<PAGE>
DELAWARE GROUP
Global Dividend
and Income Fund
1997
Semi-Annual Closed-End Income
Report
professional management
service and guidance
goals
DELAWARE
GROUP
- --------
<PAGE>
Investment
Objectives and
Strategies
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND'S OBJECTIVE
is to provide high current income, and secondarily, capital appreciation. To
achieve this, the Fund is diversified among different asset classes as
described below. Asset class concentration depends on the manager's
assessment of each market's relative risks and rewards.
U.S. COMMON
STOCKS WITH
ABOVE-AVERAGE YIELDS
The Fund's management focuses on stocks that pay high dividends relative to
their share price. Such high-yield stocks can point the Fund to strong
companies whose stocks have capital appreciation potential. The dividend
income from these stocks has the potential to add to total return.
CONVERTIBLE PREFERRED STOCKS AND BONDS
The Fund invests in both convertible preferred stock and convertible bonds.
Both pay fixed rates of income, but because they can be converted into common
stock, they are indirectly tied to the common stock's performance. As a
result, convertible securities generally offer higher income than common
stocks and an opportunity for price appreciation when the value of the
underlying security rises. The Fund may buy convertibles when the underlying
common stock offers strong growth potential, but a low yield.
HIGH-YIELD
CORPORATE BONDS
High-yield bonds, those rated BB or lower, have greater credit risk than
bonds with higher quality, investment grade ratings, but provide a greater
level of income that has historically compensated many investors for the
additional risk. Prices of high-yield bonds may also be less sensitive to
changes in interest rates than higher rated bonds.
FOREIGN STOCKS
In evaluating foreign stocks, the Fund's management takes into account risks
that include a country's inflation outlook, economy, politics, different
accounting standards, tax policies and the effect of currency fluctuations.
The value of the company's projected dividend stream is discounted for these
risks so that the management has a consistent yardstick to compare stocks
around the globe.
FOREIGN BONDS
The Fund invests in foreign government and corporate bonds whose total return
potential relative to currency, political and economic risk, appears
attractive. In order to reduce currency risk, the Fund may buy foreign bonds
denominated in U.S. dollars rather than the currency of the country issuing
the bonds.
LEVERAGING
About $25 million of your Fund's net assets were leveraged as of May 31, 1997.
Leveraging is a tool that is not available to open-end mutual funds and one that
can be an important contributor to your Fund's income and capital appreciation
potential. Of course, there is no guarantee the Fund will achieve this.
Leveraging could result in a higher degree of volatility because the Fund's net
asset value could be more sensitive to fluctuations in short-term interest rates
and equity prices. We believe this risk is reasonable given the potential
benefits of higher income.
current income
commitment
A TRADITION OF SOUND INVESTING
<PAGE>
- --------------------------------------------------------------------------------
JUNE 6, 1997
Dear Shareholder:
The first half of fiscal 1997 was challenging yet rewarding.
Global Dividend and Income Fund provided high income, capitalized on the
strong performance of U.S. and overseas stock markets and found attractive
opportunities in foreign and high-yield U.S. bonds.
For the six months ended May 31, 1997, your Fund achieved a +10.39%
total return based on market price with dividends reinvested. Net asset value
rose +7.80% during the period, with dividends reinvested.
Such above-average results were attributable, in our judgment, to
careful worldwide stock and bond selection, our prudent use of leveraging and
our strategic positioning in U.S. high-yield corporate bonds, which were less
sensitive to rising domestic interest rates than other fixed-income
securities.
AS OF MAY 31, GLOBAL DIVIDEND AND INCOME FUND SOLD AT A 2.82% PREMIUM TO ITS NET
ASSET VALUE, A SLIGHTLY HIGHER PERCENTAGE THAN SIX MONTHS EARLIER. WE BELIEVE
THIS IS AN INDICATOR OF OUR STRATEGY'S POPULARITY WITH INVESTORS.
In March, Babak Zenouzi was named your Fund's co-manager to replace
co-manager Bernard P. Schaffer, who resigned. Mr. Zenouzi holds a masters'
<TABLE>
<CAPTION>
TOTAL RETURN
- ---------------------------------------------------------------------------------------------------------
December 1, 1996 - May 31, 1997
Based On Based On Premium/
Net Asset Value Market Price Discount*
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Dividend and Income Fund +7.80% +10.39% +2.82%
(NYSE Symbol: DGF)
- ---------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index +13.15%
Merrill Lynch High-Yield Bond Index +5.06%
Morgan Stanley Europe Australia
and South East Asia (EASEA) Index +7.95%
Salomon Brothers
World Government Bond Index -3.18%
Lipper Closed-End Income Fund Average +5.01% +6.48% -3.89%
THE FUND'S TOTAL RETURN AND THE RETURNS OF UNMANAGED INDICES SHOWN ABOVE ASSUMES REINVESTMENT
OF DIVIDENDS AND DISTRIBUTIONS. THERE ARE 11 CLOSED-END FUNDS IN THE LIPPER CLOSED-END INCOME FUND AVERAGE.
PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
* AS OF MAY 31, 1997.
</TABLE>
1997 semi-annual report 1
<PAGE>
<TABLE>
<CAPTION>
TOTAL RETURN
- -------------------------------------------------------------------------------------------------------
Based on Net Asset Value for Periods Ended May 31, 1997
SIX MONTHS ONE YEAR THREE YEARS* LIFETIME*
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Global Dividend and
Income Fund +7.80% +23.07% +17.09% +15.04%
- -------------------------------------------------------------------------------------------------------
Lipper Closed-End
Income Fund Average +5.01% +15.82% +13.53% +13.04%
DGF Rank #2** #1 #1 #1
Number of funds in category 11 11 11 11
*AVERAGE ANNUAL TOTAL RETURN. FUND'S INCEPTION DATE WAS MARCH 4, 1994.
**THE #1 RANKED FUND FOR THE PERIOD WAS DELAWARE GROUP DIVIDEND & INCOME
FUND. PAST PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
</TABLE>
degree in finance from Boston College and a bachelor's degree from Babson
College. He had been managing Dividend and Income Fund's convertible and real
estate investment trust holdings since your Fund's inception. In our opinion,
the Fund's portfolio also offers attractive income and long-term total return
potential for investors who decide to reinvest dividends and thus benefit
from compounding.
On the pages that follow, your Fund's portfolio managers review U.S.
and global market conditions and provide an outlook for the balance of fiscal
1997. We wish to thank you for your confidence in Delaware Group.
Sincerely,
/s/ Wayne A. Stork
- -----------------------------------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
Portfolio Managers' Review
INVESTMENT STRATEGY
Between November 30, 1996, and May 31, 1997, Global Dividend and Income
Fund's weighting in common stocks increased from 59.2% to 61.4%. This
reflected a combination of capital appreciation in the U.S. and overseas
equity markets and a modest shift in asset allocation. We reduced the Fund's
position in convertible preferred stocks, as we believe the short-term income
and total return potential of this asset class is more limited than for
common stocks.
More than half of your Fund's portfolio was invested in U.S. and U.S.
dollar denominated securities as of May 31, reflecting the wide variety of
income opportunities in America as well as our relative confidence in the
U.S. Federal
2 1997 semi-annual report
<PAGE>
Reserve Board's ability to continue to effectively control domestic inflation.
Nevertheless, in our opinion, the Fed may need to raise short-term
interest rates modestly in the coming months. Thus, we have focused on stocks
and bonds of established companies with strong balance sheets, and whose
business prospects appear well-defined.
OUR STOCK FOCUS: GLOBAL DIVERSITY AND CREDIT-SENSITIVE U.S. STOCKS
Using our global, dividend-oriented investment discipline, we found
attractive values in a mixture of regional domestic bank stocks, and real
estate investment trusts (REITs) and foreign commercial lenders such as NATIONAL
AUSTRALIA BANK. Together these credit sensitive sectors accounted for
31.1% of your Fund's portfolio as of May 31.
Although interest rates rose modestly during the first half of fiscal
1997, the U.S. real estate and banking sectors are undergoing positive
fundamental changes that we believe make certain financial stocks attractive
for both their income and total return potential.
A healthy U.S. economy has increased long-term leasing demand for
various types of commercial, institutional and industrial space. In the six
months ended May 31, the unmanaged Morgan Stanley REIT Index provided an
attractive total return of +10.98%. We continue to emphasize REITs with low
debt levels, experienced management and a low dividend payout ratio relative
to earnings.
Bank stocks have been volatile in fiscal 1997. However, we believe
the industry's earnings are not nearly as vulnerable to modest interest rate
increases by the Fed as banks once were. Industry statistics suggest many
banks can raise interest rates on loans faster than savings rates paid to
depositors, preserving profit margins. Also, more financial institutions are
deriving a greater percentage of earnings from customer fees rather than
loans.
PORTFOLIO HIGHLIGHTS AND ASSET ALLOCATION
- --------------------------------------------------------------------------------
PERCENT OF PORTFOLIO MAY 31, 1997
Common Stocks and Non-Convertible Preferred Stocks 62.1%
Non-Convertible Corporate Bonds 32.2%
Convertible Preferred Stocks 7.4%
Convertible Bonds 5.5%
Foreign Government Bonds 14.1%
Beta* 0.51
Portfolio Turnover Rate 65%
Current Monthly
Dividend Rate $0.125 per share
* A measure of market price volatility relative to the S&P 500 Index. A number
less than 1.0 means a security has fluctuated less in price than the Index. A
number more than 1.0 means the security has fluctuated more than the Index.
The above chart adds up to more than 100% because the portfolio is leveraged.
1997 semi-annual report 3
<PAGE>
HIGH-YIELD BONDS OUTPERFORMED
OTHER BONDS
For nearly three years, high-yield bonds have performed well compared to
other fixed-income securities. In part this is because the healthy U.S.
economy has allowed corporations issuing high-yield bonds to meet obligations
to bondholders. The default rate on high-yield debt has remained well below
2%, according to CS First Boston. High-yield bonds have characteristics of
both stocks and higher risk bonds. They are sensitive to a variety of
influences, including stock prices, interest rates, supply and demand and
economic trends. Because these influences seldom act in unison, high-yield
bonds seldom suffer the highs or the lows of the broader stock and U.S.
Treasury markets.
During the first half of fiscal 1997, the high-yield bonds in your
Fund's portfolio acted like a shock absorber of broad market volatility -
providing high income that offset some of the effects of the largest short-term
U.S. stock market correction in seven years.
Your Fund balanced opportunities for high current income while taking a
relatively conservative approach to potential credit risk. We focused on bonds
rated BB and B, the highest non-investment grade ratings. We've avoided more
risky emerging technology bonds in favor of lower volatility and proven cash
flows of established manufacturing, cable, supermarket and energy bond issuers.
As of May 31, your Fund's high-yield, non-investment grade, component
had an average effective maturity of 6.6 years and an effective duration of 4.7
years. Duration indicates the approximate percentage of change in a bond's price
given a 1% change in interest rates.
DURING THE FIRST HALF OF FISCAL 1997, THE HIGH-YIELD BONDS IN YOUR FUND'S
PORTFOLIO ACTED LIKE A SHOCK ABSORBER OF BROAD MARKET VOLATILITY --
PROVIDING HIGH INCOME THAT OFFSET SOME OF THE EFFECTS OF THE LARGEST SHORT-TERM
U.S. STOCK MARKET CORRECTION IN SEVEN YEARS.
CONVERTIBLES PROVIDED INCOME AND GROWTH
Overall, the convertibles market significantly underperformed the S&P 500
Index since last autumn.
However, convertible securities provided regular above-average dividend
income from stocks and
GEOGRAPHIC DIVERSIFICATION
- --------------------------------------------------------------------------------
PERCENT OF PORTFOLIO MAY 31, 1997
South Africa 3.0%
Argentina 0.3%
United States 54.5%
Other Europe 13.3%
Asian Pacific Rim 2.5%
Australia/New Zealand 10.3%
Canada 2.3%
United Kingdom 9.1%
Spain 4.7%
Chart reflects securities' county of origin. The table on page 16 reflects the
currency in which the security is denominated.
4 1997 semi-annual report
<PAGE>
interest income from bonds. Convertible securities also helped your Fund
participate in the capital appreciation potential of small and large company
growth stocks with low dividend yields.
As of May 31, convertible securities represented 12.9% of your Fund's
portfolio, compared to 13.2% at the close of fiscal 1996. Generally, we
believe that the convertibles market is fairly valued.
FOREIGN GOVERNMENT
BONDS OUTPERFORMED
U.S. TREASURIES
When we invest in overseas bonds, we strive to obtain a rate of return for
your Fund that is meaningfully greater than the U.S. inflation rate. We also
seek to preserve capital in times of market weakness.
We emphasize markets that, in our opinion offer superior income
potential adjusted for the effect of inflation and currency fluctuations. Since
November, these markets have included Spain, Italy and New Zealand.
Your Fund also had a modest bond position in emerging market
countries such as South Africa, Greece and Poland. By using a consistent
global investment discipline, we believe we can participate in the high
growth and superior income potential of these areas with only a modest
increase in risk. As of May 31, 1997, about 6% of your Fund's portfolio was
invested in emerging market bonds.
OUR MANAGED
DISTRIBUTION POLICY
In December 1995, the Fund implemented a managed distribution policy. Under
the policy, the Fund is managed with a goal of generating as much of the
dividend as possible from ordinary income. The balance of the dividend then
comes from short-term and long-term capital gains and, if necessary, a return
of capital. We are pleased to report that no returns of capital have
been necessary since the policy was implemented.
GLOBAL DIVIDEND AND INCOME FUND
MARKET PRICE VS. NET ASSET VALUE
<TABLE>
<CAPTION>
DATE PRICE NAV %PREM DATE PRICE NAV %PREM
- ---- ------- ----- ----- ---- ----- ----- -----
<S> <C> <C> <C> <C> <C> <C>
5/31 97 $16.625 $16.280 2.12% 2/14/97 $16.875 $16.230 3.97%
5/23/97 $16.625 $16.270 2.18% 2/ 7/97 $16.875 $16.160 4.42%
5/16/97 $16.375 $16.090 1.77% 1/31/97 $16.625 $16.050 3.58%
5/ 9/97 $16.625 $16.120 3.13% 1/24/97 $16.250 $16.050 1.25%
5/ 2/97 $16.750 $15.860 5.61% 1/17/97 $16.375 $16.130 1.52%
4/25/97 $16.625 $15.450 7.61% 1/10/97 $16.375 $15.910 2.92%
4/18/97 $16.750 $15.580 7.51% 1/ 3/97 $16.125 $15.770 2.25%
4/11/97 $16.125 $15.400 4.71% 12/27/96 $16.000 $15.830 1.07%
4/ 4/97 $16.125 $15.590 3.43% 12/20/96 $15.500 $15.770 -1.71%
3/28/97 $16.000 $15.990 .06% 12/13/96 $15.125 $15.550 -2.73%
3/21/97 $15.500 $15.900 -2.52% 12/ 6/96 $15.750 $15.680 .45%
3/14/97 $16.750 $16.220 3.27% 11/30/96 $15.875 $15.810 .41%
3/ 7/97 $17.000 $16.460 3.28%
2/28/97 $17.000 $16.220 4.81%
2/21/97 $16.750 $16.290 2.82%
</TABLE>
Premium/Discount Data
High +7.61% on 4/25/97
Average +2.49%
Low -2.73% on 12/13/96
(Weekly changes)
Source: Bloomberg Business News. Past performance does not guarantee future
results.
1997 semi-annual report 5
<PAGE>
We believe the Fund's managed distribution policy increases the
attractiveness of the Fund for income oriented investors. We note that your Fund
traded at a premium to its net asset value as of May 31, 1997.
OUTLOOK
While your Fund's asset mix is subject to change as market conditions
warrant, we anticipate that our value-oriented selection process will lead us
to a similar asset mix in the months ahead. Although U.S. stock market values
are at historic highs, we're finding many intriguing income and total return
opportunities overseas. One example is GKN PLC, a British aerospace company
that we believe is well-positioned to benefit from consolidation of the
aerospace and defense sectors in Europe.
For the balance of 1997, we remain optimistic about the U.S.
high-yield bond market. Although the credit risk associated with high-yield
bonds is much greater than that of investment grade corporate bonds, we
believe the U.S. bond market is adequately compensating investors. Given what
we believe will be an unfolding scenario of sustained U.S. economic strength,
we expect to continue to invest a substantial portion of your Fund's assets
in this attractive sector.
The U.S. stock market has traversed an extraordinary distance during
the 1990s. Many investors have enjoyed high double-digit returns for almost
three consecutive years, a streak that we believe can not be sustained
indefinitely.
In a more volatile market, income becomes a more important component
of total return. We believe your Fund is well-positioned for the months ahead
because its strategy offers high income potential and global diversification
benefits. It is particularly appropriate for investors who may be
overweighted in the more aggressive sectors of the U.S. equity market.
Babak Zenouzi
VICE PRESIDENT AND
SENIOR PORTFOLIO MANAGER
U.S. EQUITIES
Paul A. Matlack
VICE PRESIDENT AND
SENIOR PORTFOLIO MANAGER
U.S. FIXED-INCOME
Clive Gillmore
DIRECTOR/SENIOR PORTFOLIO MANAGER
FOREIGN EQUITIES
Ian G. Sims
DIRECTOR/SENIOR PORTFOLIO MANAGER
FOREIGN FIXED-INCOME
June 6, 1997
6 1997 semi-annual report
<PAGE>
Fund Performance
A $10,000 investment in Global Dividend and Income Fund when the Fund began
operating on March 4, 1994, would have grown to $15,745 as of May 31, 1997,
based on net asset value with distributions reinvested. That's 17% more than the
average of the Fund's peers during the same period.
GLOBAL DIVIDEND AND INCOME FUND
GROWTH OF A $10,000 INVESTMENT
- --------------------------------------------------------------------------------
March 4, 1994, to May 31, 1997
Global Dividend and Income Fund $15,745
Lipper Closed-End Income Fund Average (11 Funds) $14,351
- --------------------------------------------------------------------------------
As of May 31, 1997, Global Dividend and Income Fund provided an average annual
total return of +15.04% over its lifetime, based on net asset value with
distributions reinvested. The Fund's lifetime average annual total return based
on market price was +13.59%.
ABOVE PERFORMANCE ASSUMES REINVESTMENT OF DISTRIBUTIONS. PAST PERFORMANCE
DOES NOT GUARANTEE FUTURE RESULTS. DGF SHARES WERE INITIALLY OFFERED WITH A
SALES CHARGE OF 6%. PERFORMANCE SINCE INCEPTION DOES NOT INCLUDE THIS OR ANY
BROKERAGE COMMISSIONS FOR PURCHASES MADE SINCE INCEPTION.
About Our Share Buyback Program
In 1994, Global Dividend and Income Fund's board of directors authorized a
share repurchase program that authorizes the Fund's lead manager to purchase
up to 10% of the Fund's outstanding shares on the floor of the New York Stock
Exchange. During the first half of fiscal 1997, the Fund did not utilize this
option because, given the Fund's market price, which stood at a modest
premium to net asset value, we believed there were more effective ways of
enhancing shareholder value.
- --------------------------------------------------------------------------------
Your Reinvestment Options
Global Dividend and Income Fund offers an automatic dividend reinvestment
program. If you would like to reinvest dividends and shares are registered in
your name, contact Investors Fiduciary Trust Co. at 1.800.596.8396. You will
be asked to put your request in writing. If you have shares registered in
"street" name, contact the broker/dealer holding the shares or your financial
adviser.
- --------------------------------------------------------------------------------
1997 semi-annual report 7
<PAGE>
Financial Statements
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF NET ASSETS-MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
-----------------------------------
<S> <C> <C>
COMMON STOCK - 61.42%
AUTOMOBILES & AUTO EQUIPMENT - 2.43%
Continental AG ................................. 26,000 $ 594,983
General Motors ................................. 16,000 916,000
GKN ............................................ 51,000 884,004
Turner & Newell ................................ 116,000 238,169
----------
2,633,156
----------
BANKING, FINANCE & INSURANCE - 9.88%
Cho Hung Bank Co Ltd - GDR Reg. S Shares ....... 42,590 250,216
Commonwealth Instalment Receipt Trustee ........ 52,000 387,537
CoreStates Financial ........................... 10,000 528,750
First Chicago NBD .............................. 20,000 1,185,000
Fleet Financial Group .......................... 12,300 751,837
Great Western Financial ........................ 22,000 1,067,000
ING Groep NV ................................... 16,000 707,955
KeyCorp ........................................ 35,000 1,903,125
Mellon Bank .................................... 10,000 875,000
National Australia Bank ........................ 88,000 1,258,071
National Mutual Holdings ....................... 35,000 51,955
PT Bank Dagang Nasional ........................ 748,562 807,801
PT Bank Dagang Nasional Warrants ............... 106,937 43,522
Summit Bancorp ................................. 18,000 888,750
----------
10,706,519
----------
BUILDING & MATERIALS - 0.41%
Compagnie de Saint-Gobain ...................... 3,200 442,663
----------
442,663
----------
CABLE, MEDIA & PUBLISHING - 0.81%
Elsevier NV .................................... 29,500 499,670
Societe Television Francaise ................... 13,900 373,653
----------
873,323
----------
CHEMICALS - 0.75%
Bayer AG ....................................... 20,750 811,234
----------
811,234
----------
COMPUTERS & TECHNOLOGY - 0.16%
BICC Group (The) .............................. 62,000 170,406
----------
170,406
----------
ELECTRONICS - 1.10%
AMP ............................................ 14,200 583,975
Siemens AG ..................................... 10,750 608,861
----------
1,192,836
----------
ENERGY - 3.67%
Centrica ....................................... 91,000 95,281
Elf Gabon SA ................................... 2,200 646,465
El Paso Natural Gas ............................ 15,000 888,750
Royal Dutch Petroleum .......................... 4,050 783,293
RWE AG ......................................... 11,000 474,037
Texaco ......................................... 10,000 1,091,250
----------
3,979,076
----------
- --------------
Top 10 common stock holdings, representing 11.36% of net assets, are in
boldface.
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (Continued)
- -----------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
---------------------------
COMMON STOCK (CONTINUED)
<S> <C> <C>
FOOD, BEVERAGE & TOBACCO - 4.28%
American Brands ................................ 15,900 $ 779,100
Philip Morris Companies ........................ 30,000 1,320,000
RJR Nabisco Holdings ........................... 30,000 971,250
Southcorp Holdings ............................. 255,000 951,181
Unigate ........................................ 77,000 619,782
----------
4,641,313
----------
HEALTHCARE & PHARMACEUTICALS - 1.21%
Baxter International ........................... 10,000 527,500
Glaxo Wellcome ................................. 39,370 786,760
----------
1,314,260
----------
LEISURE, LODGING & ENTERTAINMENT - 0.65%
Bass ........................................... 54,000 700,568
----------
700,568
----------
METALS & MINING - 0.83%
Avgold ......................................... 44,007 60,461
RTZ ............................................ 49,000 840,920
----------
901,381
----------
PACKAGING & CONTAINERS - 0.40%
Amcor .......................................... 66,000 437,109
----------
437,109
----------
PAPER & FOREST PRODUCTS - 1.12%
Carter Holt Harvey ............................. 200,000 480,689
Georgia-Pacific ................................ 8,300 732,475
----------
1,213,164
----------
REAL ESTATE - 21.22%
Alexandria Real Estate ......................... 20,700 455,400
Apartment Investment & Management .............. 25,000 696,875
Brandywine Realty Trust ........................ 20,000 405,000
Burnham Pacific Properties ..................... 45,000 596,250
Cali Realty .................................... 30,000 888,750
Camden Property Trust .......................... 27,000 793,125
CarrAmerica Realty ............................. 40,000 1,135,000
Colonial Properties Trust ...................... 30,000 877,500
Duke Realty Investments ........................ 19,000 724,375
Essex Property Trust ........................... 27,000 799,875
Excel Realty Trust ............................. 25,000 646,875
First Industrial Realty Trust .................. 33,000 973,500
Glenborough Realty Trust ....................... 38,300 833,025
Great Lakes REIT ............................... 26,000 403,000
Health Care REIT ............................... 24,750 594,000
Health & Retirement Property Trust ............. 20,000 370,000
JDN Realty ..................................... 32,000 924,000
Kilroy Realty .................................. 34,200 820,800
Liberty Property Trust ......................... 25,000 600,000
Macerich Company (The) ........................ 44,000 1,188,000
Patriot American Hospitality ................... 54,000 1,167,750
Prentiss Properties Trust ...................... 35,000 822,500
Public Storage ................................. 25,000 665,625
</TABLE>
8 1997 semi-annual report
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
--------------------------------
COMMON STOCK (CONTINUED)
REAL ESTATE (CONTINUED)
<S> <C> <C>
Reckson Associates Realty ...................... 42,000 $ 945,000
Security Capital Industrial Trust .............. 32,000 644,000
Sovran Self Storage ............................ 25,000 725,000
Spieker Porperties ............................. 25,000 921,875
Sun Communities ................................ 20,000 652,500
TriNet Corporate Realty Trust .................. 25,000 818,750
Union du Credit-Bail Immobilier ................ 2,700 262,901
Trizec Hahn .................................... 29,000 627,125
----------
22,978,376
----------
RETAIL - 1.02%
Boots .......................................... 65,000 753,419
Sime Darby (Hong Kong) ........................ 300,000 352,325
----------
1,105,744
----------
TELECOMMUNICATIONS - 2.81%
Frontier ....................................... 25,000 459,375
GTE ............................................ 15,700 692,762
Philippine Long Distance Telephone-SP ADR ...... 6,400 370,400
Telecom Corporation of New Zealand ............. 189,000 909,807
Telefonica de Espana ........................... 21,000 606,882
----------
3,039,226
----------
TRANSPORTATION & SHIPPING - 1.62%
Brambles Industries ............................ 55,000 990,195
British Airways ................................ 50,000 581,598
Knightsbridge Tankers .......................... 7,500 184,687
----------
1,756,480
----------
UTILITIES - 5.05%
BG ............................................. 91,000 304,451
Cable & Wireless ............................... 88,000 718,400
Electrabel SA .................................. 2,950 661,011
Hong Kong Electric Holdings .................... 200,000 720,136
Iberdrola SA ................................... 56,000 688,866
OGE Energy .................................... 12,000 516,000
Rochester Gas & Electric ....................... 20,000 400,000
Unicom ......................................... 37,500 853,125
United Utilities ............................... 53,000 606,522
----------
5,468,511
----------
MISCELLANEOUS - 2.00%
Eridania Beghin-Say SA ......................... 2,550 357,616
Jardine Matheson Holdings ...................... 64,800 440,640
Pacific Dunlop ................................. 175,000 488,912
Pitney Bowes ................................... 12,400 871,100
----------
2,158,268
----------
Total Common Stock (cost $56,492,555) .......... 66,523,613
----------
CONVERTIBLE PREFERRED STOCK - 7.43%
AUTOMOBILE & AUTO EQUIPMENT - 0.58%
Walbro Capital Trust 8.00% pfd cv .............. 22,000 631,125
----------
631,125
----------
BANKING, FINANCE & INSURANCE - 1.71%
Salomon 7.625% series "FSA" pfd cv "DECS" ...... 30,000 888,750
SunAmerica $3.188 pfd cv "PERCS" ............... 22,500 970,313
----------
1,859,063
----------
BUILDINGS & MATERIALS - 0.50%
Blue Circle Industries 7.625% pfd cv ........... 150,000 538,653
----------
538,653
----------
</TABLE>
<PAGE>
Statement of Net Assets (Continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
--------------------------------
CONVERTIBLE PREFERRED STOCK (CONTINUED)
CABLE, MEDIA & PUBLISHING - 1.48%
<S> <C> <C>
Cablevision Systems Series I 8.50% pfd cv .................. 33,000 $ 746,625
+Chancellor Broadcasting 7.00% pfd cv ...................... 14,000 855,750
----------
1,602,375
----------
METALS & MINING - 0.58%
Worthington Industries
7.25% pfd cv "DECS" ....................................... 41,300 624,663
----------
624,663
----------
REAL ESTATE - 1.29%
Excel Realty Trust Series A $2.125 pfd cv .................. 25,000 665,625
+Insignia Financing 6.50% pfd cv ........................... 16,700 734,800
----------
1,400,425
----------
TELECOMMUNICATIONS - 0.63%
+Loral Space & Communication 6.00% pfd cv .................. 13,000 682,500
----------
682,500
----------
TRANSPORTATION & SHIPPING - 0.66%
+Greyhound Lines 8.50% pfd cv .............................. 26,500 712,187
----------
712,187
----------
Total Convertible Preferred Stock
(cost $7,519,522) ......................................... 8,050,991
----------
PREFERRED STOCK - 0.74%
CABLE, MEDIA & PUBLISHING - 0.74%
+American Radio Systems 11.375% 3,071 310,939
+Granite Broadcasting 12.75% ............................... 510 487,050
----------
797,989
----------
Total Preferred Stock (cost $807,349) ...................... 797,989
----------
PRINCIPAL
AMOUNT
NON-CONVERTIBLE BONDS - 46.26%
AEROSPACE & DEFENSE - 0.28%
+Derlan Manufacturing sr notes
10.00% 2007 ............................................... US $300,000 301,500
----------
301,500
----------
AUTOMOBILES & AUTO EQUIPMENT - 0.93%
+Collins & Aikman sr sub notes
10.00% 2007 ............................................... US $275,000 270,188
Exide sr notes 10.75% 2002 ................................. US $400,000 421,000
Motors and Gears sr notes Series B
10.75% 2006 ............................................... US $200,000 208,000
Speedy Muffler King sr notes
10.875% 2006 .............................................. US $100,000 104,500
----------
1,003,688
----------
BANKING, FINANCE & INSURANCE - 6.92%
Aetna Industries sr notes
11.875% 2006 .............................................. US $400,000 430,500
Arcadia Financial units 11.50% 2007 ........................ US $675,000 671,625
Bank of Austria AG unsec sub
10.875% 2004 .............................................. AUD 1,000,000 885,904
Bank of Greece unsec deb (loan stock)
10.75% 2010 ............................................... GBP 120,000 234,602
DVI unsec sr notes 9.875% 2004 ............................. US $275,000 276,375
Eurofima Global sr unsec deb
9.875% 2007 ............................................... AUD 2,000,000 1,729,938
European Bank for Reconstruction &
Development unsec marathon bonds
15.25% 1998 ............................................... GRD 100,000,000 388,991
</TABLE>
1997 semi-annual report 9
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (Continued)
- ------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------------------
NON-CONVERTIBLE BONDS (CONTINUED)
BANKING, FINANCE & INSURANCE (CONTINUED)
<C> <C> <C> <C>
European Investment Bank deb
17.50% 1999 ............................... GRD 50,000,000 $ 209,174
European Investment Bank unsec matador bonds
14.00% 2001 ............................... ESP 80,000,000 715,894
First Nationwide Holdings sr sub notes
9.125% 2003 ............................... US$ 300,000 309,750
International Finance unsec marathon bonds
15.25% 1999 ............................... GRD 150,000,000 611,009
Mutual Group unsec sub deb
7.25% 2004 ................................ GBP 200,000 315,544
National Bank of Hungary sr deb
10.00% 2003 ............................... GBP 400,000 713,705
----------
7,493,011
----------
BUILDINGS & MATERIALS - 0.56%
American Standard sr notes
10.875% 1999 .............................. US$ 450,000 475,313
+Atrium Companies sr sub notes
10.50% 2006 ............................... US$ 125,000 128,750
----------
604,063
----------
CABLE, MEDIA & PUBLISHING - 2.46%
Cablevision Systems sr sub deb
10.75% 2004 ............................... US$ 400,000 414,500
Century Communications sr notes
9.75% 2002 ................................ US$ 600,000 625,500
Granite Broadcasting sr sub notes
9.375% 2005 ............................... US$ 500,000 488,125
Jones Intercable sr notes
9.625% 2002 ............................... US$ 300,000 315,750
Katz Media Series B sr sub deb
10.50% 2007 ............................... US$ 300,000 287,250
Muzak LP/Capital sr unsec notes
10.00% 2003 ............................... US$ 80,000 83,600
Rogers Cablesystems sr sec 2nd priority deb
10.00% 2007 ............................... US$ 140,000 147,700
Rogers Cablesystems sr unsec sub deb
11.00% 2015 ............................... US$ 90,000 96,075
Sullivan Graphics sr sub notes
12.75% 2005 ............................... US$ 200,000 205,000
----------
2,663,500
----------
CHEMICALS - 1.42%
Astor Series B sr sub notes
10.50% 2006 ............................... US$ 400,000 422,000
BPC Holding Series B sr sec notes
12.50% 2006 ............................... US$ 250,000 268,750
ISP Holdings Series B sr notes
9.75% 2002 ................................ US$ 216,000 226,530
NL Industries sr sec notes
11.75% 2003 ............................... US$ 165,000 182,531
UCC Investors Holding sr sub notes
11.00% 2003 ............................... US$ 400,000 436,000
----------
1,535,811
----------
COMPUTERS & TECHNOLOGY - 0.13%
Unisys sr unsec notes 11.75% 2004 .......... US$ 30,000 140,400
----------
140,400
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (Continued)
- ------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------------------------
NON-CONVERTIBLE BONDS (CONTINUED)
CONSUMER PRODUCTS - 0.57%
<C> <C> <C> <C>
American Safety Razor Series B sr notes
9.875% 2005 ........................... US$ 475,000 $ 496,375
+Pen-Tab Industries sr sub notes
10.875% 2007 .......................... US$ 125,000 127,188
----------
623,563
----------
ELECTRONICS - 0.24%
+HCC Industries sr sub notes
10.75% 2007 ........................... US$ 250,000 261,875
----------
261,875
----------
ENERGY - 0.87%
Falcon Drilling Series B sr notes
8.875% 2003 ........................... US$ 500,000 507,500
Mesa Operating sr unsec sub
10.625% 2006 .......................... US$ 200,000 226,000
Trizec Hahn Series sr B notes
10.875% 2005 .......................... US$ 200,000 210,250
----------
943,750
----------
FOOD, BEVERAGE & TOBACCO - 1.12%
+AFC Enterprises sr sub notes
10.25% 2007 ........................... US$ 250,000 251,250
+CFP Holdings sr notes
11.625% 2004 .......................... US$ 200,000 205,000
Core Mark International sr sub notes
11.375% 2003 .......................... US$ 125,000 130,625
Delta Beverage sr notes
9.75% 2003 ............................ US$ 500,000 518,750
Purina Mills sr sub notes
10.25% 2003 ........................... US$ 100,000 104,750
----------
1,210,375
----------
FOREIGN GOVERNMENT - 14.13%
Hellenic Republic 11.00% 1999 .......... GRD 150,000,000 576,605
Hydro-Quebec (loan stock)
12.75% 2015 ........................... GBP 160,000 378,243
Italian Government 9.50% 2001 .......... ITL 300,000,000 192,168
Italian Government 12.00% 2003 ......... ITL 3,300,000,000 2,373,862
New Zealand Government
8.00% 2001 ............................ NZD 2,000,000 1,416,375
New Zealand Government
8.00% 2004 ............................ NZD 2,000,000 1,419,137
*Poland Global par bond
3.00% 2024 (a) ........................ US$ 2,000,000 1,118,750
*Republic of Argentina Series L-GP
5.25% 2023 (a) ........................ US$ 500,000 338,438
Republic of Turkey unsec deb
9.00% 2003 ............................ GBP 400,000 602,457
South Africa Republic 10.75% 1998 ...... ZAL 2,500,000 526,663
South Africa Republic 12.50% 2002 ...... ZAL 14,000,000 2,890,240
Spanish Government 11.30% 2002 ......... ESP 320,000,000 2,703,350
Spanish Government 8.20% 2009 .......... ESP 100,000,000 766,693
----------
15,302,981
----------
HEALTHCARE & PHARMACEUTICALS - 0.38%
Healthsouth sr sub notes 9.50% 2001 .... US$ 200,000 211,500
Paracelsus Healthcare sr unsec sub notes
10.00% 2006 ........................... US$ 200,000 199,000
----------
410,500
----------
</TABLE>
10 1997 semi-annual report
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (Continued)
- ------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------------
NON-CONVERTIBLE BONDS (CONTINUED)
INDUSTRIALS - 1.01%
<S> <C> <C> <C>
+American Builders & Contractors Supply
sr sub notes 10.625% 2007 ................ US$ 275,000 $ 286,000
Hawk sr notes 10.25% 2003 ................ US$ 200,000 205,500
IMO Industries sr sub notes
11.75% 2006 ............................. US$ 400,000 404,000
Jordan Industries sr notes
10.375% 2003 ............................ US$ 200,000 199,500
----------
1,095,000
----------
LEISURE, LODGING & ENTERTAINMENT - 1.46%
Cinemark USA sr sub notes
9.625% 2008 ............................. US$ 500,000 508,750
Scott's Hospitality Series A unsec deb
10.95% 2001 ............................. CAD 800,000 676,428
Trump Atlantic City Associates Funding
sec 1st mtg notes 11.25% 2006 ............ US$ 400,000 394,500
----------
1,579,678
----------
METALS & MINING - 1.78%
Armco sr notes 11.375% 1999 .............. US$ 250,000 260,000
Commonwealth Aluminum sr sub notes
10.75% 2006 ............................. US$ 200,000 209,000
G.S. Technologies sr notes 12.00% 2004..... US$ 400,000 431,000
G.S. Technologies sr notes 12.25% 2005US$ 300,000 328,500
Oregon Steel Mills sec 1st mtg notes
11.00% 2003 ............................ US$ 200,000 217,500
Weirton Steel sr notes 11.375% 2004 ...... US$ 450,000 478,125
----------
1,924,125
----------
PACKAGING & CONTAINERS - 0.35%
Container Corporation of America sr notes
11.25% 2004 ............................. US$ 200,000 218,000
Stone Container sr notes 11.875% 2016 .... US$ 150,000 159,750
----------
377,750
----------
PAPER & FOREST PRODUCTS - 1.73%
Domtar, Inc. deb 10.85% 2017.............. CAD 1,000,000 869,401
Four M Series B sr sec notes
12.00% 2006 ............................. US$ 100,000 101,500
Pacific Lumber sr unsec notes
10.50% 2003 ............................. US$ 400,000 408,000
Repap Wisconsin 2nd priority sr sec notes
9.875% 2006 ............................. US$ 500,000 495,000
----------
1,873,901
----------
RETAIL - 2.97%
ASDA Group sr unsec deb
10.875% 2010 ............................ GBP 500,000 1,001,028
Cole National Group sr sub notes
9.875% 2006 ............................. US$ 500,000 527,500
Cort Furniture Rental sr notes
12.00% 2000 ............................. US$ 142,000 156,910
Fleming Companies sr sub notes
10.625% 2001 ............................ US$ 400,000 420,000
Provigo deb 11.25% 2001 ................. CAD 800,000 676,874
Ralph's Grocery sr notes 10.45% 2004 ..... US$ 400,000 439,500
----------
3,221,812
----------
TELECOMMUNICATIONS - 0.86%
Jacor Communications sr unsec sub notes
9.75% 2006 .............................. US$ 500,000 522,500
Rogers Cantel sr sub notes
11.125% 2002 ............................ US$ 400,000 415,500
----------
938,000
----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Statement of Net Assets (Continued)
- ------------------------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
---------------------------------
NON-CONVERTIBLE BONDS (CONTINUED)
TEXTILES - 1.38%
<S> <C> <C> <C>
Clark Schwebel Series B sr notes
10.50% 2006 ................................. US$ 500,000 $ 536,250
Foamex L P sr notes 11.25% 2002 .............. US$ 400,000 425,500
+GFSI sr sub notes 9.625% 2007 ............... US$ 200,000 201,000
+Synthetic Industries sr sub notes
9.25% 2007 .................................. US$ 325,000 332,313
----------
1,495,063
----------
TRANSPORTATION & SHIPPING - 1.05%
+Atlantic Express sr sec 10.75% 2004 ......... US$ 300,000 313,500
Blue Bird Body Series B sr sub notes
10.75% 2006 ................................. US$ 200,000 214,500
Teekay Shipping 1st pfd ship mtg notes
9.625% 2003 ................................. US$ 200,000 209,500
Teekay Shipping sec 1st pfd ship mtg notes
8.32% 2008 .................................. US$ 400,000 397,000
----------
1,134,500
----------
UTILITIES - 2.43%
AES sr unsec sub notes 10.25% 2006 ........... US$ 400,000 435,000
Calpine sr notes 10.50% 2006 ................. US$ 400,000 430,000
Midland Funding II Series A deb
11.75% 2005 ................................. US$ 400,000 460,500
State Electric Commission of Victoria sr unsec
10.50% 2003 ................................. AUD 1,500,000 1,303,163
----------
2,628,663
----------
MISCELLANEOUS - 1.23%
Graphic Controls Series A sr sub notes
12.00% 2005 ................................. US$ 1,000,000 1,115,000
Pierce Leahy sr sub notes
11.125% 2006 ................................ US$ 200,000 220,500
----------
1,335,500
----------
Total Non-Convertible Bonds
(cost $47,846,163) .......................... 50,099,009
----------
CONVERTIBLE BONDS - 5.44%
COMPUTERS & TECHNOLOGY - 0.92%
MacNeal-Schwendler unsec sub deb
7.875% 2004 ................................. US$ 500,000 489,375
+Safeguard Scientific sub notes
6.00% 2006 .................................. US$ 500,000 505,625
----------
995,000
----------
ELECTRONICS - 0.49%
+Atmel SA 3.25% 2002 ......................... US$ 500,000 533,125
----------
533,125
----------
HEALTHCARE & PHARMAEUTICALS - 1.12%
+ARV Assisted Living sub notes
6.75% 2006 .................................. US$ 500,000 426,875
Phymatrix sub deb 6.75% 2003 ................. US$ 900,000 786,375
----------
1,213,250
----------
INDUSTRIALS - 0.47%
U.S. Filter sub notes 4.50% 2001 ............. US$ 500,000 513,750
----------
513,750
----------
PAPER & FOREST PRODUCTS - 0.19%
Repola unsec sub 6.50% 2004 .................. FIM 1,000,000 209,352
----------
209,352
----------
REAL ESTATE - 1.29%
IRT Property sub deb 7.30% 2003 .............. US$ 500,000 515,625
LTC Properties sub deb 8.50% 2000 ............ US$ 500,000 593,125
</TABLE>
1997 semi-annual report 11
<PAGE>
Statement of Net Assets (Continued)
- -------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------
CONVERTIBLE BONDS (CONTINUED)
REAL ESTATE (CONTINUED)
LTC Properties sub deb 8.50% 2001 .............. US$ 250,000 $ 287,500
---------
1,396,250
---------
RETAIL - 0.96%
+Home Shopping Network sub deb
5.875% 2006 ................................... US$ 850,000 1,037,000
---------
1,037,000
---------
Total Convertible Bonds (cost $5,616,108) ..................... 5,897,727
---------
TOTAL MARKET VALUE OF SECURITIES OWNED - 121.29%
(cost $118,281,697) .......................................... 131,369,329
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (21.29%) .................................. (23,059,548)
----------
NET ASSETS APPLICABLE TO 6,650,647 SHARES
($0.01 par value) OUTSTANDING; EQUIVALENT TO
$16.29 PER SHARE - 100.00% ................................... $ 108,309,781
=============
ADR - American Depository Receipt
DECS - Dividend Enhanced Convertible Stock
GDR - Global Depository Receipt
MARCS - Mandatory Adjustable Redeemable Convertible Security
PERCS - Preferred Equity Redemption Cumulative Stock
+ Securities exempt from registration under Rule 144A of the Securities Act
of 1933, as amended. These securities may be resold in transactions exempt
from registration, normally to qualified institutional buyers (See Note 8).
* Sovereign debt obligations issued as part of debt restructuring that are
collateralized in full as to principal due at maturity by U.S. Treasury
zero coupon obligations which have the same maturity as the Brady Bond.
(a) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at May 31, 1997.
AUD - Australian dollars GRD - Greek drachma
CAD - Canadian dollars ITL - Italian lira
ESP - Spanish pesetas NZD - New Zealand dollars
FIM - Finnish markka US$ - U.S. dollars
GBP - British pounds ZAL - South African rand
COMPONENTS OF NET ASSETS AT MAY 31, 1997:
Common stock, $0.01 par value, 500,000,000 shares
authorized to the Fund .............................. $ 93,096,054
Distributions in excess of net investment income++ .. (1,500,617)
Accumulated net realized gain on investments ........ 3,633,195
Net unrealized appreciation of investments
and foreign currencies.............................. 13,081,149
-------------
Total net assets .................................... $ 108,309,781
=============
++ Net realized gains (losses) on foreign currencies are included in net
investment income in accordance with provisions of the Internal Revenue
Code.
See accompanying notes
<PAGE>
DELAWARE GROUP
GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1997
(UNAUDITED)
- ------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest (net of foreign taxes withheld
of $2,481) .................................. $ 2,798,168
Dividends (net of foreign taxes withheld
of $43,656) ................................. 1,523,848 $4,322,016
-----------
EXPENSES:
Management fees .............................. 458,611
Administrative fees .......................... 104,744
Amortization of line of credit
organization expenses ....................... 18,266
Reports to shareholders ...................... 16,084
Amortization of organization expenses ........ 12,376
Professional fees ............................ 12,302
Transfer agent fees .......................... 11,650
Custodian fees ............................... 10,500
NYSE fees .................................... 8,087
Taxes, other than taxes on income ............ 6,312
Directors' fees .............................. 3,696
Other ........................................ 6,704
-----------
Total operating expenses
(before interest expense) ................... 669,332
Interest expense ............................. 768,142
---------
Total expenses ............................... 1,437,474
---------
NET INVESTMENT INCOME ........................ 2,884,542
---------
NET REALIZED AND UNREALIZED
GAIN/(LOSS) ON SECURITIES AND
FOREIGN CURRENCIES:
Net realized gain/(loss) on:
Security transactions ....................... 3,391,929
Foreign currencies .......................... (228,505)
---------
Net realized gain ........................... 3,163,424
Net change in unrealized appreciation on
securities and foreign currencies ........... 2,129,598
---------
NET REALIZED AND UNREALIZED GAIN
ON SECURITIES AND FOREIGN CURRENCIES......... 5,293,022
---------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ................... $ 8,177,564
=========
See accompanying notes
12 1997 semi-annual report
<PAGE>
DELAWARE GROUP
GLOBAL DIVIDEND AND
INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS YEAR
ENDED ENDED
5/31/97 11/30/96
(UNAUDITED)
- -------------------------------------------------------------------------------------------------
OPERATIONS:
<S> <C> <C>
Net investment income ................. $ 2,884,542 $ 6,538,717
Net realized gain on securities
and foreign currencies ............... 3,163,424 4,014,840
Net change in unrealized appreciation
on securities and foreign currencies.. 2,129,598 11,042,342
------------- -------------
Net increase in net assets
resulting from operations ............ 8,177,564 21,595,899
------------- -------------
DIVIDENDS AND DISTRIBUTIONS TO
SHAREHOLDERS FROM:
Net investment income and
short-term capital gains ............. (4,156,654) (9,975,970)
Net realized long-term gains on
security transactions ................ (831,331) --
------------- -------------
(4,987,985) (9,975,970)
------------- -------------
NET INCREASE IN NET ASSETS ............ 3,189,579 11,619,929
NET ASSETS:
Beginning of period ................... 105,12O,202 93,50O,273
------------- -------------
End of period ......................... $ 108,309,781 $ 105,120,202
============= =============
</TABLE>
See accompanying notes
<PAGE>
DELAWARE GROUP
GLOBAL DIVIDEND AND
INCOME FUND, INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MAY 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
<S> <C>
Increase (Decrease) in Cash:
(Including Foreign Currency)
Cash flows provided by operating activities:
Interest and dividends received
(excluding amortization of $38,941) ............................. $ 4,662,378
Operating expenses paid ........................................... (685,379)
Interest expenses paid ............................................ (762,283)
Sale of short-term portfolio investments, net ..................... 1,199,330
Purchase of long-term portfolio investments ....................... (44,792,148)
Proceeds from disposition of long-term
portfolio investments ............................................ 45,424,157
-------------
Net cash provided by operating activities ......................... 5,046,055
-------------
Cash flows used for financing activities:
Cash dividends paid .............................................. (4,987,985)
-------------
Net cash used for financing activities ........................... (4,987,985)
Effect of exchange rates on cash .................................. (92,881)
-------------
Net decrease in cash .............................................. (34,811)
Cash at beginning of period ....................................... 561,386
-------------
Cash at end of period ............................................. $ 526,575
=============
Reconciliation of Net Increase in Net Assets
Resulting from Operations to Net Cash (Including
Foreign Currency) Provided by Operating Activities:
Net increase in net assets resulting from operations .............. $ 8,177,564
-------------
Decrease in investments ........................................... 1,507,694
Net realized gain from security transactions ...................... (3,391,929)
Net realized foreign exchange losses .............................. 228,505
Net change in unrealized appreciation of investments
and foreign currencies ............................................ (2,129,598)
Decrease in receivable for investments sold ....................... 2,345,233
Decrease in interest and dividends receivable ..................... 379,303
Decrease in deferred organization expenses ........................ 30,642
Decrease in payable for investments purchased ..................... (2,060,529)
Increase in interest payable ...................................... 5,859
Decrease in accrued expenses and other liabilities................. (46,689)
-------------
Total adjustments................................................. (3,131,509)
-------------
Net cash provided by operating activities ......................... $ 5,046,055
=============
</TABLE>
See accompanying notes
1997 SEMI-ANNUAL REPORT 13
<PAGE>
DELAWARE GROUP
GLOBAL DIVIDEND AND INCOME FUND, INC.
FINANCIAL HIGHLIGHTS--MAY 31, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period
were as follows:
Six Months For the
Ended Period
5/31/97 Year Ended Year Ended 3/4/94* to
(Unaudited) 11/30/96 11/30/95 11/30/94
---------------------------------------------------
<S> <C> <C> <C> <C>
Net asset value, beginning of period.................................. $15.81 $14.06 $13.09 $14.00+
Income (loss) from investment operations:
Net investment income............................................... 0.42 0.98 1.23 0.86
Net realized and unrealized gain (loss) on securities and foreign
currencies ........................................................ 0.82 2.27 1.06 (1.07)
------- ------ ------ ------
Total from investment operation..................................... 1.24 3.25 2.29 (0.21)
------- ------ ------ ------
Less dividends and distributions:
Dividends from net investment income and short-term capital gains (0.63) (1.50)(2) (1.32) (0.70)
Distributions from net realized long-term gains on security
transactions ...................................................... (0.13) - - -
------- ------ ------ ------
Total dividends and distributions................................... (0.76) (1.50) (1.32) (0.70)
------- ------ ------ ------
Net asset value, end of period........................................ $16.29 $15.81 $14.06 $13.09
======= ====== ====== ======
Market value, end of period........................................... $16.75 $15.88 $13.75 $11.75
======= ====== ====== ======
Total investment return based on:(1)
Market value........................................................ 10.39% 27.42% 29.74% (17.15%)
------- ------ ------ ------
Net asset value .................................................... 7.80% 24.10% 19.08% (1.11%)
======= ====== ====== ======
Ratios and supplemental data:
Net assets, end of period (000 omitted)............................. $108,310 $105,120 $93,500 $87,780
======= ====== ====== ======
Ratio of total operating expenses to adjusted average weekly net
assets (before interest expense)................................... 1.02%** 1.09% 1.13% 1.32%**
Ratio of interest expense to adjusted average weekly net assets 1.18%** 1.06% N/A N/A
Ratio of net investment income to adjusted average weekly net assets 4.41%** 5.59% 8.39% 8.54%**
Portfolio turnover.................................................. 65%** 88% 101% 86%
Average commission rate paid........................................ $ 0.0571 $ 0.0390 N/A N/A
Leverage analysis:
Debt outstanding at end of period (000 omitted)..................... $25,000 $25,000 N/A N/A
Average daily balance of debt outstanding (000 omitted)............. $25,199 $20,355 N/A N/A
Average daily balance of shares outstanding (000 omitted)........... 6,651 6,651 N/A N/A
Average debt per share ............................................. $3.79 $3.06 N/A N/A
</TABLE>
- ------------------
* Commencement of operations.
** SAnnualized.
+ Net of underwriter's discount of $0.90 and offering costs of $0.10 charged
to paid-in capital with respect to issuance of common shares.
(1) Total investment return is calculated assuming a purchase of common stock
on the opening of the first day and a sale on the closing of the last day
of each period reported. Dividends and distributions, if any, are assumed
for the purposes of this calculation, to be reinvested at prices obtained
under the Fund's dividend reinvestment plan. Generally, total investment
return based on net asset value will be higher than total investment return
based on market value in periods where there is an increase in the discount
or a decrease in the premium of the market value to the net asset value
from the beginning to the end of of such periods. Conversely, total
investment return based on net asset value will be lower than total
investment return based on market value in periods where there is a
decrease in the discount or an increase in the premium of the market value
to the net asset value from the beginning to the end of such periods. The
total investment returns calculated based on market value and net asset
value for a period of less than one year have not been annualized.
(2) Of the $1.50 per share dividends paid during the year $0.48 consisted of
short-term capital gains, which are taxable at the same rate as net
investment income.
See accompanying notes
14 1997 SEMI-ANNUAL REPORT
<PAGE>
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware Group Global Dividend and Income Fund, Inc. (The "Fund") is registered
as a diversified, closed-end management investment company under the Investment
Company Act of 1940, as amended. The Fund is organized as a Maryland
Corporation. The primary investment objective is to seek high current income.
Capital appreciation is a secondary objective.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Securities listed on a foreign exchange are
valued at the last quoted sales price before the Fund is valued. Long-term debt
securities are valued by an independent pricing service and such prices are
believed to reflect the fair value of such securities. Exchange-traded options
are valued at the last reported sale price or, if no sales are reported, at the
mean between the last reported bid and asked prices. Short-term instruments
having less than 60 days to maturity are valued at amortized cost which
approximates market value. Other securities and assets for which market
quotations are not readily available are valued at fair value as determined in
good faith by or under the direction of the Fund's Board of Directors.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from
generally accepted accounting principles.
Distributions - In December 1995, the Fund implemented a managed distribution
policy. Under the policy, the Fund declares and pays monthly dividends at an
annual rate of not less than $1.50 per share and is managed with a goal of
generating as much of the dividend as possible from ordinary income (net
investment income and short-term capital gains). The balance of the dividend
then comes from long-term capital gains (once a year) and, if necessary, a
return of capital. No dividends were designated as return of capital for the
six months ended May 31, 1997.
Foreign Currency Transactions - Transactions denominated in foreign
currencies are recorded at the current prevailing exchange rates. The value
of all assets and liabilities denominated in foreign currencies are
translated into U.S. dollars at the exchange rate of such currencies against
the U.S. dollar as of 3:00 PM EST. Transaction gains or losses resulting
from changes in exchange rates during the reporting period or upon settlement
of the foreign currency transaction are reported in operations for the
current period. It is not practical to isolate that portion of both realized
and unrealized gains and losses on investments in equity securities in the
statement of operations that result from fluctuations in foreign currency
exchange rates. The Fund does isolate that portion of gains and losses on
investments in debt securities which are due to changes in the foreign
exchange rate from that which are due to changes in market prices of debt
securities. The Fund reports certain foreign currency related transactions as
components of realized gains for financial reporting purposes, whereas such
components are treated as ordinary income (loss) for federal income tax
purposes.
Borrowings - The Fund has entered into a Line of Credit Agreement with
Societe Generale for $25,000,000. A total of $120,000 was incurred in
connection with the start-up of the Line of Credit. These costs were deferred
and are being amortized ratably over a period of three years from the date of
the first borrowing (See Note 5).
Other - Security transactions are recorded on the date the securities are
purchased or sold (trade date). Costs used in calculating realized gains and
losses on the sale of investment securities are those of the specific
securities sold. Dividend income is recorded on the ex-dividend date and
interest income is recorded on the accrual basis. Foreign dividends are also
recorded on the ex-dividend date or as soon after the ex-dividend date that
the Fund is aware of such dividends, net of all non-rebatable tax withholdings.
<PAGE>
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1997
(UNAUDITED) Continued
- --------------------------------------------------------------------------------
Original issue discounts are accreted to interest income over the lives of
the respective securities. Withholding taxes on foreign dividends have been
provided for in accordance with the Fund's understanding of the applicable
country's tax rules and rates. The Fund declares and pays dividends from net
investment income and capital gains annually.
A total of $124,000 was incurred in connection with the organization of the
Fund. These costs were deferred and are being amortized ratably over a five year
period from the date the Fund commenced operations.
Certain Fund expenses are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of the Fund's
average daily net assets.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
2. Investment Management and Other Transactions with Affiliates In accordance
with the terms of the Investment Management Agreement, the Fund pays Delaware
Management Company, Inc. (DMC), the Investment Manager of the Fund, an annual
fee equal to 0.70% of the Fund's adjusted average weekly net assets. At May 31,
1997, the Fund had a liability for Investment Management fees of $76,823.
The Fund has also entered into an advisory agreement with Delaware International
Advisers Ltd. (DIAL) (the "Subadviser") an affiliate of DMC. For the services
provided to DMC, DMC pays the Subadviser a monthly fee equal to 40% of the fee
paid to DMC under the terms of the Investment Management Agreement.
The Fund has also entered into an Administration Agreement with Princeton
Administrators, L.P., the administrator of the Fund, which provides for payment,
subject to an annual minimum fee of $150,000, of a monthly fee computed at the
annual rate of 0.15% of the Funds's adjusted average weekly net assets.
For purposes of the calculation of investment management fees and
administration fees, adjusted average weekly net assets do not include the
Line of Credit liability.
Officers, directors and employees of DMC, who are also officers, directors and
employees of the Fund, do not receive any compensation from the Fund.
3. Investments
During the six months ended May 31, 1997, the Fund made purchases of
$42,731,619 and sales of $42,818,339 of investment securities other than U.S.
government securities and temporary cash investments.
At May 31, 1997, the aggregate cost of securities and unrealized appreciation
(depreciation) for federal income tax purposes for the Fund was as follows:
Cost of Investments............................ $118,281,697
------------
Aggregate unrealized appreciation.............. 16,352,763
Aggregate unrealized depreciation.............. 3,265,131
------------
Net unrealized appreciation.................... $ 13,087,632
============
4. Capital Stock
There are 500,000,000 shares of $0.01 par value capital stock authorized.
The Fund did not repurchase any shares under the Share Repurchase Program during
the six months ended May 31, 1997.
On June 2, 1997, the Fund declared its monthly dividend in the amount of $0.125
per share. This dividend was payable June 27, 1997, to stock-holders of record
at the close of business on June 13, 1997. The ex-dividend date was June 11,
1997.
Shares issuable under the Fund's dividend reinvestment plan are purchased by the
Fund's transfer agent, IFTC, in the open market.
1997 semi-annual report 15
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
5. Line of Credit
In February 1996, the Fund had entered into a Line of Credit Agreement with
Societe Generale for $25,000,000. At May 31, 1997, the par value of loans
outstanding was $25,000,000 at a variable interest rate of 6.00%. During the six
months ended May 31, 1997, the average daily balance of loans outstanding was
$25,195,199 at a weighted average interest rate of approximately 6.078%. The
maximum amount of loans outstanding at any time during the period was
$25,383,377. The loan is collateralized by the Fund's portfolio.
6. Foreign Exchange Contracts
The Fund will generally enter into forward foreign currency contracts as a
way of managing foreign exchange rate risk. A fund may enter into these
contracts to fix the U.S. dollar value of a security that it has agreed to
buy or sell for the period between the date the trade was entered into and
the date the security is delivered and paid for. A fund may also use these
contracts to hedge the U.S. dollar value of securities it already owns
denominated in foreign currencies.
Forward foreign currency contracts are valued at the mean between the bid and
asked prices of the contracts and are marked-to-market daily. Interpolated
values are derived when the settlement date of the contract is an interim
date for which quotations are not available. The change in market value is
recorded by the Fund as an unrealized gain or loss. When the contract is
closed, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at
the time it was closed.
The use of forward foreign currency contracts does not eliminate fluctuations in
the underlying prices of the Fund's securities, but it does establish a rate of
exchange that can be achieved in the future. Although forward foreign currency
contracts limit the risk of loss due to a decline in the value of the hedged
currency, they also limit any potential gain that might result should the value
of the currency increase. In addition, the Fund could be exposed to risks if the
counterparties to the contracts are unable to meet the terms of their contracts.
No forward foreign currency contracts were outstanding as of May 31, 1997.
7. Futures Contracts
Upon entering into a futures contract, the Fund deposits cash or pledges U.S.
Government securities to a broker, equal to the minimum "initial margin"
requirements of the exchange on which the contract is traded. Subsequent
payments are received from or paid to the broker each day, based on the daily
fluctuation in the market value of the contract. These receipts or payments
are known as "variation margin" and are recorded daily by the Fund as
unrealized gains or losses until the contracts are closed. When the contracts
are closed, the Fund records a realized gain or loss equal to the difference
between the value of the contract at the time it was opened and the value at
the time it was closed.
At May 31, 1997, the Fund had no outstanding futures contracts.
Risks may arise upon entering into futures contracts from potential imperfect
correlations between the futures contracts and the underlying securities and
from the possibility of an illiquid secondary market for these instruments.
8. Concentrations of Credit Risk
Some countries in which the Fund may invest require governmental approval for
the repatriation of investment income, capital or the proceeds of sales of
securities by foreign investors. In addition, if there is a deterioration in
a country's balance of payments or for other reasons, a country may impose
temporary restrictions on foreign capital
remittances abroad.
The securities exchanges of certain foreign markets are substantially
smaller, less liquid and more volatile than the major securities markets in
the United States. Consequently, acquisition and disposition of securities by
the Fund may be inhibited. In addition, a significant proportion of the
aggregate market value of equity securities listed on the major securities
exchanges in emerging markets are held by a smaller number of investors. This
may limit the number of shares available for acquisition or disposition
by the Fund.
The Fund may invest in high-yield fixed income securities which carry ratings of
BB or lower by S&P and/or Ba or lower by Moody's. Investments in these higher
yielding securities may be accompanied by a greater degree of credit risk than
higher rated securities. Additionally, lower rated securities may be more
susceptible to adverse economic and competitive industry conditions than
investment grade securities.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
The Fund may invest up to 10% of its total assets in illiquid securities which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities. These securities, if any, have been
denoted in the Statement of Net Assets.
9. Geographic Disclosure
As of May 31, 1997, the Fund's geographic diversification was as follows:
Percentage
of Total
Market Securities
Country* Value at Value
- ------------------------------------------------------------------------------
United States ................................ $ 81,565,054 62.09%
United Kingdom ............................... 11,084,513 8.44%
Australia .................................... 7,598,060 5.78%
Spain ........................................ 5,481,685 4.17%
New Zealand .................................. 4,226,008 3.22%
South Africa ................................. 3,477,364 2.65%
Greece ....................................... 2,671,683 2.03%
Italy ........................................ 2,566,030 1.95%
Germany ...................................... 2,489,115 1.89%
Canada ....................................... 2,222,704 1.69%
France ....................................... 2,083,297 1.59%
Netherlands .................................. 1,990,919 1.52%
Poland ....................................... 1,118,750 0.85%
Hong Kong .................................... 1,072,461 0.82%
Indonesia .................................... 851,323 0.65%
Belgium ...................................... 661,011 0.50%
Finland ...................................... 209,352 0.16%
------------ ------
Total ........................................ $131,369,329 100.00%
============ ======
- ----------
*Based on the currency in which each security is denominated.
Like any investment in securities, the value of the portfolio may be subject
to risk or loss from market, currency, economic and political factors which
occur in the countries where the Fund is invested.
10. Written Options
When the Fund writes an option, an amount equal to the premium received by
the Fund is recorded as a liability and is subsequently adjusted to the
current market value of the option written. Premiums received from writing
options that expire unexercised are treated by the Fund on the expiration
date as realized gains from investments. The difference between the premium
and the amount paid on effecting a closing purchase transaction, including
brokerage commissions, is also treated as a realized gain, or if the premium
is less than the amount paid for the closing purchase transaction, as a
realized loss. If a call option is exercised, the premium is added to the
proceeds from the sale of the underlying security or currency in determining
whether the Fund has realized a gain or loss. If a put option is exercised,
the premium reduces the cost basis of the securities purchased by the Fund.
The Fund as writer of an option bears the market risk of an unfavorable
change in the price of the security underlying the written option.
Transactions in options written during the six months ended May 31, 1997,
were as follows:
Number of Premiums
Contracts Received
--------- --------
Options outstanding at November 30, 1996 340 $67,440
Options exercised ...................... 340 67,440
--- ------
Options outstanding at May 31, 1997 .... -- $ --
--- ------
16 1997 SEMI-ANNUAL REPORT
<PAGE>
This Semi-Annual Report is for the Information of Global Dividend And Income
Fund Shareholders. It sets forth details about charges, expenses, investment
objectives and operating policies of the Fund. You should read it carefully
before you invest. The return and principal value of an investment in the
Fund will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost.
Board of Directors
WAYNE A. STORK
Chairman, President and Chief Executive Officer
Delaware Group of Funds
Philadelphia, PA
WALTER P. BABICH+
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
ANTHONY D. KNERR+
Consultant, Anthony Knerr & Associates
New York, NY
ANN R. LEVEN+
Treasurer, National Gallery of Art
Washington, DC
W. THACHER LONGSTRETH
City Councilman
Philadelphia, PA
THOMAS F. MADISON*
President and Chief Executive Officer
MLM Partners
Minneapolis, Minn.
*Appointed June 19, 1997
CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
Executive Officers
WAYNE A. STORK
Chairman, President and Chief Executive Officer
Delaware Group of Funds
Philadelphia, PA
RICHARD G. UNRUH, JR.
Executive Vice President
Philadelphia, PA
PAUL E. SUCKOW
Senior Vice President/Chief Investment Officer
Fixed-Income
Philadelphia, PA
DAVID K. DOWNES
Senior Vice President/Chief Administrative Officer/
Chief Financial Officer
Philadelphia, PA
GEORGE M. CHAMBERLAIN. JR.
Senior Vice President/Secretary
Philadelphia, PA
JOSEPH H. HASTINGS
Vice President/Corporate Controller
Philadelphia, PA
MICHAEL P. BISHOF
Vice President/Treasurer
Philadelphia, PA
+Audit Committee Member
<PAGE>
THE DELAWARE GROUP INCLUDES OPEN-END AND CLOSED-END FUNDS WITH A WIDE RANGE OF
INVESTMENT OBJECTIVES. STOCK FUNDS, INCOME FUNDS, TAX-FREE FUNDS, MONEY MARKET
FUNDS AND CLOSED-END EQUITY/INCOME FUNDS GIVE INVESTORS THE ABILITY TO CREATE A
PORTFOLIO THAT FITS THEIR PERSONAL FINANCIAL GOALS. FOR A PROSPECTUS OF ANY
OPEN-END DELAWARE GROUP FUND, CONTACT YOUR FINANCIAL ADVISER OR CALL THE
DELAWARE GROUP AT 1.800.523.4640. READ THE PROSPECTUS CAREFULLY BEFORE
INVESTING. NOTICE IS HEREBY GIVEN IN ACCORDANCE WITH SECTION 23(C) OF THE
INVESTMENT ACT OF 1940 THAT THE FUND MAY PURCHASE AT MARKET PRICES FROM TIME TO
TIME SHARES OF ITS COMMON STOCK IN THE OPEN MARKET.
PRINCIPAL OFFICE OF
THE FUND
1818 Market Street
Philadelphia, PA 19103
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia, PA
INTERNATIONAL AFFILIATE
Delaware International Advisers Ltd.
London, England
INDEPENDENT AUDITORS
Ernst & Young LLP
2001 Market Street
Philadelphia, PA
REGISTRAR AND STOCK TRANSFER AGENT
Investors Fiduciary Trust Company
210 West 10th Street
Kansas City, MO 64105
1.800.596.8396
NUMBER OF RECORDHOLDERS
AS OF MAY 31, 1997
327
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS REPRESENTATIVES
1.800.659.2265
Be sure to consult your financial adviser when making investment decisions.
Mutual funds can be a valuable part of your financial plan; however, shares
of the Fund are not FDIC or NCUSIF insured, are not guaranteed by any credit
union or any bank, are not obligations of any credit union or any bank, and
involve investment risk, including the possible loss of the principal amount
invested. Shares of the Fund are not bank or credit union deposits.
Copy Rights Delaware Distributors, L.P.
LOGO
THE NEW YORK STOCK CORPORATION
DELAWARE
GROUP
=====================
Philadelphia o London
Printed in the USA on
recycled paper
(48)
SA-DGF[5/97]PP7/96
