-----BEGIN PRIVACY-ENHANCED MESSAGE----- Proc-Type: 2001,MIC-CLEAR Originator-Name: keymaster@town.hall.org Originator-Key-Asymmetric: MFkwCgYEVQgBAQICAgADSwAwSAJBALeWW4xDV4i7+b6+UyPn5RtObb1cJ7VkACDq pKb9/DClgTKIm08lCfoilvi9Wl4SODbR1+1waHhiGmeZO8OdgLUCAwEAAQ== MIC-Info: RSA-MD5,RSA, MkKHCsvKVq2HppP7izllm55bqAGcfM6ByxiBrhlaeVDWyIORvV2ZqHmwckk5Libn 3TwGrd1Cl4thGEaGm4SS3g== 0000950116-95-000317.txt : 19950801 0000950116-95-000317.hdr.sgml : 19950801 ACCESSION NUMBER: 0000950116-95-000317 CONFORMED SUBMISSION TYPE: N-30D PUBLIC DOCUMENT COUNT: 1 CONFORMED PERIOD OF REPORT: 19950531 FILED AS OF DATE: 19950731 SROS: NONE FILER: COMPANY DATA: COMPANY CONFORMED NAME: DELAWARE GROUP GLOBAL DIVIDEND & INCOME FUND INC CENTRAL INDEX KEY: 0000916713 STANDARD INDUSTRIAL CLASSIFICATION: UNKNOWN SIC - 0000 [0000] STATE OF INCORPORATION: MD FISCAL YEAR END: 1130 FILING VALUES: FORM TYPE: N-30D SEC ACT: 1940 Act SEC FILE NUMBER: 811-08246 FILM NUMBER: 95557653 BUSINESS ADDRESS: STREET 1: 1818 MARKET STREET CITY: PHILADELPHIA STATE: PA ZIP: 19103 BUSINESS PHONE: 2159881333 MAIL ADDRESS: STREET 1: PRINCETON ADMINISTRATORS LP STREET 2: P O BOX 9011 CITY: PRINCETON STATE: NJ ZIP: 08543-9011 N-30D 1 DGGD&I SEMI-ANNUAL REPORT PHOTO OF COLONIAL OBJECTS Dear Shareholder, The first six months of Global Dividend and Income Fund's second fiscal year, December 1, 1994, through May 31, 1995, saw a dramatic shift in the financial markets. The U.S. Federal Reserve raised interest rates just once in this six-month period, compared to six increases that occurred in fiscal 1994. Long-term interest rates have declined steadily, and the U.S. stock market has responded positively to a slower growth, lower interest rate environment. As you can see in the chart below, the Fund's market price responded favorably to recent conditions. And, the Fund's six-month net asset value return of +10.10% is a welcome improvement over our 1994 fiscal period, when sharply rising interest rates severely impacted high-yielding, income-oriented investments in the U.S. and abroad. We are pleased to report that Global Dividend and Income Fund continued to meet its primary objective for shareholders -- providing high current income. Effective January 1995, the Fund's monthly dividend increased 5.7% from $0.088 to $0.093 per share. During the first six months of the 1995 fiscal year, the Fund paid a total of $0.713 per share from net investment income. As of May 31, 1995, the Fund's distribution yield was 8.58% based on a market price of $13.00. - ------------------------------------------------------------------------------- Total Return (Capital + Income) December 1, 1994 - May 31, 1995 Based on Based on Performance at Market Net Asset Value Performance - ------------------------------------------------------------------------------- Global Dividend and Income Fund (NYSE Symbol: DGF) +10.10% +17.15% - ------------------------------------------------------------------------------- S&P 500 Index +19.20% - ------------------------------------------------------------------------------- MSCI Europe Australia and South East Asia Index +11.77% - ------------------------------------------------------------------------------- Lipper Closed-End Income Fund Average +16.99% - ------------------------------------------------------------------------------- The S&P 500 is an unmanaged index. The Lipper Closed-End Income Fund average included 11 funds during this period. - ------------------------------------------------------------------------------- International equity markets have been quite volatile over the past six months, as uncertainty surrounded Latin American and other emerging markets in the wake of Mexico's peso devaluation. Fortunately, we had minimal exposure to emerging markets, though international holdings, in general, were affected by the volatility. The U.S. bond market rallied as interest rates declined, leading to strong performance from high-yield corporate bonds. Our focus remained on the higher quality tiers in this market due to the uncertainty of continued economic growth. The performance of these bonds was satisfactory, though the market's riskier, lower quality bonds actually provided the best returns in this period. As for global bonds, in general, the fiscal half was very strong; however, currency changes led to disparate returns from individual foreign markets. Our avoidance of markets we believed to be overvalued, namely Japan and Germany, prevented us from capturing the full breadth of the rally in global bonds. The remainder of this report contains a more in-depth review of both market conditions and the portfolio positioning that contributed to your Fund's return so far this fiscal year. As always, we thank you for your confidence in the Delaware Group. Sincerely, /s/ Wayne A. Stork /s/ Brian F. Wruble - ----------------------------------- --------------------------------------- Wayne A. Stork Brian F. Wruble Chairman, Board of Directors President and Chief Executive Officer Delaware Group Delaware Group Global Dividend and Income Fund, Inc. Global Dividend and Income Fund, Inc. Capital Appreciation Drives U.S. Stock Market in 1995 High-yielding stocks are generally less volatile than the overall market, represented by the S&P 500 Index. One reason for this is that in times of market declines, the yield on these stocks may provide underlying support for stock prices. In a strongly rising market like we have enjoyed to date in 1995, where capital appreciation is the dominant component of total return, we would expect such stocks to rise in value, but not as much as the broad market. Nonetheless, over time, we expect dividends to be a significant component of total return and a key source of income for this Fund, and therefore remain committed to high-yielding equity securities. Within the U.S. equity portion of the portfolio, emphasis is on real estate investment trusts and utilities, which generally provide the highest income of the sectors we invest in. REAL ESTATE INVESTMENT TRUSTS Real Estate Investment Trusts (REITs) -- companies that own real estate in a variety of sectors including apartments, office and industrial space, and shopping malls -- have shown improving fundamentals; however, some investors seem to believe that a slowing economy might hinder the real estate recovery. As a result, this sector has seen only mild appreciation so far this year and therefore, in our view, still offers attractive yields and values. We are optimistic about the future potential of the REIT holdings in the portfolio. We see continued absorption of the office and industrial space created by the over-building of the '80s. This results in higher occupancies, greater demand, and consequently, potential growth of rental income. REITs pass income from rent increases to shareholders (i.e., your Fund) in the form of dividend increases. From 1992 through 1994, REIT dividend growth averaged 7% annually, compared to a 0% growth rate from 1987 through 1991. We believe this dividend growth will be a key factor in future price appreciation of these securities, as well as increasing the income potential of the portfolio. (Photo of Bernie Schaffer) Bernie Schaffer Senior Portfolio Manager U.S. Equities UTILITIES We have maintained a small position in electric utilities, which offer attractive income potential, but also face increasing competitive pressure as a result of government deregulation. We did increase our position in Entergy which came under some price pressure as a result of rallying interest rates, restructuring charges and rate reduction and consequently reached a level at which we considered it undervalued. Since then, as interest rates declined and the merger has improved cost-cutting efforts, the stock has appreciated. 2 PHOTO OF COLONIAL OBJECTS CONVERTIBLE SECURITIES The principal advantage of convertible securities in this Fund is the opportunity to participate in the capital appreciation of the underlying common stock while earning a fixed income payment. If a company's common stock does not meet our minimum dividend yield guidelines, we can include these companies in the portfolio, through their convertible securities. This ability can be beneficial in a market such as we've seen this year, when many lower yielding common stocks; which we typically would not purchase are experiencing very strong returns. (Graphic Pie Chart, Plot Points listed below) Global Dividend and Income Fund Portfolio Foreign Fixed Income 25% Foreign Equities 14% U.S. Equities 35% U.S. Fixed Income 26% Based on net assets at May 31, 1995 Earlier last year, a rising interest rate environment made convertible securities relatively less attractive and we reduced our allocation to convertibles in favor of common stocks. Late in 1994, as we believed that long-term interest rates were peaking and that further rate increases would be minimal, convertibles became increasingly attractive to us; they were selling below what we saw as true value and offered good risk/reward characteristics. U.S. High-Yield Bond Strategy Focuses on Higher Quality Tiers U.S. high-yield bonds, representing 23% of net assets of the Fund, are an important part of our strategy because of their high income and their low correlation with the other asset classes in this Fund, which makes them valuable for diversification purposes. As was explained in the opening letter, our strategy has generally been to focus on the higher quality tiers of the high-yield market. We believe that, over time, this prudent approach will help the Fund continue to meet its objective of high current income. (photo of Paul Matlack) Paul Matlack Senior Portfolio Manager U.S. High-Yield Corporate Bonds Over the past six months, with lower interest rates and only a slight slowing in the economy, "CCC" rated bonds have been the best performing segment of the high-yield market. However, "CCC" rated bonds involve substantially more credit risk than the higher quality tiers which we primarily own and, in the past, their returns have not fully compensated investors for that added risk. In the face of the short-term outperformance of these lower rated bonds, our focus on "B" and "BB" rated bonds has constrained the Fund's participation in the market rise, though in this market, it did help to reduce the Fund's volatility. We believe the economy may continue to slow and that our higher quality holdings, though still subject to the credit risk of the high-yield market, will better withstand the financial pressures put on lesser quality credits in any economic slowdown. 3 PHOTO OF COLONIAL OBJECTS (photo of Clive Gillmore) Clive Gillmore Senior Portfolio Manager Foreign Stocks FOREIGN STOCK PORTFOLIO REMAINS FOCUSED ON CORE MARKETS In line with our strategy of focusing on stocks with attractive yet sustainable yields and good long-term growth prospects, we are currently focusing on investments in the United Kingdom, Australia, Hong Kong, France, New Zealand and Spain. In spite of the dollar's weakness relative to the yen, the Japanese market remains weak from the perspective of American investors. It has a very low yield, is expensive based on our dividend discount methodology and, in our opinion, its currency is overvalued and vulnerable at current levels. Early in our fiscal period, the Japanese market suffered from poor economic news and sentimentally negative emotional factors such as the Kobe earthquake. We still believe that the Japanese market offers poor potential relative to other opportunities around the world and, accordingly, are significantly underweighted. Changes in our strategy over the last six months have focused on investing in some of the previously weak, smaller Asian markets such as Indonesia. This reallocation was accomplished by halving our position in Canada. Though the international equity portfolio underperformed its benchmark, given its risk-averse profile and the fact that high-yield international stocks continued to struggle during this period it has done well. We believe the international portfolio of the Fund is now positioned to do well in an environment of improving sentiment toward the U.S. dollar. (photo of Ian Sims) Ian Sims Senior Portfolio Manager Foreign Fixed Income FOREIGN BONDS Returns from most world bond markets, which hovered around 10% in local terms during the first half, were significantly affected by currency changes. The dollar weakened against the Japanese yen and the German mark while the Italian lira and the Australian dollar both fell relative to the U.S. dollar. As a result, bond returns in U.S. dollars ranged from over 31% for Japan to only 4% for Italy. Currency uncertainty affected the bond markets as well. Just as the yen rose because the Japanese did not invest their current account surplus abroad, so did the value of their bonds. On the other hand, companies with high government debt like Italy or Sweden, or with trade balance problems like Australia, experienced weak bond markets. This year has been difficult for value-oriented foreign bond investors because the best performing markets were those that looked the riskiest at the turn of the year. Our approach to currency management is primarily to limit holdings in those countries whose currency appears significantly overvalued, i.e. risky. Therefore, we had no exposure to bonds denominated in Japanese yen or in German marks, markets that performed very well in this period. We also had no exposure to bonds denominated in Italian lira, which worked in our favor, as those bonds were weak. However, we believe that going forward higher yielding markets like Italy, Canada and Sweden, which have made great strides with their fiscal problems and now appear undervalued, will offer greater opportunities than the markets that have led so far this year. 4 PHOTO OF COLONIAL OBJECTS Outlook for the Remainder of the Fiscal Year With about one-half of net assets in high-yielding equities (35% U.S. and 14% foreign) and the remaining assets in bonds and short-term reserves, we believe the Fund is well-diversified and well-positioned for the balance of our fiscal year to produce a high level of current income while participating in the attractive equity markets at home and abroad. Portfolio Leverage Strengthens Income Potential As we've explained in the past, the Global Dividend and Income Fund has the ability to leverage its portfolio -- that is, to borrow money for additional investment -- up to 25% of the Fund's market value including leverage. This is a tool that is not available to open-end funds and one that can be an important contributor to a Fund's income and total return potential. Leverage can be a useful tool when the interest rate environment is such that what we expect to earn from the investments is greater than what we must pay to borrow money. Though your Fund's management delayed leveraging the portfolio in the wake of last year's interest rate increases and market turbulance, we are actively evaluating economic and market conditions to determine when the use of leverage is appropriate. As with any investment, increased return potential can add to potential risk. Leveraging could result in a higher degree of principal volatility since the Fund will be more sensitive to market moves on both the upside and the downside. We believe this risk is reasonable given the potential benefits brought on by the use of leverage. Delaware Merges with Lincoln National We are pleased to tell you that the merger between the parent company of your Fund's investment manager, Delaware Management Holdings, Inc. and a subsidiary of Lincoln National Corporation, which was outlined in your Fund's last shareholder report, was completed on April 3, 1995. Delaware Management Holdings, Inc. is now a wholly-owned subsidiary of Lincoln National Corporation, a diversified financial services company, headquartered in Fort Wayne, Indiana. This merger provides the Delaware Group with opportunities to meet the challenges of increasingly complex markets with our existing team of portfolio managers and analysts, while remaining committed to our fundamental investment philosophies. 5 PHOTO OF COLONIAL OBJECTS Reinvesting Dividends If you don't need the monthly income for living expenses, we strongly recommend that you consider having the dividends from Global Dividend and Income Fund automatically reinvested. Here's why: let's say you invest $10,000 into a fund that pays a hypothetical 10% dividend per year -- and you don't reinvest it. At the end of the first year, you'd get a check for $1,000. Assuming the fund's value stays constant at $10,000, you'd get another check for $1,000 at the end of Year 2, Year 3 and so on. But if you reinvest the $1,000 instead of spending it, in Year 2 you would have an investment worth $11,000 and your dividend would be $1,100. Reinvesting that $1,100 instead of spending it would give you an investment worth $12,100 in Year 3 and a dividend of $1,210. In Year 4, your dividend would be $1,331, and so on. As you can see from the chart below, your income can grow year by year. If you want to reinvest your dividends, and your shares are registered in your name, call Investors Fiduciary Trust Company (IFTC) at 1-800-596-8396 and tell the customer service representative your preference. You will probably be asked to put your request in writing. If you have shares registered in "Street" name, call your bank, broker or other nominee who holds the shares to see if you are able to participate in our dividend reinvestment plan. Share Repurchase Program Implemented As was explained in the Fund's annual report, the Global Dividend and Income Fund Board of Directors has approved an open market Share Repurchase Program that authorizes the Fund's manager to purchase up to 10% of outstanding shares on the floor of the New York Stock Exchange. We believe this program could add to shareholder value in two ways. First, the simultaneous increase in demand and decrease in supply of outstanding shares could have a positive impact on the Fund's market price. Second, since the share purchases are likely to be made at a time when the market price is less than the underlying value of the assets, the result could be a higher net asset value per share. There is, of course, no guarantee that these results will occur. During the past six months, we repurchased 56,800 shares (about 1% of total outstanding on November 30, 1994) and believe the program was modestly successful in impacting the Fund's market price. We may continue to utilize this tool in the future depending on market conditions. A STRATEGY TO INCREASE YOUR FUTURE INCOME: REINVESTMENT OF DIVIDEND AND CAPITAL GAIN DISTRIBUTIONS Annual Annual Dividend with Dividend with Dividends and Dividends and Capital Gains Capital Gains Reinvested in Cash ------------- -------------- Year 1 $1,000 $1,000 Year 2 $1,100 $1,000 Year 3 $1,210 $1,000 Year 4 $1,331 $1,000 Year 5 $1,464 $1,000 Year 6 $1,611 $1,000 Year 7 $1,772 $1,000 Year 8 $1,949 $1,000 Year 9 $2,144 $1,000 Year 10 $2,358 $1,000 Assumes $10,000 initial investment, 10% annual dividend and capital gain distribution and does not include impact of income taxes. This illustration shows only the potential impact of dividend reinvestment on returns and does not reflect the past or future performance of this or any other Fund. 6 Financial Statements DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC. STATEMENT OF NET ASSETS May 31, 1995 (Unaudited) NUMBER MARKET OF SHARES VALUE COMMON STOCK - 30.08% AUTOMOTIVES AND AUTOMOTIVE PARTS - 0.91% GKN plc.......................................... 51,000 $ 507,987 Turner & Newell plc.............................. 116,000 311,429 --------- 819,416 --------- BANKING, FINANCE & INSURANCE - 2.33% Aetna Life & Casualty............................ 15,000 894,375 Banco Popular Espanol ........................... 3,500 523,554 National Australia Bank.......................... 66,000 563,406 PT Bank Dagang Nasional.......................... 73,000 127,053 --------- 2,108,388 --------- CHEMICALS - 0.54% Jilin Chemical Industrial........................ 23,200 493,000 --------- 493,000 --------- ENERGY - 1.22% Elf Gabon........................................ 2,200 419,571 Royal Dutch Petroleum............................ 4,050 454,504 Santos........................................... 92,250 227,747 --------- 1,101,822 --------- FOOD, BEVERAGE & TOBACCO - 4.08% Dalgety plc ..................................... 73,750 521,359 Philip Morris Companies.......................... 22,000 1,603,250 S.A. Brewing Holdings Ltd........................ 170,000 346,280 Unigate.......................................... 77,000 477,057 UST.............................................. 25,000 746,875 --------- 3,694,821 --------- HEALTHCARE & PHARMACEUTICALS - 0.73% Bristol-Myers Squibb............................. 10,000 663,750 --------- 663,750 --------- MEDIA, LEISURE & ENTERTAINMENT - 0.55% Bass plc......................................... 54,000 500,123 --------- 500,123 --------- METALS & MINING - 0.16% Hartebeestfontein................................ 49,600 148,275 --------- 148,275 --------- REAL ESTATE - 9.15% Bay Apartment Communities........................ 45,000 821,250 Crown American Realty Trust ..................... 50,000 593,750 Evans Withycombe Residential .................... 27,800 559,475 FelCor Suite Hotels.............................. 25,000 634,375 JDN Realty REIT.................................. 47,000 945,875 Macerich Company (The)........................... 30,000 592,500 Oasis Residential................................ 25,000 553,125 NUMBER MARKET OF SHARES VALUE COMMON STOCK (CONTINUED) REAL ESTATE (CONTINUED) Prime Residential................................ 52,500 $777,656 Reckson Associates Realty........................ 11,400 277,875 ROC Communities.................................. 35,000 765,625 Simon Property Group............................. 31,000 771,125 Smith (Charles E.) Residential Realty ........... 10,000 232,500 Sun Communities.................................. 20,000 477,500 Union Du Credit Bail Immobil .................... 2,700 281,364 --------- 8,283,995 --------- RETAIL - 0.81% Dickson Concepts................................. 600,000 339,364 Sime Darby - Hong Kong........................... 300,000 391,723 --------- 731,087 --------- TECHNOLOGY - 0.36% B.I.C.C.......................................... 62,000 329,952 --------- 329,952 --------- TRANSPORTATION - 0.97% Brambles Industries.............................. 42,000 414,155 Ocean Group plc.................................. 89,000 463,744 --------- 877,899 --------- UTILITIES - 6.22% British Columbia Telecom......................... 22,000 379,656 British Gas plc.................................. 91,000 437,302 Electrabel NPV................................... 3,150 662,036 Entergy.......................................... 20,000 495,000 Iberdrola........................................ 56,000 391,681 IPALCO Enterprises............................... 20,400 668,100 New England Electric System .................... 20,000 690,000 North West Water plc............................. 53,000 493,387 Rochester Gas & Electric......................... 40,000 855,000 Telecom Corp of New Zealand ..................... 139,000 554,000 --------- 5,626,162 --------- MISCELLANEOUS - 2.05% Ceramco Corporation Ltd.......................... 116,000 204,196 Cie De Navigation Mixte.......................... 1,950 380,523 Eridania Beghin-Say.............................. 2,550 386,800 Jardine Matheson Holdings Ltd ................... 64,800 508,680 Pacific Dunlop Ltd............................... 175,000 375,359 ---------- 1,855,558 ---------- TOTAL COMMON STOCK (COST $27,264,265) 27,234,248 ---------- 7 NUMBER MARKET OF SHARES VALUE CONVERTIBLE PREFERRED STOCK - 8.59% BANKING, FINANCE & INSURANCE - 1.44% Allstate 6.7647% pfd cv... ...................... 21,200 $824,150 American General Delaware $3.00 pfd cv "A" ...... 7,000 358,750 California Federal Bank 7.75% pfd cv "A" ........ 5,100 116,662 --------- 1,299,562 --------- BUILDINGS, HOUSING & MATERIALS - 0.93% Blue Circle Industries 7.625% pfd cv ............ 150,000 372,924 Kaufman & Broad Homes $1.52 pfd cv "B" .......... 30,500 468,938 --------- 841,862 --------- CHEMICALS - 0.83% ARCO 9.01% "Lyondell" Notes "DECS" .............. 29,700 746,213 --------- 746,213 --------- INDUSTRIAL MACHINERY - 0.61% MascoTech $1.20 pfd cv "DECS" ................... 40,000 555,000 --------- 555,000 --------- METALS & MINING - 1.31% AK Steel Holding 7.00% pfd cv ................... 26,600 724,850 Kaiser Aluminum $0.65 pfd cv "A" ................ 50,000 456,250 --------- 1,181,100 --------- PAPER & FOREST PRODUCTS - 1.04% *Stone Container Equity Linked Indexed notes................................... 52,714 942,258 --------- 942,258 --------- REAL ESTATE - 0.97% Prime Retail 8.50% pfd cv "B" ................... 50,000 881,250 --------- 881,250 --------- TECHNOLOGY - 0.82% +Westinghouse Electric $1.30 pfd cv "C" ......... 50,000 743,750 --------- 743,750 --------- UTILITIES - 0.64% First Chicago 5.50% pfd cv "DECS"................ 35,000 581,875 --------- 581,875 --------- TOTAL CONVERTIBLE PREFERRED STOCK (COST $8,446,280)................................ 7,772,870 --------- PRINCIPAL AMOUNT NON-CONVERTIBLE BONDS - 47.74% AEROSPACE & DEFENSE - 0.31% K & F Industries sr sub deb 13.75% 2001................................US$ 270,000 279,450 --------- 279,450 --------- PRINCIPAL MARKET AMOUNT VALUE NON-CONVERTIBLE BONDS (CONTINUED) AUTOMOTIVES AND AUTOMOTIVE PARTS - 0.87% Exide sr notes 10.75% 2002 ..................US$ 400,000 $ 425,000 +Penda Industries sr notes 10.75% 2004 ......US$ 400,000 364,000 --------- 789,000 --------- BANKING, FINANCE & INSURANCE - 10.10% Abbey National Treasury unsub deb 15.75% 1997.....................GRD 100,000,000 429,580 Aim Management Group sr sec notes 9.00% 2003................................US$ 51,000 50,490 Bank of Austria 10.875% 2004.................AUD 1,000,000 784,547 Bank of Greece matador bonds 12.50% 1997...............................ESP 80,000,000 649,297 Commonwealth Bank of Australia unsec unsub 13.75% 1999...................AUD 500,000 424,213 Eurofima sr unsec unsub deb 9.875% 2007...............................AUD 2,000,000 1,505,215 European Bank for Reconstruction & Development sr unsub marathon bonds 15.25% 1998...............................GRD 100,000,000 421,392 European Investment Bank deb 17.50% 1999...............................GRD 50,000,000 221,613 European Investment Bank marathon bonds 14.00% 2001 ...............ESP 80,000,000 719,810 International Bank for Reconstruction & Development sr unsub 15.50% 1997 ............GRD 700,000,000 3,041,447 International Finance marathon bonds 15.25% 1999...............................GRD 150,000,000 623,901 Mutual Group unsec sub deb 7.25% 2004................................GBP 200,000 274,431 --------- 9,145,936 --------- BUILDINGS, HOUSING & MATERIALS - 0.66% American Standard sr notes 10.875% 1999..............................US$ 450,000 486,000 Schuller International Group sr notes 10.875% 2004..............................US$ 100,000 110,250 --------- 596,250 --------- CHEMICALS - 2.79% Atlantis Group sr notes 11.00% 2003 ........US$ 400,000 408,000 Berry Plastics sr sub notes 12.25% 2004...............................US$ 600,000 618,000 Harris Chemical of North America sr sub notes 10.75% 2003..................US$ 400,000 390,000 8 PRINCIPAL MARKET AMOUNT VALUE NON-CONVERTIBLE BONDS (CONTINUED) CHEMICALS (CONTINUED) NL Industries sr sec notes 11.75% 2003...............................US$ 265,000 $ 282,225 +Polymer Group sr notes 12.75% 2002 .........US$ 400,000 408,000 Uniroyal Chemical Acquistion sr sub notes 11.00% 2003...............................US$ 400,000 420,000 --------- 2,526,225 --------- CONSUMER PRODUCTS - 0.70% Calmar sr sec notes 12.00% 1997 .............US$ 400,000 412,000 +Remington Arms sr sub notes 10.00% 2003...............................US$ 250,000 223,750 --------- 635,750 --------- ENERGY - 0.54% Ferrellgas sr sub notes 10.00% 2001 .........US$ 200,000 210,500 Global Marine sr sec notes 12.75% 1999...............................US$ 250,000 276,250 --------- 486,750 --------- ENVIRONMENTAL SERVICES - 0.46% Allied Waste Industries sr sub notes 10.75% 2004...............................US$ 400,000 418,000 --------- 418,000 --------- FOOD, BEVERAGE & TOBACCO - 0.40% Chiquita Brands sr notes 9.625% 2004...............................US$ 70,000 68,600 Purina Mills 10.25% 2003 ....................US$ 100,000 103,750 Specialty Foods sr sub notes 11.25% 2003...............................US$ 190,000 190,950 --------- 363,300 --------- FOREIGN GOVERNMENT - 13.03% National Bank of Hungary deb 10.00% 2003............. .................GBP 400,000 540,124 Poland Global 2.75% 2024 ....................US$ 2,000,000 785,000 Republic of Argentina 5.00% 2023 ............US$ 1,500,000 751,875 Republic of South Africa 10.75% 1998............. .................ZAL 8,000,000 1,838,164 Republic of South Africa 11.50% 2000...............................ZAL 8,000,000 1,786,214 Republic of Turkey unsec deb 9.00% 2003................................GBP 400,000 525,032 Spanish Government 10.50% 2003 ..............ESP 120,000,000 934,009 Swedish Government 9.00% 2009 ...............SEK 20,000,000 2,366,246 PRINCIPAL MARKET AMOUNT VALUE NON-CONVERTIBLE BONDS (CONTINUED) FOREIGN GOVERNMENT (CONTINUED) Treasury Corp of Victoria 10.50% 2003...............................AUD 1,500,000 $1,154,553 **United Mexican States 6.25% 2019 ..........US$ 2,000,000 1,113,126 --------- 11,794,343 ---------- HEALTHCARE & PHARMACEUTICALS - 1.40% HEALTHSOUTH Rehabilitation sr sub notes 9.50% 2001................................US$ 800,000 822,000 National Medical Enterprises sr sub notes 10.125% 2005..............................US$ 420,000 446,250 --------- 1,268,250 --------- MEDIA, LEISURE & ENTERTAINMENT - 4.24% Bally's Park Place Funding 1st mtg notes 9.25% 2004................................US$ 400,000 372,000 Century Communications sr notes 9.75% 2002................................US$ 600,000 610,500 Cinemark USA sr notes 12.00% 2002 ...........US$ 400,000 433,000 Four Seasons Hotel deb 11.05% 1996...............................CAD 800,000 588,638 Infinity Broadcasting sr sub notes 10.375% 2002..............................US$ 200,000 211,500 Jones Intercable sr notes 9.625% 2002...............................US$ 300,000 309,000 K - III Communications sr sec notes 10.625% 2002..............................US$ 400,000 421,000 Kloster Cruise Ltd. sr notes 13.00% 2003...............................US$ 185,000 157,250 Rogers Cablesystems sr sec notes 9.625% 2002...............................US$ 400,000 409,500 Santa Fe Hotel 1st sr sec mtg notes 11.00% 2000...............................US$ 112,000 101,360 Viacom International deb 10.25% 2001...............................US$ 200,000 223,000 --------- 3,836,748 --------- METALS & MINING - 0.99% Armco sr notes 11.375% 1999 ................US$ 250,000 261,250 G.S. Technologies sr notes 12.00% 2004...............................US$ 400,000 411,000 Inland Steel unsec notes 12.75% 2002 ........US$ 200,000 225,000 --------- 897,250 --------- 9 PRINCIPAL MARKET AMOUNT VALUE NON-CONVERTIBLE BONDS (CONTINUED) PAPER & FOREST PRODUCTS - 3.90% Anchor Glass Container 10.25% 2002 ..........US$ 500,000 $ 510,000 Domtar deb 10.85% 2017.......................CAD 1,000,000 734,110 Domtar sr notes 11.75% 1999 .................US$ 400,000 445,000 Owens-Illinois sr amort deb 11.00% 2003...............................US$ 900,000 1,000,125 Rainy River Forest Product sr sec notes 10.75% 2001...............................US$ 300,000 318,000 Repap Wisconsin sr sec notes 9.25% 2002................................US$ 400,000 395,000 Sweetheart Cup sr sec notes 9.625% 2000...............................US$ 125,000 124,688 --------- 3,526,923 --------- RETAIL - 2.27% ASDA-MFI Group unsec unsub deb 10.875% 2010..............................GBP 500,000 879,687 Di Giorgio sr notes 12.00% 2003 .............US$ 350,000 264,250 Fleming Companies sr sub notes 10.625% 2001..............................US$ 300,000 317,250 Food 4 Less Supermarkets sr sub notes 13.75% 2001..............................US$ 350,000 381,500 Penn Traffic sr notes 10.65% 2004 ...........US$ 200,000 210,750 --------- 2,053,437 --------- TECHNOLOGY - 0.82% ADT Operations sr sub notes 9.25% 2003................................US$ 500,000 515,000 Unisys credit-sensitive notes 13.50% 1997...............................US$ 200,000 223,000 --------- 738,000 --------- TRANSPORTATION - 0.99% Eletson Holdings 1st pfd mtg notes 9.25% 2003................................US$ 200,000 195,500 Trans Ocean Container sr sub notes 12.25% 2004 ..............................US$ 500,000 507,500 Viking Star Shipping 1st pfd ship mtg notes 9.625% 2003 ............. ................US$ 200,000 196,000 --------- 899,000 --------- UTILITIES - 1.40% Comcast Cellular sr notes 0.00% 2000 ........US$ 600,000 441,000 Dial Page sr notes 12.25% 2000 ..............US$ 400,000 414,000 Midland Funding II deb 11.75% 2005 ..........US$ 400,000 416,940 --------- 1,271,940 --------- PRINCIPAL MARKET AMOUNT VALUE NON-CONVERTIBLE BONDS (CONTINUED) MISCELLANEOUS - 1.87% Cort Furniture Rental sr notes 12.00% 2000...............................US$ 350,000 $346,500 IMO Industries sr sub deb 12.25% 1997 .......US$ 294,000 298,410 Lamar Advertising sr sec notes 11.00% 2003...............................US$ 400,000 403,000 Scott's Hospitality unsec deb 10.95% 2001...............................CAD 800,000 644,994 --------- 1,692,904 --------- TOTAL NON-CONVERTIBLE BONDS (COST $42,046,104)........................ 43,219,456 CONVERTIBLE BONDS - 10.63% BUILDINGS & MATERIALS - 0.63% Schuler Homes sub deb 6.50% 2003 ............US$ 700,000 570,500 --------- 570,500 --------- HEALTHCARE & PHARMACEUTICALS - 1.03% Careline sr sub notes 8.00% 2001 ............US$ 500,000 455,000 +Columbia HCA Healthcare sub deb 6.75% 2006................................US$ 500,000 475,000 --------- 930,000 --------- MEDIA, LEISURE & ENTERTAINMENT - 1.71% Time Warner sr notes 8.75% 2015 .............US$ 1,500,000 1,554,375 --------- 1,554,375 --------- METALS & MINING - 0.59% MascoTech sub deb 4.50% 2003 ................US$ 750,000 534,375 --------- 534,375 --------- PAPER & FOREST PRODUCTS - 0.23% Repola Ltd sub deb 6.50% 2004 ...............FIM 1,000,000 206,587 --------- 206,587 --------- REAL ESTATE - 6.44% Developers Diversified Realty sub deb 7.00% 1999................................US$ 600,000 590,250 IRT Property sub deb 7.30% 2003 .............US$ 1,200,000 1,095,000 Liberty Property Trust sub deb 8.00% 2001................................US$ 1,000,000 986,250 LTC Properties sub deb 8.50% 2000 ...........US$ 500,000 497,500 Malan Realty Investors sub deb 9.50% 2004................................US$ 800,000 722,000 Mid-Atlantic Realty Trust sub deb 7.625% 2003...............................US$ 1,000,000 868,750 10 PRINCIPAL MARKET AMOUNT VALUE CONVERTIBLE BONDS (CONTINUED) REAL ESTATE (CONTINUED) Sizeler Property Investors sub deb 8.00% 2003................................US$ 1,200,000 $ 1,069,500 --------- 5,829,250 --------- TOTAL CONVERTIBLE BONDS (COST $9,961,097) 9,625,087 --------- SHORT-TERM SECURITIES - 2.73% U.S. Treasury Bill 5.54% 06/08/1995 ........US$ 555,000 554,402 U.S. Treasury Bill 5.56% 06/08/1995 ........US$ 1,500,000 1,498,378 U.S. Treasury Bill 5.58% 06/08/1995 ........US$ 170,000 169,816 U.S. Treasury Bill 5.59% 06/08/1995 ........US$ 245,000 244,734 --------- TOTAL SHORT-TERM SECURITIES (COST $2,467,330)............................ 2,467,330 --------- TOTAL MARKET VALUE OF SECURITIES OWNED - 99.77% (COST $90,185,076)............ $90,318,991 UNREALIZED DEPRECIATION ON FORWARD FOREIGN EXCHANGE CONTRACTS++ - (0.02%)........................ (17,253) RECEIVABLES AND OTHER ASSETS NET OF LIABILITIES - 0.25% .................. 227,957 --------- NET ASSETS APPLICABLE TO 6,650,647 SHARES ($0.01 PAR VALUE) OUTSTANDING; EQUIVALENT TO $13.61 PER SHARE - 100.00% .................. $90,529,695 =========== - ------------ DECS - Dividend Enhanced Convertible Security REIT - Real Estate Investment Trust *Restricted Securities - Investment in securities not registered under the Securities Act of 1933. These securities have contractual restrictions on resale (See Note 5). ** There are 2,000,000 rights attached to these bonds which carry no cost or value to the Fund. + Security exempt from registration under Rule 144A of the Securities Act of 1933. These securities may be resold in transactions exempt from registration, normally to qualified institutional buyers (See Note 5). ++ See footnote 4 for detail of forward foreign exchange contracts. US$ - U.S. dollars GRD - Greek drachmas GBP - British pounds ZAL - South African rand CAD - Canadian dollars SEK - Swedish kronas ESP - Spanish pesetas FIM - Finnish markka AUD - Australian dollars COMPONENTS OF NET ASSETS AT MAY 31, 1995: Common stock, $0.01 par value, 500,000,000 shares authorized to the Fund..................................... $93,204,226 Accumulated undistributed income (loss): Net investment loss*....................................... (44,672) Net realized loss on investments and foreign currencies.................................. (2,737,191) Net unrealized appreciation of investments and foreign currencies.................................. 107,332 ---------- Total net assets applicable to 6,650,647 shares of common stock; equivalent to $13.61 per share........................................... $90,529,695 ----------- - ------------ *Net investment loss was calculated without consideration of net realized gains on foreign currencies. Net realized gains on foreign currencies; however, are distributed as net investment income in accordance with provisions of the Internal Revenue Code. See accompanying notes 11 Delaware Group Global Dividend and Income Fund, Inc. Statement of Operations For the Six Months Ended May 31, 1995 (Unaudited) INVESTMENT INCOME: Interest......................................... $3,234,600 Dividends........................................ 1,156,467 $4,391,067 --------- EXPENSES: Management fees ................................. 307,202 Administrative fees.............................. 92,161 Reports to shareholders ......................... 26,321 Custodian fees .................................. 20,866 Directors' fees ................................. 12,545 Amortization of organization expenses ........... 12,376 Auditing ........................................ 10,913 Transfer agent fees ............................. 10,000 Taxes, other than taxes on income ............... 8,456 NYSE fees ....................................... 8,086 Other ........................................... 25,026 533,952 --------- ---------- NET INVESTMENT INCOME BEFORE FOREIGN TAX WITHHELD.......................... 3,857,115 FOREIGN TAX WITHHELD............................. (40,029) ---------- NET INVESTMENT INCOME............................ 3,817,086 NET REALIZED LOSS AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES: Net realized gain (loss) on: Investment transactions....................... (1,743,553) Foreign currencies............................ 147,299 --------- Net realized loss................................ (1,596,254) Net unrealized appreciation on investments and foreign currencies during the period.......... 6,010,500 ---------- NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS AND FOREIGN CURRENCIES........................ 4,414,246 ---------- NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS. ................... $8,231,332 ========== See accompanying notes Delaware Group Global Dividend and Income Fund, Inc. Statement of Changes in Net Assets Six Months Ended For the Period May 31, 1995 March 4, 1994* to (Unaudited) November 30, 1994 OPERATIONS: Net investment income ........................... $ 3,817,086 $ 5,628,333 Net realized loss on investments and foreign currencies........................ (1,596,254) (1,140,937) Net unrealized appreciation (depreciation) on investments and foreign currencies during the period ..... 6,010,500 (5,903,168) ----------- ----------- Net increase (decrease) in net assets resulting from operations............................... 8,231,332 (1,415,772) ----------- ----------- DISTRIBUTIONS TO SHAREHOLDERS FROM: Net investment income............................ (4,768,050) (4,722,041) ----------- ----------- CAPITAL SHARE TRANSACTIONS: Net proceeds from initial public offering of shares (net of $765,151 offering costs) ... -- 93,813,021 Cost of shares repurchased ...................... (713,795) -- ----------- ----------- Increase (decrease) in net assets derived from capital share transactions ................... (713,795) 93,813,021 ----------- ----------- NET INCREASE IN NET ASSETS ...................... 2,749,487 87,675,208 NET ASSETS: Beginning of period....... ...................... 87,780,208 105,000 ----------- ----------- End of period (including (over)/under distributed net investment income of ($44,672)+ and $906,292, respectively) ....... $90,529,695 $87,780,208 =========== =========== - ------------- * Commencement of operations. + Overdistributed net investment income was calculated without consideration of net realized gains on foreign currencies. Net realized gains on foreign currencies; however, are distributed as net investment income in accordance with provisions of the Internal Revenue Code. See accompanying notes 12 Delaware Group Global Dividend and Income Fund, Inc. Notes to Financial Statements May 31, 1995 (Unaudited) 1. SIGNIFICANT ACCOUNTING POLICIES Delaware Group Global Dividend and Income Fund, Inc. (the "Fund") is a diversified, closed-end management investment company organized under the laws of Maryland and is registered under the Investment Company Act of 1940, as amended. The Fund had no operations prior to March 4, 1994, other than the sale of 7,447 shares of common stock for $105,000 to Delaware Management Company, Inc., the investment manager of the Fund, on February 18, 1994. Portfolio securities listed or traded on a national securities exchange, except for debt securities, are valued at the last sale price on the exchange where they are primarily traded. Securities listed on a foreign exchange are valued at the last quoted sale price before the time when the Fund is valued. Securities not traded on a particular day, over-the-counter securities and government and agency securities are valued at the mean value between bid and asked prices. Short-term instruments having a maturity of less than 60 days are valued at amortized cost. Debt securities (other than short-term obligations) are valued on the basis of valuations provided by a pricing service when such prices are believed to reflect the fair value of such securities. All assets and liabilities that are expressed in foreign currencies are valued and translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar as provided by the pricing service as of 3:30 pm New York time; this constitutes a change from the times recited in the Fund's prospectus for the valuation of securities and translation of foreign currencies into U.S. dollars. Forward foreign currency contracts are valued at the mean between the bid an asked prices of the contracts. Interpolated values are derived when the settlement date of the contract is on an interim date for which quotations are not available. Security transactions are accounted for on the date the securities are purchased or sold (trade date). Gains and losses are based upon the specific identification method for both financial statement and federal tax purposes. Dividend income and distributions to shareholders are recorded on the ex-dividend date. 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. Interest income and expenses are recorded on the accrual basis. A total of $124,000 was incurred in connection with 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. No provision for federal income taxes has been made since it is the intention of the Fund to comply with the provisions of the Internal Revenue Code available to regulated investment companies and to make requisite distributions to shareholders. 2. INVESTMENT MANAGEMENT FEE AND OTHER TRANSACTIONS WITH AFFILIATES In accordance with the terms of the Investment Management Agreement, the compensation paid to Delaware Management Company, Inc. (DMC) is equal to (on an annual basis) 0.70% of the Fund's average weekly net assets. The Fund has also entered into an advisory agreement with Delaware International Advisers Ltd. (DIAL) (the "Sub-Adviser"). For the services provided to the Manager, the Manager pays the Sub-Adviser a monthly fee equal to 40% of the fee paid to the Manager under the terms of the Investment Management Agreement. The Fund has also entered into an Administration Agreement with Middlesex 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 0.21% of the Fund's average weekly net assets. Certain officers, directors and shareholders of DMC are officers and/or directors of the Fund. Officers, directors and employees of DMC, who are also officers, directors and/or employees of the Fund, do not receive any compensation from the Fund. On May 31, 1995, the Fund had investment management fees payable to DMC of $52,452. In addition, the Fund had administrative fees payable to Middlesex Administrators L.P. of $15,736. On April 3, 1995, Delaware Management Holdings, Inc., the indirect parent of DMC and DIAL, through a merger transaction (the "Merger") became a wholly-owned subsidiary of Lincoln National Corporation. Other than the resulting change in ownership, the Merger will not materially change the manner in which DMC and DIAL have heretofore conducted their relationship with the Fund. An annual meeting of shareholders was held on March 29, 1995. The matters submitted to a vote of shareholders were the election of directors, the approval of a new investment management agreement and a new sub-advisory agreement, and the ratification of the selection of Ernst & Young LLP as independent auditors of the Fund. The new investment management agreement and sub-advisory agreement were submitted for shareholder approval in connection with the Merger noted above because the Investment Company Act of 1940 requires shareholders to vote on new investment management and sub-advisory agreements whenever there is a change in control of an investment manager. 13 The names of each director elected at the meeting along with the final vote tabulation with respect to each nominee and each matter were as follows: NUMBER OF VOTES ----------------------------------------- FOR AGAINST/WITHHELD ABSTENTIONS --- ---------------- ----------- Election of Directors: Wayne A. Stork 4,966,637 81,204 -- Walter P. Babich 4,967,217 80,624 -- Anthony D. Knerr 4,966,407 81,434 -- Ann R. Leven 4,966,857 80,984 -- W.Thacher Longstreth 4,966,580 81,262 -- Charles E. Peck 4,966,957 80,884 -- Approval of the New Investment Management Agreement 4,834,631 74,911 138,300 Approval of the New Sub-Advisory Agreement 4,822,662 74,628 150,552 Selection of Ernst & Young LLP as Independent Auditors 4,942,385 30,592 84,865 3. INVESTMENTS Investment securities based on cost for federal income tax purposes at May 31, 1995, are as follows: Cost of investments.................................... $90,185,076 Aggregate unrealized appreciation ..................... 3,746,710 Aggregate unrealized depreciation ..................... (3,612,795) ----------- Market value of investments ........................... $90,318,991 =========== Net realized loss based on cost of specific certificate or bond for federal income tax purposes was $1,743,553 for the six months ended May 31, 1995. For federal income tax purposes, the Fund had accumulated net capital losses at November 30, 1994, of $1,314,888 which may be carried forward and applied against future capital gains. The capital loss carryforward expires in 2002. During the six months ended May 31, 1995, the Fund had purchases of $27,993,120 and sales of $29,992,639 of investment securities, other than U.S. Government securities and short-term debt securities having maturities of one year or less. On May 31, 1995, the Fund had a receivable for investment securities sold of $368,897 and a payable for investment securities purchased of $2,283,592. 4. FORWARD FOREIGN EXCHANGE CONTRACTS The Fund will, from time to time, enter into foreign currency exchange contracts. There are costs and risks associated with such currency transactions. No type of foreign currency transaction will eliminate fluctuations in the prices of the Fund's foreign securities or will prevent loss if the prices of such securities should decline. Forward foreign exchange contracts as of May 31, 1995, are as follows: IN UNREALIZED EXCHANGE CONTRACT TO DELIVER SETTLEMENT DATE DEPRECIATION FOR 18,000,000 Swedish Kronas 7/31/95 $(17,253) $2,434,011 5. CONCENTRATION OF CREDIT RISK The Fund may invest in high-yield fixed income securities which carry ratings of CCC or lower by S&P and/or Caa 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 in securities whose value is derived from an underlying pool of mortgages or consumer loans. Prepayment of these loans may shorten the stated maturity of the respective obligation and may result in a loss of premium, if any has been paid. The Fund may invest up to 10% of its total assets in illiquid securities which include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of some of these securities may adversely affect the Fund's ability to dispose of such securities in a timely manner and at a fair price when it is necessary to liquidate such securities. These securities have been denoted in the Statement of Net Assets. 14 6. GEOGRAPHIC DISCLOSURE As of May 31, 1995, the Fund's geographic diversification was as follows: PERCENTAGE OF TOTAL SECURITIES COUNTRY* AT VALUE United States............. 63.15% United Kingdom............ 7.35% Australia................. 6.42% Greece.................... 5.25% South Africa.............. 4.18% Spain..................... 3.56% Sweden.................... 2.62% Canada.................... 2.60% France.................... 1.62% New Zealand............... 0.84% Hong Kong................. 0.81% Belgium................... 0.73% Netherlands............... 0.50% Finland................... 0.23% Indonesia................. 0.14% ------ Total..................... 100.00% ====== 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. * Based on the country of the currency in which each security is denominated. 7. CAPITAL STOCK There are 500,000,000 shares of $0.01 par value capital stock authorized. The Fund sold 6,700,000 shares in its initial public offering. Under the Share Repurchase Program, the Fund repurchased 56,800 shares at a weighted average discount of 4.29% per share during the six months ended May 31, 1995. On June 2, 1995, the Fund declared its monthly dividend in the amount of $0.093 per share. This dividend is payable June 30, 1995, to stockholders of record at the close of business on June 16, 1995. The ex-dividend date was June 14, 1995. Shares issuable under the Fund's dividend reinvestment plan are purchased by the Fund's transfer agent, IFTC in the open market. 8. FINANCIAL HIGHLIGHTS Selected data for each share outstanding throughout the period were as follows: SIX MONTHS ENDED FOR THE PERIOD MAY 31, 1995 MARCH 4, 1994* (UNAUDITED) TO NOVEMBER 30, 1994 Net asset value, beginning of period ...... $ 13.09 $ 14.00+ -------- -------- Income from investment operations: Net investment income.................... 0.59 0.84 Net realized and unrealized gain/(loss) on securities........................... 0.64 (1.05) -------- -------- Net increase (decrease) in net assets from investment operations ............. 1.23 (0.21) -------- -------- Less distributions: Dividends from net investment income .... (0.71) (0.70) -------- -------- Total distributions...................... (0.71) (0.70) -------- -------- Net asset value, end of period ............ $ 13.61 $ 13.09 ======== ======== Market value, end of period ............... $ 13.00 $ 11.75 ======== ======== Total investment return based on: (1) Market value............................. 17.15% (17.15%) ======== ======== Net asset value.......................... 10.10% (1.11%) ======== ======== Ratios/Supplemental Data: Net assets, end of period (000's omitted) ............................... $90,530 $87,780 ======== ======== Ratio of expenses to average net assets.............................. 1.22%** 1.32%** Ratio of net investment income to average net assets................... 8.73%** 8.54%** Portfolio turnover......................... 33% 86% * Commencement of operations. ** Annualized. + Net of 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 based on market value and net asset value have not been annualized. 15 9. QUARTERLY RESULTS OF OPERATIONS (UNAUDITED)
NET REALIZED AND NET INCREASE UNREALIZED GAIN(LOSS) (DECREASE) IN INVESTMENT NET INVESTMENT ON INVESTMENTS AND NET ASSETS RESULTING MARKET PRICE QUARTER ENDED INCOME INCOME FOREIGN CURRENCIES FROM OPERATIONS ON NYSE+ - ------------ ----------------- ---------------- -------------------- --------------------- --------------- TOTAL PER TOTAL PER TOTAL PER TOTAL PER (000) SHARE (000) SHARE (000) SHARE (000) SHARE HIGH LOW ------- ----- ------ ----- ------- ------ ------- ------ ------ ------ May 31, 1994 *..... $2,078 $0.31 $1,794 $0.27 ($3,661) ($0.54) ($1,867) ($0.27) $15.13 $11.88 August 31, 1994 .. 2,231 0.33 1,930 0.29 491 0.07 2,421 0.36 13.13 12.13 November 30, 1994 . 2,245 0.34 1,904 0.28 (3,874) (0.58) (1,970) (0.30) 12.88 11.63 ------- ----- ------ ----- ------- ------ ------- ------ $6,554 $0.98 $5,628 $0.84 ($7,044) ($1.05) ($1,416) ($0.21) ======= ===== ====== ===== ====== ===== ======= ====== February 28, 1995 . $2,146 $0.32 $1,837 $0.27 $1,362 $0.20 $3,199 $0.47 $12.50 $11.50 May 31, 1995....... 2,245 0.34 1,980 0.30 3,052 0.46 5,032 0.76 13.00 12.25 ------- ----- ------ ----- ------- ------ ------- ------ $4,391 $0.66 $3,817 $0.57 $4,414 $0.66 $8,231 $1.23 ======= ===== ====== ===== ====== ===== ======= ======
- ------------- * The Fund commenced operations on March 4, 1994. + As reported on the New York Stock Exchange 16 Board of Directors WAYNE A. STORK* Chairman Delaware Group of Funds Dividend and Income Fund 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 Deputy Treasurer National Gallery of Art Washington, DC W. THACHER LONGSTRETH Vice Chairman Packquisition Corp. Philadelphia, PA CHARLES E. PECK Secretary, Enterprise Homes, Inc. Columbia, MD Audit Committee WALTER P. BABICH ANN R. LEVEN ANTHONY D. KNERR Executive Officers BRIAN F. WRUBLE President and CEO WINTHROP S. JESSUP Executive Vice President DAVID K. DOWNES Senior Vice President/Chief Administrative Officer/Chief Financial Officer GEORGE M. CHAMBERLAIN, JR. Senior Vice President/Secretary *Officer and Director Delaware Group of Funds FOR GROWTH OF CAPITAL Trend Fund DelCap Fund Value Fund FOR TOTAL RETURN Dividend Growth Fund Decatur Total Return Fund Decatur Income Fund Delaware Fund FOR GLOBAL DIVERSIFICATION International Equity Fund Global Assets Fund Global Bond Fund FOR CURRENT INCOME Delchester Fund U.S. Government Fund Treasury Reserves Intermediate Fund FOR TAX-FREE CURRENT INCOME Tax-Free USA Fund Tax-Free Insured Fund Tax-Free USA Intermediate Fund Tax-Free Pennsylvania Fund MONEY MARKET FUNDS Delaware Cash Reserve U.S. Government Money Fund Tax-Free Money Fund CLOSED-END EQUITY/INCOME Dividend and Income Fund Global Dividend and Income Fund The Delaware Group includes funds with a wide range of investment objectives. Stock funds, income funds, tax-free funds, money market funds, closed-end equity/income funds and global funds give investors the ability to create a portfolio that fits their personal financial goals. For more information, including a prospectus of any Delaware Group fund, contact your financial adviser or call the Delaware Group at 800-523-4640 or 215-988-1333 in Philadelphia. Read the Prospectus carefully before investing. BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS. PRINCIPAL OFFICE OF THE FUND 1818 Market Street Philadelphia, PA 19103 INVESTMENT MANAGER Delaware Management Company, Inc. Philadelphia SUB-ADVISER Delaware International Advisers Ltd. London INDEPENDENT AUDITORS Ernst & Young LLP 2001 Market Street Philadelphia, PA 19103 REGISTRAR AND STOCK TRANSFER AGENT Investors Fiduciary Trust Company 210 West 10th Street Kansas City, MO 64105 800-596-8396 NUMBER OF RECORDHOLDERS AS OF MAY 31, 1995 392 GDIF-02[5/95]PP795 DELAWARE GROUP A TRADITION OF SOUND INVESTING SINCE 1929 PHOTO OF COLONIAL OBJECTS | 1995 | | SEMI- | | ANNUAL | | REPORT | DELAWARE | GROUP | ======== | Global Dividend and | Income Fund | | -----END PRIVACY-ENHANCED MESSAGE-----