<PAGE>
Closed-End Income
DELAWARE GROUP
Global Dividend
and Income Fund
service and guidance
professional management
goals
[Photo of illustration from Closed-End Brochure]
1998
Semi-Annual Report
DELAWARE(SM)
INVESTMENTS
- ------------
Philadelphia * London
<PAGE>
Investment
Objectives and
Strategies
[Photo of glasses, keyboard & pen]
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.
current income
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 default risk than
bonds with higher quality ratings, but provide a greater level of income to
compensate investors for the additional risks. Prices of high-yield bonds tend
to be less sensitive to changes in interest rates than higher rated bonds due
to their higher coupons.
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 effect of currency fluctuations. The
value of the company's projected dividend stream is "discounted" for these
risks so that 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 $21.6 million (19%) of your Fund's assets were leveraged as of May 31,
1998. Leveraging is a tool that is generally not available to open-end mutual
funds and one that can be an important contributor to your Fund's income and
capital appreciation. Of course, there is no guarantee the Fund will achieve
its objective by using leveraging. 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.
commitment
A TRADITION OF SOUND INVESTING
<PAGE>
June 15, 1998
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income
1
Dear Shareholder:
Robust U.S. economic growth was a mixed blessing for income-oriented global
investors during the first half of fiscal 1998.
Certain U.S. securities such as real estate investment trusts (REITs)
stagnated as investor demand waned. The income and capital appreciation
potential of some international securities was negatively affected by the
strength of the U.S. dollar relative to many foreign currencies. A stronger
dollar reduced your Fund's returns from international stocks and bonds when
the returns were converted from local currency to U.S. dollars.
During the period, Global Dividend and Income Fund strove to maximize
income and participate in the market's capital appreciation potential. For the
six months ended May 31, 1998, the Fund provided a total return of +5.92% (at
net asset value with distributions reinvested). This was less than several
unmanaged measures of market performance and the Fund's Lipper peer group
average, as shown below.
As of mid-year, your Fund offered a superior yield compared to the Standard
& Poor's 500 Index and the average of its peers. Global Dividend and Income
Fund's yield, based on market price, was 8.76% as of May 31. This was many
times greater than the average yield on stocks in the S&P 500 Index, which
stood at a record low of 1.42%, and a higher yield than many domestic
corporate bonds.
THE INCOME AND CAPITAL APPRECIATION POTENTIAL OF MANY INTERNATIONAL SECURITIES
WAS NEGATIVELY AFFECTED BY THE STRENGTH OF THE U.S. DOLLAR RELATIVE TO MANY
FOREIGN CURRENCIES.
On May 31, 1998, Dividend and Income Fund shares closed at a 2.75% discount
to net asset value on the New York Stock Exchange. Given that your Fund has
traded at a premium to net asset value for most of its lifetime, we believe
the discount is temporary.
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
- --------------------------------------------------------------------------------------------------------
AT NET ASSET VALUE FOR PERIODS ENDED MAY 31, 1998
Six Months One Year Premium/Discount
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Dividend and Income Fund +5.92% +15.88% -2.75%
Standard & Poor's 500 Index +15.07% +30.69%
Merrill Lynch High-Yield Bond Index +4.98% +12.54%
Morgan Stanley Europe Australia
and South East Asia (EASEA) Index +25.62% +30.17%
Salomon Brothers World
Government Bond Index +2.33% +5.40%
Lipper Closed-End Income Fund Average (11 funds) +6.85% +16.03% -7.95%
</TABLE>
The Fund's total return and the returns of the unmanaged indexes shown above
assume reinvestment of distributions. Past performance does not guarantee
future results. All returns are in U.S. dollars.
<PAGE>
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2
During the first half of fiscal 1998, your fund had a strong position in
REIT stocks. A major reason why real estate stocks have failed to keep pace
with the rest of the U.S. stock market has been political uncertainty that has
generated a negative shift in short-term investor expectations. The Clinton
Administration proposed legislation last winter that would reduce tax breaks
available to certain REITs.
After many years of strong performance, high-yield bond prices weakened
this past spring amid a deluge of new issuance. More than $80 billion of bonds
were brought to market in the first five months of calendar 1998, more than
twice as much as during the same period a year earlier. This increased supply
was difficult for the market to absorb.
Throughout the first half of the 1998 fiscal year, most sectors of the U.S.
economy, with the exception of technology, have weathered the Asian economic
storm. However, the long-term consequences of events in the Pacific region
remain unclear.
Investors are concerned that financial problems in Asia may further crimp
the region's demand for U.S. products. Also, Asian countries have begun to
increase exports to the U.S. - bringing increased competition to U.S.
manufacturers.
In volatile times, we believe value and income-oriented investment
strategies can outperform strategies based on high expectations of growth. We
are pleased to report that your Fund's average annual total return since
inception has been significantly higher than its Lipper peer group average.
While we can't guarantee the future, we believe your Fund's consistent
investment discipline can continue to serve shareholders well over the long
term.
On the pages that follow, your Fund's managers in Philadelphia and London
review Global Dividend and Income Fund's strategy in detail. They also provide
additional insight as to how global economic conditions affected your Fund
during the first half of fiscal 1998.
Sincerely,
/s/ Wayne A. Stork
- --------------------------------------
Wayne A. Stork
Chairman
/s/ Jeffrey J. Nick
- --------------------------------------
Jeffrey J. Nick
President and Chief Executive Officer
<TABLE>
<CAPTION>
RANKINGS AND AVERAGE ANNUAL TOTAL RETURNS
- --------------------------------------------------------------------------------------------
BASED ON NET ASSET VALUE FOR PERIODS ENDED MAY 31, 1998
One Year Three Years Lifetime
- --------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Global Dividend and Income Fund (DGF) +15.88% +16.27% +13.34%
Lipper Closed-End Income Fund Average +16.03% +14.34% +11.76%
DGF Rank #11 #2 #1
Number of Funds in Category 11 10 9
</TABLE>
Fund's inception date was March 4, 1994. Past performance does not guarantee
future results. All performance assumes dividends and distributions
reinvested. Rankings are based on total return at net asset value.
<PAGE>
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3
Portfolio Managers' Review
Investment diversification across domestic and foreign asset classes can help
lessen the impact of an economic slump in any one geographic region. Although
we are disappointed with Dividend and Income Fund's results since November, we
believe our diversification strategy helped to preserve capital as Asian
markets grappled with recession.
As of May 31, approximately 53% of your Fund's net assets were invested in
common stocks - a slight increase from November 30. The increase resulted
mainly from capital appreciation of the
Fund's holdings.
When selecting common stocks for your Fund's portfolio, we seek undervalued
dividend paying stocks in the U.S. and in established foreign markets.
Global Dividend and Income Fund's largest country allocation outside the
U.S. during the first half of the 1998 fiscal year was the United Kingdom.
Stocks in the U.K. generally offer higher dividend yields than stocks in many
developed countries around the world.
Your Fund's bond allocation consists primarily of high yield U.S. corporate
securities and foreign government debt. A small portion of your Fund's net
assets is allocated to debt securities issued by foreign corporations.
We decreased your Fund's allocation to U.S. corporate bonds by
approximately 10 percentage points between November and May. In our view,
better bond values could be found overseas - particularly in Europe. Thus, we
shifted part of your Fund's net assets from domestic bonds to foreign bonds.
As of May 31, 1998, your Fund's foreign bond component accounted for 13.3% of
net assets.
At mid-year, 14.5% of Global Dividend and Income Fund's net assets were
allocated to convertible securities. Convertible securities tend to provide a
better dividend or bond yield than common stocks while generally offering less
capital appreciation potential. Convertibles also have the option of being
converted to common stock at a pre-stated share price.
Your Fund attempts to reduce risk through defensive currency hedging, which
helps protect the dollar value of your investments. The Fund will generally
use forward currency contracts, which can limit the risk of loss should the
value of the hedged currency decline. On May 31, 1998, 2.2% of your Fund's net
assets were allocated to forward currency contracts.
ASSET MIX
- ----------------------------------------------
May 31, 1998
Common and Preferred Stocks 53.7%
Foreign Bonds 13.3%
Non-Convertible U.S. Corporate Bonds 18.5%
Convertible Preferred Stocks 9.2%
Convertible U.S. Bonds 5.3%
The above chart represents net assets.
<PAGE>
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4
BANK AND
PHARMACEUTICAL STOCKS
BUFFERED VOLATILITY
Your Fund's bank and pharmaceutical stocks provided a cushion against the
volatility experienced by some of our bond holdings since November.
The banking industry benefited from internal expansion, restructuring and
merger activity and reported near record profits during the winter and spring.
We are especially pleased with Mellon Bank - your Fund's largest bank holding.
The Pittsburgh based institution reported record earnings during its 1997
fiscal year.
Mellon thwarted a takeover attempt by Bank of New York last spring and is
taking steps to broaden its product offerings. We believe this bodes well for
the bank, which is positioning itself to compete more effectively.
Your Fund's international pharmaceutical holdings also made a positive
contribution to our results. Bayer, the German pharmaceutical giant and one of
your Fund's ten largest holdings, reported that sales grew across all business
segments during 1997.
The capital appreciation prospects for Bayer, best known in the U.S. for
its brand of aspirin, look promising. The company is striving to nearly double
its global share of the prescription drug market. Bayer is reportedly looking
for partners in the healthcare and/or life sciences industry to assist in its
expansion.
REITs
BUILDING VALUE FOR THE
FUTURE
Despite short-term weakness in the REIT market during the fiscal period, we
believe fundamental factors affecting the U.S. real estate market - property
prices and tenant demand - remain strong and bode well for long-term real
estate investors.
The U.S. Treasury Department reportedly wants to limit the expansion of
four paired-share REITs, an arrangement that permits the equity of both a REIT
and tenant operating company to trade as a single security. We do not believe
the proposed REIT legislation - if passed in the present form - will alter the
basic profitability of the real estate industry.
REITs provide investors the opportunity to participate in larger scale
commercial real estate without the usual challenges of direct property
investment. Your Fund's REIT portion invests in a broad range of companies
nationwide. These companies may specialize in apartment complexes, offices,
malls, shopping centers, industrial plants, self-storage centers and hotels.
One of your Fund's top office/industrial sector holdings has performed
exceptionally well since autumn, primarily because investors have rewarded the
firm's expansion plans. Spieker Properties recently filed a registration
statement with the Securities
GEOGRAPHIC DIVERSIFICATION
- ------------------------------
MAY 31, 1998
United States 61.3%
South Africa 2.3%
United Kingdom 9.1%
Canada 1.6%
Latin America 3.8%
Continental Europe 12.2%
Australia/New Zealand 6.1%
Turkey 1.9%
Asian Pacific Rim 1.70%
<PAGE>
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5
and Exchange Commission (SEC) to offer an additional $500 million worth of
shares to build offices and industrial buildings at U.S. seaports and
airports.
FOREIGN BONDS
STRONGER U.S. DOLLAR =
WEAKER RETURNS
Preserving capital in European and Pacific Rim bond markets was challenging as
the U.S. dollar rose against most major currencies, especially the Japanese
yen.
In managing your Fund's foreign bond portfolio, our research focuses on
long-term factors such as inflation and on trends that can be analyzed with
reasonable certainty.
We place great importance on quality and select only those bonds rated A or
better by Standard & Poor's. Generally, your Fund's foreign bond holdings will
have an average maturity in the five- to 10-year range, which we believe
offers attractive income compared to the risk to principal from fluctuating
interest rates.
South Africa was your Fund's largest country weighting in foreign bonds -
accounting for 2.3% of net assets on May 31. At the end of spring, most South
African bonds were offering yields in excess of 10%.
Due to the appreciation of the U.S. dollar since November, our South
African bonds, which pay interest in rand, lost value. However, we believe the
country's future prospects remain promising due to its improving political
climate and economy.
We have had only limited exposure to Asian bonds since November. However,
two small positions we hold in Indonesia and South Korea negatively affected
our results.
HIGH-YIELD BONDS
THE LAW OF SUPPLY
AND DEMAND
Strong U.S. economic growth helped create an exceptional environment for
high-yield bonds last winter. Default rates by corporate issuers fell to
historic lows while both the supply and investor demand for high-yield bonds
increased.
These favorable market dynamics abruptly shifted in April when the supply
of high-yield bonds increased more than demand. Investors grew concerned that
Asia's economic crisis would negatively affect profits at U.S. companies that
have issued high-yield bonds, especially cyclical companies and
telecommunications firms. Should cash flow deteriorate, companies in these
sectors may have difficulty meeting debt payments.
WHEN INVESTING IN OVERSEAS BONDS, YOUR FUND STRIVES TO OBTAIN A RATE OF RETURN
THAT IS MEANINGFULLY GREATER THAN THE U.S. INFLATION RATE.
In managing your fund's high-yield bond portfolio, we maintain a relatively
conservative approach to credit risk. During the first half of the 1998 fiscal
year, we focused on:
o Bonds rated B in industries whose prospects were clearly defined;
o New bond offerings of at least $100 million;
o Companies with experienced management teams; and,
o Diversification across many industrial sectors.
<PAGE>
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6
OUTLOOK
In the coming months, we expect to continue to focus on Europe rather than
Asia for overseas investment opportunities. At mid-year, Japan had fallen into
a recession which has the potential to drag down the already weakened emerging
market economies of the Pacific Rim.
At the same time, however growth prospects in Western Europe appear
excellent. Equity and fixed-income markets in countries such as the U.K.,
Italy and Spain are prospering as the continent moves to a single currency and
reduces government regulation.
In the U.S., we believe that stable interest rates and the potential for
moderating economic growth bode well for the U.S. economy over the coming
months. In his semi-annual report to Congress last June, Federal Reserve Board
chairman Alan Greenspan indicated that traditional inflationary pressures were
subdued.
By adhering to our value-oriented method of evaluating stocks and bonds, we
believe our consistent investment discipline can overcome short-term market
volatility for the long-term investor.
BABAK ZENOUZI
Vice President/Senior Portfolio Manager
- - U.S. Equities
PAUL A. MATLACK
Vice President/Senior Portfolio Manager
- - U.S. Fixed Income
CLIVE A. GILLMORE
Director/Senior Portfolio Manager
- - Foreign Equities
IAN G. SIMS
Director/Senior Portfolio Manager
- - Foreign Fixed-Income
June 15, 1998
GLOBAL DIVIDEND AND INCOME FUND
- ------------------------------------
MAKET PRICE VS. NET ASSET VALUE
DECEMBER 1, 1997 TO MAY 31, 1998
- ------------------------------------
- ------------------------------------
PREMIUM/DISCOUNT Data
Current -2.75%
High 8.44% on 01/16/98
Average 3.96%
Low -2.75% on 05/29/98
- ------------------------------------
Premium Discount table
Market Net Asset
Price Value
5/29/98 $16.625 $17.1
5/22/98 $16.875 $17.26
5/15/98 $17.5 $17.23
5/8/98 $17.813 $17.54
5/1/98 $17.625 $17.54
4/24/98 $17.625 $17.47
4/17/98 $17.688 $17.62
4/10/98 $17.625 $17.68
4/3/98 $17.813 $17.74
3/27/98 $17.5 $17.69
3/20/98 $17.813 $17.56
3/13/98 $17.875 $17.34
3/6/98 $18.313 $17.2
2/27/98 $18.438 $17.14
2/20/98 $18.625 $16.93
2/13/98 $18.5 $16.95
2/6/98 $18.5 $17.11
1/30/98 $18.063 $16.8
1/23/98 $17.875 $16.72
1/16/98 $18 $16.74
1/9/98 $18.25 $16.47
1/2/98 $18.25 $16.79
12/26/97 $18.5 $16.93
12/19/97 $18.125 $16.86
12/12/97 $17.563 $17.27
12/5/97 $17.188 $17.27
11/28/97 $17.313 $17.09
Source: Bloomberg Business News. Past performance does not guarantee future
results. Shading indicates the Fund's market price was at a discount to net
asset value.
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7
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 $17,356 as of May 31, 1998,
based on market value with distributions reinvested. That's more than 7%
higher than the average of the Fund's peers during the same period.
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. Even though the Fund traded at a discount to net asset value during
the first half of fiscal 1998, we did not buy back shares because we believed
there were more effective ways of enhancing shareholder value.
YOUR REINVESTMENT OPTIONS
If your shares are not held in "street" name and you are not already
reinvesting dividends, 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.
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.
GLOBAL DIVIDEND AND INCOME FUND-
GROWTH OF A $10,000 INVESTMENT
- ----------------------------------
MARCH 4, 1994, TO MAY 31, 1998
Dividend and Income Fund $17,356
Lipper Closed-End Income
Fund Average (9 Funds) $16,640
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.
<PAGE>
8 closed-end income
Financial Statements
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF NET ASSETS
MAY 31, 1998 (UNAUDITED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
------------------------------------
<S> <C> <C>
COMMON STOCK - 63.32%
Automobiles & Auto Equipment - 4.26%
Chrysler ................................. 25,000 $ 1,390,625
Continental .............................. 26,000 788,987
General Motors ........................... 16,000 1,151,000
GKN ...................................... 102,000 1,512,783
-----------
4,843,395
-----------
BANKING, FINANCE & INSURANCE - 9.34%
Bayerische Verelnsbank ................... 7,800 654,086
Commonwealth Bank of Australia ........... 46,517 547,754
First Chicago NBD ........................ 13,000 1,136,687
First Union .............................. 16,200 896,062
Fleet Financial Group .................... 12,300 1,008,600
ING Groep NV ............................. 16,000 1,099,809
KeyCorp .................................. 26,000 986,375
Mellon Bank .............................. 20,000 1,348,750
National Australia Bank .................. 75,430 1,046,204
National Mutual Holdings ................. 35,000 78,482
PT Bank Dagang Nasional Indonesia Warrants 213,874 303
Summit Bancorp ........................... 16,000 802,000
Washington Mutual ........................ 14,500 1,024,063
-----------
10,629,175
-----------
BUILDINGS & MATERIALS - 0.56%
Compagnie de Saint-Gobain ................ 3,200 631,146
-----------
631,146
-----------
CABLE, MEDIA & PUBLISHING - 0.40%
Elsevier NV .............................. 29,500 459,589
-----------
459,589
-----------
CONSUMER PRODUCTS - 1.53%
Dollar General (Strypes) ................. 18,000 697,500
Tenneco .................................. 25,000 1,040,625
-----------
1,738,125
-----------
CHEMICALS - 1.12%
Bayer .................................... 20,750 990,482
Orica .................................... 41,600 280,103
-----------
1,270,585
-----------
ELECTRONICS - 1.09%
AMP ...................................... 14,200 539,600
Siemens .................................. 10,750 705,494
-----------
1,245,094
-----------
ENERGY - 4.75%
Centrica ................................. 91,000 148,394
Duke Energy .............................. 10,000 576,250
El Paso Natural Gas ...................... 30,000 1,158,750
Elf Gabon ................................ 2,200 396,773
PacifiCorp ............................... 20,000 461,250
Royal Dutch Petroleum .................... 16,200 924,067
RWE ...................................... 11,000 585,542
Texaco ................................... 20,000 1,155,000
-----------
5,406,026
-----------
</TABLE>
Top 10 common stock holdings, representing 10.71% of net assets, are in
boldface.
<PAGE>
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
FOOD, BEVERAGE & TOBACCO - 4.14%
Fortune Brands ......................... 23,300 $ 895,594
Foster's Brewing Group ................. 291,542 633,646
Philip Morris Companies ................ 20,000 747,500
RJR Nabisco Holdings ................... 24,000 676,500
Southcorp .............................. 255,000 917,266
Unigate ................................ 77,000 834,999
-----------
4,705,505
-----------
HEALTHCARE & PHARMACEUTICALS - 1.45%
Baxter International ................... 10,000 571,875
Glaxo Wellcome ......................... 39,370 1,072,150
-----------
1,644,025
-----------
LEISURE, LODGING & ENTERTAINMENT - 0.78%
Bass ................................... 48,214 892,366
-----------
892,366
-----------
METALS & MINING - 0.54%
Rio Tinto .............................. 49,000 609,669
-----------
609,669
-----------
PACKAGING & CONTAINERS - 0.27%
Amcor .................................. 66,000 305,909
-----------
305,909
-----------
PAPER & FOREST PRODUCTS - 1.47%
Carter Holt Harvey ..................... 200,000 236,620
Georgia-Pacific ........................ 8,300 532,756
Georgia-Pacific Timber Group ........... 38,300 902,444
-----------
1,671,820
-----------
REAL ESTATE - 20.38%
Apartment Investment & Management ...... 19,700 768,300
Arden Realty ........................... 35,000 960,313
Camden Property Trust .................. 25,000 764,063
Capital Automotive REIT ................ 25,000 359,375
CarrAmerica Realty ..................... 30,000 840,000
Corporate Office Properties ............ 30,700 314,675
Duke Realty Investments ................ 38,000 859,750
Equity Office Properties Trust ......... 25,000 687,500
Essex Property Trust ................... 27,000 877,500
Excel Realty Trust ..................... 32,000 872,000
First Industrial Realty Trust .......... 23,000 713,000
Glenborough Realty Trust ............... 30,000 843,750
Golf Trust of America .................. 33,400 1,093,850
Grove Property Trust ................... 50,000 515,625
Health Care REIT ....................... 24,750 638,859
INMC Mortgage Holdings ................. 30,000 710,625
JDN Realty ............................. 29,000 942,500
Koger Equity ........................... 34,500 724,500
Liberty Property Trust ................. 31,142 823,317
Macerich Company (The) ................. 36,000 972,000
Pan Pacific Retail Properties .......... 33,800 716,138
Patriot American Hospitality ........... 42,000 1,005,375
Penn Real Estate Investment Trust ...... 24,000 565,500
</TABLE>
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closed-end income 9
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
------------------------------------
<S> <C> <C>
COMMON STOCK (CONTINUED)
REAL ESTATE (CONTINUED)
Philips International Realty ........ 30,000 $ 517,500
Prentiss Properties Trust ........... 43,508 1,112,173
Public Storage ...................... 32,000 960,000
Reckson Associates Realty ........... 34,000 845,750
Spieker Properties .................. 25,000 995,313
Sun Communities ..................... 20,000 678,750
Union Du Credit - Bail Immobilier ... 2,700 372,319
Wharf Holdings ...................... 107,000 136,701
-----------
23,187,021
-----------
RETAIL - 0.87%
Boots ............................... 65,000 993,177
-----------
993,177
-----------
TELECOMMUNICATIONS - 2.47%
GTE ................................. 15,700 915,506
Telecom Corporation of New Zealand .. 189,000 870,142
Telefonica .......................... 22,909 1,024,974
-----------
2,810,622
-----------
TRANSPORTATION & SHIPPING - 1.45%
Brambles Industries ................. 55,000 1,116,154
British Airways ..................... 50,000 529,570
-----------
1,645,724
-----------
UTILITIES - 5.79%
BG .................................. 80,294 413,428
Cable & Wireless .................... 88,000 996,618
Electrabel .......................... 2,950 738,613
Hong kong Electric Holdings ......... 200,000 587,172
Iberdrola ........................... 56,000 925,222
Rochester Gas & Electric ............ 20,000 615,000
Southern ............................ 30,000 796,875
Texas Utilities ..................... 20,000 790,000
United Utilities .................... 53,000 717,344
-----------
6,580,272
-----------
MISCELLANEOUS - 0.66%
Eridania Beghin-Say ................. 2,550 558,354
Jardine Matheson Holdings ........... 64,800 196,992
-----------
755,346
-----------
Total Common Stock (cost $54,209,989) 72,024,591
-----------
CONVERTIBLE PREFERRED STOCK - 10.97%
AUTOMOBILES & AUTO EQUIPMENT - 0.54%
BTI Cap Trust 6.50% ................. 12,500 617,187
-----------
617,187
-----------
BANKING, FINANCE & INSURANCE - 1.68%
Salomon 7.625% series FSA "DECS" .... 23,000 1,127,000
SunAmerica $3.188 "PERCS" ........... 16,700 784,900
-----------
1,911,900
-----------
BUILDINGS & MATERIALS - 0.94%
Blue Circle Industries 7.625% ....... 150,000 489,210
Ingersoll Rand 6.75% "PRIDES" ....... 24,000 585,000
-----------
1,074,210
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
-----------------------------
<S> <C> <C>
CONVERTIBLE PREFERRED STOCK (CONTINUED)
CABLE, MEDIA & PUBLISHING - 0.83%
Metromedia Intl Group 7.25% ........... 16,900 $ 946,400
----------
946,400
----------
ENERGY - 0.67%
CalEnergy Capital Trust III 6.50% ..... 16,000 762,000
----------
762,000
----------
HEALTHCARE & PHARMACEUTICALS - 0.61%
Herbalife DECS Trust III 8.75% ........ 30,600 696,150
----------
696,150
----------
METALS & MINING - 0.17%
Worthington Industries 7.25% "DECS" ... 14,800 190,550
----------
190,550
----------
REAL ESTATE - 2.19%
Crescent Real Estate 6.75% ............ 31,300 774,675
Reckson Assoc. Realty 7.625% Series A . 40,000 955,000
SL Green Realty Corp 8.00% ............ 30,000 766,875
----------
2,496,550
----------
RETAIL - 1.03%
Cendant 7.50% "PRIDES" ................ 31,000 1,170,250
----------
1,170,250
----------
TRANSPORTATION & SHIPPING - 1.39%
Greyhound Lines 8.50% ................. 26,500 977,188
Union Pacific Cap Trust 6.25% "TIDES" . 12,000 600,000
----------
1,577,188
----------
UTILITIES - 0.92%
Houston Industries 7.00% "ACES" ....... 15,000 1,044,375
----------
1,044,375
----------
Total Convertible Preferred Stock
(cost $11,420,635) ................. 12,486,760
----------
PREFERRED STOCK - 0.59%
CABLE, MEDIA & PUBLISHING - 0.59%
American Radio Systems Series B 11.375% 73 8,687
Granite Broadcasting 12.75% ........... 576 659,520
----------
668,207
----------
Total Preferred Stock (cost $507,562) . 668,207
----------
PRINCIPAL
AMOUNT
NON-CONVERTIBLE BONDS - 37.86%
AEROSPACE & DEFENSE - 0.28%
Derlan Manufacturing sr notes
10.00% 2007 ........................US$ $300,000 315,000
----------
315,000
----------
AUTOMOBILES & AUTO EQUIPMENT - 0.85%
Collins & Aikman Series B sr sub notes
10.00% 2007 ........................US$ 275,000 288,750
Motors & Gears Series D sr notes
10.75% 2006 ........................US$ 200,000 216,000
Venture Holdings Trust sr sub notes
9.75% 2004 .........................US$ 457,000 463,855
----------
968,605
----------
</TABLE>
<PAGE>
10 closed-end income
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
-----------------------------
<S> <C> <C> <C>
NON-CONVERTIBLE BONDS (CONTINUED)
BANKING, FINANCE & INSURANCE - 2.59%
Banco Nacional de Comercia Exterior unsec deb
7.25% 2004 ................................. US$ 750,000 $ 702,188
Bank of Greece Series RG unsec deb (loan stock)
10.75% 2010 ................................ GBP 120,000 261,238
DVI unsec sr notes 9.875% 2004 ................ US$ 225,000 239,625
European Investment Bank deb
17.50% 1999 ................................ GRD 50,000,000 172,619
First Nationwide Holdings sr sub notes
9.125% 2003 ................................ US$ 300,000 317,250
International Finance unsec marathon bonds
15.25% 1999 ................................ GRD 150,000,000 514,470
National Bank of Hungary sr deb
10.00% 2003 ................................ GBP 400,000 734,222
-----------
2,941,612
-----------
Buildings & Materials - 1.40%
American Standard sr notes
7.375% 2008 ................................ US$ 1,000,000 987,500
American Standard sr notes
10.875% 1999 ............................... US$ 450,000 471,375
Atrium Companies sr sub notes
10.50% 2006 ................................ US$ 125,000 133,125
-----------
1,592,000
-----------
Cable, Media & Publishing - 0.61%
Granite Broadcasting sr sub notes
9.375% 2005 ................................ US$ 500,000 510,000
Muzak LP/Capital sr unsec notes
10.00% 2003 ................................ US$ 80,000 83,400
Rogers Cablesystems sr unsec sub deb
11.00% 2015 ................................ US$ 90,000 105,750
-----------
699,150
-----------
CHEMICALS - 0.24%
BPC Holding Series B sr sec notes
12.50% 2006 ................................ US$ 250,000 276,250
-----------
276,250
-----------
COMPUTERS & TECHNOLOGY - 0.11%
Unisys sr unsec notes 11.75% 2004 ............. US$ 105,000 121,538
-----------
121,538
-----------
CONSUMER PRODUCTS - 0.68%
American Safety Razor Series B sr notes
9.875% 2005 ................................ US$ 475,000 517,750
Fedders North America sr sub notes
9.375% 2007 ................................ US$ 250,000 254,375
-----------
772,125
-----------
ELECTRONICS - 0.33%
HCC Industries sr unsec sub notes
10.75% 2007 ................................ US$ 250,000 265,000
Insilco sr unsec sub notes 10.25% 2007 ........ US$ 100,000 105,125
-----------
370,125
-----------
FOOD, BEVERAGE & TOBACCO - 0.55%
Core - Mark International sr sub notes
11.375% 2003 ............................... US$ 100,000 106,750
Delta Beverage sr notes 9.75% 2003 ............ US$ 500,000 522,500
-----------
629,250
-----------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
------------------------------------
<S> <C> <C> <C>
NON-CONVERTIBLE BONDS (CONTINUED)
FOREIGN CURRENCY LINKED NOTES - 1.40%
IDR Currency Linked Notes 0.00% 1998 ............. US$ $ 2,000,000 $ 445,536
South Korean Won Currency Linked Notes
0.00% 1998 ..................................... US$ 2,000,000 1,141,062
------------
1,586,598
------------
FOREIGN GOVERNMENT - 15.87%
Argentina Global Bond 9.75% 2027 ................. US$ 369,000 341,556
Hellenic Republic 9.20% 2002 ..................... GRD 100,000,000 327,504
Hellenic Republic 11.00% 1999 .................... GRD 150,000,000 496,798
Hydro-Quebec (loan stock) 12.75% 2015 ............ GBP 160,000 426,591
Mexican United States Global Bond
9.875% 2007 .................................... US$ 750,000 786,562
Mexican Cetes (T-Bills) 0.00% 1998 ............... MXN 1,500,000 1,568,733
New Zealand Government 8.00% 2001 ................ NZD 2,000,000 1,095,409
New Zealand Government 8.00% 2004 ................ NZD 2,000,000 1,141,979
*Poland Global par bond 3.00% 2024 (b) ............ US$ 2,000,000 1,288,750
Poland Govt Bond 15.00% 1999 ..................... PLZ 2,500,000 669,458
Republic of Argentina Series BGLO sr unsec unsub
8.375% 2003 .................................... US$ 500,000 487,500
*Republic of Brazil - IDU Series A deb
6.8125% 2001 (b) ............................... US$ 350,000 338,625
Republic of Columbia unsec unsub
7.625% 2007 .................................... US$ 1,000,000 921,250
Republic of South Africa Series 160
10.75% 1998 .................................... ZAR 2,500,000 475,436
Republic of South Africa Series 162
12.50% 2002 .................................... ZAR 14,000,000 2,604,409
Republic of Turkey unsec deb 9.00% 2003 .......... GBP 400,000 626,596
Russian Ministry of Finance unsec unsub
9.25% 2001 ..................................... US$ 500,000 467,500
Spanish Government 11.30% 2002 ................... ESP 170,000,000 1,373,572
Turkish T-Bill 0.00% 1998 ........................ TRL 80,000,000,000 2,616,909
------------
18,055,137
------------
HEALTHCARE & PHARMACEUTICALS - 0.37%
Healthsouth sr sub notes 9.50% 2001 .............. US$ 200,000 211,000
Paracelsus Healthcare sr unsec sub notes
10.00% 2006 .................................... US$ 200,000 205,500
------------
416,500
------------
INDUSTRIALS - 0.23%
American Builders & Contractors Series B sr unsec
sub notes 10.625% 2007 ......................... US$ 250,000 259,375
------------
259,375
------------
LEISURE, LODGING & ENTERTAINMENT - 1.76%
AFC Enterprises sr sub notes 10.25% 2007 ......... US$ 250,000 266,250
Alliance Gaming sr unsec sub notes
10.00% 2007 .................................... US$ 200,000 206,500
Cinemark USA Series B sr sub notes
9.625% 2008 .................................... US$ 500,000 517,500
Scott's Hospitality Series A unsec deb
10.95% 2001 .................................... CAD 800,000 623,534
Trump Atlantic City Associates Funding sec 1st mtg
notes 11.25% 2006 .............................. US$ 400,000 393,000
------------
2,006,784
------------
</TABLE>
<PAGE>
closed-end income 11
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C> <C>
NON-CONVERTIBLE BONDS (CONTINUED)
METALS & MINING - 1.16%
Commonwealth Aluminum sr sub notes
10.75% 2006 ................................... US$ $ 200,000 $ 215,500
Keystone Consolidated Industries sr sec notes
9.625% 2007 ................................... US$ 600,000 618,000
Weirton Steel sr notes 11.375% 2004 .............. US$ 450,000 489,375
----------
1,322,875
----------
PACKAGING & CONTAINERS - 0.50%
Container Corporation of America Series A sr notes
11.25% 2004 ................................... US$ 200,000 218,000
Pierce Leahy sr sub notes 11.125% 2006 ........... US$ 129,000 145,770
Pierce Leahy sr sub notes 9.125% 2007 ............ US$ 200,000 206,000
----------
569,770
----------
PAPER & FOREST PRODUCTS - 1.01%
Domtar deb 10.85% 2017 ........................... CAD 1,000,000 938,907
Four M Series B sr sec notes 12.00% 2006 ......... US$ 100,000 107,000
Pacific Lumber sr unsec notes 10.50% 2003 ........ US$ 100,000 103,875
----------
1,149,782
----------
RETAIL - 2.75%
ASDA Group unsec unsub deb
10.875% 2010 .................................. GBP 500,000 1,098,174
Cole National Group sr sub notes
9.875% 2006 ................................... US$ 500,000 538,750
Cort Furniture Rental sr notes 12.00% 2000 ....... US$ 142,000 154,780
Fleming Companies sr notes 10.625% 2001 .......... US$ 400,000 428,000
Provigo Series 1991 deb 11.25% 2001 .............. CAD 800,000 624,887
Wilsons Leather sr unsec notes
11.25% 2004 ................................... US$ 275,000 287,375
----------
3,131,966
----------
TELECOMMUNICATIONS - 1.18%
Iridium sr unsec deb 11.25% 2005 ................. US$ 50,000 50,687
Jacor Communications sr unsec sub notes
9.75% 2006 .................................... US$ 500,000 543,750
Outdoor Communications sr sub notes
9.25% 2007 .................................... US$ 225,000 237,375
Rogers Communications sr unsec notes
8.875% 2007 ................................... US$ 500,000 505,000
----------
1,336,812
----------
TEXTILES - 0.48%
GFSI Series B sr unsec sub notes
9.625% 2007 ................................... US$ 200,000 211,750
Synthetic Industries Series B sr sub notes
9.25% 2007 .................................... US$ 325,000 338,000
----------
549,750
----------
TRANSPORTATION & SHIPPING - 0.66%
Atlantic Express sr sec notes 10.75% 2004 ........ US$ 300,000 319,500
Blue Bird Body Series B sr sub notes
10.75% 2006 ................................... US$ 200,000 221,000
Teekay Shipping 1st pfd ship mtg notes
9.625% 2003 ................................... US$ 198,000 207,653
----------
748,153
----------
UTILITIES - 1.19%
AES sr unsec sub notes 10.25% 2006 ............... US$ 400,000 440,000
Calpine sr notes 10.50% 2006 ..................... US$ 400,000 439,000
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
--------------------------------
<S> <C> <C> <C>
NON-CONVERTIBLE BONDS (CONTINUED)
UTILITIES (CONTINUED)
Midland Funding II Series A deb
11.75% 2005 ............................... US$ $ 400,000 $ 476,000
-----------
1,355,000
-----------
MISCELLANEOUS - 1.66%
Fischer Scientific International sr sub notes
9.00% 2008 ................................ US$ 250,000 249,375
Graphic Controls Series A sr sub notes
12.00% 2005 ............................... US$ 1,000,000 1,122,500
Huntsman sr sub notes 9.50% 2007 ............ US$ 500,000 513,750
-----------
1,885,625
-----------
Total Non-Convertible Bonds
(cost $45,958,941) ........................ 43,059,782
-----------
CONVERTIBLE BONDS - 6.26%
BANKING, FINANCE & INSURANCE - 0.36%
Bell Atlantic Financial sr unsec deb
5.75% 2003 ................................ US$ 400,000 415,000
-----------
415,000
-----------
BUSINESS SERVICES - 0.55%
Metamor Worldwide sub notes
2.94% 2004 ................................ US$ 700,000 623,000
-----------
623,000
-----------
COMPUTERS & TECHNOLOGY - 0.58%
Platinum Technology sub notes
6.25% 2002 ................................ US$ 610,000 658,800
-----------
658,800
-----------
HEALTHCARE & PHARMACEUTICALS - 0.47%
Centocor Inc sub notes 4.75% 2005 ........... US$ 500,000 532,500
-----------
532,500
-----------
INDUSTRIALS - 0.80%
Thermo Fibertek sub notes 4.50% 2004 ........ US$ 835,000 908,063
-----------
908,063
-----------
LEISURE, LODGING & ENTERTAINMENT - 0.50%
Capstar Hotel sub notes 4.75% 2004 .......... US$ 640,000 568,800
-----------
568,800
-----------
PAPER & FOREST PRODUCTS - 0.18%
Repola unsec sub deb 6.50% 2004 ............. FIM 1,000,000 203,212
-----------
203,212
-----------
REAL ESTATE - 1.20%
Atria Communities sub notes 5.00% 2002 ...... US$ 535,000 524,300
IRT Property sub deb 7.30% 2003 ............. US$ 500,000 517,500
LTC Properties sub deb 8.50% 2001 ........... US$ 250,000 324,688
-----------
1,366,488
-----------
TELECOMMUNICATIONS - 1.62%
+Jacor Communications notes 4.70% 2018 ....... US$ 900,000 381,375
Smartalk Teleservices unsec sub notes
5.75% 2004 ................................ US$ 855,000 803,700
Tel-Save Holdings sub notes 5.00% 2004 ...... US$ 700,000 658,000
-----------
1,843,075
-----------
Total Convertible Bonds (cost $7,004,565) ... 7,118,938
-----------
</TABLE>
<PAGE>
12 closed-end income
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF NET ASSETS (CONTINUED)
- ------------------------------------------------------------------------------
MARKET
VALUE
------------
Total Market Value Of Securities Owned - 119.00%
(cost $119,101,692) ........................................... 135,358,278
Liabilities Net Of Receivables And Other
Assets - (19.00)% ............................................. (21,610,742)
Net Assets Applicable To 6,650,647 Shares ------------
($0.01 par value) Outstanding; Equivalent To
$17.10 Per Share - 100.00% .................................... $113,747,536
============
- -----------------
GDR - Global Depository Receipt
DECS - Dividend Enhanced Convertible Stock
PERCS - Preferred Equity Redemption Cumulative Stock
PRIDES - Preferred Redeemable Increased Dividend Securities
TIDES - Term Income Deferrable Equity Securities
ACES - Automatic Common Exchange Security
+ Zero coupon security as of May 31, 1998. The coupon shown is the effective
yield as of May 31, 1998.
* Sovereign debt obligations issued as part of debt restructuring that are
collateralized in full as to principal due at maturity by U.S. Treasury
zero coupon obligations which have the same maturity as the Brady Bond.
** Distribution in excess of net investment income includes net realized gain
on foreign currencies. Net realized gains on foreign currencies are
distributed as net investment income in accordance with provisions of the
Internal Revenue Code.
(a) The warrants enable the holder to subscribe to one ordinary share for
every one warrant held at IDR 725 per share until February 14, 2000.
(b) Coupon will increase periodically based upon a predetermined schedule.
Stated interest rate in effect at May 31, 1998.
CAD - Canadian dollar MXN - Mexican peso
ESP - Spanish peseta NZD - New Zealand dollar
FIM - Finnish markka PLZ - Polish Zlotty
GBP - British pound TRL - Turkish lira
GRD - Greek drachma US$ - U.S. dollar
HKD - Hong Kong Dollar ZAR - South African rand
COMPONENTS OF NET ASSETS AT MAY 31, 1998:
Common stock, $0.01 par value, 500,000,000 shares authorized
to the Fund ................................................... $ 93,096,054
Distributions in excess of net investment income** ............... (1,775,833)
Accumulated undistributed net realized gain on investments and
foreign currencies ............................................ 6,191,391
Net unrealized appreciation of investments and foreign currencies 16,235,924
------------
Total net assets ................................................. $113,747,536
============
See accompanying notes
<PAGE>
DELAWARE GROUP
GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MAY 31, 1998
(UNAUDITED)
- -------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ............................................ $3,457,756
Dividends (net of foreign taxes withheld
of $38,272) ...................................... 1,844,215 $5,301,971
---------- ----------
EXPENSES:
Management fees ..................................... 487,344
Administrative fees ................................. 104,431
Reports to shareholders ............................. 23,100
Amortization of line of credit organization
expenses ......................................... 18,266
Amortization of organization expenses ............... 12,376
Custodian fees ...................................... 7,000
Transfer agent fees ................................. 19,000
Professional fees ................................... 15,498
Directors' fees ..................................... 2,733
Taxes, other than taxes on income ................... 3,624
Other ............................................... 17,775
----------
Total operating expenses (before interest
expense) ......................................... 711,147
Interest expense .................................... 780,169
-----------
Total expenses ...................................... 1,491,316
-----------
Net Investment Income ............................... 3,810,655
-----------
Net Realized And Unrealized Gain (Loss) on
Investments And Foreign Currencies:
Net realized gain (loss) on:
Investment transactions .......................... 4,537,855
Foreign currencies ............................... (137,779)
-----------
Net realized gain ................................ 4,400,076
Net change in unrealized appreciation/depreciation on
investments and foreign currencies ............... (1,304,251)
-----------
Net Realized And Unrealized Gain On
Investments And Foreign Currencies ............... 3,095,825
-----------
Net Increase In Net Assets Resulting
From Operations .................................. $6,906,480
===========
See accompanying notes
<PAGE>
closed-end income 13
DELAWARE GROUP
GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENTS OF CHANGES IN NET ASSETS
- ------------------------------------------------------------------------------
SIX MONTHS YEAR
ENDED ENDED
5/31/98 11/30/97
(UNAUDITED)
------------- -------------
Operations:
Net investment income ............................ $ 3,810,655 $ 6,653,917
Net realized gain on investments and
foreign currencies ............................ 4,400,076 5,297,743
Net change in unrealized appreciation/depreciation
on investments and foreign currencies ......... (1,304,251) 6,588,624
------------- -------------
Net increase in net assets resulting
from operations ............................... 6,906,480 18,540,284
------------- -------------
Dividends And Distributions To
Shareholders From:
Net investment income ............................ (5,586,488) (6,345,563)
Net realized gains on investment transactions .... (1,256,972) (3,630,407)
------------- -------------
(6,843,460) (9,975,970)
------------- -------------
Net Increase In Net Assets ....................... 63,020 8,564,314
------------- -------------
Net Assets:
Beginning of period .............................. 113,684,516 105,120,202
------------- -------------
End of period .................................... $ 113,747,53 $ 113,684,516
============= =============
See accompanying notes
<PAGE>
DELAWARE GROUP
GLOBAL DIVIDEND AND INCOME FUND, INC.
STATEMENT OF CASH FLOWS
SIX MONTHS ENDED MAY 31, 1998
(UNAUDITED)
- ------------------------------------------------------------------------------
INCREASE (DECREASE) IN CASH: (INCLUDING FOREIGN CURRENCY)
CASH FLOWS PROVIDED BY OPERATING ACTIVITIES:
Interest and dividends received (excluding amortization
of $1,354,844) .......................................... $ 4,132,179
Operating expenses paid .................................... (1,013,816)
Interest expenses paid ..................................... (788,038)
Sale of short-term portfolio investments, net .............. 12,497
Purchase of long-term portfolio investments ................ (25,036,762)
Proceeds from disposition of long-term portfolio investments 32,334,852
------------
Net cash provided by operating activities .................. 9,640,912
============
CASH FLOWS USED FOR FINANCING ACTIVITIES:
Cash dividends paid ........................................ (6,843,460)
------------
Net cash used for financing activities ..................... (6,843,460)
------------
Effect of exchange rates on cash ........................... (64,111)
------------
Net increase in cash ....................................... 2,733,341
Cash at beginning of period ................................ 0
Cash at end of period ...................................... $ 2,733,341
============
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 ....... $ 6,906,480
------------
Decrease in investments ................................. 5,337,149
Net realized gain from security transactions ............ (4,537,855)
Net realized foreign exchange losses .................... 137,779
Net change in unrealized appreciation of investments and
foreign currencies ................................... 1,304,251
Decrease in receivable for investments sold ............. 591,136
Decrease in interest and dividends receivable ........... 185,053
Decrease in deferred organization expenses .............. 30,641
Increase in payable for investments purchased ........... 27,458
Decrease in interest payable ............................ (7,869)
Decrease in accrued expenses and other liabilities ...... (333,311)
------------
Total adjustments ....................................... 2,734,432
------------
Net cash provided by operating activities .................. $ 9,640,912
============
See accompanying notes
<PAGE>
14 closed-end income
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------
SIX YEAR FOR THE PERIOD
MONTHS ENDED ENDED 3/4/94* TO
5/31/98 11/30/97 11/30/96# 11/30/95# 11/30/94#
(UNAUDITED)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period .................................. $17.09 $15.81 $14.06 $13.09 $14.00+
Income (loss) from investment operations:
Net investment income .............................................. 0.57 1.00 0.98 1.14 0.84
------- ------- ------- ------- -------
Net realized and unrealized gain (loss) on investments and
foreign currencies ................................................. 0.47 1.78 2.27 1.15 (1.05)
------- ------- ------- ------- -------
Total from investment operations ................................... 1.04 2.78 3.25 2.29 (0.21)
------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income ............................... (0.84) (0.95) (1.02) (1.32) (0.70)
Distributions from net realized gains on investment transactions ... (0.19) (0.55) (0.48) - -
------- ------- ------- ------- -------
Total dividends and distributions .................................. (1.03) (1.50) (1.50) (1.32) (0.70)
------- ------- ------- ------- -------
Net asset value, end of period ..................................... $17.10 $17.09 $15.81 $14.06 $13.09
======= ======= ======= ======= =======
Market value, end of period ........................................... $16.63 $17.31 $15.88 $13.75 $11.75
======= ======= ======= ======= =======
Total return based on:(1)
Market value ....................................................... 1.66% 18.98% 27.42% 29.74% (17.15%)
======= ======= ======= ======= =======
Net asset value .................................................... 5.92% 17.93% 24.10% 19.08% (1.11%)
======= ======= ======= ======= =======
Ratios and supplemental data:
Net assets, end of period (000 omitted) ............................$113,748 $113,685 $105,120 $93,500 $87,780
Ratio of total operating expenses to adjusted average
weekly net assets (before interest expense) ........................ 1.02%** 1.02% 1.09% 1.13% 1.32%**
Ratio of interest expense to adjusted
average weekly net assets .......................................... 1.12%** 1.16% 1.06% N/A N/A
Ratio of net investment income to adjusted
average weekly net assets .......................................... 5.49%** 4.93% 5.59% 8.39% 8.54%**
Portfolio turnover ................................................. 37% 68% 88% 101% 86%
Leverage analysis:
Debt outstanding at end of period (000 omitted) .................... $25,000 $25,000 $25,000 N/A N/A
Average daily balance of debt outstanding (000 omitted) ............ $25,000 $25,000 $20,355 N/A N/A
Average daily balance of shares outstanding (000 omitted) .......... $6,651 $6,651 6,651 N/A N/A
Average debt per share ............................................. $3.76 $3.76 $3.06 N/A N/A
</TABLE>
- ------------
* Commencement of operations.
** Annualized.
# Certain prior year information has been reclassified to conform with current
year presentation.
+ 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 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.
See accompanying notes
<PAGE>
closed-end income 15
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
NOTES TO FINANCIAL STATEMENTS
MAY 31, 1998
(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.
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).
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.
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
<PAGE>
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. 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.
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 prior year information has been reclassified to conform with current
year presentation.
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, Administration Agreements 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, 1998, the Fund had a liability for Investment Management
fees of $163,877.
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 Fund'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, 1998, the Fund made purchases of
$25,064,220 and sales of $31,517,436 of investment securities other than U.S.
government securities and temporary cash investments.
At May 31, 1998, the aggregate cost of securities and unrealized appreciation
for federal income tax purposes for the Fund was as follows:
Cost of Investments ................................ $119,101,692
------------
Aggregate unrealized appreciation .................. 23,706,503
Aggregate unrealized depreciation .................. 7,449,918
------------
Net unrealized appreciation ........................ $ 16,256,585
============
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, 1998.
<PAGE>
16 closed-end income
Notes To Financial Statements (Continued)
- ------------------------------------------------------------------------------
Shares issuable under the Fund's dividend reinvestment plan are purchased by
the Fund's transfer agent, IFTC, in the open market.
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, 1998, the par value of loans
outstanding was $25,000,000 at a variable interest rate of 6.125%. During the
six months ended May 31, 1998, the average daily balance of loans outstanding
was $25,000,000 at a weighted average interest rate of approximately 6.16%.
The maximum amount of loans outstanding at any time during the period was
$25,000,000. 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, 1998.
7. Credit and Market Risks
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
county'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.
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.
<PAGE>
8. Geographic Disclosure
As of May 31, 1998, the Fund's geographic diversification was as follows:
PERCENTAGE OF
TOTAL SECURITIES
COUNTRY* MARKET VALUE AT VALUE
- -------- ------------ --------
United States .................. $ 83,021,469 61.33%
United Kingdom ................. 12,356,530 9.13
Australia ...................... 4,925,519 3.64
Germany ........................ 3,724,591 2.75
New Zealand .................... 3,344,150 2.47
Spain .......................... 3,323,767 2.46
South Africa ................... 3,079,845 2.27
Mexico ......................... 3,057,483 2.26
Turkey ......................... 2,616,909 1.93
Netherlands .................... 2,483,465 1.83
Canada ......................... 2,187,328 1.62
France ......................... 1,958,592 1.45
Poland ......................... 1,958,208 1.45
Greece ......................... 1,511,391 1.12
South Korea .................... 1,141,062 0.84
Columbia ....................... 921,250 0.68
Argentina ...................... 829,056 0.61
Belgium ........................ 738,613 0.55
Hong Kong ...................... 723,874 0.53
Russia ......................... 467,500 0.35
Indonesia ...................... 445,839 0.33
Brazil ......................... 338,625 0.25
Finland ........................ 203,212 0.15
------------ ------
Total .......................... $135,358,278 100.00%
============ ======
*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.
9. 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 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. There was no option activity during
the six months ended May 31, 1998.
10. Year 2000
Like other investment companies, financial and business organizations and
individuals around the world, the Fund could be adversely affected if computer
systems used by the Investment Manager and other service providers do not
properly process and calculate date-related information and data on and after
January 1, 2000. The Fund is taking steps to obtain satisfactory assurances
that the Investment Manager and other major service providers are taking steps
reasonably designed to address the Year 2000 issue with respect to the
computer systems that such service providers use. At this time, however, there
can be no assurance that these steps will be sufficient to avoid any adverse
impact to the Fund.
<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
Delaware Investments Family of Funds
Philadelphia, PA
JEFFREY J. NICK
President and Chief Executive Officer
Delaware Investments Family 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, MN
CHARLES E. PECK
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
+Audit Committee Member
<PAGE>
Executive Officers
WAYNE A. STORK
Chairman
Delaware Investments Family of Funds
Philadelphia, PA
JEFFREY J. NICK
President and Chief Executive Officer
Delaware Investments Family of Funds
Philadelphia, PA
RICHARD G. UNRUH, JR.
Executive Vice President
Philadelphia, PA
directors & officers [Photo of Globes]
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
<PAGE>
The Delaware Investments 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 Investments fund, contact your financial
adviser or call the Delaware Group at 1.800.523.1918. 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
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, 1998
288
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
www.delawarefunds.com
[Photo of Globes]
DGF
Listed
NYSE
THE NEW YORK STOCK EXCHANGE
DELAWARE(SM)
INVESTMENTS
- -----------
Philadelphia * London
Printed in the USA
on recycled paper
(857)
SA-DGF [5/98] PP7/98
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan; however, shares of the
Funds are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Funds are not bank or credit union
deposits.
(C) Delaware Distributors, L.P.
