<PAGE>
DELAWARE(SM)
INVESTMENTS Delaware Group Global Dividend and Income Fund
------------
Closed-End Income
(Closed-End Income Artwork)
2000 SEMI-ANNUAL REPORT
<PAGE>
A TRADITION OF SOUND INVESTING SINCE 1929
-----------------------------------------
Your Fund's Investment Strategies
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 yields 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.
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 fluctuation. The
value of a 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 $25 million (29%) of your Fund's assets were leveraged as of May 31, 2000.
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 that 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.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(C)Delaware Distributors, L.P.
<PAGE>
TABLE OF CONTENTS
-----------------
Letter to Shareholders 1
Portfolio Management
Review 3
Performance Summary 6
Financial Statements
Statement of Net Assets 7
Statement of Operations 11
Statements of Changes in
Net Assets 12
Statement of Cash Flows 13
Financial Highlights 14
Notes to Financial
Statements 15
<PAGE>
"THE SHARP DOWNTURN IN
DOMESTIC STOCK MARKETS
THIS PAST SPRING MAY
HAVE SOMEWHAT
TEMPERED MOMENTUM IN
SOUTHEAST ASIA."
Dear Shareholder
July 10, 2000
Recap of Events - Over the last six-month period, stock markets around the world
were characterized by striking parallels in performance. Many international
stock indices demonstrated the same volatility seen in both the S&P 500 Index
and the Nasdaq Composite.
As the end of 1999 approached, U.S. stock markets experienced a strong rally led
by shares of growth stocks in general, and technology companies in particular.
That bull run persisted through the month of February, before investor sentiment
did an about-face and the market gave up most of its gains during the second
half of the six-month period. This correction has continued through the end of
May, 2000.
In Europe, corporate profits were on the rise as the new year came and went.
Technology, and wireless stocks in particular, were leading a charge similar to
that seen in the U.S. However, Europe also witnessed the pullback beginning in
March. European wireless stocks, feeling the pressure of licensing, in many
cases gave up most or all of their recent gains. Despite this volatility, and a
weakening euro that has confounded forecasters, the overall economic outlook in
Europe is encouraging. The Morgan Stanley Capital International (MSCI) Europe
Index finished the six-month period up 8.43%.
The sharp downturn in domestic stock markets this past spring may have somewhat
tempered momentum in Southeast Asia, where economies such as those in Singapore
and Indonesia had shown strong moves toward full recovery at the start of the
year. International investors can be encouraged, however, by the continued rapid
growth seen in Hong Kong, as well as in China, which was aided in part by the
prospect of entry into the World Trade Organization.
<TABLE>
<CAPTION>
Average Annual Total Returns
Premium (+)/
Discount (-)
For Periods Ended May 31, 2000 Six Months One Year Five Year Lifetime As of 5/31/00
----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Delaware Group Global Dividend
and Income Fund -0.10% -5.75% +9.76% +8.02% -8.93%
----------------------------------------------------------------------------------------------------------
Standard & Poor's 500 Index +2.90% +9.11% +11.22%
Merrill Lynch High-Yield Bond Index -2.07% -2.95% +6.56% +10.92%
Morgan Stanley Europe, Australia and
Southeast Asia Index +3.33% +13.70% +16.00% +12.73%
Salomon Smith Barney Non-U.S
World Government Bond Index -4.61% -2.64% +1.26% +11.23%
Lipper Closed-End Income and
Preferred Stock Funds Average (11 funds) -0.46% -7.22% +7.68% +7.89%
----------------------------------------------------------------------------------------------------------
</TABLE>
All performance shown above is at net asset value without effect of sales
charges and assumes reinvestment of dividends and capital gains. The Lipper
category represents the average returns of income and preferred stock mutual
funds tracked by Lipper Analytical (Source: Lipper Analytical Services, Inc.).
The Standard & Poor's 500 Index is an unmanaged composite of mostly
large-capitalization U.S. companies. The Merrill Lynch High-Yield Bond Index
measures the performance of the U.S. high-yield bond market. The Morgan Stanley
Europe, Australia and Southeast Asia Index is an equity index measuring the
performance of stocks in Europe, Australia and Southeast Asia, excluding Japan.
The Salomon Smith Barney Non-U.S. World Government Bond Index measures the
general performance of non-U.S. bond markets. You cannot invest directly in an
index. Past performance does not guarantee future results.
1
<PAGE>
Bond markets around the world suffered a difficult six months, as rising U.S.
interest rates and a lack of liquidity in the high-yield markets caused returns
to lag. Some corporate bonds began to bounce back as investors looked for a
relative haven from the equities markets, although it was U.S. Treasuries which
benefited most from that mentality, gaining added investor interest from the
Treasury's plan to buy back long-term debt.
Delaware Group Global Dividend and Income Fund returned -0.10% during the
six-month period ended May 31, 2000. The S&P 500 Index returned 2.90% for the
same period. The Delaware Group Global Dividend and Income Fund has a value
directive, while the stock market has recently been characterized by momentum
investing, with investors focused on growth companies, and technology in
particular.
Outlook - Since March, investors' often extreme bias toward growth companies has
shown some signs of changing, and we believe the Delaware Group Global Dividend
and Income Fund is well-positioned if markets begin favoring value investing
strategies. We believe that any great disparity between growth and value biases
cannot be sustained over the long-term, and we look forward to the second half
of 2000, in which a cooler economy is expected to prompt the Federal Reserve to
end its campaign of interest rate hikes. The Fed's goal - a healthy U.S. economy
growing at a less robust pace - is good for both international and domestic
markets. We believe that many opportunities lie ahead, and that our disciplined,
value-based outlook at global investing provides a sound long-term approach and
valuable portfolio diversification. Thank you for your continued confidence in
Delaware Investments.
Sincerely,
/s/Wayne A. Stork /s/David K. Downes
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
(Closed-End Income Artwork)
2
<PAGE>
PORTFOLIO MANAGEMENT REVIEW
---------------------------
Joanna Bates
Senior Portfolio Manager
Foreign Fixed Income
Delaware Investment Advisers Ltd.
Michael Dugan
Senior Portfolio Manager
U.S. Equities
Delaware Management Company
Clive A. Gillmore
Senior Portfolio Manager
Foreign Equities
Delaware Investment Advisers Ltd.
Paul A. Matlack
Senior Portfolio Manager
U.S. Fixed Income
Delaware Management Company
Christopher A. Moth
Senior Portfolio Manager
Foreign Fixed Income
Delaware Investment Advisers Ltd.
July 10, 2000
Portfolio Highlights
Delaware Group Global Dividend and Income Fund provided a total return of
-0.10% for the six-month period ended May 31, 2000. Your Fund's return was
negative for this period, as was a peer group of closed-end funds with similar
investment objectives tracked by Lipper Analytical Services. Given the
challenging markets faced by your Fund during the period, performance may have
suffered worse had it not been for our dollar-denominated holdings in foreign
debt. The dollar was strong against other currencies throughout the period.
U.S. Stocks
As of May 31, 2000, Delaware Group Global Dividend and Income Fund's allocation
to common stock was 73.17% of the portfolio's adjusted net assets. Early in our
fiscal year, many investors focused primarily on technology and growth stocks,
largely ignoring stocks with a value orientation. But since the drop in the
Nasdaq in mid-March, the market has at times been more in tune with our style of
investing. Our strategy has been to position the Fund in a combination of
economically sensitive stocks, and the energy, REIT, and utility sectors.
Energy, REITs, and utilities have performed well while economically sensitive
stocks lagged. When the Fed completes its phase of monetary tightening, we
believe that cyclical stocks will regain value.
Basic Industry: Chemicals and metal companies were negatively impacted by the
Fed's more restrictive monetary policy. Many investors have moved away from
these sectors, apparently concerned that the Fed's interest rate increases may
slow the economy more than anticipated, which would negatively impact the
performance of companies in these industries.
Energy: Oil prices have been rising since January, 1999, despite recent
assurances by OPEC countries that production would be increased. Our holdings in
Chevron and Texaco once again delivered strong returns during our fiscal period.
REITs: For much of the period's first three months, REIT prices declined even
though the underlying property values remained solid. As a result, investors
tended to ignore REITs in favor of large-cap stocks with higher growth
potential. However, April's stock market volatility marked a transition, as
investors recognized REITs to be a low-volatility asset class with attractive
values and the potential for steady returns. This provided a catalyst that began
to send REIT prices up again. Our REIT holdings delivered strong returns in
April and May, which helped the Fund's overall performance.
Utilities: The shake-up in the technology sector caused many investors to seek
out the relative stability traditionally found in utility company stocks.
Investors were attracted to the more reliable earnings and low P/Es available
from companies in this sector. Telephone and electric companies in particular
performed well here, and our holdings in GTE contributed positively to the
Fund's performance for the period.
3
<PAGE>
Delaware Group Global Dividend
and Income Fund
Country Allocation
May 31, 2000
Others 12.89%
(14 countries)
United Kingdom 9.18%
United States 54.44%
South Africa 5.04%
Germany 3.46%
Netherlands 1.81%
New Zealand 3.05%
Canada 2.62%
Poland 2.20%
Greece 2.18%
Australia 3.13%
Foreign Stocks
Volatile equity markets characterized the period abroad as well. The Fund's
performance was at times hurt by its underexposure to telecommunications and
technology stocks during the first three months of the period, when those stocks
performed quite well. Several telecommunications stocks that we did own -
including Germany's Siemens AG and Spain's Telefonica SA - were eventually
trimmed from the portfolio when their prices reached a level at which we no
longer considered them "value" investments. We continue to look for
telecommuications and technology stocks that meet our criteria, and will add to
the portfolio in these sectors when we do see value.
We continue to see future promise in the United Kingdom, and the U.K. once again
remained the Fund's largest country allocation overseas, accounting for about
9.2% of the portfolio. British Gas and the mortgage-lending firm Halifax are two
examples of British "old economy" stocks that have been added to the portfolio
recently.
We have traditionally invested lightly in Japan, and currently have zero
exposure there. We continue to feel justified in our belief that value in
Japanese equity markets is scarce. Although Japan shows signs of recovery from
its recession and deflationary pressures, we believe the road to recovery may be
long and arduous.
Despite OPEC's willingness to intervene, and its promises at the end of May to
raise production, oil prices continued a drastic rise through the end of the
period. The rise in prices helped many of our energy stocks across the board,
and in Europe this included Royal Dutch Petroleum, based in The Hague.
High-Yield Bonds
Over the last six months, high-yield bonds continued to wrestle with market
conditions that set in nearly 18 months ago, when economic problems in Asia
became a global concern. Despite a booming U.S. economy and ongoing recovery
abroad, demand for higher risk investments remained weak. Flows into high-yield
bond mutual funds are significantly below their pre-Asian crisis levels.
Fortunately, new issues of high-yield bonds are also down. Still, demand remains
insufficient, contributing to the weak price performance of the bonds in your
Fund.
Liquidity, or the ability to sell a security without significantly affecting its
price, continued to be one of the Fund's biggest hurdles. Securities dealers
remain reluctant to commit capital to their inventory of high-yield bonds. This
reluctance, in our opinion, may stem from losses incurred during the summer of
1998, when demand for high-yield bonds fell sharply. Rising interest rates,
which generally reduce the value of all types of bonds, may have also caused
dealers to reduce their inventories, in turn adding to the liquidity problems.
As a result, we found it increasingly difficult to sell bonds that we no longer
viewed as attractive without adversely affecting their price.
(Closed-End Income Artwork)
4
<PAGE>
Foreign Bonds
The past six months have been a difficult period for U.S. investors in
international bonds. In U.S. dollar terms, bond markets were negative during the
period, with the Fund's benchmark for this component of the portfolio, the
Salomon Smith Barney Non-U.S. World Government Bond Index showing a -4.61%
return for the six months ended May 31, 2000. Every major market was negative,
with the exception of Canada, which managed a +2% return.
The U.S. dollar itself has continued to be strong across the board, particularly
against the South African rand, which is down by more than 11%. The Australian
dollar and New Zealand dollar have also been weak, both down by more than 10%
against the dollar, while the euro continued its steady slippage, falling by 7%
during the period. As a result, we feel these currencies are particularly
undervalued and have made them our areas of greatest debt exposure. The slight
exception is Europe, however, where uncertainty surrounding the euro and the
European Central Bank's proactive role on interest rates has led us to maintain
a lower percentage of holdings in this area than our benchmark. Our most
significant European bond investments are in emerging markets such as Poland and
Greece.
As in equities, we currently have no exposure to the Japanese bond market, where
medium-term inflation risk is very real considering the extreme deficit and
sharply rising ratio of debt to Gross National Product.
Outlook
Economic data released in early June showed visible signs that the U.S. economy
may finally be slowing. This came as welcome news to investors who hope the
Federal Reserve will end its campaign of interest rate hikes intended to cool
the economy and head off inflation. A slower domestic economy would likely bring
about a broadening of the market, which would be welcome given our value
approach. While we continue to monitor the U.S. economy for signs of a slowdown,
we believe that economic expansion elsewhere in the world may produce strong
earnings for many of the global, dividend-producing companies in which the Fund
invests. In addition, we believe that given currency valuations abroad, the
outlook for the international bond markets is generally much brighter than it
was six months ago.
As usual, portfolio managers of the Delaware Group Global Dividend and Income
Fund continue to favor dividend-paying stocks that appear to be selling at less
than their true worth. We are confident in our disciplined, objective approach
to selecting stocks and look forward to benefiting from new opportunities as
they arise in the markets.
"THE RISE IN OIL PRICES
HELPED MANY OF OUR
ENERGY STOCKS ACROSS
THE BOARD."
5
<PAGE>
FUND BASICS
-----------
Fund Objectives
The Fund seeks to achieve current
income and, secondarily, capital appreciation.
Total Fund Assets
$86.73 million
Number of Holdings
169
Fund Start Date
March 4, 1994
NYSE Symbol
DGF
Portfolio Asset Mix
May 31, 2000
Non-Convertible Bonds 34.82%
Common Stock 56.80%
Convertible Bonds 1.58%
Liabilities Net of
Receivables and
Other Assets 1.88%
Preferred Stock, Warrants &
Short-Term Securities 0.85%
Convertible Preferred Stock 4.07%
The above chart represents adjusted net assets.
Adjusted net assets excludes debt outstanding.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND PERFORMANCE
----------------------------------------------------------
Market Price vs. Net Asset Value
November 30, 1999 to May 31, 2000
---------------------------------
Premium(+)/Discount(-)Data
Current -8.93% on 5/31/00
High -8.93% on 5/31/00
Low -18.48% on 12/31/99
Mkt Price NAV
--------- -----
"Nov. 99" 11.25 13
"Dec. 99" 12 12.94
"Jan. 00" 11.56 12.68
"Feb. 00" 10.50 11.81
"Mar. 00" 10.68 12.42
"Apr. 00" 11.31 12.53
"May 00" 11.62 12.53
Your Fund's Share Buyback Program
Your Fund's Board of Directors approved a share repurchase program in 1994 that
authorized Delaware Group Global Dividend and Income Fund's lead manager to
purchase up to 10% of the Fund's outstanding shares on the floor of the New York
Stock Exchange.
The Fund commenced a tender offer to purchase for cash up to 10% of its issued
and outstanding shares of common stock on June 1, 2000, which expired on June
29, 2000. The tender offer was oversubscribed and all tenders were subject to
proration (at a ratio of approximately 50.40%) in accordance with the terms of
the tender offer. Following the purchase of shares tendered, the Fund has
5,985,582 shares of common stock outstanding.
Your Reinvestment Options
Delaware Group 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 Equiserve at 1.800.426.5523. 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.
(Closed-End Income Artwork)
6
<PAGE>
Statement of Net Assets
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND
----------------------------------------------
Number of Market
May 31, 2000 (Unaudited) Shares Value
--------------------------------------------------------------------------------
Common Stock - 73.17%
Aerospace & Defense - 0.62%
Lockheed Martin .................................. 22,000 $ 539,000
----------
539,000
----------
Automobiles & Automotive Parts - 4.03%
Continental ...................................... 26,000 476,797
Dana ............................................. 23,000 593,688
Ford Motor ....................................... 18,000 874,125
General Motors ................................... 11,000 776,875
GKN .............................................. 56,000 775,208
----------
3,496,693
----------
Banking, Finance & Insurance - 10.00%
Bayerische Verelnsbank ........................... 7,800 499,363
Block (H&R) ...................................... 11,000 339,625
Financial Security Assurance Holdings ............ 18,853 1,416,332
First Union ...................................... 17,200 605,225
Halifax Group .................................... 32,000 314,084
ING Groep NV ..................................... 16,507 987,625
KeyCorp .......................................... 26,000 546,000
Mellon Financial ................................. 16,000 617,000
National Australia Bank .......................... 75,430 1,124,098
National City .................................... 25,000 500,000
Sanlam ........................................... 303,000 327,344
St. Paul ......................................... 25,000 937,500
Summit Bancorp ................................... 16,000 459,000
----------
8,673,196
----------
Buildings & Materials - 1.31%
Blue Circle ...................................... 77,922 497,334
Compagnie de Saint-Gobain ........................ 3,200 446,467
Wharf (Holdings) ................................. 107,000 192,242
----------
1,136,043
----------
Cable, Media & Publishing - 0.49%
Gannett .......................................... 6,600 427,350
----------
427,350
----------
Chemicals - 2.18%
Bayer ............................................ 20,750 805,581
Dow Chemical ..................................... 8,000 856,500
Orica ............................................ 56,800 230,273
----------
1,892,354
----------
Computers & Technology - 1.41%
Pitney Bowes ..................................... 20,000 870,000
Xerox ............................................ 13,000 352,625
----------
1,222,625
----------
Consumer Products - 0.68%
Siemens .......................................... 4,050 591,517
----------
591,517
----------
<PAGE>
Number of Market
Shares Value
--------------------------------------------------------------------------------
Common Stock (continued)
Electronics & Electrical Equipment - 2.55%
Eaton ............................................ 14,000 $1,015,875
Rockwell International ........................... 6,300 258,300
Thomas & Betts ................................... 33,000 936,375
----------
2,210,550
----------
Energy - 5.88%
Chevron .......................................... 14,000 1,294,125
Conoco Class B ................................... 21,000 598,500
EOG Resources .................................... 23,000 747,500
Royal Dutch Petroleum ............................ 16,200 998,284
RWE .............................................. 11,000 398,311
Sasol ............................................ 39,400 258,616
Texaco ........................................... 14,000 804,125
----------
5,099,461
----------
Food, Beverage & Tobacco - 5.60%
Bass ............................................. 56,470 618,945
Foster's Brewing Group ........................... 329,542 801,598
Goodman Fielder .................................. 970,000 686,799
Heinz (H.J.) ..................................... 14,000 548,625
Nabisco Group Holdings ........................... 24,000 523,500
Philip Morris .................................... 20,000 522,500
RJ Reynolds Tobacco Holdings ..................... 29,000 804,750
Unigate .......................................... 77,000 349,923
----------
4,856,640
----------
Healthcare & Pharmaceuticals - 1.28%
Glaxo Wellcome ................................... 39,370 1,109,746
LTC Healthcare ................................... 1,612 1,612
----------
1,111,358
----------
Industrial Machinery - 1.92%
Caterpillar ...................................... 11,000 420,750
Deere & Co. ...................................... 30,000 1,246,875
----------
1,667,625
----------
Metals & Mining - 1.68%
Alcan Aluminum ................................... 30,000 984,375
Rio Tinto ........................................ 32,111 471,919
----------
1,456,294
----------
Packaging & Containers - 1.22%
Amcor ............................................ 170,100 489,521
Crown Cork & Seal ................................ 33,000 565,125
----------
1,054,646
----------
Paper & Forest Products - 2.93%
Carter Holt Harvey ............................... 200,000 161,093
Georgia-Pacific (Timber Group) ................... 38,300 885,688
International Paper .............................. 20,000 696,250
Paperlinx ........................................ 56,700 98,422
Weyerhaeuser ..................................... 14,000 694,750
----------
2,536,203
----------
7
<PAGE>
Statement of Net Assets (continued)
Number of Market
Delaware Group Global Dividend and Income Fund Shares Value
--------------------------------------------------------------------------------
Common Stock (continued)
Real Estate - 14.21%
Apartment Investment & Management ............ 19,700 $ 789,231
Camden Property Trust ........................ 10,000 280,625
Capital Automotive ........................... 6,500 92,625
Corporate Office Properties .................. 30,700 266,706
Duke Realty Investments ...................... 38,000 819,375
Equity Office Properties Trust ............... 25,000 664,063
Essex Property Trust ......................... 13,000 517,563
Franchise Finance ............................ 40,000 902,500
General Growth Properties .................... 15,100 477,538
Grove Property Trust ......................... 50,000 715,625
Liberty Property Trust ....................... 31,142 778,550
Macerich ..................................... 36,000 785,250
MeriStar Hospitality ......................... 20,000 380,000
Pan Pacific Retail Properties ................ 33,800 676,000
Philips International Realty ................. 30,000 510,000
Prentiss Properties Trust .................... 43,508 1,044,192
Public Storage ............................... 32,000 714,000
Reckson Associates Realty .................... 34,000 745,875
Spieker Properties ........................... 11,100 515,456
Sun Communities .............................. 20,000 647,500
-----------
12,322,674
-----------
Retail - 1.54%
Boots ........................................ 65,000 542,359
Great Universal Stores ....................... 128,700 795,406
-----------
1,337,765
-----------
Telecommunications - 2.52%
Cable & Wireless ............................. 50,300 839,781
GTE .......................................... 10,700 676,775
Telecom Corporation of New Zealand ........... 189,000 664,288
-----------
2,180,844
-----------
Transportation & Shipping - 1.30%
British Airways .............................. 93,000 504,794
Norfolk Southern ............................. 35,000 623,438
-----------
1,128,232
-----------
Utilities - 9.82%
BG ........................................... 148,370 887,534
Duke Energy .................................. 30,000 1,747,500
Electrabel ................................... 1,689 388,548
Hong Kong Electric Holdings .................. 200,000 669,896
Iberdrola .................................... 56,000 715,989
PowerGen ..................................... 82,300 539,140
Scottish Power ............................... 26,100 836,831
Southern ..................................... 25,000 648,438
Telefonica de Espana ......................... 37,032 760,323
TXU .......................................... 23,000 822,250
United Utilities ............................. 53,000 501,156
-----------
8,517,605
-----------
Total Common Stock (cost $63,525,451) ........ 63,458,675
-----------
<PAGE>
Number of Market
Shares Value
--------------------------------------------------------------------------------
Convertible Preferred Stock - 5.25%
Banking, Finance & Insurance - 0.69%
Sovereign Capital Trust II 7.50% ............... 13,000 $ 600,438
----------
600,438
----------
Buildings & Materials - 0.63%
Ingersoll Rand 6.75% PRIDES .................... 24,000 549,000
----------
549,000
----------
Paper & Forest Products - 0.94%
Georgia-Pacific Units 7.50% .................... 22,500 818,438
----------
818,438
----------
Metals & Mining - 0.08%
Rouge Industries Class A ....................... 14,800 66,600
----------
66,600
----------
Real Estate - 1.37%
General Growth Properties 7.25% ................ 18,700 404,388
SL Green Realty 8.00% .......................... 30,000 780,000
----------
1,184,388
----------
Transportation & Shipping - 1.54%
Greyhound Lines 8.50% .......................... 26,500 814,875
Union Pacific Cap Trust 6.25% TIDES ............ 12,000 520,500
----------
1,335,375
----------
Total Convertible Preferred Stock
(cost $5,095,500) ........................... 4,554,239
----------
Preferred Stock - 0.75%
Granite Broadcasting 12.75% .................... 7,366 650,067
----------
Total Preferred Stock (cost $659,422) .......... 650,067
----------
Principal Market
Amount++ Value
----------- -----------
Non-Convertible Bonds - 44.85%
Banking, Finance & Insurance - 1.81%
Banco Nacional de Comercia Exterior
unsec deb 7.25% 2/2/04 ...................... US$ $ 750,000 $ 693,938
Bank of Greece Series RG unsec deb
(loan stock) 10.75% 9/16/10 ................. GBP 120,000 229,274
National Bank of Hungary sr deb
10.00% 8/5/03 ............................... 400,000 642,663
-----------
1,565,875
-----------
Cable, Media & Publishing - 2.05%
Adelphia Communications
9.37% 11/15/09 .............................. US$ 1,000,000 903,750
Charter Communications 8.625%
4/1/09 ...................................... 500,000 420,000
Granite Broadcasting sr sub notes
9.375% 12/1/05 .............................. 500,000 457,500
-----------
1,781,250
-----------
Chemicals - 0.26%
BPC Holding Series B sr sec notes
12.50% 6/15/06 .............................. 266,562 227,244
-----------
227,244
-----------
8
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Group Global Dividend and Income Fund Amount++ Value
--------------------------------------------------------------------------------
Non-Convertible Bonds (continued)
Computers & Technology - 0.13%
Unisys sr unsec notes
11.75% 10/15/04 ............................. $ 105,000 $ 112,613
------------
112,613
------------
Consumer Products - 1.06%
American Safety Razor Series B
sr notes 9.875% 8/1/05 ...................... 475,000 458,375
Fedders North America sr sub notes
9.375% 8/15/07 .............................. 250,000 233,750
Fisher Scientific International
9.00% 2/1/08 ................................ 250,000 223,750
------------
915,875
------------
Food, Beverage & Tobacco - 0.94%
Chiquita Brands 9.625% 1/15/04 ................ 1,000,000 815,000
------------
815,000
------------
Foreign Government - 24.42%
Argentina Global Bond
9.75% 9/19/27 ............................... 369,000 276,289
Belgium Kingdom 5.75% 9/28/10 .................EUR 1,200,000 1,134,571
Deutschland Republic
6.25% 1/1/24 ................................ 1,000,000 1,019,109
Hellenic Republic 8.60% 3/26/08 ...............GRD 250,000,000 794,610
Hellenic Republic 8.70% 4/8/05 ................ 350,000,000 1,071,166
Hellenic Republic 9.20% 3/21/02 ............... 100,000,000 289,931
Hydro-Quebec (loan stock)
12.75% 9/13/15 ..............................GBP 160,000 391,781
New Zealand Government
8.00% 2/15/01 ...............................NZD 2,000,000 920,975
New Zealand Government
8.00% 4/15/04 ............................... 3,400,000 1,602,224
Poland Government Bond
12.00% 10/12/03 .............................PLZ 5,500,000 1,133,476
Poland Government Bond
8.50% 2/12/05 ............................... 7,000,000 1,277,361
Portugal Government Bond
5.375% 6/23/08 ..............................EUR 1,000,000 923,824
Republic of Argentina Series
BGLO sr unsec unsub
11.00% 10/9/06 ..............................US$ 1,500,000 1,351,650
*Republic of Brazil - IDU
Series A deb 7.00% 1/1/01 ................... 123,000 123,168
Republic of Columbia unsec unsub
7.625% 2/15/07 .............................. 1,000,000 687,500
Republic of Korea unsub notes
8.875% 4/15/08 .............................. 1,000,000 1,003,050
Republic of South Africa
Series 153 13.00% 8/31/10 ................... 11,000,000 1,459,664
Republic of South Africa
Series 162 12.50% 1/15/02 ...................ZAR 14,000,000 2,010,747
<PAGE>
Principal Market
Amount++ Value
--------------------------------------------------------------------------------
Non-Convertible Bonds (continued)
Foreign Government (continued)
Republic of South Africa Series
177 9.50% 5/15/07 ................... $13,000,000 $ 1,471,060
Republic of Turkey unsec deb
9.00% 10/27/03 ...................... GBP 400,000 581,151
Russian Ministry of Finance unsec
unsub 9.25% 11/27/01 ................ US$ 500,000 468,750
United Mexican States Global Bonds
8.25% 2/24/09 ....................... 2,500,000 1,186,943
----------
21,179,000
----------
Leisure, Lodging & Entertainment - 1.02%
AFC Enterprises sr sub notes
10.25% 5/15/07 ...................... 250,000 241,250
Hollywood Casino sr sec notes
11.25% 5/1/07 ....................... 500,000 507,500
Scott's Hospitality Series A
unsec deb 10.95% 4/16/01 ............ CAD 800,000 134,837
----------
883,587
----------
Metals & Mining - 1.10%
Weirton Steel sr notes
11.375% 7/1/04 ...................... US$ 950,000 957,125
----------
957,125
----------
Packaging & Containers - 0.87%
Container Corporation of America
Series A sr notes 11.25% 5/1/04 ..... 200,000 202,750
Delta Beverage Group
9.75% 12/15/03 ...................... 400,000 378,000
Pierce Leahy sr sub notes
8.125% 5/15/08 ...................... 200,000 175,000
----------
755,750
----------
Paper & Forest Products - 0.93%
Domtar deb 10.85% 8/5/17 ............... CAD 1,000,000 806,421
----------
806,421
----------
Retail - 2.85%
ASDA Group unsec unsub deb
10.875% 4/20/10 ..................... GBP 250,000 482,746
Buhrmann 12.25% 11/1/09 ................ US$ 1,000,000 1,037,500
Fleming Companies sr notes
10.625% 12/15/01 .................... 400,000 397,500
Provigo Series 1991 deb
11.25% 3/15/01 ...................... CAD 800,000 553,880
----------
2,471,626
----------
Telecommunications - 4.64%
Global Crossing 9.50% 11/15/09 ......... US$ 1,000,000 952,500
Level 3 Communications
9.125% 5/1/08 ....................... 1,000,000 865,000
Level 3 Communications
6.00% 3/15/10 ....................... 600,000 505,500
9
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Group Global Dividend and Income Fund Amount++ Value
--------------------------------------------------------------------------------
Non-Convertible Bonds (continued)
Telecommunications (continued)
Nextel Communications
9.375% 11/15/09 .......................... $ 1,000,000 $ 945,000
Teligent 11.50% 12/1/07 .................... 1,000,000 755,000
-------------
4,023,000
-------------
Transportation & Shipping - 0.76%
Atlantic Express sr sec notes
10.75% 2/1/04 ............................. 300,000 256,500
Worldwide Flight 12.25% 8/15/07 ............. 600,000 405,000
-------------
661,500
-------------
Utilities - 2.01%
AES sr unsec sub notes 10.25% 7/15/06 400,000 391,000
Korea Electric unsub notes
6.375% 12/1/03 ............................ 1,000,000 931,250
Midland Funding II Series A deb
11.75% 7/23/05 ............................ 400,000 422,000
-------------
1,744,250
-------------
Total Non-Convertible Bonds
(cost $44,902,137) ........................ 38,900,116
-------------
Convertible Bonds - 2.03%
Automobiles & Automotive
Equipment - 0.80%
Mascotech sub debt 4.50% 12/15/03 ........... 900,000 696,375
-------------
696,375
-------------
Banking, Finance & Insurance - 0.45%
Bell Atlantic Financial sr unsec
deb 5.75% 4/1/03 .......................... 400,000 391,000
-------------
391,000
-------------
Real Estate - 0.78%
IRT Property sub deb 7.30% 8/15/03 .......... 500,000 457,500
LTC Properties 8.50% 1/1/01 ................. 250,000 218,750
-------------
676,250
-------------
Total Convertible Bonds
(cost $1,926,055) ......................... 1,763,625
-------------
Short-Term Securities - 0.35%
**U.S. Treasury Bills 5.54% due 7/6/00 ........ 303,000 301,333
-------------
Total Short Term Securities
(cost $301,333) ........................... 301,333
-------------
Warrants - 0.00%
Transportation & Shipping - 0.00%
***Worldwide Flight ............................ 600 600
-------------
Total Warrants (cost $5,852) ................ 600
-------------
Total Market Value Of Securities -
126.40% (cost $116,415,750) ............... 109,628,655
Liabilities Net of Receivables
And Other Assets - (26.40%)+ .............. (22,900,760)
-------------
Net Assets Applicable to 6,650,647
Shares ($0.01 par value)
Outstanding; Equivalent to $13.04
Per Share - 100.00% ....................... $86,727,895
-------------
<PAGE>
Summary of Abbreviations:
ACES - Automatic Common Exchange Security
DECS - Dividend Enhanced Convertible Stock
PIK - Payment-In-Kind
PRIDES - Preferred Redeemable Increased Dividend Securities
STRYPES - Structured Yield Product Exchangeable for Stock
TIDES - Term Income Deferrable Equity Securities
deb - Debentures
sec - Secured
sr - Senior
sub - Subordinated
unsub - Unsubordinated
CAD - Canadian dollar
EUR - European Monetary Unit
GBP - British pound
GRD - Greek drachma
NZD - New Zealand dollar
PLZ - Polish Zlotty
US$ - U.S. dollar
ZAR - South African rand
--------------
Components of Net Assets at May 31, 2000:
Common stock, $0.01 par value,
500,000,000 shares authorized
to the Fund .................................. $93,096,054
Distributions in excess of net
investment income (a) ........................ (2,809,043)
Accumulated net realized gain on
investments, foreign currencies and
options written .............................. 3,337,804
Net unrealized depreciation of
investments, foreign currencies and
options written .............................. (6,896,920)
-----------
Total net assets ................................ $86,727,895
===========
--------------
*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.
**U.S. Treasury Bills are traded on a discount basis; the interest rate shown
is the discount rate paid at the time of purchase by the Fund.
***Non-income producing securities
(a)Distributions in excess of net investment income includes net realized
gains (losses) on foreign currencies. Net realized gains (losses) on foreign
currencies are treated as net investment income in accordance with
provisions of the Internal Revenue code.
+Of this amount, $25,000,000 represents borrowings under the Fund's Line of
Credit. See Note 5 in "Notes to Financial Statements".
++Principal amount is stated in the currency in which each bond is
denominated.
See accompanying notes
10
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Six Months Ended May 31, 2000 (Unaudited)Delaware Group Global Dividend and Income Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Investment Income:
Dividends ................................................................................... $2,310,462
Interest (net of foreign taxes withheld of $35,480) ......................................... 1,698,809 $ 4,009,271
---------- -----------
Expenses:
Management fees ............................................................................. 400,064
Accounting and Administration fees .......................................................... 50,000
Custodian fees .............................................................................. 45,426
Professional fees ........................................................................... 29,732
Reports to shareholders ..................................................................... 19,200
Taxes (other than taxes on income) .......................................................... 10,969
Directors' fees ............................................................................. 5,000
Transfer agent fees ......................................................................... 6,062
Other ....................................................................................... 3,700
----------
Total operating expenses (before interest expense) 570,153
Interest expense ............................................................................ 849,514
-----------
Total operating expenses (after interest expense) ........................................... 1,419,667
Less expenses paid indirectly ............................................................... (1,261)
-----------
Total expenses .............................................................................. 1,418,406
-----------
Net Investment Income ....................................................................... 2,590,865
-----------
Net Realized and Unrealized Gain (Loss) on Investments, Foreign Currencies,
and Options Written:
Net realized gain (loss) on:
Investment transactions ................................................................... 3,451,139
Options written ........................................................................... 38,470
Foreign currencies ........................................................................ (851,076)
-----------
Net realized gain ........................................................................... 2,638,533
Net change in unrealized appreciation/depreciation of investments, foreign
currencies, and options written ............................................................. (6,114,603)
-----------
Net Realized and Unrealized Loss on Investments, Foreign Currencies, and
Options Written ............................................................................. (3,476,070)
-----------
Net Decrease in Net Assets Resulting from Operations ........................................ $(885,205)
===========
</TABLE>
See accompanying notes
11
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Group Global Dividend and Income Fund
-------------------------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/00 11/30/99
(Unaudited)
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment income ...................................................... $ 2,590,865 $ 6,193,806
Net realized gain on investments, foreign currencies and options written ... 2,638,533 3,674,549
Net change in unrealized appreciation/depreciation of investments, foreign
currencies and options written ............................................. (6,114,603) (10,773,534)
-------------------------------
Net decrease in net assets resulting from operations ....................... (885,205) (905,179)
-------------------------------
Dividends and Distributions to Shareholders From:
Net investment income ...................................................... (4,548,832) (5,732,051)
Net realized gain on investments ........................................... (438,943) (5,207,792)
-------------------------------
(4,987,775) (10,939,843)
-------------------------------
Net Decrease In Net Assets ................................................. (5,872,980) (11,845,022)
Net Assets:
Beginning of period ........................................................ 92,600,875 104,445,897
-------------------------------
End of period .............................................................. $86,727,895 $ 92,600,875
===============================
</TABLE>
See accompanying notes
12
<PAGE>
Statement of Cash Flows
<TABLE>
<CAPTION>
Six Months Ended May 31, 2000 (Unaudited)Delaware Group Global Dividend and Income Fund
------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Net Cash (Including Foreign Currency) Provided by Operating Activities:
Net decrease in net assets resulting from operations ................................................................. $ (885,205)
------------
Adjustments to reconcile net decrease in net assets from operations to cash provided by operating activities:
Amortization of discount on securities .......................................................................... (326,432)
Net proceeds from investment transactions ....................................................................... 557,097
Net realized gain on investments ................................................................................ (3,489,609)
Net realized foreign exchange losses ............................................................................ 851,076
Net change in unrealized depreciation of investments and foreign currencies ..................................... 6,114,603
Decrease in receivable for investments sold ..................................................................... 1,327,120
Increase in interest and dividends receivable ................................................................... (162,612)
Decrease in payable for investments purchased ................................................................... (513,925)
Increase in interest payable .................................................................................... 12,709
Decrease in accrued expenses and other liabilities .............................................................. (43,979)
------------
Total adjustments ............................................................................................... 4,326,048
------------
Net cash provided by operating activities ............................................................................ 3,440,843
------------
Cash flows used for financing activities:
Proceeds from line of credit (Note 5) ........................................................................... 25,000,000
Principal repayment on line of credit (Note 5) .................................................................. (25,000,000)
Cash dividends paid ............................................................................................. (4,987,775)
------------
Net cash used for financing activities ............................................................................... (4,987,775)
------------
Effect of exchange rates on cash ..................................................................................... (146,449)
------------
Net decrease in cash ................................................................................................. (1,693,381)
Cash at beginning of period .......................................................................................... 2,838,671
------------
Cash at end of period ................................................................................................ $ 1,145,290
============
Cash paid for interest ............................................................................................... $ 836,806
============
</TABLE>
See accompanying notes
13
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Group Global Dividend and Income Fund
-----------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
5/31/00(1) 11/30/99 11/30/98 11/30/97 11/30/96 11/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ....................... $ 13.92 $ 15.70 $ 17.09 $ 15.81 $ 14.06 $ 13.09
Income (loss) from investment operations:
Net investment income .................................... 0.39 0.93 1.09 1.00 0.98 1.14
Net realized and unrealized gain (loss) on
investments and foreign currencies ..................... (0.52) (1.07) (0.70) 1.78 2.27 1.15
---------------------------------------------------------------------
Total from investment operations ........................... (0.13) (0.14) 0.39 2.78 3.25 2.29
---------------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income ..................... (0.68) (0.86) (1.38) (0.95) (1.02) (1.32)
Distributions from net realized gains on
investment transactions ................................ (0.07) (0.78) (0.40) (0.55) (0.48) --
---------------------------------------------------------------------
Total dividends and distributions ........................ (0.75) (1.64) (1.78) (1.50) (1.50) (1.32)
---------------------------------------------------------------------
Net asset value, end of period ............................. $ 13.04 $ 13.92 $ 15.70 $ 17.09 $ 15.81 $14.06
=====================================================================
Market value, end of period ................................ $ 11.88 $ 11.75 $ 15.88 $ 17.31 $ 15.88 $ 13.75
=====================================================================
Total return based on:(1)
Market value ............................................. 7.78% (17.00%) 2.05% 18.98% 27.42% 29.74%
Net asset value .......................................... (0.10%) (0.57%) 2.19% 17.93% 24.10% 19.08%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $86,728 $92,601 $104,446 $113,685 $105,120 $93,500
Ratio of total operating expenses to average net assets .. 3.17% 2.69% 2.69% 2.67% 2.61% 1.13%
Ratio of total operating expenses to adjusted average
net assets (before interest expense)(2) ................ 0.99% 1.00% 1.03% 1.02% 1.09% N/A
Ratio of interest expense to adjusted
average net assets(2) .................................. 1.48% 1.15% 1.16% 1.16% 1.06% N/A
Ratio of net investment income to average net assets ..... 5.78% 6.14% 6.63% 6.03% 6.80% 8.39%
Ratio of net investment income to adjusted
average net assets(2) .................................. 4.52% 4.92% 5.38% 4.93% 5.59% N/A
Portfolio turnover ....................................... 40% 58% 51% 68% 88% 101%
Leverage analysis:
Debt outstanding at end of period (000 omitted) .......... $25,000 $25,000 $ 25,000 $ 25,000 $ 25,000 N/A
Average daily balance of debt outstanding (000 omitted) .. $25,000 $25,000 $ 25,000 $ 25,000 $ 20,355 N/A
Average daily balance of shares outstanding
(000 omitted) .......................................... 6,651 6,651 6,651 6,651 6,651 N/A
Average debt per share ................................... $ 3.76 $ 3.76 $ 3.76 $ 3.76 $ 3.06 N/A
</TABLE>
----------
(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 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.
(2) Adjusted net assets excludes debt outstanding.
See accompanying notes
14
<PAGE>
Notes to Financial Statements
May 31, 2000 (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 accounting principles
generally accepted in the United States and are consistently followed by the
Fund.
Security Valuation - All equity securities are valued at the last quoted sales
price as of the close of the New York Stock Exchange (NYSE) on the valuation
date. If on a particular day an equity security does not trade, then the mean
between the bid and asked prices will be used. 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. Money market 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 accounting
principles generally accepted in the United States.
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 a return of capital for the
six months ended May 31, 2000.
Borrowings - A total of $120,000 was incurred in connection with the start-up of
the Line of Credit in 1996. 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
12:00 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
<PAGE>
--------------------------------------------------------------------------------
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.
Use of Estimates - The preparation of financial statements in conformity with
accounting principles generally accepted in the United States requires
management to make estimates and assumptions that affect the reported amounts of
assets and liabilities at the date of the financial statements and the reported
amounts of revenues and expenses during the reporting period. Actual results
could differ from those estimates.
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. 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.
Certain expenses of the Fund are paid through commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $1,261 for the six months ended May 31, 2000.
The Fund may receive earnings credits from its custodian when positive cash
balances are maintained, which are used to offset custody fees. There were no
credits for the six months ended May 31, 2000. The expenses paid under the above
arrangements are included in their respective expense captions on the Statement
of Operations with the corresponding expense offset shown as "expenses paid
indirectly."
Certain prior year information has been reclassified to conform with current
year presentation.
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 (DMC), the Investment Manager of the Fund, an
annual fee which is calculated daily at the rate of 0.70% of the adjusted
average weekly net assets. At May 31, 2000, the Fund had a liability for
Investment Management fees and other expenses payable to DMC of $68,880.
15
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
2. Investment Management, Administration Agreements and Other
Transactions with Affiliates (continued)
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 engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide accounting and administration services. The Fund pays DSC an annual
minimum fee of $100,000, of a monthly fee computed at the annual rate of 0.05%
of the Fund's adjusted average weekly net assets. At May 31, 2000 the Fund had a
liability for such fees and other expenses payable to DSC of $9,481.
For purposes of the calculation of investment management fees and accounting and
administration fees, adjusted average weekly net assets do not include the Line
of Credit liability.
Officers, directors and employees of DMC and DSC, 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, 2000, the Fund made purchases of $29,071,569
and sales of $22,335,943 of investment securities other than U.S. government
securities and temporary cash investments. The cost of investments for federal
income tax purposes approximates cost for book purposes. At May 31, 2000 the
aggregate cost of securities and unrealized appreciation (depreciation) for the
Fund was as follows:
Cost of investments ................................... $116,415,750
------------
Aggregate unrealized appreciation ..................... $9,129,452
Aggregate unrealized depreciation ..................... (15,916,547)
------------
Net unrealized depreciation ........................... ($6,787,095)
============
4. Capital Shares
The Fund did not repurchase any shares under the Share Repurchase Program during
the six months ended May 31, 2000. Shares issuable under the Fund's dividend
reinvestment plan are purchased by the Fund's transfer agent, EquiServe, in the
open market.
5. Line of Credit
Effective January 29, 1999, the Fund had entered into a Line of Credit Agreement
with Chase Manhattan Bank for $25,000,000. At May 31, 2000, the par value of
loans outstanding was $25,000,000 at a variable interest rate of 6.84%. During
the six months ended May 31, 2000, the average daily balance of loans
outstanding was $25,000,000 at a weighted average interest rate of approximately
6.65%. The maximum amount of loans outstanding at any time during the year was
$25,000,000. The loan is collateralized by the Fund's portfolio.
<PAGE>
--------------------------------------------------------------------------------
6. Foreign Exchange Contracts
The Fund will generally enter into forward foreign currency contracts and
forward foreign cross 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 and forward foreign cross 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.
The following forward foreign cross currency contracts were outstanding at May
31, 2000:
Net Unrealized
Contracts To In Exchange Settlement Appreciation/
Receive For Date Depreciation
------------- ------------- ---------- ---------------
EUR 2,554,686 GBP 1,600,000 08/31/00 (837)
7. Options
During the six months ended May 31, 2000, the Fund entered into options
contracts in accordance with its investment objectives. When the Fund writes an
option, the premium is received and a liability is recorded and adjusted on a
daily basis to reflect 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 treated as a realized gain or loss. If a
call option is exercised, the premium is added to the proceeds from the sale of
the underlying security 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.
16
<PAGE>
Notes to Financial Statements (continued)
--------------------------------------------------------------------------------
Transactions in options written during the six months ended May 31, 2000 for the
Fund were as follows:
Number Premiums
Of Contracts Received
------------ --------
Options outstanding at
November 30, 1999 ....................... 247 $38,470
Options written ........................... -- --
Options terminated in
closing purchase transaction ............ -- --
Options expired ........................... (247) (38,470)
---- -------
Options written outstanding at
May 31, 2000 ............................ -- --
---- -------
8. 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
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.
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>
--------------------------------------------------------------------------------
9. Geographic Disclosure
As of May 31, 2000, the Fund's geographic diversification* was as follows:
United States ............................ $ 59,680,616.00 54.44%
United Kingdom ........................... 10,066,906.00 9.18%
South Africa ............................. 5,527,431.00 5.04%
Germany .................................. 3,790,678.00 3.46%
Australia ................................ 3,430,711.00 3.13%
New Zealand .............................. 3,348,580.00 3.05%
Canada ................................... 2,871,294.00 2.62%
Poland ................................... 2,410,837.00 2.20%
Greece ................................... 2,384,981.00 2.18%
Netherlands .............................. 1,985,909.00 1.81%
South Korea .............................. 1,934,300.00 1.76%
Mexico ................................... 1,880,881.00 1.72%
Argentina ................................ 1,627,939.00 1.48%
Belgium .................................. 1,523,119.00 1.39%
Spain .................................... 1,476,312.00 1.35%
Bermuda .................................. 952,500.00 0.87%
Portugal ................................. 923,824.00 0.84%
Hong Kong ................................ 862,138.00 0.79%
Colombia ................................. 687,500.00 0.63%
Hungary .................................. 642,663.00 0.59%
Turkey ................................... 581,151.00 0.53%
Russia ................................... 468,750.00 0.43%
France ................................... 446,467.00 0.41%
Brazil ................................... 123,168.00 0.10%
--------------- -------
Total .................................... $109,628,655.00 100.00%
=============== =======
----------------------
*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.
17
<PAGE>
DELAWARE(SM) DGF
INVESTMENTS Listed
--------------------- NYSE
Philadelphia o London THE NEW YORK STOCK EXCHANGE
Registrar and Stock Transfer Agent
EquiServe
P.O. Box 8040
Boston, MA 02266-8040
1.800.426.5523
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This semi-annual report is for the information of Delaware Group Global Dividend
and Income Fund shareholders. It sets forth details about charges, expenses,
investment objectives and operating policies of the Fund. You should read the
prospectus carefully before you invest. The return and principal value of an
investment in the Fund will fluctuate so that shares, when resold, may be worth
more or less than their original cost.
Notice is hereby given in accordance with Section 23(c) of the Investment Act of
1940 that the Fund may from time-to-time purchase shares of its Common Stock on
the open market at market prices.
<TABLE>
-----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
BOARD OF DIRECTORS Charles E. Peck Joseph H. Hastings
Retired Senior Vice President/Corporate Controller
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans Michael P. Bishof
Philadelphia, PA Vice President and Treasurer Senior Vice President/Treasurer
3M Corporation Philadelphia, PA
Walter P. Babich+ St. Paul, MN
Board Chairman Lisa O. Brinkley
Citadel Constructors, Inc. AFFILIATED OFFICERS Senior Vice President/Compliance Director
King of Prussia, PA Philadelphia, PA
Richard J. Flannery
David K. Downes Executive Vice President/General Counsel Investment Manager
President and Chief Executive Officer Philadelphia, PA Delaware Management Company
Delaware Investments Family of Funds Philadelphia, PA
Philadelphia, PA Richard G. Unruh, Jr.
Executive Vice President/ International Affiliate
John H. Durham Chief Investment Officer, Fixed Income Delaware International Advisers Ltd.
Private Investor Philadelphia, PA London, England
Horsham, PA
William E. Dodge Principal Office of the Fund
Anthony D. Knerr+ Executive Vice President/ 1818 Market Street
Consultant, Anthony Knerr & Associates Chief Investment Officer, Equity Philadelphia, PA 19103-3682
New York, NY Philadelphia, PA
Independent Auditors
Ann R. Leven+ Ernst & Young LLP
Former Treasurer, National Gallery of Art 2001 Market Street
Washington, DC Philadelphia, PA
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
+ Audit Committee Member
(3363) Printed in the USA
SA-DGF [5/00] PP 7/00 Recordholders as of May 31, 2000: 250 (J6057)
