.98% for the quarter ended June 30, 1998.
Average annual returns for periods ending 12/31/99
Morgan Stanley Capital
Institutional International Emerging
Class Markets Free Index
1 year 55.16% 66.41%
Lifetime 0.58% 1.47%
(Inception 6/10/96)
The Fund's returns are compared to the performance of the Morgan Stanley Capital
International Emerging Markets Free Index. You should remember that unlike the
Fund, the index is unmanaged and doesn't reflect the costs of operating a mutual
fund, such as the costs of buying, selling and holding the securities.
What are Delaware Emerging Markets
Fund's fees and expenses?
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges directly Maximum sales charge (load) imposed on
from your investments when you buy or purchases as a percentage of offering price none
sell shares of the Institutional Class. Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange fees(1) none
- -------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees 1.25%
deducted from the Fund's assets. Distribution and service (12b-1) fees none
Other expenses 1.44%
Total annual fund operating expenses 2.69%
Fee waivers and payments(2) (0.99%)
Net expenses 1.70%
- -------------------------------------------------------------------------------------------------------------------
This example is intended to help you 1 year $173
compare the cost of investing in the 3 years $741
Fund to the cost of investing in other 5 years $1,337
mutual funds with similar investment 10 years $2,949
objectives. We show the cumulative
amount of Fund expenses on a
hypothetical investment of $10,000 with
an annual 5% return over the time shown.(3)
This is an example only, and does not
represent future expenses, which may be
greater or less than those shown here.
</TABLE>
(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) The investment manager has contracted to waive fees and pay expenses
through January 31, 2001 in order to prevent total operating expenses
(excluding any taxes, interest, brokerage fees and extraordinary expenses)
from exceeding 1.70% of average daily net assets.
(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. This example reflects the net operating
expenses with expense waivers for the one-year period and the total
operating expenses without expense waivers for years two through 10.
9
<PAGE>
Profile: Delaware New Pacific Fund
- --------------------------------------------------------------------------------
What is the Fund's goal?
Delaware New Pacific Fund seeks to maximize long-term capital appreciation.
Although the Fund will strive to achieve its goal, there is no assurance
that it will.
What are the Fund's main investment strategies? The Fund invests primarily in
stocks of companies of all sizes that are located in or have their principal
business activities in countries located in the Pacific Basin, such as
Australia, China, Hong Kong, Japan, Korea, Malaysia, Philippines, Singapore and
Taiwan. The Fund may invest in both established and developing countries. Under
normal circumstances we will invest at least 65% of the Fund's net assets in
Pacific Basin countries.
In selecting stocks for the portfolio, we look for companies that can benefit
from future economic growth in the region. We evaluate both individual companies
and individual countries to determine how much of the portfolio should be
allocated to companies located there. When evaluating individual companies, we
consider the growth prospects for the company and its industry, the financial
strength of the company and the quality of its management. We also consider
whether the stock appears overvalued or undervalued compared to other stocks in
the market or in its industry.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease, sometimes rapidly
and unpredictably, according to changes in the value of the Fund's investments.
These fluctuations can be even more pronounced for funds like Delaware New
Pacific Fund that invests in developing countries. This Fund will be affected
primarily by declines in stock prices, which can be caused by a drop in foreign
stock markets or poor performance in specific industries or companies. Because
the Fund invests in international securities in both established and developing
countries, it will be affected by international investment risks related to
changes in currency valuations, political instability, economic instability, and
lax accounting and regulatory standards. For a more complete discussion of risk,
please turn to page 26.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
How has Delaware New Pacific Fund performed?
- --------------------------------------------------------------------------------
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Institutional Class shares have varied
over the past five calendar years, as well as average annual returns for
one-year and five-year periods and since inception. The Fund's past performance
does not necessarily indicate how it will perform in the future. The
Institutional Class' returns reflect voluntary expense caps. The returns would
be lower without the voluntary caps.
During the periods illustrated in this bar chart, the Institutional Class'
highest quarterly return was 27.05% for the quarter ended December 31, 1999 and
its lowest quarterly return was -25.83% for the quarter ended December 31, 1997.
Year-by-year total return (Institutional Class)
-3.21% 8.20% -31.53% -21.83% 75.18%
1995 1996 1997 1998 1999
10
<PAGE>
How has Delaware New Pacific Fund performed? (continued)
- --------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/99
Morgan
Stanley
Institutional Class Pacific Index
(Inception 2/3/94)
1 year 75.18% 57.96%
5 year -0.36% 2.70%
Lifetime -2.70% 2.08%
The Fund's returns are compared to the performance of the Morgan Stanley Pacific
Index. You should remember that unlike the Fund, the index is unmanaged and
doesn't reflect the costs of operating a mutual fund, such as the costs of
buying, selling and holding the securities.
What are Delaware New Pacific
Fund's fees and expenses?
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges directly Maximum sales charge (load) imposed on
from your investments when you buy or purchases as a percentage of offering price none
sell shares of the Institutional Class. Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange fees(1) none
- ------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees(2) 0.85%
deducted from the Fund's assets. Distribution and service (12b-1) fees none
Other expenses 1.44%
Total operating expenses(3) 2.29%
- ------------------------------------------------------------------------------------------------------------------
This example is intended to help you 1 year $232
compare the cost of investing in the 3 years $715
Fund to the cost of investing in other 5 years $1,225
mutual funds with similar investment 10 years $2,625
objectives. We show the cumulative
amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5%
return over the time shown.(4) This is an
example only, and does not represent
future expenses, which may be greater or
less than those shown here.
</TABLE>
<TABLE>
<S> <C>
(1) Exchanges are subject to the requirements of each fund in the Delaware Investments family. A front-end sales
charge may apply if you exchange your shares into a fund that has a front-end sales charge.
(2) Reflects a new management fee which became effective on April 1, 1999.
(3) The investment manager has agreed to waive fees and pay expenses through October 31, 2000 in order to prevent
total operating expenses (excluding any taxes, interest, brokerage fees and extraordinary expenses) from
exceeding 2.00% of average daily net assets. The fees and expenses shown in the table do not reflect this
voluntary expense cap. The table to the right shows operating expenses, reflecting the manager's current fee
waivers and payments.
(4) The Fund's actual rate of return may
be greater or less than the hypothetical Fund expenses including voluntary expense caps in effect through
5% return we use here. Also, this October 31, 2000
example assumes that the Fund's total ----------------------------------------------------------------
operating expenses remain unchanged in Management fees 0.56%
each of the periods we show. This example Distribution and service (12b-1) fees none
does not reflect the voluntary expense Other expenses 1.44%
limitation discussed in footnote 3. Total operating expenses 2.00%
</TABLE>
11
<PAGE>
Profile: Delaware Global Bond Fund
What is the Fund's goal?
Delaware Global Bond Fund seeks to achieve current income consistent with
preservation of principal. Although the Fund will strive to achieve its
goal, there is no assurance that it will.
What are the Fund's main investment strategies? Delaware Global Bond Fund
invests primarily in fixed-income securities that may also provide the potential
for capital appreciation. The Fund is a global fund. Therefore, at least 65% of
the Fund's total assets will be invested in fixed-income securities of issuers
from at least three different countries, one of which may be the United States.
An issuer is considered to be from the country where it is located, where the
majority of its assets are or where it generates the majority of its operating
income.
In selecting investments for the Fund,
o We strive to identify fixed-income securities that provide high income
potential.
o In order to compare the value of different fixed-income securities, even those
issued in different countries, we look at the value of anticipated future
interest and principal payments, taking into consideration what we think the
inflation rate in that country will be. We then estimate what we think the
value of those anticipated future payments would be worth if they were being
paid today. We believe this gives us an estimate of a bond's true value.
o We generally prefer to purchase securities in countries where the currency is
undervalued or fair-valued compared to other countries because these
securities may offer greater return potential. We attempt to determine whether
a particular currency is overvalued or undervalued by comparing the amount of
goods and services that a dollar will buy in the United States to the amount
of foreign currency required to buy the same amount of goods and services in
another country. When the dollar buys less, the foreign currency may be
overvalued, and when the dollar buys more, the foreign currency may be
undervalued.
What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. These fluctuations can be even more
pronounced for funds like Delaware Global Bond Fund, which invests in developing
countries. The Fund's investments normally decrease when there are declines in
bond prices, which can be caused by a drop in the bond market, an adverse change
in interest rates or an adverse situation affecting the issuer of the bond.
Because the Fund invests in international securities in both established and
developing countries, it will be affected by international investment risks
related to currency valuations, political instability, economic instability, or
lax accounting and regulatory standards. The Fund may invest in high-yield, high
risk foreign fixed-income securities, which are subject to substantial risks,
particularly during periods of economic downturns or rising interest rates.
The Fund is considered "non-diversified" under federal laws that regulate mutual
funds. This means the Fund may allocate more of its net assets to investments in
single securities than a "diversified" fund. Thus, adverse effects on the Fund's
investments may affect a larger portion of its overall assets and subject the
Fund to greater risks. For a more complete discussion of risk, please turn to
page 26.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
12
- -----
<PAGE>
How has Delaware Global Bond Fund performed?
Year-by-year total return (Institutional Class)
1995 21.23%
1996 12.20%
1997 0.91%
1998 7.61%
1999 -3.46%
This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Institutional Class have varied over
the five calendar years, as well as the average annual returns of these shares
for the one-year and five-year periods and since inception. The Fund's past
performance is not necessarily an indication of how it will perform in the
future. The returns reflect voluntary expense caps. The returns would be lower
without the voluntary caps.
During the periods illustrated in this bar chart, the Institutional Class'
highest quarterly return was 5.83% for the quarter ended June 30, 1995 and its
lowest quarterly return was -2.86% for the quarter ended March 31, 1997.
Average annual returns for periods ending 12/31/99
Institutional Salomon Smith Barney
Class World Government
Bond Index
(Inception 12/27/94)
1 year -3.46% -5.07%
5 year 7.36% 5.90%
Lifetime 7.34% 6.08%
The Fund's returns are compared to the performance of the Salomon Smith Barney
World Government Bond Index. You should remember that unlike the Fund, the index
is unmanaged and doesn't reflect the costs of operating a mutual fund, such as
the costs of buying, selling and holding the securities.
What are Delaware Global Bond Fund's
fees and expenses?
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
You do not pay sales charges directly from your investments Maximum sales charge (load) imposed on
when you buy or sell shares of the Institutional Class. purchases as a percentage of offering price none
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange fees(1) none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are deducted from the Management fees 0.75%
Fund's assets. Distribution and service (12b-1) fees none
Other expenses 0.49%
Total annual fund operating expenses 1.24%
Fee waivers and payments(2) (0.24%)
Net expenses 1.00%
- ------------------------------------------------------------------------------------------------------------------------------------
This example is intended to help you compare the 1 year $102
cost of investing in the Fund to the cost of 3 years $370
investing in other mutual funds with similar 5 years $658
investment objectives. We show the cumulative 10 years $1,479
amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return
over the time shown.(3) This is an example only,
and does not represent future expenses, which may
be greater or less than those shown here.
</TABLE>
(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) The investment manager has contracted to waive fees and pay expenses through
January 31, 2001 in order to prevent total operating expenses (excluding any
taxes, interest, brokerage fees and extraordinary expenses) from exceeding
1.00% of average daily net assets.
(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. This example reflects the net operating
expenses with expense waivers for the one-year period and the total
operating expenses without expense waivers for years two through 10.
13
-----
<PAGE>
How we manage the Funds
Our investment strategies
We research individual companies and analyze economic and market conditions,
seeking to identify the securities or market sectors that we think are the best
investments for a particular Fund. Following are descriptions of how the
portfolio managers pursue the Funds' investment goals.
The investment objective of each Fund described in this Prospectus is
non-fundamental. This means the Board of Trustees may change the objective
without obtaining shareholder approval. If an objective were changed, we would
notify shareholders before the change became effective.
Delaware International Equity Fund
Delaware International Equity Fund seeks long-term growth without undue risk to
principal. We invest primarily in equity securities, including common stocks,
which provide the potential for capital appreciation and income. Our strategy
would commonly be described as a value strategy. That is, we strive to purchase
stocks that are selling for less than their true value. In order to estimate
what a security's true value is, we evaluate its future income potential, taking
into account the impact both currency fluctuations and inflation might have on
that income stream. We then determine what that income would be worth if paid
today. That helps us decide what we think the security is worth today. We then
compare our estimate of the security's value to its current price to determine
if it is a good value.
We use income as an indicator of value because we believe it allows us to
compare securities across different sectors and different countries--all using
one measurement standard. We can even use this analysis to compare stocks to
bonds.
We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.
<TABLE>
<CAPTION>
How to use
this glossary
<S> <C> <C> <C>
The glossary includes
definitions of Glossary A-C Amortized cost Average maturity
investment terms used --------------------------------------------------------------------------------------
throughout the Amortized cost is a method used to value a fixed-income An average of when
Prospectus. If you security that starts with the face value of the security and the individual bonds
would like to know then adds or subtracts from that value depending on whether and other debt
the meaning of an the purchase price was greater or less than the value of the securities held in a
investment term that security at maturity. The amount greater or less than the portfolio will
is not explained in par value is divided equally over the time remaining until mature.
the text please check maturity.
the glossary.
</TABLE>
14
- -----
<PAGE>
We may purchase securities in any foreign country, developed or emerging;
however, we currently anticipate investing in Australia, Belgium, Canada,
Finland, France, Germany, Hong Kong, Italy, Japan, Malaysia, the Netherlands,
New Zealand, Singapore, Spain, Switzerland and the United Kingdom. This is a
representative list; the Fund may also invest in countries not listed here. We
may invest more than 25% of the Fund's total assets in the securities of issuers
located in the same country.
We generally maintain a long-term focus in the Fund, seeking companies that we
believe will perform well over the next three to five years.
Delaware Global Equity Fund
Delaware Global Equity Fund seeks long-term total return. We invest in U.S. and
foreign equity securities, including common stocks, that provide the potential
for capital appreciation and income. We invest primarily in developed markets;
however, we may purchase securities in emerging markets. We may invest more than
25% of the Fund's total assets in the securities of issuers located in the same
country.
To determine how much of the Fund's assets to allocate to international stocks
and how much to U.S. stocks, we compare the potential total return of each asset
class in the context of our expectations for inflation, economic growth, and
political stability in various regions.
In selecting foreign stocks for the Fund, we follow the same investment strategy
as Delaware International Equity Fund. We generally look for securities that are
undervalued based on our analysis of their future income stream.
The Fund may also seek to achieve growth by investing up to 35% of its assets in
income producing debt securities such as U.S. or foreign government bonds or
corporate bonds. As a general policy, the Fund only invests in debt securities
when we believe they offer better long-term potential returns with less risk
than investments in equity securities. We apply our analysis of future income
potential to both stocks and bonds in order to decide whether any portion of the
portfolio should be allocated to bonds.
Delaware Overseas Equity Fund
Delaware Overseas Equity Fund seeks to maximize total return. Under normal
circumstances, we will invest at least 65% of the value of Delaware Overseas
Equity Fund's total assets in securities of issuers located in at least three
foreign countries. However, we may invest more than 25% of the Fund's total
assets in the securities of issuers located in the same country.
The Fund will emphasize established companies, although it may invest in
companies of varying sizes as measured by assets, sales and market
capitalization. The Fund may invest in securities of issuers located in a
variety of different foreign countries including: Australia, Austria, Belgium,
Brazil, Canada, Denmark, Finland, France, Germany, Greece, Hong Kong, India,
Ireland, Italy, Japan, Luxembourg, Malaysia, Mexico, the Netherlands, New
Zealand, Norway, Portugal, Singapore, South Africa, Spain, Sweden, Switzerland,
Thailand and the United Kingdom. This is a representative list; the Fund may
also invest in countries not listed here.
<TABLE>
<CAPTION>
Bond ` Bond ratings Capital
<S> <C> <C>
- --------------------------------------------------------------------------------------------------------------------------
A debt security, like an IOU, issued by a company, Independent evaluations of The amount of
municipality or government agency. In return for creditworthiness, ranging from money you invest.
lending money to the issuer, a bond buyer Aaa/AAA (highest quality) to D
generally receives fixed periodic interest (lowest quality). Bonds rated
payments and repayment of the loan amount on a Baa/BBB or better are considered
specified maturity date. A bond's price changes investment grade. Bonds rated Ba/BB
prior to maturity and is inversely related to or lower are commonly known as junk
current interest rates. When interest rates rise, bonds. See also Nationally
bond prices fall, and when interest rates fall, recognized statistical rating
bond prices rise. organization.
</TABLE>
15
-----
<PAGE>
How we manage the Funds (continued)
Our strategy for Delaware Overseas Equity Fund can best be described as a value
strategy. We use the same income-oriented evaluation process to identify
attractive undervalued stocks in a variety of countries and regions. To increase
the Fund's return potential and also add further diversification opportunities,
we may invest up to 40% of the Fund's assets in securities of companies located
in emerging market countries or in government securities of emerging market
countries.
In deciding how much of the portfolio to allocate to emerging markets, we
consider both the total return potential of those markets and the expected level
of risk.
We may invest up to 5% of the Fund's assets in securities of issuers that have
been in continuous operation for less than three years.
Delaware Emerging Markets Fund
Delaware Emerging Markets Fund seeks long-term capital appreciation. The Fund
may invest in a broad range of equity securities, including common stocks. Our
primary emphasis will be on the stocks of companies located in or having their
principal business in an emerging country.
We consider an "emerging country" to be any country that is:
o generally recognized to be an emerging or developing country by the
international financial community, including the World Bank and the
International Finance Corporation;
o classified by the United Nations as developing; or
o included in the International Finance Corporation Free Index or the Morgan
Stanley Capital International Emerging Markets Free Index.
Developing or emerging countries include almost every nation in the world except
the United States, Canada, Japan, Australia, New Zealand and most nations
located in Western and Northern Europe. A representative list of the countries
where we may invest includes: Argentina, Botswana, Brazil, Chile, China,
Colombia, Czech Republic, Estonia, Ghana, Greece, Hong Kong, Hungary, India,
Indonesia, Ivory Coast, Jamaica, Jordan, Kenya, Korea, Latvia, Lithuania,
Malaysia, Mauritius, Mexico, Morocco, Nigeria, Pakistan, Peru, the Philippines,
Poland, Portugal, Russia, Slovenia, South Africa, Sri Lanka, Taiwan, Thailand,
Turkey, Venezuela and Zimbabwe. We may invest in other countries, particularly
as markets in other emerging countries develop. We may invest more than 25% of
the Fund's total assets in the securities of issuers located in the same
country.
In deciding whether a company is from an emerging country, we evaluate publicly
available information and question individual companies to determine if the
company meets one of the following criteria:
o the principal trading market for the company's securities is in a country that
is emerging;
<TABLE>
<CAPTION>
C-D Capital appreciation Capital gains distributions Commission Compounding
---------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
An increase in the value Payments to mutual fund The fee an investor pays to a Earnings on an
of an investment. shareholders of profits (realized financial adviser for investment investment's previous
gains) from the sale of a fund's advice and help in buying or earnings.
portfolio securities. Usually paid selling mutual funds, stocks, bonds
once a year; may be either or other securities.
short-term gains or long-term
gains.
</TABLE>
16
- -----
<PAGE>
o the company generates 50% or more of its annual revenue from operations in
emerging countries, even though the company's securities are traded in an
established market or in a combination of emerging and established markets; or
o the company is organized under the laws of an emerging market country and has
a principal office in an emerging country.
Currently, investing in many emerging countries is not feasible or may involve
significant political risks. We focus our investments in emerging countries
where we consider the economies to be developing strongly and where the markets
are becoming more sophisticated. In deciding where to invest we place particular
emphasis on factors such as economic conditions (including growth trends,
inflation rates and trade balances), regulatory and currency controls,
accounting standards and political and social conditions. We believe investment
opportunities may result from an evolving long-term trend favoring
market-oriented economies, a trend that may particularly benefit countries
having developing markets.
When we evaluate individual companies we strive to apply a value-oriented
selection process, similar to what we use for Delaware International Equity
Fund, Delaware Global Equity Fund and Delaware Overseas Equity Fund. However, in
emerging markets, more of the return is expected to come from capital
appreciation rather than income. Thus, there is greater emphasis on the
manager's assessment of the company's future growth potential.
The Fund may invest up to 35% of its net assets in high-yield, high risk foreign
fixed-income securities. This typically includes so-called Brady Bonds.
Delaware New Pacific Fund
Delaware New Pacific Fund seeks to maximize long-term capital appreciation. It
invests primarily in equity securities of companies domiciled or having their
principal business activities in countries located in the Pacific Basin.
The Fund will invest in companies of varying sizes, measured by assets, sales
and market capitalization. When we evaluate individual companies, we consider
the growth prospects for the company and its industry, the financial strength of
the company and the quality of its management. We also look at whether the stock
appears overvalued or undervalued compared to other stocks in the market or its
industry.
While the Fund will generally have investments in companies located in at least
three different countries or regions, the Fund may from time to time have
investments in only one or a few countries or regions. We may invest more than
25% of the Fund's total assets in the securities of issuers located in the same
country.
The Fund may invest up to 35% of its assets in securities of U.S. issuers. In
addition, the Fund may invest in short-term debt instruments to meet anticipated
day-to-day operating expenses and liquidity requirements. The Fund may invest up
to 5% of its assets in the securities of issuers that have been in continuous
operation for less than three years.
<TABLE>
<CAPTION>
Consumer Price
Index (CPI) Contingent deferred sales charge (CDSC) Corporate bond Currency exchange rates Depreciation
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Measurement of Fee charged by some mutual funds A debt security The price at which one A decline in an
U.S. inflation; when shares are redeemed (sold back issued by a country's currency can be investment's
represents the to the fund) within a set number of corporation. See converted into another's. value.
price of a basket years; an alternative method for Bond. This exchange rate varies
of commonly investors to compensate a financial almost daily according to
purchased goods. adviser for advice and service, a wide range of political,
rather than an up-front commission. economic, and other factors.
</TABLE>
17
-----
<PAGE>
How we manage the Funds (continued)
Delaware Global Bond Fund
Delaware Global Bond Fund seeks current income consistent with the preservation
of principal. We invest primarily in fixed-income securities that may also
provide the potential for capital appreciation.
We may invest in:
o foreign and U.S. government securities;
o debt obligations of foreign and U.S. companies;
o debt securities of supranational entities;
o securities of issuers in emerging market countries, including Brady Bonds,
which tend to be of lower quality and more speculative than securities of
developed country issuers; and
o zero-coupon bonds.
At the time this Prospectus was prepared we anticipated that for increased
safety, a large percentage of Delaware Global Bond Fund's assets would be
invested in securities of supranational entities and in U.S. and foreign
government securities.
While the Fund may purchase securities of issuers in any foreign country,
developed or emerging, we currently anticipate investing in Australia, Belgium,
Canada, France, Germany, Hong Kong, Japan, Malaysia, the Netherlands, Singapore,
Spain, Switzerland and the United Kingdom, as well as Indonesia, Korea, New
Zealand, the Philippines, South Africa, Taiwan and Thailand. This is a
representative list; we may also invest in other countries. More than 25% of the
Fund's total assets may be invested in the securities of issuers located in the
same country.
Generally, the value of fixed-income securities rises when interest rates
decline and declines when interest rates rise. The value of your investment in
the Fund will be affected by changes in interest rates. We generally keep the
average weighted maturity of the portfolio in the five-to-ten year range.
However, if we anticipate a declining interest rate environment, we may extend
the average weighted maturity past ten years or if we anticipate a rising rate
environment, we may shorten the average weighted maturity to less than five
years.
<TABLE>
<CAPTION>
Dividend
D-M Diversification distribution Duration Expense ratio
----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
The process of Payments to mutual A measurement of a A mutual fund's total operating expenses,
spreading fund shareholders of fixed-income expressed as a percentage of its total net assets.
investments among a dividends passed investment's price Operating expenses are the costs of running a
number of different along from the volatility. The mutual fund, including management fees, offices,
securities, asset fund's portfolio of larger the number, staff, equipment and expenses related to
classes or securities. the greater the maintaining the fund's portfolio of securities and
investment styles to likely price change distributing its shares. They are paid from the
reduce the risks of for a given change fund's assets before any earnings are distributed
investing. in interest rates. to shareholders.
</TABLE>
18
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<PAGE>
The securities we typically invest in
Stocks offer investors the potential for capital appreciation, and may pay
dividends as well. Fixed-income securities offer the potential for greater
income payments than stocks, and also may provide capital appreciation. The
following chart provides a brief description of the securities that the Funds
may invest in. The Funds can hold securities denominated in any currency. Please
see the Statement of Additional Information for additional descriptions of these
as well as other investments.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Common stocks: Delaware International Equity Fund, Delaware Global Equity Fund, Delaware Overseas Equity Delaware Global Bond
Securities that Fund, Delaware Emerging Markets Fund and Delaware New Pacific Fund will invest their Fund typically does
represent assets in common stocks, some of which will be dividend-paying stocks. not invest in common
shares of stocks.
ownership in a
corporation.
Stockholders
participate in
the corporation's
profits and
losses,
proportionate to
the number of
shares they own.
Corporate bonds: Although not a principal Delaware Overseas Delaware Emerging Delaware New Delaware Global Bond
Debt obligations strategy of the Fund, for Equity Fund may Markets Fund may Pacific Fund Fund may invest in
issued by U.S. or temporary defensive purposes, invest up to 40% of invest in corporate generally does corporate bonds,
foreign the Fund may invest all or a its assets in obligations issued not invest in generally those
corporations. substantial portion of its developing country by emerging country corporate bonds. rated A or better by
assets in corporate obligations corporate and companies. These S&P or Moody's or if
rated AA or better by S&P and Aa government bonds bonds may be high unrated, determined
or better by Moody's, or if although it risk, fixed-income to be of comparable
unrated, determined to be of generally does not securities. quality. The Fund
comparable quality. intend to do so. See may also invest in
"Foreign government Although not a high-yield, high
All corporate debt will be rated securities" on page principal strategy risk emerging
AA or better by S&P and Aa or 20. of the Funds, for markets corporate
better by Moody's, or if temporary defensive bonds.
unrated, determined to be of purposes, the Fund
comparable quality. may invest all or a
substantial portion
Delaware Global of their respective
Equity Fund may seek assets in corporate
to achieve growth by obligations rated AA
investing up to 35% or better by S&P and
of its assets in Aa or better by
debt securities, Moody's, or if unrated,
including corporate determined to be of
bonds. Generally, comparable quality.
Delaware Global
Equity Fund will
invest in debt
securities when we
believe they offer
better long-term
potential returns
with less risk than
equity investments.
- ------------------------------------------------------------------------------------------------------------------------------------
<PAGE>
Financial adviser Fixed-income securities Inflation Investment goal Management fee
- ------------------------------------------------------------------------------------------------------------------------
Financial With fixed-income The increase in the The objective, such The amount paid by a
professional (e.g., securities, the cost of goods and as long-term capital mutual fund to the
broker, banker, money you originally services over time. growth or high investment adviser
accountant, planner invested is paid U.S. inflation is current income, that for management
or insurance agent) back at a frequently measured a mutual fund services, expressed
who analyzes pre-specified by changes in the pursues. as an annual
clients' finances maturity date. These Consumer Price Index percentage of the
and prepares securities, which (CPI). fund's average daily
personalized include government, net assets.
programs to meet corporate or
objectives. municipal bonds, as
well as money market
securities,
typically pay a
fixed rate of return
(often referred to
as interest). See
Bond.
</TABLE>
19
<PAGE>
How we manage the Funds (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Foreign government Delaware Global Delaware We may invest a Delaware New Delaware Global Bond
securities: Debt Equity Fund may seek Overseas portion of Delaware Pacific Fund Fund will generally
obligations issued to achieve growth by Equity Fund Emerging Markets generally does invest in agencies,
by a government investing up to 35% may invest Fund's assets in not invest in securities issued by
other than the of its assets in up to 40% foreign governmental foreign foreign governments,
United States or by foreign governmental of its securities issued by government their
an agency, debt securities. assets in emerging or securities. instrumentalities or
instrumentality or Generally, Delaware developing developing political
political Global Equity Fund country countries, which may subdivisions that
subdivision of such will invest in debt corporate be lower rated, are rated AAA or AA
governments. securities when we and government including securities by S&P or Aaa or Aa
believe they offer bonds combined rated below by Moody's or, if
better long-term although it investment grade. unrated, considered
potential returns generally does to be of comparable
with less risk than not intend to Although not a quality. We may
equity investments. do so. principal strategy invest a portion of
of the Fund, for the Fund's assets in
temporary defensive foreign governmental
Although not a principal purposes, the Fund securities issued by
strategy of the Funds, for may invest in high emerging countries,
temporary defensive purposes, quality debt which may be lower
Delaware International Equity obligations of rated, including
Fund and Delaware Global foreign governments, securities rated
Equity Fund may invest all or their agencies, below investment
a substantial portion of their instrumentalities grade.
respective assets in high and political
quality debt obligations of sub-divisions.
foreign governments, their
agencies, instrumentalities
and political sub-divisions.
U.S. government Although not a principal strategy of the Funds, for temporary Delaware New Delaware Global Bond
securities: defensive purposes Delaware International Equity Fund, Delaware Pacific Fund Fund may invest a
Securities issued Global Equity Fund, Delaware Overseas Equity Fund and Delaware generally does significant portion
or guaranteed by Emerging Markets Fund may invest in U.S. government securities. not invest in of its assets in
the U.S. U.S. government U.S. government
government or securities. securities. It will
issued by an invest only in U.S.
agency or government
instrumentality obligations,
of the U.S. including bills,
government. notes and bonds that
are issued or
guaranteed as to the
payment of principal
and interest by the
U.S. government and
securities of U.S.
government agencies
or instrumentalities
that are backed by
the full faith and
credit of the United
States.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
M-M
Morgan Stanley
Capital
International EAFE
(Europe, Australia,
Market capitalization Maturity Far East) Index
- --------------------------------------------------------------------------------
The value of a The length of time The Morgan Stanley
corporation until a bond issuer Capital
determined by must repay the International EAFE
multiplying the underlying loan Index is an
current market price principal to international index
of a share of common bondholders. including stocks
stock by the number traded on 16
of shares held by exchanges in Europe,
shareholders. A Australia and the
corporation with one Far East, weighted
million shares by capitalization.
outstanding and the The index is
market price per unmanaged and
share of $10 has a doesn't include the
market actual costs of
capitalization of buying, selling, and
$10 million. holding securities.
20
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Investment company Each Fund may hold investment Delaware Overseas Delaware Emerging Delaware New Delaware Global
securities: In some company securities if we Equity Fund may not Markets Fund may Pacific Fund Bond Fund may hold
countries, believe the country offers hold investment hold open-end and may not hold closed-end
investments by U.S. good investment opportunities. company securities. closed-end investment investment company
mutual funds are Both Funds would generally investment company company securities.
generally made by hold closed-end investment securities. Please securities.
purchasing shares of companies, but Delaware Global see Delaware
investment companies Equity Fund may also hold International Equity
that in turn invest open-end investment companies. Fund and Delaware
in the securities of These investments involve an Global Equity Fund
such countries. indirect payment of a portion for a complete
of the expenses of the other explanation.
investment companies,
including their advisory fees.
Foreign currency Although the Funds value their assets daily in U.S. dollars, they do not intend to convert their holdings of
transactions: A foreign currencies into U.S. dollars on a daily basis. Each Fund will, however, from time to time, purchase or
forward foreign sell foreign currencies and/or engage in forward foreign currency exchange transactions. Each Fund may conduct
currency exchange its foreign currency transactions on a cash basis at the rate prevailing in the foreign currency exchange
contract involves an market or through a forward foreign currency exchange contract or forward contract.
obligation to
purchase or sell a A Fund may use forward contracts for defensive hedging purposes to attempt to protect the value of the Fund's
specific currency on current security or currency holdings. It may also use forward contracts if it has agreed to sell a security
a fixed future date and wants to "lock-in" the price of that security, in terms of U.S. dollars. Investors should be aware of the
at a price that is costs of currency conversion. The Funds will not use forward contracts for speculative purposes.
set at the time of
the contract. The
future date may be
any number of days
from the date of the
contract as agreed
by the parties
involved.
American Depositary Each Fund may invest in sponsored and unsponsored ADRs, EDRs and GDRs, generally This is not a
Receipts (ADRs), focusing on those whose underlying securities are issued by foreign entities. principal strategy
European Depositary for Delaware Global
Receipts (EDRs), and To determine whether to purchase a security in a foreign market or through an Bond Fund.
Global Depositary ADR, we evaluate the price levels, the transaction costs, taxes and
Receipts (GDRs): administrative costs involved with each security to identify the most efficient
ADRs are receipts choice.
issued by a U.S.
depositary (usually
a U.S. bank) and
EDRs and GDRs are
receipts issued by a
depositary outside
of the U.S. (usually
a non-U.S. bank or
trust company or a
foreign branch of a
U.S. bank).
Depositary receipts
represent an
ownership interest
in an underlying
security that is
held by the
depositary.
Generally, the
holder of the
depositary receipt
is entitled to all
payments of
interest, dividends
or capital gains
that are made on the
underlying security.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
Morgan Stanley
Capital Morgan Stanley
International Capital
Emerging Markets International World Morgan Stanley
Free Index Index Pacific Index
- --------------------------------------------------------------------------------
The Morgan Stanley The Morgan Stanley A total return
International Capital index, reported in
Emerging Markets International World U.S. dollars, based
Free Index is a U.S. Index is an on share prices and
dollar denominated international index reinvested gross
index comprised of that includes stocks dividends of
stocks of countries traded in Europe, approximately 500
with below average Australia, the Far companies (only
per capita GDP as East, plus the U.S., those securities
defined by the World Canada and South deemed sufficiently
Bank, foreign Africa, weighted by liquid for trading
ownership capitalization. by investors) from
restrictions, a tax the following 6
regulatory countries:
environment, and Australia, Hong
greater perceived Kong, Japan,
market risk than in Malaysia, New
the developed Zealand and
countries. Within Singapore.
this index, MSCI
aims to capture an
aggregate of 60% of
local market
capitalization.
21
<PAGE>
How we manage the Funds (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Supranational The Funds do not invest in these entities. We anticipate
entities: Debt investing a large
securities of percentage of
supranational Delaware Global
entities may be Bond Fund's assets
denominated in any in debt securities
currency. These of supranational
securities are entities.
typically of
high-grade quality.
A supranational
entity is an entity
established or
financially
supported by the
national governments
of one or more
countries to promote
reconstruction or
development. The
International Bank
for Reconstruction
and Development
(more commonly known
as the World Bank)
would be one example
of a supranational
entity.
Zero coupon bonds: Delaware Delaware Global Equity Fund Delaware Emerging Delaware New Pacific Delaware Global
Zero coupon bonds International and Delaware Overseas Equity Markets Fund may Fund does not invest Bond Fund may
are debt obligations Equity Fund Fund do not invest in these invest in zero in these securities. invest in zero
that do not entitle typically does securities. coupon bonds. coupon bonds.
the holder to any not invest in
periodic payments of these
interest before securities.
maturity or a
specified date when
the securities begin
paying current
interest. Therefore,
they are issued and
traded at a discount
from their face
amounts or par
value. The market
prices of zero
coupon bonds are
generally more
volatile than the
market prices of
securities that pay
interest
periodically and are
likely to respond to
changes in interest
rates to a greater
degree than do
non-zero coupon
securities having
similar maturities
and credit quality.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
N-R
NASD Regulation, Inc. Nationally recognized statistical Net asset value
(NASD) rating organization (NRSRO) (NAV)
A self-regulating A company that The daily dollar
organization, assesses the credit value of one mutual
consisting of quality of bonds, fund share. Equal to
brokerage firms commercial paper, a fund's net assets
(including preferred and common divided by the
distributors of stocks and municipal number of shares
mutual funds), that short-term issues, outstanding.
is responsible for rating the
overseeing the probability that the
actions of its issuer of the debt
members. will meet the
scheduled interest
payments and repay
the principal.
Ratings are
published by such
companies as Moody's
Investors Service,
Inc. (Moody's),
Standard & Poor's
Ratings Group (S&P),
Duff & Phelps, Inc.
(Duff), and Fitch
IBCA, Inc. (Fitch).
22
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Brady Bonds: These Delaware International Equity Fund, Delaware Emerging Delaware New Delaware Global Bond
are debt securities Delaware Global Equity Fund and Delaware Markets Fund may Pacific Fund Fund may invest in
issued under the Overseas Equity Fund do not invest in invest in Brady does not invest Brady Bonds. Please
framework of the these securities. Bonds. We believe in Brady Bonds. see Delaware
Brady Plan, an that the economic Emerging Markets
initiative for reforms undertaken Fund to the left for
debtor nations to by countries in a complete
restructure their connection with the explanation.
outstanding external issuance of Brady
indebtedness Bonds can make the
(generally, debt of countries
commercial bank that have issued or
debt). Brady Bonds have announced plans
tend to be of lower to issue these bonds
quality and more a viable opportunity
speculative than for investment.
securities of
developed country
issuers.
High-yield, high Delaware International Equity Fund, Delaware Emerging Delaware New Delaware Global Bond
risk fixed-income Delaware Global Equity Fund and Delaware Markets Fund may Pacific Fund Fund may invest a
securities: Overseas Equity Fund do not invest in invest up to 35% of does not invest portion of its
Securities that are these securities. its net assets, in in these assets in these
rated lower than high-yield, high securities. securities.
BBB by S&P or Baa risk foreign
by Moody's, or if fixed-income
unrated, of equal securities.
quality. These
securities may be
issued by companies
or governments of
emerging or
developing
countries, which may
be less
creditworthy. The
risk that these
companies or
governments may not
be able to make
interest or
principal payments
is substantial.
Restricted We may invest in privately placed securities that are eligible for resale only among certain institutional
securities: buyers without registration, including Rule 144A Securities.
Privately placed
securities whose
resale is restricted
under securities
law.
<PAGE>
Illiquid securities: Delaware International Equity Fund, Delaware Emerging Delaware New Pacific Fund and Delaware
Securities that Delaware Global Equity Fund and Delaware Markets Fund may Global Bond Fund may invest up to 10% of
cannot be sold or Overseas Equity Fund may invest up to invest up to 15% of net assets in illiquid securities.
disposed of in the 10% of net assets in illiquid net assets in
ordinary course of securities. illiquid securities.
business, within
seven days, at
approximately the
price at which a
fund has valued
them.
- ------------------------------------------------------------------------------------------------------------------------------------
Preferred stock Price-to-earnings ratio Principal Prospectus Redeem
Preferred stock has A measure of a Amount of money you The official To cash in your
preference over stock's value invest (also called offering document shares by selling
common stock in the calculated by capital). Also that describes a them back to the
payment of dividends dividing the current refers to a bond's mutual fund, mutual fund.
and liquidation of market price of a original face value, containing
assets. Preferred share of stock by due to be repaid at information required
stocks also often its annual earnings maturity. by the SEC, such as
pay dividends at a per share. A stock investment
fixed rate and are selling for $100 per objectives,
sometimes share with annual policies, services
convertible into earnings per share and fees.
common stock. of $5 has a P/E of
20.
</TABLE>
23
<PAGE>
How we manage the Funds (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
------------- ----------- ----------- ------------ ----------- -----------
<S> <C> <C>
Repurchase Typically, we use repurchase agreements as a short-term investment for a Fund's cash position. In order to
agreements: An enter into these repurchase agreements, a Fund must have collateral of at least 102% of the repurchase price.
agreement between a The Funds will only enter into repurchase agreements in which the collateral is composed of U.S. government
buyer, such as a securities.
fund, and a seller
of securities in
which the seller
agrees to buy the
securities back
within a specified
time at the same
price the buyer paid
for them, plus an
amount equal to an
agreed upon interest
rate. Repurchase
agreements are often
viewed as equivalent
to cash.
Other securities: Delaware Delaware Global Delaware Overseas Delaware Delaware New Delaware
Each Fund is International Equity Fund may Equity Fund may Emerging Pacific Fund Global Bond
permitted to invest Equity Fund may invest in preferred invest in all types Markets Fund may invest in Fund may
in other securities invest in stocks, convertible of securities with may invest in all types of invest in
that are listed preferred stocks, securities, equity preferred stocks, securities with futures and
here. More convertible warrants, futures characteristics, convertible equity options. The
information about securities, and options. including trust or securities, characteristics, Fund may also
these securities warrants, limited partnership warrants, futures including trust invest in
can be found in futures and interests, preferred and options. or limited interest rate
the Statement of options. stocks, rights, partnership swaps.
Additional warrants and interests,
Information. convertible preferred stocks,
securities. The Fund rights and warrants
may hold futures and and convertible
options. The Fund securities. The
may also invest in Fund may also hold
swaps. futures and options.
The Fund may also
invest in swaps.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
R-S
Salomon Smith Barney World
Risk Sales charge Government Bond Index
- --------------------------------------------------------------------------------
Generally defined as Charge on the The World Government
variability of purchase or Bond Index is a
value; also credit redemption of fund market-capitalization
risk, inflation shares sold through weighted benchmark
risk, currency and financial advisers. that tracks the
interest rate risk. May vary with the performance of the
Different amount invested. 18 Government bond
investments involve Typically used to markets of
different types and compensate advisers Australia, Austria,
degrees of risk. for advice and Belgium, Canada,
service provided. Denmark, Finland,
France, Germany,
Ireland, Italy,
Japan, the
Netherlands,
Portugal, Spain,
Sweden, Switzerland,
the United Kingdom
and the United
States.
24
<PAGE>
Portfolio turnover Each Fund (other than Delaware New Pacific Fund) anticipates
that its annual portfolio turnover will be less than 100%. A turnover rate of
100% would occur if a Fund sold and replaced securities valued at 100% of its
net assets within one year. High turnover in a Fund could result in additional
brokerage commissions to be paid by the Fund and higher tax liability for the
Fund.
Borrowing from banks Each Fund may borrow money as a temporary measure for
extraordinary or emergency purposes or to facilitate redemptions. A Fund will
not borrow money in excess of one-third of the value of its net assets.
Securities lending Each Fund may loan up to one-quarter (one-third, in the case
of Delaware New Pacific Fund and Delaware Overseas Equity Fund) of its assets to
qualified broker/dealers or institutional investors to generate additional
income for the Fund. All such loans will be secured by collateral.
Purchasing securities on a when-issued or delayed delivery basis Delaware New
Pacific Fund and Delaware Overseas Equity Fund may buy or sell securities on a
when-issued or delayed delivery basis; that is, paying for securities before
delivery or taking delivery at a later date. Each Fund will designate cash or
securities in amounts sufficient to cover its obligations, and will value the
designated assets daily.
Temporary defensive positions For temporary defensive purposes, Delaware
International Equity Fund, Delaware Global Equity Fund and Delaware Emerging
Markets Fund may each invest all or a substantial portion of their assets in
high quality debt instruments of foreign governments, the U.S. government, or
foreign or U.S. companies. Also, for temporary defensive purposes, Delaware
Overseas Equity Fund may invest a substantial portion of its assets in cash or
cash equivalent investments or in U.S. securities, and Delaware New Pacific Fund
may invest up to 100% of its assets in money market instruments, cash or cash
equivalents. To the extent that a Fund does so, the Fund may be unable to meet
its investment objective.
<TABLE>
<CAPTION>
SEC (Securities Additional
and Exchange Signature Standard Information
Commission) Share classes guarantee deviation (SAI) Stock
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Federal agency Different Certification by A measure of an The document An investment
established by classifications a bank, investment's serving as that represents
Congress to of shares; brokerage firm volatility; for "Part B" of a a share of
administer the mutual fund or other mutual funds, fund's prospectus ownership
laws governing share classes financial measures how that provides (equity) in a
the securities offer a variety institution much a fund's more detailed corporation.
industry, of sales charge that a total return has information Stocks are often
including mutual choices. customer's typically varied about the fund's referred to as
fund companies. signature is from its organization, "equities."
valid; signature historical investments,
guarantees can average. policies and
be provided by risks.
members of the
STAMP program.
</TABLE>
25
-----
<PAGE>
How we manage the Funds (continued)
The risks of investing
in the Funds
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in a Fund you should
carefully evaluate the risks. An investment in the Funds typically provides the
best results when held for a number of years. The following are the chief risks
you assume when investing in the Funds. Please see the Statement of Additional
Information for further discussion of these risks and other risks not discussed
here.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware
Inter- Global Overseas Delaware Delaware Delaware
national Equity Equity Emerging New Pacific Global Bond
Equity Fund Fund Fund MarketsFund Fund Fund
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Market risk is the We maintain a long-term investment approach and focus on stocks we believe can appreciate over an extended
risk that all or a time frame regardless of interim market fluctuations. In deciding what portion of a Fund's portfolio
majority of the should be invested in any individual country, we evaluate a variety of factors, including opportunities
securities in a and risks relative to other countries.
certain market--
like the stock or In addition, for For temporary Same as for For temporary As part of the
bond market--or in temporary defensive defensive purposes, Delaware defensive Delaware Global
a certain country purposes, the Funds Delaware International purposes, Bond Fund's
or region will may invest all or a Overseas Equity Equity Fund and Delaware New principal investment
decline in value substantial portion Fund may invest a Delaware Global Pacific Fund may strategy, the Fund
because of factors of their assets in substantial portion Equity Fund as invest up to may invest in
such as economic high quality debt of its assets in cash explained to 100% of its assets securities that
conditions, future instruments of or cash equivalent the left. in money market generally have
expectations or foreign governments, investments or in instruments, cash relatively less
investor confidence. the U.S. government, U.S. securities. or cash market risk.
(including their equivalents.
agencies and
instrumentalities)
or foreign or U.S.
companies.
Industry and We typically hold a number of different securities in a variety of sectors in order to minimize the impact
security risk is the that a poorly performing security would have on a Fund. This risk is more significant for Delaware Global
risk that the value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Bond Fund, which are non-diversified funds.
of securities in a
particular industry
or the value of an
individual stock or
bond will decline
because of changing
expectations for the
performance of that
industry or for the
individual company
issuing the stock
or bond.
Interest rate risk Delaware International Equity Fund, Delaware Global Equity Fund, Delaware Overseas Interest rate risk
is the risk that Equity Fund, Delaware New Pacific Fund and Delaware Emerging Markets und are is a significant
securities, generally less affected by interest rate risk because they typically hold a smaller risk for Delaware
particularly bonds amount of fixed-income securities than Delaware Global Bond Fund. Global Bond Fund. In
with longer maturities, an attempt to manage
will decrease in value interest rate risk,
if interest rates rise. we adjust the Fund's
average weighted
maturity based on
our view of interest
rates. The Fund's
average weighted
maturity will
generally be in the
five- to-ten year
range. When we
anticipate that
interest rates will
decline, we may
extend the average
maturity beyond
tenyears and when we
anticipate that
interest rates will
rise, we may shorten
the average maturity
to less than five
years.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Uniform Gift to Minors Act and
T-V Total return Uniform Transfers to Minors Act Volatility
-----------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
An investment Federal and state laws that provide The tendency of an investment to go up or down in
performance measurement, a simple way to transfer property to value by different magnitudes. Investments that
expressed as a percentage, a minor with special tax generally go up or down in value in relatively small
based on the combined advantages. amounts are considered "low volatility" investments,
earnings from dividends, whereas those investments that generally go up or
capital gains and change in down in value in relatively large amounts are
price over a given period. considered "high volatility" investments.
</TABLE>
26
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<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware
Inter- Global Overseas Delaware Delaware Delaware
national Equity Equity Emerging New Pacific Global Bond
Equity Fund Fund Fund MarketsFund Fund Fund
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Currency risk is the Each Fund may try to hedge its currency risk by purchasing foreign currency exchange contracts. If a Fund
risk that the value agrees to purchase or sell foreign securities at a pre-set price on a future date, the Fund attempts to
of a fund's protect the value of a security it owns from future changes in currency rates. If a Fund has agreed to
investments may be purchase or sell a security, it may also use foreign currency exchange contracts to "lock-in" the
negatively affected security's price in terms of U.S. dollars or another applicable currency. Each Fund may use forward
by changes in currency exchange contracts only for defensive or protective measures, not to enhance portfolio returns.
foreign currency However, there is no assurance that such a strategy will be successful.
exchange rates.
Adverse changes in
exchange rates may
reduce or eliminate
any gains produced
by investments that
are denominated in
foreign currencies
and may increase any
losses.
Small company risk is These Funds typically These Funds may invest in small companies and would Delaware Global
the risk that prices focus their investment be subject to this risk. We typically hold a number Bond Fund does not
of smaller companies in larger companies. of different stocks in order to reduce the impact that invest in small
may be more volatile one small company stock would have on the Funds. This companies.
than larger companies risk is more significant for Delaware Emerging
because of limited Markets Fund, which is a non-diversified Fund.
financial resources or
dependence on narrow
product lines.
Political risk is the We evaluate the political situations in the countries where we invest and take into account any potential
risk that countries or risks before we select securities for the portfolio. However, there is no way to eliminate political
the entire region risk when investing internationally.
where we invest may
experience political
instability. This may
cause greater
fluctuation in the
value and liquidity of
our investments due to
changes in currency
exchange rates,
governmental seizures
or nationalization of
assets.
Emerging market risk Delaware International Delaware Overseas Equity Fund, Delaware Emerging Markets Fund, Delaware New
is the possibility Equity Fund and Pacific Fund and Delaware Global Bond Fund are subject to this risk. Striving to
that the risks Delaware Global Equity manage this risk, the portfolio managers carefully screen securities within
associated with Fund, to the limited emerging markets and attempt to consider material risks associated with an
international extent that they invest individual company or bond issuer. We cannot eliminate emerging market risk and
investing will be in emerging markets, consequently encourage shareholders to invest in these Funds only if they have a
greater in emerging are subject to this long-term time horizon, over which the potential of individual securities is
markets than in more risk. more likely to be realized.
developed foreign
markets because, among
other things, emerging
markets may have less
stable political and
economic environments.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
27
-----
<PAGE>
How we manage the Funds (continued)
How we strive to manage them
Risks
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware
Inter- Global Overseas Delaware Delaware Delaware
national Equity Equity Emerging New Pacific Global Bond
Equity Fund Fund Fund MarketsFund Fund Fund
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Inefficient market The Funds will attempt to reduce these risks by investing in a number of different countries, and
risk is the risk noting trends in the economy, industries and financial markets.
that foreign markets Delaware Global
may be less liquid, Bond Fund will
have greater price also perform
volatility, less credit analysis
regulation and in an attempt
higher transaction to reduce
costs than U.S. these risks.
markets.
Information risk is We conduct fundamental research on the companies we invest in rather than relying solely on information
the risk that available through financial reporting. We believe this will help us to better uncover any potential
foreign companies weaknesses in individual companies.
may be subject to
different
accounting, auditing
and financial
reporting standards
than U.S. companies.
There may be less
information
available about
foreign issuers than
domestic issuers.
Furthermore,
regulatory oversight
of foreign issuers
may be less
stringent or less
consistently applied
than in the United
States.
Non-diversified fund Delaware Delaware Global Delaware Delaware Delaware New Delaware
risk is the risk that International Equity Fund will Overseas Emerging Pacific Fund is Global
non-diversified Equity Fund is not be diversified Equity Fund Markets Fund a diversified Bond Fund
funds are believed a diversified under the 1940 Act. is a is a non- fund, and is is a non-
to be subject to fund, and is Non-diversified diversified diversified not subject diversified
greater risks not subject investment fund, and is fund, the to this risk. fund, the same
because adverse to this risk. companies have the not subject same as as Delaware
effects on their flexibility to to this risk. Delaware Global Equity
security holdings invest as much as Global Equity Fund. Please
may affect a larger 50% of their Fund. Please see the full
portion of their assets in as few see the full explanation
overall assets. as two issuers explanation to under Delaware
with no single the left under Global Equity
issuer accounting Delaware Fund to
for more than 25% Global Equity the left.
of the portfolio. Fund.
\ The remaining 50%
of the portfolio
must be diversified
so that no more than
5% of a fund's
assets is invested
in the securities
of a single issuer.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
28
- -----
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Delaware Delaware
Inter- Global Overseas Delaware Delaware Delaware
national Equity Equity Emerging New Pacific Global Bond
Equity Fund Fund Fund Markets Fund Fund Fund
-----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Foreign government and This is not a significant Delaware Emerging Markets This is not a The Fund is
supranational securities risk for Delaware Fund is subject to this risk significant subject to this
risks relate to the ability of International Equity and will attempt to limit risk for Delaware risk and will
a foreign government or Fund, Delaware this risk by performing New Pacific Fund. attempt to limit
government related issuer Global Equity Fund credit analysis on the issuer this risk by
to make timely payments or Delaware Overseas of each security purchased. performing
on its external debt Equity Fund. credit analysis
obligations. The Fund attempts to on the issuer of
reduce this risk by limiting each security
the portion of net assets purchased.The
that may be invested in Fund attempts
these securities. to reduce the
risks associated
The Fund also compares with investing in
the risk-reward potential foreign
of foreign government governments by
securities being focusing on
considered to that offered bonds rated
by equity securities to within the two
determine whether to highest rating
allocate assets to equity categories.
or fixed-income
investments.
Credit risk of high-yield, This is not a Delaware Emerging This is not a Delaware
high risk fixed-income significant risk for Markets Fund may invest significant risk Global Bond
securities relates to Delaware up to 35% of its net assets for Delaware Fund may
securities rated lower than International Equity in high-yield, high risk New Pacific invest a
BBB by S&P and Baa by Moody's Fund, Delaware foreign fixed-income Fund. portion of its
are considered to be of poor Global Equity Fund securities. assets in these
standing and predominantly or Delaware Overseas We intend to limit our securities.
speculative as to the Equity Fund. investment in any single Please see
issuer's ability to repay lower rated bond, which the complete
interest and principal. can help to reduce the explanation
These bonds are often effect of an individual under
issued by less creditworthy default on the Fund. We Delaware
companies or by highly also intend to limit our Emerging
leveraged (indebted) firms, overall holdings of bonds Markets Fund
which are generally less in this category. Such to the left.
able than more financially limitations may not protect
stable firms to make the Fund from widespread
scheduled payments of bond defaults brought
interest and principal. The about by a sustained
risks posed by bonds issued economic downturn or
under such circumstances from price declines that
are substantial. might result from changes
in the quality ratings of
individual bonds.
Transaction costs risk relates Each of the Funds is subject to this risk. We strive to monitor transaction costs and to choose
to the costs of buying, selling an efficient trading strategy for the Funds.
and holding foreign securities,
including brokerage, tax
and custody costs, may be
higher than those involved
in domestic transactions
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
29
-----
<PAGE>
Who manages the Funds
Investment managers and sub-advisers
Delaware International Advisers Ltd. makes investment decisions for Delaware
International Equity Fund, Delaware Global Equity Fund, Delaware Emerging
Markets Fund and Delaware Global Bond Fund, manages the Funds' business affairs
and provides daily administrative services. Delaware International Advisers Ltd.
is affiliated with Delaware Management Company, a series of Delaware Management
Business Trust, which is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc.
Delaware Management Company is the sub-adviser to Delaware Global Equity Fund.
Delaware Management Company manages the U.S. securities portion of Delaware
Global Equity Fund's portfolio under the overall supervision of Delaware
International Advisers Ltd. and furnishes Delaware International Advisers Ltd.
with investment recommendations, asset allocation advice, research and other
investment services regarding U.S. securities.
Delaware Overseas Equity Fund and Delaware New Pacific Fund are managed by
Delaware Management Company. Delaware International Advisers Ltd. is Delaware
Overseas Equity Fund's sub-adviser and AIB Govett, Inc. is Delaware New Pacific
Fund's sub-adviser. The sub-advisers are responsible for day-to-day management
of the Fund's assets. Delaware Management Company administers the Funds' affairs
and has ultimate responsibility for all investment advisory services for the
Funds. Delaware Management Company also supervises the sub-adviser's
performance.
For the services they provided, the manager and sub-advisers, where applicable,
were paid an aggregate fee by each Fund for the last fiscal year as follows:
Investment management fees
<TABLE>
<CAPTION>
Delaware Delaware Delaware Delaware Delaware Delaware
International Global Overseas Emerging New Pacific Global Bond
Equity Fund Equity Fund Equity Fund Markets Fund Fund Fund
- -------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
As a percentage of
average daily net assets 0.81% 0.34%* none* 0.28%* 0.22%* 0.51%*
</TABLE>
*Reflects a waiver of fees by the manager.
Portfolio managers
Delaware International Equity Fund
Clive A. Gillmore and Nigel G. May have primary responsibility for making
day-to-day investment decisions for Delaware International Equity Fund. In
making investment decisions for the Fund, Mr. Gillmore and Mr. May regularly
consult with a fourteen member international equity team.
Clive A. Gillmore, Deputy Managing Director, Senior Portfolio Manager and
Director of Delaware International Advisers Ltd., has been the senior portfolio
manager for Delaware International Equity Fund since its inception. A graduate
of the University of Warwick and having begun his career at Legal and General
Investment Management, Mr. Gillmore joined Delaware International Advisers in
1990 after eight years of investment experience. His most recent position prior
to joining Delaware International Advisers was as a Pacific Basin equity analyst
and senior portfolio manager for Hill Samuel Investment Management Ltd. Mr.
Gillmore completed the London Business School Investment program.
30
<PAGE>
Nigel G. May, Senior Portfolio Manager and Director of Delaware International
Advisers Ltd., is a graduate of Sidney Sussex College, Cambridge. Mr. May joined
Mr. Gillmore as Co-Manager of the Fund on December 22, 1997. He joined Delaware
International Advisers in 1991, assuming portfolio-management responsibilities
and sharing analytical responsibilities for continental Europe. He previously
had been with Hill Samuel Investment Management Ltd. for five years.
Delaware Global Equity Fund
Elizabeth A. Desmond has primary responsibility for making day-to-day investment
decisions for Delaware Global Equity Fund. Robert L. Arnold makes investment
decisions for the U.S. equity portion of the Fund.
Elizabeth A. Desmond, Senior Portfolio Manager and Director of Delaware
International Advisers Ltd., has been the portfolio manager for the Fund since
July 21, 1998. Ms. Desmond is a graduate of Wellesley College and the masters
program in East Asian studies at Stanford University. After working for the
Japanese government for two years, she began her investment career as a Pacific
Basin investment manager with Shearson Lehman Global Asset Management. Prior to
joining Delaware International in the spring of 1991, she was a Pacific Basin
equity analyst and senior portfolio manager at Hill Samuel Investment
Management, Ltd. Ms. Desmond is a CFA charterholder.
Robert L. Arnold, Vice President/Senior Portfolio Manager of the Fund, has been
managing the U.S. equity portion of the Fund since July 21, 1998. Prior to that
time he managed other Delaware Investments mutual funds and was a financial
analyst focusing on the financial services industry including banks, thrifts,
insurance companies and consumer finance companies. Mr. Arnold holds a BS from
Carnegie Mellon University and earned an MBA from the University of Chicago. He
began his investment career as a management consultant with Arthur Young in
Philadelphia. Prior to joining Delaware Investments in March 1992, Mr. Arnold
was a planning analyst with Chemical Bank in New York.
Delaware Overseas Equity Fund
Clive Gillmore and Robert Akester have had primary responsibility for making
day-to-day investment decisions for Delaware Overseas Equity Fund since
September 15, 1997. Please see Delaware International Equity Fund for a
description of Mr. Gillmore's business experience.
Robert Akester, Senior Portfolio Manager of Delaware International Advisers
Ltd., joined Delaware International Advisers Ltd. in 1996. Mr. Akester, who
began his investment career in 1969, was most recently a Director of Hill Samuel
Investment Management Ltd., which he joined in 1985. His prior experience
included working as a Senior Analyst and head of the Southeast Asian Research
team at James Capel, and as a Fund Manager at Prudential Assurance Co., Ltd. Mr.
Akester holds a BS in Statistics and Economics from University College, London
and is an associate of the Institute of Actuaries, with a certificate in Finance
and Investment.
Delaware Emerging Markets Fund
Clive Gillmore also has primary responsibility for making day-to-day investment
decisions for Delaware Emerging Markets Fund (please see Delaware International
Equity Fund for a description of Mr. Gillmore's business experience). In making
investment decisions for Delaware Emerging Markets Fund, Mr. Gillmore regularly
consults with a fourteen member international equity team, including co-managers
Robert Akester and Joshua H. Brooks. (Please see Delaware Overseas Equity Fund
for a description of Mr. Akester's business experience). Mr. Gillmore has been
managing the Fund since its inception.
31
<PAGE>
Who manages the Funds (continued)
Joshua H. Brooks, Senior Portfolio Manager of Delaware International Advisers
Ltd., holds a bachelor's degree from Yale University and an MBA from The London
Business School. He began his investment career with Delaware Investments in
1991. Prior to joining the investment team in London, he was based in
Philadelphia with responsibilities that included equity market analysis and
acting as liaison with Delaware International.
Delaware New Pacific Fund
Jane Pickard has had primary responsibility for making day-to-day investment
decisions for the Fund since November 12, 1997. Ms. Pickard graduated in law
from Edinburgh University. She joined Barclays de Zoete Wedd Securities Limited
in 1991, where she initially worked as a specialist in structured debt products,
moving into the Pacific Rim equity division in 1992. She remained there until
1995 when she moved to IAI International where she had responsibility for
Pacific Region investment for U.S. institutional and retail funds. Ms. Pickard
joined AIB Govett Asset Management, an affiliate of AIB Govett, Inc., in 1996.
Delaware Global Bond Fund
Christopher A. Moth and Joanna Bates have primary responsibility for making
day-to-day investment decisions for Delaware Global Bond Fund. In making
investment decisions for Delaware Global Bond Fund, Mr. Moth and Ms. Bates
regularly consult with David G. Tilles.
Christopher A. Moth, Senior Portfolio Manager, Director and Head of Investment
Strategy of Delaware International Advisers Ltd., is a graduate of The City
University, London. He joined Delaware International in 1992. He previously
worked at the Guardian Royal Exchange where he was responsible for technical
analysis, quantitative models and projections. Mr. Moth has been awarded the
certificate in Finance and Investment from the Institute of Actuaries in London.
Mr. Moth became Co-Manager of the Fund in January 1997.
Joanna Bates, Senior Portfolio Manager, Credit and Emerging Markets of Delaware
International Advisers Ltd., is a graduate of London University. She joined the
Fixed Income team at Delaware International in June 1997. Prior to that she was
Associate Director, Fixed Interest at Hill Samuel Investment Management Ltd.
which she joined in 1990. She had previously worked at Fidelity International
and Save & Prosper as a fund manager and analyst for global bond markets. Ms.
Bates is an associate of the Institute of Investment Management and Research.
Ms. Bates became Co-Manager of the Fund in July 1999.
David G. Tilles, Managing Director and Chief Investment Officer of Delaware
International Advisers Ltd., was educated at the Sorbonne, Warwick University
and Heidelberg University. Prior to joining Delaware International in 1990 as
Managing Director and Chief Investment Officer, he spent 16 years with Hill
Samuel Investment Management Ltd. in London, serving in a number of investment
capacities. His most recent position prior to joining Delaware International was
Chief Investment Officer of Hill Samuel Investment Management Ltd.
32
<PAGE>
Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.
<TABLE>
<CAPTION>
Board of Trustees
<S> <C> <C>
Investment managers The Funds Custodian
Delaware International Advisers Ltd. The Chase Manhattan Bank
Third Floor, 80 Cheapside 4 Chase Metrotech Center
London, England EC2V 6EE Brooklyn, NY 11245
Delaware Management Company Distributor Service agent
One Commerce Square Delaware Distributors, L.P. Delaware Service Company, Inc.
Philadelphia, PA 19103 1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
Sub-advisers
Delaware Management Company Shareholders
Delaware International Advisers Ltd.
AIB Govett, Inc.
250 Montgomery St., Suite 1200
San Francisco, CA 94104
Portfolio managers
(see page 30 for details)
</TABLE>
Board of Trustees A mutual fund is governed by a Board of Trustees which has
oversight responsibility for the management of the fund's business affairs.
Trustees establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the Board of Trustees must be independent of the fund's
investment manager and distributor. These independent fund trustees, in
particular, are advocates for shareholder interests.
Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's Prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.
Sub-adviser A sub-adviser is a company generally responsible for the management
of the fund's assets. They are selected and supervised by the investment
manager.
Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.
<PAGE>
Custodian Mutual funds are legally required to protect their portfolio
securities and most funds place them with a qualified bank custodian who
segregates fund securities from other bank assets.
Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASD) rules governing mutual fund sales practices.
Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.
Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect trustees. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.
33
<PAGE>
About your account
Investing in the Funds
Institutional Class shares are available for purchase only by the following:
o retirement plans introduced by persons not associated with brokers or dealers
that are primarily engaged in the retail securities business and rollover
individual retirement accounts from such plans;
o tax-exempt employee benefit plans of the manager or its affiliates and
securities dealer firms with a selling agreement with the distributor;
o institutional advisory accounts of the manager, or its affiliates and those
having client relationships with Delaware Investment Advisers, an affiliate of
the manager, or its affiliates and their corporate sponsors, as well as
subsidiaries and related employee benefit plans and rollover individual
retirement accounts from such institutional advisory accounts;
o a bank, trust company and similar financial institution investing for its own
account or for the account of its trust customers for whom such financial
institution is exercising investment discretion in purchasing shares of the
Class, except where the investment is part of a program that requires payment
to the financial institution of a Rule 12b-1 Plan fee; and
o registered investment advisers investing on behalf of clients that consist
solely of institutions and high net-worth individuals having at least
$1,000,000 entrusted to the adviser for investment purposes, but only if the
adviser is not affiliated or associated with a broker or dealer and derives
compensation for its services exclusively from its clients for such advisory
services.
34
<PAGE>
How to buy shares
[GRAPHIC OMITTED]
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.
[GRAPHIC OMITTED]
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014128934013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us at 800.510.4015 so we can assign you an
account number.
[GRAPHIC OMITTED]
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C
shares. To open an account by exchange, call your Client Services Representative
at 800.510.4015.
[GRAPHIC OMITTED]
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.
35
<PAGE>
About your account (continued)
How to buy shares (continued)
The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a
business day, you will pay that day's closing share price which is based on the
Fund's net asset value. If we receive your order after the close of regular
trading, you will pay the next business day's price. A business day is any day
that the New York Stock Exchange is open for business. We reserve the right to
reject any purchase order.
We determine each Fund's net asset value (NAV) per share at the close of regular
trading of the New York Stock Exchange each business day that the Exchange is
open. We calculate this value by adding the market value of all the securities
and assets in a Fund's portfolio, deducting all liabilities, and dividing the
resulting number by the number of shares outstanding. The result is the net
asset value per share. We price securities and other assets for which market
quotations are available at their market value. We price fixed-income securities
on the basis of valuations provided to us by an independent pricing service that
uses methods approved by the Board of Trustees. Any fixed-income securities that
have a maturity of less than 60 days we price at amortized cost. For all other
securities, we use methods approved by the Board of Trustees that are designed
to price securities at their fair market value.
36
<PAGE>
How to redeem shares
[GRAPHIC OMITTED]
By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of more than
$50,000, you must include a signature guarantee for each owner. You can also fax
your written request to 215.255.8864. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of
record on an account.
[GRAPHIC OMITTED]
By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.
[GRAPHIC OMITTED]
By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. Bank information must be on file before you request a wire redemption.
[GRAPHIC OMITTED]
Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.
37
<PAGE>
About your account (continued)
How to redeem shares
(continued)
If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.
When you send us a properly completed request to redeem or exchange shares
before the close of regular trading on the New York Stock Exchange (normally
4:00 p.m. Eastern Time), you will receive the net asset value as determined on
the business day we receive your request. You may have to pay taxes on the
proceeds from your sale of shares. We will send you a check, normally the next
business day, but no later than seven days after we receive your request to sell
your shares. If you purchased your shares by check, we will wait until your
check has cleared, which can take up to 15 days, before we send your redemption
proceeds.
Account minimum
If you redeem shares and your account balance falls below $250, your Fund may
redeem your account after 60 days' written notice to you.
Exchanges
You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund. If you exchange shares to a fund that has a
sales charge you will pay any applicable sales charges on your new shares. You
don't pay sales charges on shares that are acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's Prospectus and read it carefully before buying shares through an
exchange. You may not exchange your shares for Class B and Class C shares of the
funds in the Delaware Investments family.
Dividends, distributions
and taxes
Dividends, if any, are paid quarterly for Delaware International Equity Fund,
Delaware Global Equity Fund and Delaware Global Bond Fund and annually for
Delaware Overseas Equity Fund Delaware New Pacific Fund and Delaware Emerging
Markets Fund. Any capital gains are distributed annually. We automatically
reinvest all dividends and any capital gains.
Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from these Funds is the same whether you
reinvest your dividends or receive them in cash. Distributions from a Fund's
long-term capital gains are taxable as capital gains, while distributions from
short-term capital gains and net investment income are generally taxable as
ordinary income. Any capital gains may be taxable at different rates depending
on the length of time the Fund held the assets. In addition, you may be subject
to state and local taxes on distributions.
We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
38
<PAGE>
Certain management considerations
Year 2000
As with other mutual funds, financial and business organizations and individuals
around the world, the Funds could be adversely affected if the computer systems
used by their service providers do not properly process and calculate
date-related information from and after January 1, 2000. This is commonly known
as the "Year 2000 Problem." Each Fund has taken steps to obtain satisfactory
assurances that its major service providers have taken steps reasonably designed
to address the Year 2000 Problem on the computer systems that the service
providers use. However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the business of the Funds. The
portfolio managers and investment professionals of the Funds consider Year 2000
compliance (including, but not limited to, any or all of the following: impact
on business, cost of compliance plan review and contingency planning, and vendor
compliance) in the securities selection and investment process. However, there
can be no guarantees that, even with their due diligence efforts, they will able
to predict the affect of Year 2000 on any company or the performance of its
securities.
Investment by
fund of funds
Delaware International Equity Fund, Delaware Emerging Markets Fund, Delaware New
Pacific Fund and Delaware Global Bond Fund accept investments from the series
portfolios of Delaware Group Foundation Funds, a fund of funds. From time to
time, a Fund may experience large investments or redemptions due to allocations
or rebalancings by Foundation Funds. While it is impossible to predict the
overall impact of these transactions over time, there could be adverse effects
on portfolio management. For example, the Fund may be required to sell
securities or invest cash at times when it would not otherwise do so. These
transactions could also have tax consequences if sales of securities result in
gains, and could also increase transactions costs or portfolio turnover. The
manager will monitor transactions by Foundation Funds and will attempt to
minimize any adverse effects on each Fund and Foundation Funds as a result of
these transactions.
Fund companies
The Funds are separate series of the investment companies shown below.
Delaware Group Global & International Funds
Delaware International Equity Fund
Delaware Global Equity Fund
Delaware Emerging Markets Fund
Delaware Global Bond Fund
Delaware Group Adviser Funds
Delaware Overseas Equity Fund
Delaware New Pacific Fund
39
<PAGE>
Financial highlights
The Financial
highlights tables
are intended to help you understand a Fund's financial performance. All "per
share" information reflects financial results for a single Fund share. This
information has been audited by Ernst & Young LLP, whose report, along with each
Fund's financial statements, is included in the Fund's annual report, which is
available upon request by calling 800.523.1918. Information for Delaware
Overseas Equity Fund and Delaware New Pacific Fund for the fiscal periods ended
on or before October 31, 1996 has been audited by the Fund's previous auditors.
<TABLE>
<CAPTION>
Institutional Class
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
Delaware International 11/30
Equity Fund 1999 1998 1997 1996 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $15.370 $14.720 $14.710 $12.240 $11.970
Income from investment operations:
Net investment income1 0.222 0.318 0.267 0.530 0.323
Net realized and unrealized gain on
investments and foreign currencies 0.880 0.962 0.238 2.405 0.637
------- ------- ------- ------- -------
Total from investment operations 1.102 1.280 0.505 2.935 0.960
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (0.282) (0.475) (0.475) (0.320) (0.220)
Distributions from net realized gain
on investments none (0.155) (0.020) (0.145) (0.470)
------- ------- ------- ------- -------
Total dividends and distributions (0.282) (0.630) (0.495) (0.465) (0.690)
------- ------- ------- ------- -------
Net asset value, end of period $16.190 $15.370 $14.720 $14.710 $12.240
======= ======= ======= ======= =======
Total return(2) 7.26% 9.10% 3.55%(3) 24.68%(3) 8.46%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $115,009 $164,823 $71,177 $34,194 $11,660
Ratio of expenses to average net assets 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 1.56% 1.40% 1.41% 1.65% 1.77%
Ratio of net investment income to
average net assets 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 1.40% 2.10% 1.75% 3.90% 2.87%
Portfolio turnover 3% 5% 8% 9% 21%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Per share information for the years ended November 30, 1996, 1997, 1998 and
1999 was based on the average shares outstanding method.
(2) 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.
(3) Total return reflects expense limitations in effect during the period.
<TABLE>
<CAPTION>
How to read the Net investment Net realized and unrealized gain (loss) on investments and Net asset value
Financial highlights income foreign currencies (NAV)
----------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment A realized gain on investments occurs when we sell an investment This is the value
income includes at a profit, while a realized loss on investments occurs when we of a mutual fund
dividend and sell an investment at a loss. When an investment increases or share, calculated
interest income decreases in value but we do not sell it, we record an unrealized by dividing the
earned from a gain or loss. The amount of realized gain per share that we pay net assets by the
fund's securities; to shareholders is listed under "Less dividends and number of shares
it is after expenses distributions-Distributions from net realized gain on outstanding.
have been deducted. investments." Realized and unrealized gain (loss) on foreign
currencies represent changes in the U.S. dollar value of assets
(including investments) and liabilities denominated in foreign
currencies as a result of changes in foreign currency exchange rates.
</TABLE>
40
<PAGE>
<TABLE>
<CAPTION>
Institutional Class
- ------------------------------------------------------------------------------------------------------------------------------------
Period
Year Ended 12/27/94(1)
11/30 through
Delaware Global Equity Fund 1999 1998(4) 1997 1996 11/30/95
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $13.610 $14.100 $13.340 $11.930 $10.000
Income from investment operations:
Net investment income(2) 0.170 0.329 0.478 0.567 0.473
Net realized and unrealized gain on
investments and foreign currencies 0.300 0.816 0.857 1.533 1.697
Total from investment operations 0.470 1.145 1.335 2.100 2.170
Less dividends and distributions:
Dividends from net investment income (0.150) (0.405) (0.525) (0.420) (0.240)
Distributions from net realized gain
on investments (0.680) (1.230) (0.050) (0.270) none
Total dividends and distributions (0.830) (1.635) (0.575) (0.690) (0.240)
Net asset value, end of period $13.250 $13.610 $14.100 $13.340 $11.930
Total return(3) 3.63% 9.07% 10.34% 18.38% 21.88%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $1,229 $2,627 $2,310 $2,203 $2,191
Ratio of expenses to average net assets 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 2.02% 1.69% 1.86% 2.24% 7.25%
Ratio of net investment income to
average net assets 1.27% 2.47% 3.54% 4.43% 5.05%
Ratio of net investment income to
average net assets prior to
expense limitation and
expenses paid indirectly 0.80% 2.03% 2.63% 2.96% (1.25%)
Portfolio turnover 29% 90% 74% 34% 57%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Date of commencement of trading; ratios have been annualized but total
return has not been annualized.
(2) Per share information for the years ended November 30, 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. Total return also reflects expense limitations in effect
during the period.
<TABLE>
<CAPTION>
Ratio of net investment
Ratio of expenses to income to average Portfolio
Total return Net assets average net assets net assets turnover rate
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
This represents the rate that an Net assets represent The expense ratio is the We determine this ratio This figure tells
investor would have earned or lost the total value of percentage of net assets by dividing net you the amount of
on an investment in a fund. In all the assets in a that a fund pays annually for investment income by trading activity
calculating this figure for the fund's portfolio, operating expenses and average net assets. in a fund's
financial highlights table, we less any liabilities, management fees. These portfolio. For
include applicable fee waivers, that are attributable expenses include accounting example, a fund
exclude front-end and contingent to that class and administration with a 50%
deferred sales charges, and assume of the fund. expenses, services for turnover has
the shareholder has reinvested all shareholders, and similar bought and sold
dividends and realized gains. expenses. half of the value
of its total
investment
portfolio during
the stated
period.
</TABLE>
41
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Institutional Class
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Overseas Year Ended
Equity Fund 10/31
19992 1998(2) 1997(2) 1996(1) 1995
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $8.930 $12.480 $12.320 $11.440 $11.020
Income (loss) from investment operations:
Net investment income (loss) 0.098 0.123 (0.020) (0.060) 0.040
Net realized and unrealized gain (loss) on
investments and foreign currencies 0.872 (1.513) (0.950) 0.963 0.410
------- ------- ------- ------- ------
Total from investment operations 0.970 (1.390) 0.930 0.903 0.450
------- ------- ------- ------- ------
Less dividends and distributions:
Dividends from net investment income (0.720) (0.520) (0.440) (0.023) (0.030)
Distributions from net realized gain
on investments (1.370) (1.640) (0.330) none none
------- ------- ------- ------- ------
Total dividends and distributions (2.090) (2.160) (0.770) (0.023) (0.030)
Net asset value, end of period $7.810 $8.930 $12.480 $12.320 $11.440
Total return3 14.30%(4) (12.82%)(4) 8.04% 7.91%(4) 4.22%(4)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $69 $59 $60 $284 $161
Ratio of expenses to average net assets 1.55% 1.53% 1.50% 1.50% 1.50%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly 5.01% 3.45% N/A 2.28% 2.61%
Ratio of net investment income to
average net assets 1.25% 1.23% (0.15%) (0.19%) 0.40%
Ratio of net investment income to
average net assets prior to
expense limitation and
expenses paid indirectly (2.21%) (0.69%) N/A (0.97%) (0.71%)
Portfolio turnover 7% 87% 18% 21% 9%
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(2) The average shares outstanding method has been applied for per share
information.
(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.
(4) Total return reflects expense limitations in effect during the period.
42
<PAGE>
<TABLE>
<CAPTION>
Institutional Class
- ------------------------------------------------------------------------------------------------------------------------------------
Period
6/10/961
Delaware Emerging through
Markets Fund 1999 1998 1997 11/30/96
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $6.550 $10.250 $9.990 $10.000
Income (loss) from investment operations:
Net investment income2 0.099 0.151 0.098 0.047
Net realized and unrealized gain (loss) on
investments and foreign currencies 1.521 (3.191) 0.262 (0.057)
------- ------- ------- -------
Total from investment operations 1.620 (3.040) 0.360 (0.010)
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (0.090) (0.055) (0.025) none
Distributions from net realized gain
on investments none (0.605) (0.075) none
------- ------- ------- -------
Total dividends and distributions (0.090) (0.660) (0.100) none
------- ------- ------- -------
Net asset value, end of period $8.080 $6.550 $10.250 $9.990
======= ======= ======= =======
Total return3 25.24% (31.55%) 3.64% (0.10%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $2,791 $1,117 $1,916 $3,717
Ratio of expenses to average net assets 1.70% 1.70% 1.70% 1.70%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly 2.69% 3.61% 2.72% 3.80%
Ratio of net investment income to
average net assets 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 0.41% (0.07%) (0.20%) (1.63%)
Portfolio turnover 17% 47% 65% 36%
</TABLE>
(1) Date of commencement of trading; ratios have been annualized but total
return has not been annualized.
(2) Per share information 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. Total return also reflects expense limitations in effect
during the period.
43
<PAGE>
Financial highlights (continued)
<TABLE>
<CAPTION>
Institutional Class
- -------------------------------------------------------------------------------------------------------------------------
Year Ended
11/30
Delaware New Pacific Fund 1999(1) 1998(1) 1997(1) 1996(2) 1995
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $4.690 $7.440 $9.530 $8.770 $10.480
Income (loss) from investment operations:
Net investment income (loss) (0.020) 0.024 0.020 (0.050) (0.010)
Net realized and unrealized gain on
investments and foreign currencies 2.790 (2.719) (1.960) 0.820 (1.410)
------ ------ ------ ------ -------
Total from investment operations 2.770 (2.695) (1.940) 0.770 (1.420)
------ ------ ------ ------ -------
Less dividends and distributions:
Dividends from net investment income none (0.055) (0.150) (0.010) none
Distributions from net realized gain
on investments none none none (0.010) none
------ ------ ------ ------ -------
Total dividends and distributions none (0.055) (0.150) (0.010) (0.290)
------ ------ ------ ------ -------
Net asset value, end of period $7.460 $4.690 $7.440 $9.530 $8.770
====== ====== ====== ====== =======
Total return(3) 59.06% (36.39%) (20.79%) 8.77% (13.65%)
Ratios and supplemental data:
Net assets, end of period (000 omitted) $1,204 $219 $250 $119 $62
Ratio of expenses to average net assets 1.66% 1.60% 1.50% 1.50% 1.50%
Ratio of expenses to average net assets
prior to expense limitation and
expenses paid indirectly 2.27% 2.93% 1.56% 2.45% 3.38%
Ratio of net investment income (loss) to
average net assets (0.35%) 0.45% 0.22% (0.09%) (0.16%)
Ratio of net investment income (loss) to
average net assets prior to expense limitation
and expenses paid indirectly (0.96%) (0.88%) 0.16% (1.04%) (2.04%)
Portfolio turnover 90% 188% 178% 163% 163%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) The average shares outstanding method has been applied for per share
information.
(2) Commencing May 3, 1996, Delaware Management Company replaced Lincoln
National Corporation as the Fund's investment manager.
(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. Total return also reflects expense limitations in effect during the
period.
44
<PAGE>
<TABLE>
<CAPTION>
Institutional Class
- -------------------------------------------------------------------------------------------------------------------------
Period
Year Ended 12/27/94(1)
11/30 through
Delaware Global Bond Fund 1999 1998 1997 1996 11/30/95
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.930 10.810 $11.520 $11.270 $10.000
Income from investment operations:
Net investment income(2) 0.592 0.627 0.658 0.788 0.782
Net realized and unrealized gain (loss) on
investments and foreign currencies (0.937) (0.017) (0.515) 0.732 1.088
------- ------- ------- ------- -------
Total from investment operations (0.345) 0.610 0.143 1.520 1.870
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income (0.490) (0.460) (0.813) (0.910) (0.600)
Distributions from net realized gain
on investments (0.105) (0.030) (0.040) (0.360) none
------- ------- ------- ------- -------
Total dividends and distributions (0.595) (0.490) (0.853) (1.270) (0.600)
------- ------- ------- ------- -------
Net asset value, end of period $9.990 $10.930 $10.810 $11.520 $11.720
======= ======= ======= ======= =======
Total return(3) (3.31%) 5.88% 1.45% 14.68% 19.21%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $11,668 $12,937 $11,278 $6,707 $897
Ratio of expenses to average net assets 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 1.24% 1.29% 1.74% 4.70% 12.04%
Ratio of net investment income to
average net assets 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 5.40% 5.54% 5.27% 3.37% (3.09%)
Portfolio turnover 90% 93% 76% 42% 98%
- -------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Date of commencement of trading; ratios have been annualized but total
return has not been annualized.
(2) Per share information for 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. Total return also reflects expense limitations in effect during the
period.
45
<PAGE>
Delaware International
Equity Fund
Delaware Global Equity
Fund
Delaware Overseas
Equity Fund
Delaware Emerging
Markets Fund
Delaware New
Pacific Fund
Delaware Global
Bond Fund
Additional information about the Funds' investments is available in the Funds'
annual and semi-annual reports to shareholders. In the Funds' shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Funds' performance during the report
period. You can find more detailed information about the Funds in the current
Statements of Additional Information, which we have filed electronically with
the Securities and Exchange Commission (SEC) and which is legally a part of this
Prospectus. If you want a free copy of the Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in these Funds, you can write to us at 1818 Market Street, Philadelphia, PA
19103-3682, or call toll-free 800.523.1918. You may also obtain additional
information about the Funds from your financial adviser.
You can find reports and other information about the Funds on the SEC web site
(http://www.sec.gov), or you can get copies of this information, after payment
of a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Information about the Funds, including their
Statement of Additional Information, can be reviewed and copied at the
Securities and Exchange Commission's Public Reference Room in Washington, D.C.
You can get information on the public reference room by calling the SEC at
1.800.SEC.0330.
<PAGE>
Web site
www.delawareinvestments.com
E-mail
[email protected]
Client Services Representative
800.510.4015
Delaphone Service
800.362.FUND (800.362.3863)
oFor convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.
Delaware Group Global & International Funds
Investment Company Act file number: 811-6324
Delaware Group Adviser Funds
Investment Company Act file number: 811-7972
Delaware Fund Symbols CUSIP NASDAQ
----- ------
Delaware International Equity Fund
----------------------------------
Institutional Class 245914403 DEQIX
Delaware Global Equity Fund
---------------------------
Institutional Class 245914601 DGAIX
Delaware Overseas Equity Fund
-----------------------------
Institutional Class 245917851 DEWIX
Delaware Emerging Markets Fund
------------------------------
Institutional Class 245914817 DEMIX
Delaware New Pacific Fund
-------------------------
Institutional Class 245917810 DENIX
Delaware Global Bond Fund
-------------------------
Institutional Class 245914502 DGBIX
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
P-048 [--] PP 02/00
