The Emerging Markets Portfolio seeks long-term capital appreciation. The Portfolio, an international fund, generally invests in equity securities of companies that are organized in, have a majority of their assets in, or derive a majority of their operating income from emerging countries. The Emerging Markets Portfolio is presently closed to new investors.
The Global Real Estate Securities Portfolio seeks maximum long-term total return through a combination of current income and capital appreciation. Under normal circumstances, the Portfolio will invest at least 80% of its net assets in securities issued by U.S. and non-U.S. companies in the real estate and real estate–related sectors. The Portfolio may invest in companies across all market capitalizations and may invest its assets in securities of companies located in emerging market countries. Under normal circumstances, the Portfolio will invest at least 40% of its total assets in securities of non-U.S. issuers.
The Global Fixed Income Portfolio seeks current income consistent with the preservation of principal. The Portfolio invests primarily in fixed income securities that may also provide the potential for capital appreciation. The Portfolio is a global fund that invests in issuers located throughout the world. The Global Fixed Income Portfolio is presently closed to new investors.
The International Fixed Income Portfolio seeks current income consistent with the preservation of principal. The Portfolio invests primarily in fixed income securities that may also provide the potential for capital appreciation. The Portfolio is an international fund that invests primarily in issuers that are organized, have a majority of their assets, or derive most of their operating income outside of the United States. The International Fixed Income Portfolio is presently closed to new investors.
Carefully consider the Portfolios’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Portfolios’ prospectus, which may be obtained by visiting www.delawareinvestments.com or calling 800 231-8002. Investors should read the prospectus carefully before investing.
The Portfolios of Delaware Pooled Trust (DPT) are designed exclusively for institutional investors and high net worth individuals.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
A REIT fund’s tax status as a regulated investment company could be jeopardized if it holds real estate directly, as a result of defaults, or receives rental income from real estate holdings.
The Portfolio’s share price and yield will fluctuate in response to movements in stock prices.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Portfolios may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolios may be prepaid prior to maturity, potentially forcing the Portfolios to reinvest that money at a lower interest rate.
Securities in the lowest of the rating categories considered to be investment grade (that is, Baa or BBB) have some speculative characteristics.
High yielding, noninvestment grade bonds (junk bonds) involve higher risk than investment grade bonds.
The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
Because the Portfolios expect to hold a concentrated portfolio of a limited number of securities, the Portfolios’ risk is increased because each investment has a greater effect on the Portfolios’ overall performance.
The Portfolios will be affected primarily by changes in stock prices.
The Real Estate Investment Trust II, The Global Real Estate Securities, The Select 20, The Global Fixed Income, and The International Fixed Income Portfolios are considered “non-diversified” as defined in the Investment Company Act of 1940, which means that each may allocate more of its net assets to investments in single securities than a “diversified” portfolio. Thus, adverse effects on any single investment may affect a larger portion of overall assets and subject these Portfolios to greater risks and volatility.
2009 Annual report · Delaware Pooled Trust
3
Portfolio management review
Delaware Pooled® Trust — The Large-Cap Value Equity Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Large-Cap Value Equity Portfolio returned +12.12% at net asset value (NAV) with all distributions reinvested. The Portfolio outperformed its benchmark, the Russell 1000® Value Index, which returned +4.78% during the same time frame. For the Portfolio’s complete annualized performance, please see the table on page 6.
The past 12 months were a time of tremendous volatility for stock investors. Between the start of the period in November 2008 and the market’s low in early March 2009, equities remained severely depressed as the recession deepened. Beginning in the third quarter of 2008, U.S. gross domestic product (GDP) — which measures the combined value of the goods and services produced by a nation — fell for the fourth consecutive quarter. The economy’s 5.4% drop in the fourth quarter of 2008 and 6.4% decline in the first quarter of 2009 was the worst consecutive quarterly drop in GDP in more than 50 years. (Source: Bloomberg.)
Starting in the second week of March, however, conditions gradually began to improve. Investors seemed to conclude that the market climate was less dire than they had feared. Over time, credit markets began to function more normally and investor confidence gradually increased as evidence of economic growth mounted. During the third calendar quarter of 2009, in fact, the U.S. economy expanded by an estimated 3.5%, according to the U.S. Commerce Department’s initial reading of GDP released in late October. It was the fastest growth in the past two years.
After a difficult 2008, the Portfolio generated very strong results compared to its benchmark during this fiscal period. Most of our relative outperformance came during the period’s first five months, and then again in October 2009, when the Portfolio held up relatively well during declining markets. This trend has been fairly typical of our management approach; through our value-oriented, defensive style, we seek to do well in relative terms in down markets by minimizing losses.
The biggest positive for the Portfolio was a de-emphasis of the financial sector, the hardest-hit group in the marketplace during the downturn. In addition, the Portfolio benefited on a relative basis from owning what the portfolio management team believed were the appropriate financial stocks for the Portfolio — that is, financial stocks that, in our opinion, are issued by higher-quality businesses with less credit sensitivity that have tended to fare well in the economic storm.
Another helpful factor was an overweight position in technology stocks relative to the benchmark. One of the best-performing stocks within this group was Motorola, whose shares rose along with investors’ hopes that the mobile telephone maker might be in the early stages of a turnaround.
Other contributors to overall relative performance came from the healthcare and consumer staples sectors, two relatively defensive areas that held up better than average during the market’s decline. Within healthcare, the Portfolio’s top contributor to relative performance was drug manufacturer Wyeth, which was acquired for a premium price by rival Pfizer, another of our holdings. In consumer staples, food-processing company Archer-Daniels-Midland also did relatively well, benefiting from increasing global affluence and demand for better nutrition. Elsewhere, the Portfolio gained strength from clothing retailer Gap, whose shares held up relatively well in the downturn and which gained significant ground as the market bounced back. We sold our position in Gap relatively late in the period, believing that its stock price had exceeded that warranted by the company’s underlying fundamentals.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
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There were relatively few individual detractors during the fiscal year. We saw negative results in both the materials and industrials sectors, two groups in which our security selection proved somewhat disappointing. The biggest individual detractor was R.R. Donnelley & Sons, whose commercial printing business has suffered along with consumer spending trends. Apparel company Limited Brands, another economically sensitive business, also hampered performance. We sold both stocks prior to the market recovery because we believed they could continue to face significant challenges for some time.
Throughout the period, we positioned the Portfolio relatively defensively, emphasizing what we believed were attractively valued stocks with limited economic sensitivity. In the financial sector, for example, we kept our weighting in the group lower than the S&P 500 Index (which we use to measure sector allocations). We generally favored stocks whose performance has historically been less correlated with the health of the financial markets. We also maintained relatively high weightings compared to the S&P 500 Index in defensive sectors such as healthcare and consumer staples.
Toward the end of the period, however, we added two holdings that made the Portfolio somewhat more economically sensitive. First, we increased our energy weighting by purchasing National Oilwell Varco, an oil and gas equipment and services company that we felt was attractively valued and which we believed had the potential to benefit from rising global energy demand. We also added Lowe’s, one of the country’s two leading home-improvement retailers. We believe that Lowe’s, currently trading at a low valuation, could be helped by a recovering housing market. Despite these recent moves, we continue to see significant economic risks ahead and believe that an overall defensive posture remains warranted.
2009 Annual report · Delaware Pooled Trust
5
Performance summary
Delaware Pooled® Trust — The Large-Cap Value Equity Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
Portfolio performance | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| +12.12% | | -9.21% | | -0.23% | | +1.84% | | +8.05% |
Portfolio profile |
Oct. 31, 2009 |
| |
Total net assets |
| $10.1 million |
| |
Number of holdings |
33 |
| |
Inception date |
Feb. 3, 1992 |
Performance of $1,000,000
| | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| The Large-Cap Value Equity Portfolio | $1,000,000 | | $1,199,568 |
| Russell 1000 Value Index | $1,000,000 | | $1,183,771 |
2009 Annual report · Delaware Pooled Trust
6
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 1.16%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.70% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Russell 1000 Value Index measures the performance of the large-cap value segment of the U.S. equity universe. It includes those Russell 1000 companies with lower price-to-book ratios and lower forecasted growth values. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
The S&P 500 Index measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the U.S. stock market.
Past performance is not a guarantee of future results.
The Portfolio will be affected primarily by changes in stock prices.
2009 Annual report · Delaware Pooled Trust
7
Portfolio management review
Delaware Pooled® Trust — The Select 20 Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Select 20 Portfolio returned +23.51% at net asset value (NAV) with all distributions reinvested during the 12 months ended Oct. 31, 2009, surpassing the +17.04% return of the benchmark Russell 3000® Growth Index. For complete performance information, see the chart on page 10.
The fiscal year began much as the prior one ended. Widespread pessimism continued to grip the global markets and stocks continued their virtual free fall. The U.S. economy pushed further into recession as, in broad terms, banks refused to lend, businesses were unable to borrow, manufacturers slowed production, unemployment crept upward, and consumer spending remained anemic.
Congress threw the financial system a lifeline in the form of a $700 billion “bailout” known as the Troubled Asset Relief Program (TARP). The Federal Reserve lowered the fed funds rate (the rate at which banks lend to one another) to virtually zero and implemented other measures to jump-start the economy.
Beginning in March 2009, favorable earnings reports and activity in mergers and acquisitions (M&A) contributed to cautious optimism as the Dow Jones Industrial Average (Dow) posted its best month since October 2002. Supported by some additional early signs of an economic recovery, the second quarter of 2009 was the best quarter for the Dow since late 2003. Previously down-and-out sectors like financials led the charge. The technology sector also enjoyed a bit of a rebound as signs of a recovery prompted analysts to predict significant investment in information technology. Confidence seemed to return to the corporate boardrooms as initial public offerings and M&A proposals made headlines on a regular basis. A “new and improved” General Motors emerged from bankruptcy protection in time to participate in the federal government’s cash-for-clunkers program, which took effect in August 2009 and increased auto sales for the industry as a whole. (Source: Bloomberg.)
Moving into the latter part of the fiscal period, the manufacturing sector enjoyed its first signs of expansion since early 2008, and housing began experiencing a slow rebound as borrowers sought to take advantage of low mortgage rates and tax incentives (sources: Institute of Supply Management, U.S. Commerce Department, and National Association of Realtors). Gross domestic product estimates reported by the U.S. Commerce Department for the third quarter of 2009 were the strongest in two years, another sign that the recovery seemed to have begun. After falling below 6,500 in March, the Dow briefly surged past 10,000 in October; the resurgence was primarily a result of more-favorable earnings reports.
Although we are encouraged to see improving economic indicators, we are mindful that these indicators are rising from recessionary lows. Therefore, we are concerned about the nature and magnitude of the market rally that began in March 2009. We believe it was driven in part by investor sentiment moving from extreme risk aversion toward normalization.
Throughout the year, we stayed true to our long-term approach to stock selection and sought only those we deemed as higher-quality companies with business models that we believed could withstand the type of adverse market cycles we have experienced of late. We expect to own stocks over a three- to five-year horizon, and we consider each company’s competitive position in both strong and adverse market conditions. The Portfolio maintained relatively large positions in a small number of stocks.
With individuals conserving their entertainment dollars, NetFlix was among the Portfolio’s top contributors. This long-term holding continued to dominate rivals in its core DVD-by-mail operations and has positioned itself well to participate in the next phase of digital distribution through partnerships with makers of game consoles and TV/DVD players. In keeping with the opportunistic strategy of this Portfolio, we sold NetFlix during the period and re-allocated the proceeds to other positions that we felt had more attractive risk-reward characteristics.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
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Apple overcame a period of lackluster consumer activity by producing and marketing stellar products. iPhone sales have exceeded expectations and the device remains highly profitable as a stand-alone product. However, the story does not end there, because the iPhone’s success has driven more consumers to the company’s Mac and iPod lines, generating even greater platform benefits.
Unfortunately, the Portfolio owned some companies that could not escape the harsh economic realities of the fiscal year, which at times included fallout from management missteps. Hard-drive manufacturer Seagate Technology, for instance, struggled as a result of an overall lack of technology spending, as businesses generally seemed to hold off on major systems upgrades. The company also suffered from poor managerial execution, which sparked a board confrontation and eventually led to the creation of a new management team. We chose to sell Seagate during the period.
Heartland Payment Systems, a processor of credit and debit card transactions, also struggled during the period. The company suffered a security breach when outside hackers stole significant user data. We examined this issue very closely during a trying time for the company, and came away impressed with the way it was handled. We also believe the stock sold off more than was warranted. For these reasons, we continue to hold the stock.
The market has moved significantly in a relatively short time frame but we remain concerned about the extent of the rally. However, as long-term investors, we are less focused on short-term market gyrations and quarter-by-quarter earnings comparisons. We continue to adhere to our philosophies and believe we are appropriately positioned for the future. We are bottom-up stock pickers and are not looking to take on more cyclical risk, but we will add or decrease positions or change weightings if we perceive opportunities.
2009 Annual report · Delaware Pooled Trust
9
Performance summary
Delaware Pooled® Trust — The Select 20 Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | |
| Periods ended Oct. 31, 2009 | | 1 year | | 3 years | | 5 years | | Lifetime |
| | +23.51% | | -4.73% | | +0.12% | | -5.40% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $10.2 million |
| |
| Number of holdings |
| 21 |
| |
| Inception date |
| March 31, 2000 |
Performance of $1,000,000
| | Starting value (March 31, 2000) | | Ending value (Oct. 31, 2009) |
| The Select 20 Portfolio | $1,000,000 | | $587,025 |
| Russell 3000 Growth Index | $1,000,000 | | $585,976 |
2009 Annual report · Delaware Pooled Trust
10
The performance graph assumes $1 million invested on March 31, 2000, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
On Feb. 28, 2008, the Portfolio changed its investment strategy to limit its investments to no fewer than 15 securities and no more than 25 securities. The performance prior to Feb. 28, 2008, is that of the Portfolio under its former name and strategy, The All-Cap Growth Equity Portfolio.
The most recent prospectus designated the Portfolio’s total operating expenses as 1.64%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.89% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Russell 3000 Growth Index measures the performance of the broad growth segment of the U.S. equity universe. It includes those Russell 3000 companies with higher price-to-book ratios and higher forecasted growth values. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
The Dow Jones Industrial Average, mentioned on page 8, is an often-quoted market indicator that comprises 30 widely held blue-chip stocks.
Past performance is not a guarantee of future results.
Stocks of companies with high growth expectations may be more susceptible to price declines if they do not meet those high expectations.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
The Portfolio will be affected primarily by changes in stock prices.
Because the Portfolio expects to hold a concentrated portfolio of a limited number of securities, the Portfolio’s risk is increased because each investment has a greater effect on the Portfolio’s overall performance.
“Nondiversified” Portfolios may allocate more of their net assets to investments in single securities than “diversified” Portfolios. Resulting adverse effects may subject these Portfolios to greater risks and volatility.
2009 Annual report · Delaware Pooled Trust
11
Portfolio management review
Delaware Pooled® Trust — The Large-Cap Growth Equity Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Large-Cap Growth Equity Portfolio returned +18.51% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. The Portfolio’s benchmark, the Russell 1000® Growth Index, returned +17.51% for the same period. Complete annualized performance for The Large-Cap Growth Equity Portfolio is shown in the table on page 14.
The fiscal year began much as the prior one ended. Widespread pessimism continued to grip the global markets and stocks continued their virtual free fall. The U.S. economy pushed further into recession as, in broad terms, banks refused to lend, businesses were unable to borrow, manufacturers slowed production, unemployment crept upward, and consumer spending remained anemic.
Congress threw the financial system a lifeline in the form of a $700 billion “bailout” known as the Troubled Asset Relief Program (TARP). The Federal Reserve lowered the fed funds rate (the rate at which banks lend to one another) to virtually zero and implemented other measures to jump-start the economy.
Beginning in March 2009, favorable earnings reports and activity in mergers and acquisitions contributed to cautious optimism as the Dow Jones Industrial Average (Dow) posted its best month since October 2002. Supported by some additional early signs of an economic recovery, the second quarter of 2009 was the best quarter for the Dow since late 2003. Previously down-and-out sectors like financials led the charge. The technology sector also enjoyed a bit of a rebound as signs of a recovery prompted analysts to predict significant investment in information technology. Confidence seemed to return to the corporate boardrooms as initial public offerings and M&A proposals made headlines on a regular basis. A “new and improved” General Motors emerged from bankruptcy protection in time to participate in the federal government’s cash-for-clunkers program, which took effect in August 2009 and increased auto sales for the industry as a whole. (Source: Bloomberg.)
Moving into the latter part of the fiscal period, the manufacturing sector enjoyed its first signs of expansion since early 2008, and housing began experiencing a slow rebound as borrowers sought to take advantage of low mortgage rates and tax incentives (sources: Institute of Supply Management, U.S. Commerce Department, and National Association of Realtors). Gross domestic product estimates reported by the U.S. Commerce Department for the third quarter of 2009 were the strongest in two years, another sign that the recovery seemed to have begun. After falling below 6,500 in March, the Dow briefly surged past 10,000 in October; the resurgence was primarily a result of more favorable earnings reports.
Although we are encouraged to see improving economic indicators, we are mindful that these indicators are rising from recessionary lows. Therefore, we are concerned about the nature and magnitude of the market rally that began in March 2009. We believe it was driven in part by investor sentiment moving away from extreme risk aversion toward normalization.
Throughout the year, we stayed true to our long-term approach to stock selection and sought only those we deemed as higher-quality companies with business models that we believed could withstand the type of adverse market cycles we have experienced of late. We expect to own stocks over a three- to five-year horizon, and we consider each company’s competitive position in both strong and adverse market conditions.
IntercontinentalExchange was one of our top performers. The company seems well positioned to benefit from the evolution of exchanges for futures and derivatives markets, particularly if these markets continue to grow and regulators demand greater transparency in such trading.
Apple overcame a period of lackluster consumer activity by producing and marketing stellar products. iPhone sales have exceeded expectations and the device remains highly profitable as a stand-alone product. However, the
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
12
story does not end there, because the iPhone’s success has driven more consumers to the company’s Mac and iPod lines, generating even greater platform benefits. The holding was the strongest contributor to the Portfolio’s overall return for the period.
We also have had success in finding companies we believe are relatively resistant to recessionary conditions, such as Crown Castle International. The popularity of iPhone, BlackBerry, and other smart-phone devices has forced telecommunications carriers to add bandwidth capacity to their wireless networks. We believe Crown Castle is well positioned to benefit from this trend because it is the largest owner and operator of cell phone towers.
Unfortunately, the Portfolio owned some companies that could not escape the harsh economic realities of the fiscal year, which at times included fallout from management missteps. Hard-drive manufacturer Seagate Technology, for instance, struggled as a result of an overall lack of technology spending, as businesses generally seemed to hold off on major systems upgrades. The company also suffered from poor managerial execution, which sparked a board confrontation and eventually led to the creation of a new management team.
Likewise, MGM Mirage struggled with a weak economy that dramatically depressed leisure travel to Las Vegas (and other tourist destinations). To make matters worse, the company struggled to raise much-needed financing for its high-profile CityCenter, a major project for the company in Las Vegas. We chose to sell both Seagate and MGM Mirage during the period.
eBay was another holding we exited, following what we believed was management’s inability to improve the company’s core auction business. While the company had raised its overall platform profile with its PayPal and Skype segments, the lack of direction within its core operations prompted us to sell the position.
The market has moved significantly in a relatively short time frame, but we remain concerned about the extent of the rally. However, as long-term investors, we are less focused on short-term market gyrations and quarter-by-quarter earnings comparisons. We continue to adhere to our philosophies and believe we are well positioned for the future. We are bottom-up stock pickers and are not looking to take on more cyclical risk, but we will add or decrease positions or change weightings if we perceive opportunities.
2009 Annual report · Delaware Pooled Trust
13
Performance summary
Delaware Pooled® Trust — The Large-Cap Growth Equity Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | |
| Average annual total returns (at NAV) | | | | | | |
| Periods ended Oct. 31, 2009 | | 1 year | | 3 years | | Lifetime |
| | +18.51% | | -5.28% | | -3.19% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $251 million |
| |
| Number of holdings |
| 32 |
| |
| Inception date |
| Nov. 1, 2005 |
Performance of $1,000,000
| | Starting value (Nov. 1, 2005) | | Ending value (Oct. 31, 2009) |
| Russell 1000 Growth Index | $1,000,000 | | $979,006 |
| The Large-Cap Growth Equity Portfolio | $1,000,000 | | $878,272 |
2009 Annual report · Delaware Pooled Trust
14
The performance graph assumes $1 million invested on Nov. 1, 2005, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.65%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.65% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Russell 1000 Growth Index measures the performance of the large-cap growth segment of the U.S. equity universe. It includes those Russell 1000 companies with higher price-to-book ratios and higher forecasted growth values. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
The Dow Jones Industrial Average, mentioned on page 12, is an often-quoted market indicator that comprises 30 widely held blue-chip stocks.
Past performance is not a guarantee of future results.
The Portfolio will be affected primarily by changes in stock prices.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
2009 Annual report · Delaware Pooled Trust
15
Portfolio management review
Delaware Pooled® Trust — The Small-Cap Growth Equity Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Small-Cap Growth Equity Portfolio returned +29.20% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. The Portfolio’s benchmark, the Russell 2000® Growth Index, returned +11.34% for the same period. Complete annualized performance for The Small-Cap Growth Equity Portfolio is shown in the table on page 18.
The fiscal year began during one of the most turbulent periods since the Great Depression. In the first four months of the fiscal period, stock prices — which had already suffered steep declines — continued to fall, pushing the U.S. economy deeper into recession. To stabilize the financial system and shore up the economy, the U.S. Congress and Federal Reserve undertook an extraordinary set of actions. Congress passed the American Recovery and Reinvestment Act of 2009, a monumental fiscal stimulus package, while the Fed launched a range of unconventional programs, alongside more traditional means of monetary stimulus, which included dropping the target for the fed funds rate to virtually zero. As the U.S. economy sunk deeper into recession, investors’ risk aversion grew and many fled the equity market for the relative comfort of U.S. government securities.
During the months of January and February 2009, virtually all economic news continued to paint a portrait of a global economy facing serious and potentially long-term difficulties. Gross domestic product data released in February confirmed that the U.S. economy shrank by more than 6.0% during the fourth quarter of 2008 and that every major component of the economy (with the notable exception of government spending) declined. While a reduction in exports and a decline in the equipment and software sector were notable, retail sales figures were perhaps most worrisome, as consumers largely curtailed spending during the quarter. (Data: U.S. Commerce Department, Dow Jones, Bloomberg.)
Equity investors took their cues from the disappointing economic news, driving major stock market indices to levels not seen in more than 10 years. The stock market hit its lowest point for the fiscal year in early March 2009. From this point, stocks (as measured by the S&P 500 Index) recorded seven months of gains, as investors seemed to grow increasingly confident that the financial crisis had been successfully contained. At first, the rally focused on riskier segments of the equity market, such as the financial and industrials sectors, as investors sought securities with higher potential returns.
For the final quarter of the fiscal year, many economic indicators reflected more positive trends, and for those indicators still in decline, the rate of decline slowed. Importantly, areas of the economy that had been among the largest obstacles to economic growth — the housing market, consumer sales, and manufacturing activity — showed signs of improvement (source: Bloomberg).
During the period, we stayed true to our bottom-up investment process, seeking out and holding what we believed to be market leaders that had the potential to deliver more growth in revenue and earnings than the benchmark. For example, the Portfolio held F5 Networks, which we consider to be a leader in what the information technology industry calls “application delivery”. This stock was a strong performer for the period. Going forward, we believe it could benefit from structural shifts in technology, if information technology virtualizes and enterprises take advantage of increased efficiencies related to data center optimization.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
16
Another contributor was Medarex, a biopharmaceutical company that develops and markets human antibody-based therapeutic products. We were originally attracted to Medarex because it is one of the only companies with a platform development technology for generating fully human antibody therapeutics. We sold our position in early September 2009, when Bristol-Myers Squibb acquired the company.
Charles River Laboratories International also contributed to performance. The company is a clinical research organization that helps pharmaceutical and biotechnology companies develop drugs. When we initiated the position, many investors feared that the weak economy and mergers such as that between Pfizer and Wyeth would impede drug development and decrease the amount of research and development across the industry. This environment was beneficial for stockholders of Charles River Labs, which was attractive to some investors for its relatively robust research and development pipeline.
Data Domain hurt performance for the period. The company provides storage systems that enable organizations of all sizes to manage, retain, and protect their data. We eliminated the position from the Portfolio because we didn’t believe the potential upside for maintaining the stock offset the risks. Specifically, Data Domain was a small company with well-capitalized competition in an industry that is consistently exposed to disruptive technologies.
RHI Entertainment, a market leader in the development and licensing of made-for-television movies and television mini-series, also detracted from performance. The stock suffered because television networks, troubled by lack of sponsorship, pulled back on their commitment to movies and mini-series. As a result, RHI Entertainment’s revenues and earnings suffered. We believe that demand for its products may increase as the economy improves and therefore continue to hold the stock.
As the price of oil and natural gas experienced severe price declines in response to the global economic crisis, demand for ION Geophysical products and services also declined. The company provides advanced systems and services that aid drilling companies. The stock was also troubled by heightened financial risk as a result of a large acquisition made in 2008. This risk caused us to eliminate the stock from our Portfolio.
Despite the renewed economic optimism that prevailed during much of the period, unemployment remained a prominent, ongoing concern. A high unemployment rate may continue to affect the consumer and, as a result, is one of several longer-term hurdles that the U.S. economy continues to face. In this environment, we remain committed to seeking out and holding those companies we think have the potential to generate strong relative growth in earnings and revenues.
2009 Annual report · Delaware Pooled Trust
17
Performance summary
Delaware Pooled® Trust — The Small-Cap Growth Equity Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | | |
| Periods ended Oct. 31, 2009 | | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| | +29.20% | | -4.64% | | +0.95% | | +1.56% | | +6.20% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $0.7 million |
| |
| Number of holdings |
| 84 |
| |
| Inception date |
| Sept. 15, 1998 |
Performance of $1,000,000
| | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| The Small-Cap Growth Equity Portfolio | $1,000,000 | | $1,167,683 |
| Russell 2000 Growth Index | $1,000,000 | | $1,011,926 |
2009 Annual report · Delaware Pooled Trust
18
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 1.20%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.95% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Russell 2000 Growth Index measures the performance of the small-cap growth segment of the U.S. equity universe. It includes those Russell 2000 companies with higher price-to-book ratios and higher forecasted growth values. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
The S&P 500 Index, mentioned on page 16, measures the performance of 500 mostly large-cap stocks weighted by market value, and is often used to represent performance of the U.S. stock market.
Past performance is not a guarantee of future results.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
The Portfolio will be affected primarily by changes in stock prices.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
2009 Annual report · Delaware Pooled Trust
19
Portfolio management review
Delaware Pooled® Trust — The Focus Smid-Cap Growth Equity Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Focus Smid-Cap Growth Equity Portfolio returned +33.07% at net asset value (NAV) with all distributions reinvested during the 12 months ended Oct. 31, 2009, surpassing the +18.21% return of the benchmark Russell 2500™ Growth Index. For complete performance information, see the table on page 22.
The fiscal year began much as the prior one ended. Widespread pessimism continued to grip the global markets and stocks continued their virtual free fall. The U.S. economy pushed further into recession as, in broad terms, banks refused to lend, businesses were unable to borrow, manufacturers slowed production, unemployment crept upward, and consumer spending remained anemic.
Congress threw the financial system a lifeline in the form of a $700 billion “bailout” known as the Troubled Asset Relief Program (TARP). The Federal Reserve lowered the fed funds rate (the rate at which banks lend to one another) to virtually zero and implemented other measures to jump-start the economy.
Beginning in March 2009, favorable earnings reports and activity in mergers and acquisitions contributed to cautious optimism as the Dow Jones Industrial Average (Dow) posted its best month since October 2002. Supported by some additional early signs of an economic recovery, the second quarter of 2009 was the best quarter for the Dow since late 2003. Previously down-and-out sectors like financials led the charge. The technology sector also enjoyed a bit of a rebound as signs of a recovery prompted analysts to predict significant investment in information technology. Confidence seemed to return to the corporate boardrooms as initial public offerings and M&A proposals made headlines on a regular basis. A “new and improved” General Motors emerged from bankruptcy protection in time to participate in the federal government’s cash-for-clunkers program, which took effect in August 2009 and increased auto sales for the industry as a whole. (Source: Bloomberg.)
Moving into the latter part of the fiscal period, the manufacturing sector enjoyed its first signs of expansion since early 2008, and housing began experiencing a slow rebound as borrowers sought to take advantage of low mortgage rates and tax incentives (sources: Institute of Supply Management, U.S. Commerce Department, and National Association of Realtors). Gross domestic product estimates reported by the U.S. Commerce Department for the third quarter of 2009 were the strongest in two years, another sign that the recovery seemed to have begun. After falling below 6,500 in March, the Dow briefly surged past 10,000 in October; the resurgence was primarily a result of more-favorable earnings reports.
Although we are encouraged to see improving economic indicators, we are mindful that these indicators are rising from recessionary lows. Therefore, we are concerned about the nature and magnitude of the market rally that began in March 2009. We believe it was driven in part by investor sentiment moving from extreme risk aversion toward normalization.
We expect to own stocks over a three- to five-year horizon, and we consider each company’s competitive position in both strong and adverse market conditions. The Portfolio remained concentrated, with large positions in a small number of stocks because we believe 20–30 holdings is adequate for diversification.
During the period, we suspected the aversion many investors felt toward risk would abate, and we thus positioned the Portfolio to participate in a rebound. Within the Portfolio, for example, we maintained and monitored a specific basket of stocks that generally had suffered more than the average stock, given the risk-averse posture of the market. These holdings represented a small percentage of the overall Portfolio and we believed the higher risk-reward profile was justified by certain
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
20
cyclical characteristics. These stocks surged in the rally and contributed to the Portfolio’s outperformance of the benchmark.
With individuals conserving their entertainment dollars, NetFlix was the Portfolio’s top contributor during the fiscal year. This long-term holding continued to dominate rivals in its core DVD-by-mail operations and has positioned itself well to participate in the next phase of digital distribution through partnerships with makers of game consoles and TV/DVD players.
IntercontinentalExchange was another top performer. We believe the electronic trading marketplace is well positioned to benefit from the evolution of exchanges, particularly if futures and derivative markets continue to grow and regulators demand greater transparency. We elected to sell IntercontinentalExchange when the stock outgrew the Portfolio’s market-cap limit. During the market selloff, its market cap fell within our parameters and we bought the stock again.
Another contributor, Whole Foods Market, initially struggled, due in part to the perception that higher-end stores would suffer from the downdraft in the economy. We maintained our position and the stock improved when management slowed capital investments by restricting new store growth and drove profitability by focusing on real cash returns at existing stores.
Unfortunately, the Portfolio owned companies that could not escape the harsh realities of the times. We remain frustrated with Weight Watchers International’s inability to improve its core business (meetings), but held our position because of its growing internet-based operations and food licensing arrangements that provide higher recurring revenues.
Abiomed showed that disappointments in a challenging environment can prove devastating, as the heart-pump manufacturer struggled with clinical trial setbacks. We maintained our relatively small allocation and believe its upside remains significant, given its product successes abroad.
Heartland Payment Systems, a processor of credit and debit card transactions, also struggled during the period. The company suffered a security breach when outside hackers stole significant user data. We examined this issue very closely during a trying time for the company, and came away impressed with the way it was addressed by the company. We also believe the stock sold off more than was warranted. For these reasons, we continue to hold the stock.
The market has moved significantly in a relatively short time frame but we remain concerned about the extent of the rally. However, as long-term investors, we are less focused on short-term market gyrations and quarter-by-quarter earnings comparisons. We continue to adhere to our philosophies and believe we are appropriately positioned for the future. We are bottom-up stock pickers and are not looking to take on more cyclical risk, but we will add or decrease positions or change weightings if we perceive opportunities.
2009 Annual report · Delaware Pooled Trust
21
Performance summary
Delaware Pooled® Trust — The Focus Smid-Cap Growth Equity Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | Lifetime |
| +33.07% | | -1.08% | | +3.56% | | +2.71% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $3.5 million |
| |
| Number of holdings |
| 30 |
| |
| Inception date |
| Dec. 1, 2003 |
Performance of $1,000,000
| | Starting value (Dec. 1, 2003) | | Ending value (Oct. 31, 2009) |
| The Focus Smid-Cap Growth Equity Portfolio | $1,000,000 | | $1,171,718 |
| Russell 2500 Growth Index | $1,000,000 | | $1,133,517 |
2009 Annual report · Delaware Pooled Trust
22
The performance graph assumes $1 million invested on Dec. 1, 2003, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 1.12%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.92% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Russell 2500 Growth Index measures the performance of the small- to mid-cap growth segment of the U.S. equity universe. It includes those Russell 2500 companies with higher price-to-book ratios and higher forecasted growth values. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
The Dow Jones Industrial Average, mentioned on page 20, is an often-quoted market indicator that comprises 30 widely held blue-chip stocks.
Past performance is not a guarantee of future results.
Stocks of companies with high growth expectations may be more susceptible to price declines if they do not meet those high expectations.
Investments in small and/or medium-sized companies typically exhibit greater risk and higher volatility than larger, more established companies.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
The Portfolio will be affected primarily by changes in stock prices.
Because the Portfolio expects to hold a concentrated portfolio of a limited number of securities, the Portfolio’s risk is increased because each investment has a greater effect on the Portfolio’s overall performance.
2009 Annual report · Delaware Pooled Trust
23
Portfolio management review
Delaware Pooled® Trust — The Real Estate Investment Trust Portfolio II
Oct. 31, 2009
For its fiscal year ended Oct. 31, 2009, Delaware Pooled Trust — The Real Estate Investment Trust Portfolio II returned - -2.62% at net asset value (NAV) with all distributions reinvested. In comparison, the Portfolio’s benchmark, the FTSE NAREIT Equity REITs Index, advanced by 0.06% during the same period. Complete annualized performance for the Real Estate Investment Trust Portfolio II is shown in the table on page 26.
Investors in U.S. real estate securities saw tremendous market volatility during the past year. The lack of readily available credit was a problem for businesses and individuals alike, but it was an especially acute challenge for real estate investments trusts (REITs). With access to financing largely cut off (or prohibitively expensive), many investors worried that formerly healthy companies would be unable to survive. As a result, REIT prices fell particularly sharply during the downturn and even lagged the broad U.S. equity market, which itself lost significant ground.
Once credit market conditions improved, so did REIT performance. REIT investors became increasingly comfortable owning companies with higher debt levels and weaker balance sheets. In this environment, the real estate securities market turned in much-improved performance for most of the rest of the period.
As we do in all types of market conditions, we continued to employ our “bottom up” security selection strategy, in which we evaluate potential investments based on our assessment of each company’s growth prospects, relative valuation, and balance-sheet quality (among other factors). Given the highly volatile conditions of the past year, however, our approach was more opportunistic than usual, as we sought to take advantage of shifting conditions in the marketplace.
Early on, the Portfolio was positioned relatively defensively in light of the weak investment environment. We focused on companies with longer lease terms, and we added to our holdings in manufactured-home REITs, which have historically tended to provide steady returns (albeit with relatively limited growth potential). Simultaneously, we limited exposure to companies with shorter-duration leases, and we cut our weighting in mall and office REITs. We also looked to avoid stocks that we believed had significant balance sheet problems.
This defensive stance was generally beneficial during the downturn, but it can be argued that we maintained this positioning for too long into the spring as credit markets loosened and REIT markets advanced. We conservatively calculated that the recovery would be much shorter than it turned out to be. In actuality, credit conditions continued improving, and by summer 2009 it was evident that a more-sustainable improvement had taken place. We began adjusting the Portfolio accordingly, taking measures that included adding more economically sensitive REITs and reducing our healthcare allocation.
During the final months of the fiscal year, we felt it was prudent to once again make the portfolio more defensive. In the short period between July and September alone, the FTSE NAREIT Equity REITs Index advanced by nearly one-third. We saw the advance as unsustainable, and we cut our positions in companies we believed faced serious fundamental challenges or troubled balance sheets.
We emphasize that all of the moves listed above were made at the margins of the Portfolio, designed to take advantage of what we believed were unique opportunities presented by then-current conditions. Our basic emphasis on large-capitalization REITs with strong balance sheets remains unchanged. As always, we continue favoring REITs that we feel exhibit high-quality property portfolios, a focus on fundamentally solid real estate markets, and capable management teams that are focused on the long term.
The most significant negative effects on the Portfolio’s performance compared to its benchmark index came from holdings within the lodging sector. Our intentional lack of exposure in the sector hampered results.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
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A second source of relative underperformance came within the industrials sector, where our group of stocks posted a collective decline of more than 25% for the period. ProLogis, an owner, operator, and developer of industrial properties, was among the Portfolio’s weakest contributors to overall return for the period. The company’s stock suffered as investors worried about the amount of debt on the company’s balance sheet. The Portfolio also lost ground against the benchmark within specialty REITs. Our performance was hindered, for example, by our relatively underweight position versus the index in forest-products company Rayonier, a benchmark component that posted strong returns overall.
On the positive side, our investments in the so-called mixed sector — which consists of companies that own multiple property types or that focus on niches within the real estate market — had positive effects on our results. For instance, we were helped by our position in Digital Realty Trust. This owner/operator of data centers has benefited from the growing number of corporations that choose to cut costs by outsourcing their data-management needs. Liberty Property Trust, an owner/operator of office and industrial properties that benefited from its solid balance sheet, also contributed to the Portfolio’s overall return. During the broad REIT upswing that ran between 2002 and 2007, Liberty’s share price did not inflate as dramatically as many other companies, and the stock’s comparatively tempered nature helped it weather the recent storm.
The strongest individual contributors to the Portfolio’s overall return during the fiscal year included Mack-Cali Realty, an owner/operator of office properties that focuses on the northeastern United States. Despite facing a similar decline in business fundamentals along with the rest of the office sector, Mack-Cali was supported by its strong balance sheet and success in maintaining its tenant base.
At period end, we anticipate continued challenges in REIT markets. It’s very difficult to say how much (if any) growth we can expect in the year ahead. Nonetheless, our philosophy and investment process remain unchanged. We continue aiming to provide investors with a high-quality, research-driven way to invest in REITs.
2009 Annual report · Delaware Pooled Trust
25
Performance summary
Delaware Pooled® Trust — The Real Estate Investment Trust Portfolio II
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| -2.62% | | -14.48% | | -1.16% | | +9.02% | | +6.11% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $5.2 million |
| |
| Number of holdings |
| 50 |
| |
| Inception date |
| Nov. 4, 1997 |
Performance of $1,000,000
| | | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| FTSE NAREIT Equity REITs Index | $1,000,000 | | $2,432,197 |
| The Real Estate Investment Trust Portfolio II | $1,000,000 | | $2,371,194 |
2009 Annual report · Delaware Pooled Trust
26
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 1.20%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.95% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The FTSE NAREIT Equity REITs Index measures the performance of all publicly traded equity real estate investment trusts traded on U.S. exchanges. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
The Portfolio is considered “nondiversified” as defined in the Investment Company Act of 1940, which means that it may allocate more of its net assets to investments in single securities than a “diversified” portfolio. Thus, adverse effects on any single investment may affect a larger portion of overall assets and subject the Portfolio to greater risks and volatility.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
A REIT fund’s tax status as a regulated investment company could be jeopardized if it holds real estate directly, as a result of defaults, or receives rental income from real estate holdings.
2009 Annual report · Delaware Pooled Trust
27
Portfolio management review
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Core Focus Fixed Income Portfolio returned +17.41% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. The Portfolio’s benchmark, the Barclays Capital U.S. Aggregate Index, returned +13.79% for the same period. Complete annualized performance for The Core Focus Fixed Income Portfolio is shown in the table on page 30.
The fiscal year was a study in contrasts. During the first few months, the financial markets featured the worst conditions that the portfolio management team has ever witnessed. In our opinion, the months afterward offered some of the most attractive fixed income opportunities in decades.
Just prior to the start of the fiscal period, financial markets were jolted by the bankruptcy of storied Wall Street investment bank Lehman Brothers. This event, followed soon after by the near bankruptcy (and ultimate federal bailout) of insurance giant American International Group (AIG), sent the financial markets into a near panic.
Within this context, investor risk aversion was at record levels as the period began, and fixed income investors fled almost uniformly to the relative safety of government securities.
The Portfolio’s relatively conservative investment mandate — the fact that it does not invest in riskier areas of the fixed income market like high yield bonds or emerging market credits — generally helped in mitigating losses during the first months of the fiscal period. At the same time, however, the Portfolio’s underweight position versus its benchmark in Treasury and agency notes hurt its performance. For similar reasons, Portfolio exposure to nonagency mortgage-backed securities (MBS) — those that are not backed by the government — also hurt Portfolio performance, as these securities are generally considered riskier than agency-backed MBS. We decreased Portfolio exposure to nonagency MBS in late 2008.
The Portfolio’s emphasis on higher-quality and liquid investment grade corporate bonds contributed to its relative performance, though corporate bonds (particularly lower-rated corporate bonds) were not immune from the difficult investment climate.
As the second quarter of 2009 began, the market’s broad-based, deep pessimism shifted to a more optimistic outlook and investors rediscovered their appetite for risk. The bond market appeared to anticipate better times ahead as prices rose dramatically on all risk assets. We believe the Portfolio was well positioned for the shift in investor sentiment and, as a result, the Portfolio’s strong returns beginning at that time help to explain its outperforming its benchmark for the complete fiscal period.
Specifically, the Portfolio’s overweight allocation versus the benchmark to investment grade corporate bonds added to results both on an absolute basis and versus the benchmark. Corporate bonds were among the asset classes most affected by the credit crisis, as yields ballooned. However, as credit conditions eased, investment grade corporate bonds experienced a massive and sustained rally. Within the Portfolio, security selection was a significant positive across many industries, including banking, basic industry, communications, consumer (both cyclicals and noncyclicals), and technology. Our emphasis in BBB- and A-rated issues also had a positive effect.
The Portfolio’s underweight position in traditionally conservative agency MBS also contributed to its performance because returns on agency (government-backed) MBS significantly trailed those of corporate bonds as well as nonagency MBS. Overweight positions in nonagency MBS, as well as asset-backed securities (ABS) and commercial mortgage-backed securities (CMBS), added to Portfolio performance. Our prevailing emphasis on the higher-quality part of the ABS and CMBS sectors, however, modestly offset Portfolio returns because market returns were progressively stronger within the lower-quality categories.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
29
Performance summary
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | Lifetime |
| +17.41% | | +5.70% | | +4.69% | | +5.18% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $20.6 million |
| |
| Number of holdings |
| 227 |
| |
| Inception date |
| June 30, 2004 |
Performance of $1,000,000
| | | Starting value (June 30, 2004) | | Ending value (Oct. 31, 2009) |
| Barclays Capital U.S. Aggregate Index | $1,000,000 | | $1,331,444 |
| The Core Focus Fixed Income Portfolio | $1,000,000 | | $1,309,143 |
2009 Annual report · Delaware Pooled Trust
30
The performance graph assumes $1 million invested on June 30, 2004, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.63%. Management has voluntarily agreed to reimburse certain expenses and/or waive its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding, in an aggregate amount, 0.43% of average daily net assets of the Portfolio. Please see the most recent prospectus for additional information on the fee waivers.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Barclays Capital U.S. Aggregate Index measures the performance of more than 8,500 publicly issued investment grade (Baa3/BBB- or better) corporate, U.S. government, mortgage- and asset-backed securities with at least one year to maturity and at least $250 million par amount outstanding. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
The letter ratings are provided by S&P and describe the creditworthiness of the underlying bonds in the portfolio and generally range from AAA (highest quality) to CCC (lowest; highly speculative).
Securities in the lowest of the rating categories considered to be investment grade (that is, Baa or BBB) have some speculative characteristics.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Portfolio may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolio may be prepaid prior to maturity, potentially forcing the Portfolio to reinvest that money at a lower interest rate.
Investments in foreign bonds have special risks, which include currency fluctuations, economic and political change, and differing accounting standards. The Portfolio may utilize futures, swaps, and foreign currency contracts for defensive strategy purposes to project or minimize the impact of potential changes.
The Portfolio may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
The Portfolio may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
2009 Annual report · Delaware Pooled Trust
31
Portfolio management review
Delaware Pooled® Trust — The High-Yield Bond Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The High-Yield Bond Portfolio returned +46.38% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. For the same period, the Merrill Lynch U.S. High Yield Master II Constrained Index returned +49.54%. Complete annualized performance for The High-Yield Bond Portfolio annual report is shown in the table on page 34.
The fiscal year was largely a story in two parts. The period began amid the worst economic and financial markets that the portfolio managers have ever witnessed. The latter part of the period, however, featured a considerable recovery that, in our opinion, featured some of the most attractive opportunities in decades.
Just before the start of the fiscal period, financial markets were jolted by the bankruptcy of storied Wall Street investment bank Lehman Brothers. This event, followed soon after by the near bankruptcy (and ultimate federal bailout) of insurance giant American International Group (AIG), sent the financial markets into a near panic. Within this context, stock and bond prices appeared to be in free fall as the period began, and credit was virtually unavailable. Businesses began to cut capital spending, and large-scale job losses ensued.
By early 2009, bond valuations on all non-Treasury assets had fallen to extreme lows, reflecting a massive “flight to quality” by investors, amid fears of an economic depression. High yield spreads expanded to levels never seen before. During the worst phase of the crisis — October and November 2008 — many bonds rated at or below CCC were yielding more than 20%. As might be expected in a market driven by deep economic troubles, higher-quality BB- and B-rated bonds recorded smaller, but still substantial, losses. (Source: J.P. Morgan.)
In early 2009, the environment for high yield securities took a 180-degree turn. Investors seemed increasingly willing to accept risk as a monumental fiscal stimulus program was signed into law by the president in February. The program was coupled with the Federal Reserve’s commitment to keeping short-term interest rates near zero and a variety of government initiatives designed to restore liquidity and boost confidence in the financial markets. Credit spreads among high yield bonds began to narrow substantially beginning in March, as investors’ confidence in corporate balance sheets and earnings prospects rebounded.
The high yield market also began experiencing significant inflows of investment capital at this time. Year to date (through Sept. 30, 2009, the latest data available), for example, high yield mutual funds took $25.5 billion of inflows, with more than $8 billion of this flow occurring during the third quarter (source: AMG Data Services). Low yields in competing investments such as money market accounts, certificates of deposit, and savings accounts, combined with the huge amounts of liquidity infused by central banks all over the world, helped explain these inflows.
Within the Portfolio during the period, we tended to emphasize companies with, in our view, strong cash flows and other favorable business fundamentals. We especially preferred the basic industry sector — including chemicals and metals/mining, among other groups — because we believed it might benefit from a cyclical upswing.
In addition, the Portfolio generally carried an overweight in B-rated securities because we believed that the most favorable risk and reward opportunities existed there. Conversely, the Portfolio held a lighter-than-benchmark exposure to bonds with a BB rating, which is just below investment grade. Over the course of the fiscal period, this underweight position detracted from Portfolio performance and helped to explain the Portfolio’s
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
32
underperformance versus the benchmark. The Portfolio’s individual holdings within this category actually outpaced those of the benchmark, but our underweight position ultimately hurt the Portfolio’s relative returns, because BB-rated bonds (which constituted more than 40% of the benchmark during the period) experienced solid returns for the year.
On the positive side, the Portfolio benefited from bonds rated CCC, where it had a return advantage over the benchmark of more than 8 percentage points.
As the period came to a close, we viewed the most attractive part of the market to be in medium- to lower-quality B-rated bonds, as well as in higher-quality CCC-rated bonds. We also continued favoring high yield bonds over leveraged loans, given the large valuation gap that existed.
Even though we believed the high yield asset class had seen the worst of the credit crisis come and go, our plan within the Portfolio at the end of the period remained to proceed with caution. While we believe that default expectations may drop in 2010, we remain mindful that a full 65% of currently outstanding loans and bonds will need to be refinanced in the 2012–2015 time period (source: J.P. Morgan). The bottom line was that we generally began to add risk to the Portfolio without completely throwing caution to the wind from a credit-quality perspective.
2009 Annual report · Delaware Pooled Trust
33
Performance summary
Delaware Pooled® Trust — The High-Yield Bond Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance |
| Average annual total returns (at NAV) |
| Periods ended Oct. 31, 2009 | | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| | +46.38% | | +5.40% | | +6.53% | | +7.85% | | +7.33% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
Total net assets |
$23.6 million |
| |
Number of holdings |
309 |
| |
Inception date |
Dec. 2, 1996 |
Performance of $1,000,000
| | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| The High-Yield Bond Portfolio | $1,000,000 | | $2,129,523 |
| Merrill Lynch U.S. High Yield Master II Constrained Index | $1,000,000 | | $1,864,687 |
2009 Annual report · Delaware Pooled Trust
34
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.77%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.59% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Merrill Lynch U.S. High Yield Master II Constrained Index is a market value–weighted index that tracks the public high yield debt market. Issues included in the Merrill Lynch U.S. High Yield Master II Constrained Index have maturities of one year or more and have a credit rating lower than BBB- by S&P and Baa3 by Moody’s, but are not in default. The Merrill Lynch U.S. High Yield Master II Constrained Index limits any individual issuer to a maximum of 2% benchmark exposure. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Portfolio may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolio may be prepaid prior to maturity, potentially forcing the Portfolio to reinvest that money at a lower interest rate.
The letter ratings are provided by S&P and describe the creditworthiness of the underlying bonds in the portfolio and generally range from AAA (highest quality) to CCC (lowest; highly speculative).
Securities in the lowest of the rating categories considered to be investment grade (that is, Baa or BBB) have some speculative characteristics.
High yielding, noninvestment grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
The Portfolio may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
The Portfolio may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
2009 Annual report · Delaware Pooled Trust
35
Portfolio management review
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
Oct. 31, 2009
Delaware Pooled Trust — The Core Plus Fixed Income Portfolio returned +25.55% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. The Portfolio’s benchmark, the Barclays Capital U.S. Aggregate Index, returned +13.79% for the same period. Complete annualized performance for The Core Plus Fixed Income Portfolio is shown in the table on page 38.
The fiscal year was a study in contrasts. During the first few months, the financial markets featured the worst conditions that the portfolio management team has ever witnessed. In our opinion, the months afterward offered some of the most attractive fixed income opportunities in decades.
Just before the start of the fiscal period, financial markets were jolted by the bankruptcy of storied Wall Street investment bank Lehman Brothers. This event, followed soon after by the near bankruptcy (and ultimate federal bailout) of insurance giant American International Group (AIG), sent financial markets into a near panic.
Within this context, risk aversion was at record levels as the period began, and fixed income investors fled almost uniformly to the relative safety of government securities. At that time, the Portfolio’s underweight position versus its benchmark in Treasury and agency notes hurt its performance. For similar reasons, exposure to nonagency mortgage-backed securities (MBS) — those that are not backed by the government — also hurt the Portfolio’s performance. We decreased the Portfolio’s exposure to nonagency MBS as we headed into 2009.
Although the Portfolio had little exposure to high yield debt early in the fiscal period, the positions it did hold also detracted from returns at that time. In fact, during the fourth quarter of 2008, high yield bonds experienced their worst quarterly performance in history (source: J.P. Morgan).
As the second quarter of 2009 began, the market’s deep pessimism shifted to a more optimistic outlook and investors seemed to rediscover their appetite for risk. The bond market appeared to anticipate better times ahead as prices rose dramatically on all risk assets. We believe the Portfolio was well positioned for the shift in investor sentiment, and as a result, the Portfolio’s strong returns beginning at that time help to explain its outperforming the benchmark for the complete fiscal period.
Specifically, the Portfolio’s overweight allocation versus the benchmark to investment grade corporate bonds added to its results both on an absolute basis and versus the benchmark. Corporate bonds were among the asset classes most affected by the credit crisis, as yields ballooned. However, as credit conditions eased, investment grade corporate bonds experienced a massive and sustained rally. Within the Portfolio, security selection was a significant positive across many industries, including banking, basic industry, communications, consumer (both cyclicals and noncyclicals), and technology. Our emphasis in BBB- and A-rated issues also had a positive effect.
The Portfolio’s exposure to high yield and emerging market debt, which are not included in the benchmark index, also helped overall relative performance for the year. Our prevailing emphasis on higher-quality credits, however, moderated performance, as market returns were progressively stronger within the lower-quality categories.
Though the Portfolio’s exposure to them remained limited, emerging markets generally outperformed the benchmark, providing another source of relative strength to the Portfolio. Our emerging market focus was on countries that we believed had good fiscal policies in place prior to the downturn, had less-distressed economies, or had sufficiently flexible economic stimulus programs. These countries tended to experience more-vigorous economic recoveries. Examples of these countries include Indonesia, Brazil, and India, among others.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
37
Performance summary
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | |
| Periods ended Oct. 31, 2009 | | 1 year | | 3 years | | 5 years | | Lifetime |
| | | +25.55% | | +7.36% | | +6.06% | | +6.83% |
| Portfolio profile |
Oct. 31, 2009 |
| |
Total net assets |
$53.6 million |
| |
Number of holdings |
430 |
| |
Inception date |
June 28, 2002 |
Performance of $1,000,000
| | Starting value (June 28, 2002) | | Ending value (Oct. 31, 2009) |
| The Core Plus Fixed Income Portfolio | $1,000,000 | | $1,624,755 |
| Barclays Capital U.S. Aggregate Index | $1,000,000 | | $1,474,728 |
2009 Annual report · Delaware Pooled Trust
38
The performance graph assumes $1 million invested on June 28, 2002, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.57%. Management has voluntarily agreed to reimburse certain expenses and/or waive its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding, in an aggregate amount, 0.45% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Barclays Capital U.S. Aggregate Index measures the performance of more than 8,500 publicly issued investment grade (Baa3/BBB- or better) corporate, U.S. government, mortgage- and asset-backed securities with at least one year to maturity and at least $250 million par amount outstanding. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
The letter ratings are provided by S&P and describe the creditworthiness of the underlying bonds in the portfolio and generally range from AAA (highest quality) to CCC (lowest; highly speculative).
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Portfolio may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolio may be prepaid prior to maturity, potentially forcing the Portfolio to reinvest that money at a lower interest rate.
High yielding, noninvestment grade bonds (junk bonds) involve higher risk than investment grade bonds. The high yield secondary market is particularly susceptible to liquidity problems when institutional investors, such as mutual funds and certain other financial institutions, temporarily stop buying bonds for regulatory, financial, or other reasons. In addition, a less liquid secondary market makes it more difficult for the Fund to obtain precise valuations of the high yield securities in its portfolio.
The Portfolio may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
The Portfolio may experience portfolio turnover in excess of 100%, which could result in higher transaction costs and tax liability.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
2009 Annual report · Delaware Pooled Trust
39
Portfolio management review
Delaware Pooled® Trust — The International Equity Portfolio
Oct. 31, 2009
Investors have reason to be pleased with the recovery that international equity markets enjoyed during the 12-month period ended Oct. 31, 2009. For the fiscal year, The International Equity Portfolio produced a strong absolute gain of +16.11% at net asset value (NAV) with all distributions reinvested, though it lagged the benchmark MSCI EAFE (Europe, Australasia, Far East) Index (net), which returned +27.71%. Complete annualized performance for The International Equity Portfolio is shown in the table on page 42.
In very strong markets such as we experienced during the fiscal period, the Portfolio’s relative performance was in line with what we would have expected. We attribute this performance to our defensive, value-oriented style. Over the past 12 months, the market displayed unusual levels of volatility. Keep in mind that in the month prior to the beginning of the Portfolio’s fiscal year, the market (as measured by the MSCI EAFE Index) was down by approximately 20%. As the fiscal period unfolded, the market remained extremely volatile — five months were negative and seven were positive. However, there was no clear trend in which negative months were followed by recoveries. Instead, the market fluctuated back and forth in reaction to the news of various government interventions.
Action in currency markets was pronounced as well. For instance, during the period the euro appreciated more than 16% versus the dollar, and the Australian dollar strengthened by a remarkable 37% against the U.S. dollar. (Source: Bloomberg.)
Against this backdrop, we maintained our investment discipline, which is designed to identify companies with reasonable valuations and the potential for long-term appreciation. Toward the end of the fiscal period, this approach led the Portfolio to be overweight in some fairly defensive sectors such as telecommunications and healthcare, both of which underperformed versus the benchmark for the period. We also held underweight positions in the three strongest sectors: materials, industrials, and financials. As a result, most of the Portfolio’s relative underperformance versus the benchmark is attributed to security and sector selection. Currency effects were largely neutral, and our country selection decisions had positive effects.
Our decision to underweight the materials sector (which includes commodities) was a major factor in our underperformance versus the benchmark. In recent months, most global commodity prices staged an impressive recovery after a precipitous decline in 2008. Copper, the bellwether of global industrial activity, was up dramatically by midyear, driving the outperformance of the materials and energy sectors and, to a large extent, emerging markets. The roots of the rally lie in the unprecedented stimulus measures unleashed by central banks and governments world-wide. China implemented a substantial program of fiscal stimulus and monetary easing, in the form of a $600 billion spending program and a large, policy-led acceleration of credit expansion (source: Bloomberg). This explosion in lending and investment is now manifesting itself through a rise in domestic consumption and a rapid recovery in domestic property sales and automobile sales. To us, however, this recovery in commodities appeared fragile: Based on our longer-term analysis, valuations for most metals and mining stocks exceeded their fair values. As a result, we maintained a significant underweight in the materials sector and in emerging markets in general, where materials are an important component of the market.
At the same time, we felt more positive about China’s effects on developed economies in the Pacific Rim, including Australia, Singapore, and Hong Kong. In particular, Australian equities rose 65% and managed to navigate the downturn without falling into recession (all country returns based on MSCI country indices). In addition, Australian authorities began raising interest rates, which caused the Australian dollar to rise markedly versus the U.S. dollar.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
40
Equity performance in Singapore and Hong Kong also was strong, rising 63% and 64%, respectively. Equity markets in these regions benefited from the recovery in China as well as from the fact that the financial sector, which dominates both economies, was up significantly. In Singapore, banks, diversified financials, and real estate together make up 49% of market capitalization; in Hong Kong the percentage is 63%. (Source: Bloomberg.)
Not surprisingly, some of the Portfolio’s best-performing stocks were financial companies located in the Pacific Rim. These included Wharf Holdings, the Hong Kong–based property developer; Wesfarmers, the Australian conglomerate whose operations include insurance (as well as mining, energy, supermarkets, and department stores); National Australia Bank; and the Singapore-based Oversea-Chinese Banking. At the end of the period, the Portfolio maintained each of the holdings.
While the Portfolio’s holdings of European financial companies performed relatively well — examples include Fortis, Banco Santander, and UniCredito — the Portfolio was underweight in the financial sector overall, which hurt performance. At period end, each of these stocks remained in the Portfolio.
Japan was one of the worst-performing markets during the fiscal year, with an overall return of 13.76%. Although the Portfolio was slightly underweight in the Japanese market, our security selection suffered due to a marked rotation into riskier holdings and out of the defensive sectors in which we found more value. As a result, nine of the 10 weakest performers in the Portfolio were Japanese stocks, including Kao, Seven & I Holdings, and West Japan Railway. We remain confident that these holdings are solid enterprises, and we believe performance may improve in a market environment less focused on cyclical growth.
2009 Annual report · Delaware Pooled Trust
41
Performance summary
Delaware Pooled® Trust — The International Equity Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
Portfolio performance | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| +16.11% | | -5.13% | | +5.47% | | +6.31% | | +8.34% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
Total net assets |
$913.1 million |
| |
Number of holdings |
57 |
| |
Inception date |
Feb. 4, 1992 |
Performance of $1,000,000
| | | | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| | The International Equity Portfolio | $1,000,000 | | $1,844,301 |
|
| | MSCI EAFE Index (gross) | $1,000,000 | | $1,273,148 |
| | MSCI EAFE Index (net) (benchmark) | $1,000,000 | | $1,224,563 |
2009 Annual report · Delaware Pooled Trust
42
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.87%.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The MSCI EAFE Index measures equity market performance across developed market countries in Europe, Australasia, and the Far East. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. Index “gross” return reflects the maximum possible dividend reinvestment. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.
If and when we invest in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to special risks, including counterparty risk.
The Portfolio is presently closed to new investors.
2009 Annual report · Delaware Pooled Trust
43
Portfolio management review
Delaware Pooled® Trust — The Labor Select International Equity Portfolio
Oct. 31, 2009
Investors have reason to be pleased with the recovery that international equity markets enjoyed during the 12-month period ended Oct. 31, 2009. For the fiscal year, The Labor Select International Equity Portfolio produced a strong absolute gain of +16.76% at net asset value (NAV) with all distributions reinvested, though it lagged the benchmark MSCI EAFE (Europe, Australasia, Far East) Index (net), which returned +27.71%. Complete annualized performance for The Labor Select International Equity Portfolio is shown in the table on page 46.
In very strong markets such as we experienced during the fiscal period, the Portfolio’s relative performance was in line with what we would have expected. This performance is due to our defensive, value-oriented style. Over the past 12 months, the market displayed unusual levels of volatility. Keep in mind that in the month prior to the beginning of the Portfolio’s fiscal year, the market (as measured by the MSCI EAFE Index) was down by approximately 20%. As the fiscal period unfolded, the market remained extremely volatile — five months were negative and seven were positive. However, there was no clear trend in which negative months were followed by recoveries. Instead, the market fluctuated back and forth in reaction to the news of various government interventions.
Action in currency markets was pronounced as well. For instance, during the period the euro appreciated more than 16% versus the dollar, and the Australian dollar strengthened by a remarkable 37% against the U.S. dollar. (Source: Bloomberg.)
Against this backdrop, we maintained our investment discipline, which is designed to select companies with reasonable valuations and the potential for long-term total return. This approach often leads us to defensive sectors such as telecommunications and healthcare, both of which underperformed this year. We also underweighted the three strongest sectors: materials, industrials, and financials. As a result, most of the Portfolio’s relative underperformance versus the benchmark is attributed to security and sector selection. Currency effects were largely neutral, and our country selection decisions had positive effects.
Our decision to underweight the materials sector (which includes commodities) was a major factor in our underperformance versus the benchmark. In recent months, most global commodity prices staged an impressive recovery after a precipitous decline in 2008. Copper, the bellwether of global industrial activity, was up dramatically by midyear, driving the outperformance of the materials and energy sectors and, to a large extent, emerging markets. The roots of the rally lie in the unprecedented stimulus measures unleashed by central banks and governments world-wide. China implemented a substantial program of fiscal stimulus and monetary easing, in the form of a $600 billion spending program and a large, policy-led acceleration of credit expansion (source: Bloomberg). This explosion in lending and investment is now manifesting itself through a rise in domestic consumption and a rapid recovery in domestic property sales and automobile sales. To us, however, this recovery in commodities appeared fragile: Based on our longer-term analysis, valuations for most metals and mining stocks exceeded their fair values. As a result, we maintained a significant underweight in the materials sector and in emerging markets in general, where materials are an important component of the market.
At the same time, we felt more positive about China’s effects on developed economies in the Pacific Rim, including Australia, Singapore, and Hong Kong. In particular, Australian equities rose 65% and managed to navigate the downturn without falling into recession (all country returns based on MSCI country indices). In addition, Australian authorities began raising interest rates, which caused the Australian dollar to rise markedly versus the U.S. dollar.
Equity performance in Singapore and Hong Kong also was strong, rising 63% and 64%, respectively. Equity markets in these countries benefited from the recovery in China as well as from the fact that the financial sector, which dominates both economies, was up significantly. In Singapore, banks, diversified financials, and real estate together make up 49% of market capitalization; in Hong Kong the percentage is 63%. (Source: Bloomberg.)
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
44
Not surprisingly, some of our top-performing stocks were financial companies located in the Pacific Rim: Wharf Holdings, the Hong Kong–based property developer; Wesfarmers, the Australian conglomerate whose operations include insurance (as well as mining, energy, supermarkets, and department stores); National Australia Bank; and the Singapore-based United Overseas Bank. At the end of the period, the Portfolio maintained each of the holdings.
We were much more comfortable with banks in the Pacific Rim compared to banks in Europe, for a number of reasons: they are generally better capitalized; there’s much less risk associated with toxic assets; and they are more concentrated on traditional banking operations. Lending to companies in Asia is still profitable because there is strong economic growth potential. European and U.S. banks tend to chase higher returns on equity via structured products, which, as we learned during the credit crisis, can be a far riskier strategy.
While the Portfolio’s holdings of European financial companies performed relatively well — examples include Fortis, Banco Santander, and UniCredit — the Portfolio was underweight in the financial sector overall, which hurt performance. At period end, each of these stocks remained in the Portfolio.
Japan was one of the worst-performing markets during the fiscal year, with an overall return of 13.76%. Although the Portfolio was slightly underweight in the Japanese market, our security selection suffered due to a marked rotation into riskier holdings and out of the defensive sectors in which we found more value. As a result, nine of the 10 weakest performers in the Portfolio were Japanese stocks, including Kao, Seven & I Holdings, and West Japan Railway. We remain confident that these holdings are solid enterprises, and we believe performance may improve in a market environment less focused on cyclical growth.
2009 Annual report · Delaware Pooled Trust
45
Performance summary
Delaware Pooled® Trust — The Labor Select International Equity Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
Portfolio performance | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| +16.76% | | -5.13% | | +5.57% | | +6.49% | | +8.26% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
Total net assets |
$797.7 million |
| |
Number of holdings |
49 |
| |
Inception date |
Dec. 19, 1995 |
Performance of $1,000,000
| | | | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| | The Labor Select International Equity Portfolio | $1,000,000 | | $1,874,603 |
|
| | MSCI EAFE Index (gross) | $1,000,000 | | $1,273,148 |
| | MSCI EAFE Index (net) (benchmark) | $1,000,000 | | $1,224,563 |
2009 Annual report · Delaware Pooled Trust
46
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.87%.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The MSCI EAFE Index measures equity market performance across developed market countries in Europe, Australasia, and the Far East. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. Index “gross” return reflects the maximum possible dividend reinvestment. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations.
If and when we invest in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to special risks, including counterparty risk.
The Portfolio will be affected primarily by changes in stock prices.
2009 Annual report · Delaware Pooled Trust
47
Portfolio management review
Delaware Pooled® Trust — The Emerging Markets Portfolio
Oct. 31, 2009
One year — and the market’s more reasoned evaluation of fundamentals — has made a remarkable difference within the emerging markets asset class. Over the fiscal period, these markets delivered strong returns. For the 12-month period ended Oct. 31, 2009, Delaware Pooled Trust — The Emerging Markets Portfolio with all distributions reinvested returned +57.05% at net asset value (NAV). The Portfolio’s benchmark, the MSCI Emerging Markets Index (net), returned +64.13%. For the Portfolio’s complete annualized performance, please see the table on page 50.
As managers who follow a strict valuation discipline, we believe the Portfolio’s underperformance of its benchmark was still a solid achievement. We generated a significant absolute return while remaining true to an investment process that places a strong emphasis on preserving capital.
To summarize some of the factors that contributed to this dramatic turnaround for emerging markets: At the outset of last year’s global market crisis, emerging markets had been — unfairly, we believe — tarred with the same brush as developed markets. For example, banks in emerging markets had largely been far more selective in their lending — focusing on stable, conventional loan instruments in their home markets. In addition, these economies had been developing their own domestic spending base and, though still heavily reliant on exports, the imbalance had been diminishing. One additional platform supporting the positive reassessment by investors was the fact that many of these countries have, in recent years, paid down a considerable amount of their short-term debts. (Source: Bloomberg.)
Our underperformance for the period versus the MSCI Emerging Markets Index was largely attributable to our long-term valuation perspective. We declined to follow benchmark weights in countries and sectors where we viewed the enormous gains as driven, at least partially, by short-term momentum buying rather than by fundamental factors. Money had been pouring into these markets, and the massive upswing generated, in our view, too much excitement. One country that stands out in this regard is India, which gained more than 75% for the period (all country returns based on MSCI country indices). Notwithstanding recent elections that have opened the door to much-needed infrastructure investment and regulatory and financial reforms, a new course remains to be implemented. In our opinion, India’s stock valuations have remained high, and we’ve been hard-pressed to find opportunities there that adequately meet our investment discipline. Our underweight in India hurt our relative performance.
On the sector side, our overweight in telecommunications also detracted from relative performance. The Portfolio’s highly defensive focus continued to make telecommunications stocks attractive as their strong free cash flows supported high dividend yields. In general terms, many of our telecom holdings have been moving steadily ahead, expanding the market penetration of their phones and range of services. Two telecoms that disappointed during this period were mobile phone operators Mobile TeleSystems (MTS), a Russian company, and Egypt’s Orascom Telecom Holding. Although the Russian mobile-phone market is fairly well penetrated, we believed MTS had an opportunity to sell more usage services than it did, and we were optimistic about its growth potential. We continued to hold MTS at period end. Orascom has been very active in the Middle East, Africa, and Asia, often facing limited competition. We believe that countries like Egypt have been overlooked as investors have focused their interest on the more mainstream emerging market countries, most notably the BRIC countries: Brazil, Russia, India, and China. As a result, we see potential upside for Orascom in the years ahead, and continue to maintain a position in the stock.
The views expressed are current as of the date of this report and are subject to change.
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On the positive side, within the Portfolio the consumer discretionary sector turned in sizable returns of 81% — its subsector, automobiles, experienced the greatest gain within this sector. Both the developed and emerging markets have seen their governments pushing stimulus money at consumers. In many parts of the globe, this translated into heightened demand for autos. The Portfolio’s overweight position in South Korea’s Hyundai helped us take advantage of this temporary sea of stimulus money, including the cash-for-clunkers program in the United States, and had positive effects on relative as well as absolute performance.
Portfolio holdings in Taiwan also performed relatively well during the period, particularly those in the information technology sector. As mainland China’s dialogue with Taiwan continued during the period, many Taiwanese companies profited from China’s explosive growth. One beneficiary was MediaTek, one of the world’s leading software developers for mobile phone operating systems. According to our research, when China was handing out stimulus cash, this translated into a strong surge in mobile phone purchases. We held an overweight position in MediaTek over the period (and held the stock at period end).
The Portfolio also benefited from its exposure to Turkish, Chinese, and Russian markets. We had built up our position in Turkey substantially in 2008, and the market there had a strong year. Turkey was up 65% for the period. The Portfolio’s story for China and Russia played out differently. We had added to our positions in these countries as the markets fell in late 2008. Later in the 12-month period, China’s performance began to decline, but by then we had sold out of stretched positions. Similarly, with Russia for the period, we took some profits for the Portfolio during the market’s rebound, as valuations became less attractive. In both countries, we believe our concentration on a structured valuation process enabled us to time our exit favorably.
We ended the fiscal period with a balance of cautionary and sanguine observations. We believe investors who bring reasonable expectations to the emerging markets and a long-term outlook tend to leave themselves less open to disappointment. Emerging markets have matured a lot in recent years. We hold the view that, though considerable risks remain in many of these countries, the discount in valuation of emerging compared to developed markets should be much lower than it was in prior periods, generally speaking. At fiscal year end, we continued to believe that, on a very-long-term basis, over multiple years, the emerging market asset class continues to hold the potential for comparatively favorable returns.
2009 Annual report · Delaware Pooled Trust
49
Performance summary
Delaware Pooled® Trust — The Emerging Markets Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
Portfolio performance | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| +57.05% | | +6.88% | | +15.64% | | +15.86% | | +10.01% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
Total net assets |
$597.6 million |
| |
Number of holdings |
71 |
| |
Inception date |
April 16, 1997 |
Performance of $1,000,000
| | | | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| | The Emerging Markets Portfolio | $1,000,000 | | $4,357,435 |
|
| | MSCI Emerging Markets Index (gross) | $1,000,000 | | $2,964,818 |
| | MSCI Emerging Markets Index (net) (benchmark) | $1,000,000 | | $2,881,730 |
2009 Annual report · Delaware Pooled Trust
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The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 1.14%.
The purchase reimbursement fee (0.55%) and redemption reimbursement fee (0.55%) are paid to the Portfolio. The fees are designed to reflect an approximation of the brokerage and other transaction costs associated with the investment of an investor’s purchase amount or the disposition of assets to meet redemptions, and to limit the extent to which the Portfolio (and, indirectly, the Portfolio’s existing shareholders) would have to bear such costs. In lieu of the reimbursement fees, investors in The Emerging Markets Portfolio may be permitted to utilize alternative purchase and redemption methods designed to accomplish the same economic effect as the reimbursement fees. Reimbursement fees applicable to purchases and redemptions of shares of the Portfolio are not reflected in the “performance of $1,000,000” chart.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The MSCI Emerging Markets Index measures equity market performance across emerging market countries world-wide. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. Index “gross” return reflects the maximum possible dividend reinvestment. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt. High yielding, noninvestment grade bonds (junk bonds) involve higher risk than investment grade bonds.
If, and to the extent that, we invest in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to the special risks associated with those activities.
Instances of high double-digit returns are unusual, cannot be sustained, and were primarily achieved during favorable market conditions.
The Portfolio will be affected primarily by changes in stock prices.
The Portfolio is presently closed to new investors.
2009 Annual report · Delaware Pooled Trust
51
Portfolio management review
Delaware Pooled® Trust — The Global Real Estate Securities Portfolio
Oct. 31, 2009
For its fiscal year ended Oct. 31, 2009, Original Class shares of The Global Real Estate Securities Portfolio returned +13.75% at net asset value (NAV) with all distributions reinvested. In comparison, the Portfolio’s benchmark, the FTSE EPRA/NAREIT Global Real Estate Index, returned +22.79% during the same period. For complete annualized performance, see the table on page 54.
Investors in global real estate securities experienced unprecedented market volatility during the Portfolio’s fiscal year.
As the fiscal year began, the world economy was in turmoil. For several months thereafter, credit markets nearly ceased to function. In this environment, financial markets fell sharply. Risky investments fared very poorly, and all but the least-volatile fixed income securities lost substantial value. The lack of available credit was a problem for businesses and individuals alike, but it was an especially acute challenge for real estate investment trusts (REITs) and other property companies. With access to financing largely cut off (or prohibitively expensive), many investors worried that formerly healthy companies might be unable to survive. As a result, global real estate securities fell sharply.
Because of the vital role that credit plays in the REIT universe, it’s not surprising that once credit market conditions improved, so did the performance of real estate securities. Beginning in March 2009, credit became easier to obtain, and global real estate securities (represented by the FTSE EPRA/NAREIT Global Real Estate Index) turned in much-improved performance. In fact, according to our research, as investors’ pessimism turned to optimism, many of the same REITs that had fared the worst during the downturn ended up among the best performers when markets turned positive.
Among the notable sources of the Portfolio’s underperformance was the negative effect of stock selection within Japan, where we owned, in our view, a number of high-quality, larger-capitalization stocks with strong balance sheets. These real estate companies generally held up well during the market downturn in the first half of the period. However, they did not fare well later, when the market began favoring riskier, more-leveraged companies. Two examples include Aeon Mall and Mitsubishi Estate Company. Aeon, a developer and manager of large shopping malls throughout the country, experienced declining sales within its specialty-store tenants. The company also announced that it would be opening fewer shopping centers during the next two years, which may have added to the pressure on the company’s stock. We sold Aeon during the fiscal period, after it met one or more of our liquidation criteria.
A company with broad reach, Mitsubishi Estate Company has significant activity in markets that include housing, office buildings, parking lots, and hotels. Toward the end of the Fund’s fiscal period, Mitsubishi reported second-quarter earnings that were 10% weaker than the year-earlier period. The company’s shares, already somewhat depressed, dipped further. The company remains in the Portfolio, however, as we believe in the attractive location of its properties, especially the Marunouchi area in central Tokyo — which represents 80% of the firm’s net operating income and is one of the most expensive and sought after pieces of real estate in the world.
An underweight in Hong Kong property stocks, which as a group did well during the market’s upturn, also detracted from the Portfolio’s performance versus the benchmark. Like those in other emerging markets, many Hong Kong–based real estate securities tend to experience greater levels of volatility than the typical REIT. While our Hong Kong allocation was a source of strength in absolute terms, our underweight compared to the index had negative effects on the Portfolio’s relative performance.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
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Among individual holdings, Brazil’s BR Malls Participacoes, the country’s largest shopping center company, was a positive performer. BR Malls continued to benefit from several growth trends, including favorable demographics, an expanding culture of consumerism within Brazilian society, and a more stable government backdrop. Elsewhere, Shimao Property Holdings, a large, well-diversified Chinese homebuilder, also performed well, bolstered by what we view as a strong balance sheet and solid management team. BR Malls and Shimao were no longer in the Portfolio at the end of the period, having met one or more of our criteria for selling the shares.
As we do in all types of market conditions, we continued to employ our “bottom up” security selection strategy, in which we evaluated each company based on thorough evaluations of its growth prospects, relative valuation, and balance-sheet quality (among other factors). Given the highly volatile conditions of the past year, however, our approach was more opportunistic than usual, as we sought to take advantage of shifting opportunities in the marketplace.
Early on, as the investment environment deteriorated, we made the Portfolio more defensive. For instance, we focused on companies with longer lease terms, including healthcare and “triple net” REITs. Triple-net leases, in which tenants pay all property maintenance costs in addition to rent, tend to be relatively defensive investments because the business provides a greater income stream. Simultaneously, we limited our exposure to companies with shorter-duration leases — such as hotel companies, which tend to have uncertain cash flows relative to other sectors. We also looked to avoid stocks with significant balance sheet problems.
This defensive stance had positive effects on the Portfolio’s performance during the downturn, although it could be argued that we maintained this positioning for too long into the spring as credit markets loosened and the REIT markets advanced. We conservatively calculated that the recovery would be much shorter than it turned out to be. In actuality, credit conditions continued improving, and by summer 2009 it was evident that a longer-lived improvement had taken place. We began adjusting the Portfolio accordingly, including the following measures:
We increased exposure to emerging markets such as Brazil, China, and Singapore.
After we felt that emerging-market gains had peaked, we increased allocations within developed markets, including the United Kingdom, Canada, Australia, and the United States. Rebounds in these established economies trailed those of emerging economies.
We emphasize that the moves listed above were made at the margins of the Portfolio, poised to take advantage of what we believed were unique opportunities presented by the current conditions. Indeed, Brazilian exposure was decreased substantially by the end of the fiscal period. Our basic emphasis on large-capitalization REITs with strong balance sheets remains unchanged. As always, we continue favoring REITs that we believe exhibit high-quality property portfolios, a focus on fundamentally solid real estate markets, and capable management teams that are focused on the long term. We will continue to maintain this focus, aiming to provide investors with a high-quality, research-driven way to invest in REITs.
2009 Annual report · Delaware Pooled Trust
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Performance summary
Delaware Pooled® Trust — The Global Real Estate Securities Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | |
| Average annual total returns (at NAV) | | | |
| Periods ended Oct. 31, 2009 | 1 year | | Lifetime |
| Original Class | +13.75% | | -15.56% |
| Class P | +14.03% | | -15.77% |
Portfolio profile |
Oct. 31, 2009 |
| |
Total net assets |
$54.8 million |
| |
Number of holdings |
86 |
| |
Inception date |
Jan. 10, 2007 |
The Global Real Estate Securities Portfolio offers two classes of shares: Original Class and Class P.
Performance of $1,000,000
| | Starting value (Jan. 10, 2007) | | Ending value (Oct. 31, 2009) |
| FTSE EPRA/NAREIT Global Real Estate Index | $1,000,000 | | $642,874 |
| The Global Real Estate Securities Portfolio (Original Class) | $1,000,000 | | $622,004 |
2009 Annual report · Delaware Pooled Trust
54
The performance graph assumes $1 million invested on Jan. 10, 2007, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses for shares as 1.12%, excluding 12b-1 fees. Management has contracted to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding, in an aggregate amount, 1.07% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Original Class shares are not subject to sales charges or 12b-1 fees and are available to investors investing $1 million in The Global Real Estate Securities Portfolio or in the aggregate across the portfolios comprising Delaware Pooled Trust, subject to certain exceptions. Class P shares charge a 12b-1 fee of 0.25% but are not subject to sales charges. Class P shares are available to defined contribution plans making a minimum investment of $5 million, subject to certain exceptions. Please see the applicable prospectus for more information concerning the eligibility, fees and expenses for each class.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The FTSE EPRA/NAREIT Global Real Estate Index tracks the performance of listed real estate companies and real estate investment trusts (REITs) world-wide. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
A REIT fund’s tax status as a regulated investment company could be jeopardized if it holds real estate directly, as a result of defaults, or receives rental income from real estate holdings.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations.
If and when we invest in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to special risks, including counterparty risk.
The Portfolio is considered “nondiversified” as defined in the Investment Company Act of 1940, which means that it may allocate more of its net assets to investments in single securities than a “diversified” portfolio. Thus, adverse effects on any single investment may affect a larger portion of overall assets and subject the Portfolio to greater risks and volatility.
2009 Annual report · Delaware Pooled Trust
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Portfolio management review
Delaware Pooled® Trust — The Global Fixed Income Portfolio
Oct. 31, 2009
Based on the recovery of financial markets and the strength of foreign currencies relative to the U.S. dollar, The Global Fixed Income Portfolio returned +17.52% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. A large portion of this return was a result of currency movements, as the U.S. dollar weakened significantly during the period. The Portfolio outpaced the performance of its benchmark, the Citigroup® World Government Bond Index, which gained +16.26% for the same period. Complete annualized performance for The Global Fixed Income Portfolio is shown in the table on page 58.
The 12-month period can best be described as a year of two halves. In the first half, risk aversion dominated. This was a global phenomenon that affected all markets in which we invest. It was a challenging time because fearful investors are typically slow to react to opportunity. Yet we attempted to take advantage of this market paralysis with a strategy of looking for good values, despite the crisis and the credit crunch.
We were a bit early, and the Portfolio lagged in terms of benchmark-relative performance during the first two quarters of the fiscal period. Bond prices reached rock bottom in March 2009; after that, we began seeing a strong recovery in risk assets. Government interventions, both monetary and fiscal, came to the rescue. Interest rates were slashed to virtually zero in many countries, and government spending around the world expanded enormously. These measures were effective in injecting life back into the fixed income markets, and our strategies began paying off in the second half of the period.
As always, we focused on relative prospective real yield, or PRY, which is a measure of a market’s 10-year bond yield adjusted by our assessment of inflation for the next two years. Our PRY analysis led us to perceived opportunities in some of the smaller markets in Europe, such as Italy, Spain, and Ireland. As the credit crunch unfolded, many investors shunned credits issued by these countries. As a result, spreads widened, and we availed ourselves of what we saw as new opportunities in these markets. As noted above, this strategy was not particularly effective during the first half of the period. But during the spring and summer of 2009, those markets outperformed strongly.
One of the most positive stories in the Portfolio comes from one of the newest members of the European Union, Poland. We initiated exposure to Poland at the beginning of 2009, based on our observation that productivity was improving while inflation was likely to remain in check. These factors appeared to provide support for government bonds and the Polish zloty. Although our strategy didn’t perform well initially, the tide began to turn starting in the summer and into the fall of 2009. As a result, we “took profits” for the Portfolio, and cut our 8% weighting in half (down to 4%).
The Portfolio also benefited from an overweight position in Australia. The Australian economy has weathered the downturn fairly well, and the Australian dollar rallied as commodity prices bounced back. In addition, the Reserve Bank of Australia was one of the first central banks to start raising interest rates, a move that has made the currency more competitive. Our Australian credits have been average performers in local terms, but the currency exposure has provided a relatively strong boost to the Portfolio’s returns.
Portfolio returns were less successful from the overweighted allocation to Mexico. We’ve maintained the Portfolio’s Mexican exposure for quite some time because we like the fundamentals in this market: We feel comfortable that inflation is under control, and the Mexican government has been cutting rates to try to stimulate growth. Unfortunately, Mexico has been a laggard when it comes to bouncing off the depressed levels of last year. Strong trade linkages with the United States damaged the Mexican economy and the
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
56
peso bore the brunt of the damage. We believe the Mexican bonds in the Portfolio still represent good value, and that the recent recovery in currency has the potential to continue.
At the end of 2008, we gradually initiated exposure to corporate bonds. Although corporate bonds are not a component of the benchmark, we noticed that the spreads between corporate and government bonds were extremely wide, and we felt they offered value on a medium-term basis. Again, the strategy underperformed initially. However, as investors’ risk aversion moderated, the Portfolio ultimately benefited from the exposure.
From approximately the start of 2009 through the end of the fiscal period, the Portfolio enjoyed strong returns attributable primarily to the strength of the euro and other currencies versus the U.S. dollar. In general, we do not actively manage currencies to seek higher returns. Rather, we recognize currency fluctuations as a major source of volatility, and we have policies in place to manage currency risk. We might only intervene when we believe a currency is extremely overvalued — by two standard deviations or more. For example, during the previous fiscal year (ended October 2008), we hedged both the pound sterling and the euro back into dollars when both currencies hit two standard deviations of overvaluation relative to the dollar. Both hedges were helpful in mitigating the effects of currency weakness that year. At this period’s end, however, the only hedge in place was from the euro into pound sterling.
The Global Fixed Income Portfolio currently holds a benchmark-neutral weighting in the U.S. market. Our PRY valuation rates the U.S. as having merely average prospects. Bond yields are quite low, and we think economic recovery in the U.S. is going to be slow and inconsistent. Weakness abounds, whether you look at capacity utilization, gross domestic product relative to potential (the so-called output gap), or the rate of unemployment compared to normal levels. This implies that core inflation should remain extremely low in the U.S., although we do see the potential for a bit of headline inflation because of rebounding oil and food prices.
In spite of the period’s second-half recovery, we know that strong economic headwinds remain, particularly in some of the countries where consumer indebtedness rose to unprecedented levels — such as in the United Kingdom, Ireland, and Spain. Debt in those countries needs to be worked off, and doing so could likely take time. At the close of the fiscal year, we viewed the current recovery as likely to be fragile and halting around the globe.
2009 Annual report · Delaware Pooled Trust
57
Performance summary
Delaware Pooled® Trust — The Global Fixed Income Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | |
| Periods ended Oct. 31, 2009 | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| +17.52% | | +9.90% | | +6.62% | | +8.41% | | +8.57% |
Portfolio profile |
Oct. 31, 2009 |
| |
Total net assets |
$143.2 million |
| |
Number of holdings |
59 |
| |
Inception date |
Nov. 30, 1992 |
Performance of $1,000,000
| | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| The Global Fixed Income Portfolio | $1,000,000 | | $2,242,426 |
| Citigroup World Government Bond Index | $1,000,000 | | $1,914,412 |
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The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.62%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.60% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
Expense limitations were in effect during the period shown. Performance would have been lower had the expense limitations not been in effect.
The Citigroup World Government Bond Index is a market capitalization–weighted benchmark that tracks the performance of 23 world government bond markets. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.
If and when we invest in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to special risks, including counterparty risk.
The Portfolio is considered “nondiversified” as defined in the Investment Company Act of 1940, which means that it may allocate more of its net assets to investments in single securities than a “diversified” portfolio. Thus, adverse effects on any single investment may affect a larger portion of overall assets and subject the Portfolio to greater risks and volatility.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Portfolio may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolio may be prepaid prior to maturity, potentially forcing the Portfolio to reinvest that money at a lower interest rate.
The Portfolio is presently closed to new investors.
2009 Annual report · Delaware Pooled Trust
59
Portfolio management review
Delaware Pooled® Trust — The International Fixed Income Portfolio
Oct. 31, 2009
Based on the recovery of financial markets and the strength of foreign currencies relative to the U.S. dollar, The International Fixed Income Portfolio returned +18.86% at net asset value (NAV) with all distributions reinvested for the fiscal year ended Oct. 31, 2009. A large portion of this return was a result of currency movements, as the U.S. dollar weakened significantly during the period. The Portfolio, however, trailed the performance of its benchmark, the Citigroup® Non-U.S. World Government Bond Index, which gained +19.26% for the same period. Complete annualized performance for The International Fixed Income Portfolio is shown in the table on page 62.
The 12-month period can best be described as a year of two halves. In the first half, risk aversion dominated. This was a global phenomenon that affected all markets in which we invest. It was a challenging time because fearful investors are typically slow to react to opportunity. Yet we attempted to take advantage of this market paralysis with a strategy of looking for good values, despite the crisis and the credit crunch.
We were a bit early, and the Portfolio lagged in terms of benchmark-relative performance during the first two quarters of the fiscal period. Bond prices reached rock bottom in March 2009; after that, we began seeing a strong recovery in risk assets. Government interventions, both monetary and fiscal, came to the rescue. Interest rates were slashed to virtually zero in many countries, and government spending around the world expanded enormously. These measures were effective in injecting life back into the fixed income markets, and our strategies began paying off in the second half of the period.
As always, we focused on relative prospective real yield, or PRY, which is a measure of a market’s 10-year bond yield adjusted by our assessment of inflation for the next two years. Our PRY analysis led us to what we viewed as opportunities in some of the smaller markets in Europe, such as Italy and Ireland. As the credit crunch unfolded, many investors shunned credits issued by these countries. As a result, spreads widened, and we availed ourselves of what we saw as new opportunities in these markets. As noted above, this strategy was not particularly effective during the first half of the period. But during the spring and summer of 2009, those markets outperformed strongly.
One of the most positive stories in the Portfolio comes from one of the newest members of the European Union, Poland. We initiated exposure to Poland at the beginning of 2009, based on our observation that productivity was improving while inflation was likely to remain in check. These factors appeared to provide support for government bonds and the Polish zloty. Although our strategy didn’t perform well initially, the tide began to turn in the summer and into the fall of 2009. As a result, we “took profits” for the Portfolio and cut our 8% weighting in half (down to 4%).
The Portfolio also benefited from an overweight position in Australia. The Australian economy has weathered the downturn fairly well, and the Australian dollar rallied as commodity prices bounced back. In addition, the Reserve Bank of Australia was one of the first central banks to start raising interest rates, a move that has made the currency more competitive. Our Australian credits have been average performers in local terms, but the currency exposure provided a relatively strong boost to the Portfolio’s returns.
Portfolio returns were less successful from the overweighted allocation to Mexico. We’ve maintained the Portfolio’s Mexican exposure for quite some time because we like the fundamentals in this market: We feel comfortable that inflation is under control, and the Mexican government has been cutting rates to try to stimulate growth. Unfortunately, Mexico has been a laggard when it comes to bouncing off the depressed levels of last year. Strong trade linkages with the U.S. damaged the Mexican economy and the peso bore the brunt of the damage. We believe the Mexican bonds in the Portfolio still represent good value, and that the recent recovery in currency has the potential to continue.
The views expressed are current as of the date of this report and are subject to change.
2009 Annual report · Delaware Pooled Trust
60
At the end of 2008, we gradually initiated exposure to corporate bonds. Although corporate bonds are not a component of the benchmark, we noticed that the spreads between corporate and government bonds were extremely wide, and we felt they offered value on a medium-term basis. Again, the strategy underperformed initially. However, as investors’ risk aversion moderated, the Portfolio ultimately benefited from the exposure.
From approximately the start of 2009 until the end of the fiscal period, the Portfolio enjoyed strong returns attributable primarily to the strength of the euro and other currencies versus the U.S. dollar. In general, we do not actively manage currencies to seek higher returns. Rather, we recognize currency fluctuations as a major source of volatility, and we have policies in place to manage currency risk. We might only intervene when we believe a currency is extremely overvalued — by two standard deviations or more. For example, during the previous fiscal year (ended October 2008), we hedged both the pound sterling and the euro back into dollars when both currencies hit two standard deviations of overvaluation relative to the dollar. Both hedges were helpful in mitigating the effects of currency weakness that year. At this period’s end, however, the only hedge in place was from the euro into pound sterling.
In spite of the second-half fiscal period recovery, we know that strong economic headwinds remain, particularly in some of the countries where consumer indebtedness rose to unprecedented levels — such as in the United Kingdom, Ireland, and Spain. Debt in those countries needs to be worked off, and doing so could likely take time. At the close of the fiscal year, we viewed the current recovery as likely to be fragile and halting around the globe.
2009 Annual report · Delaware Pooled Trust
61
Performance summary
Delaware Pooled® Trust — The International Fixed Income Portfolio
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Current performance may be lower or higher than the performance data quoted. Please obtain the performance data for the most recent month end by calling 800 231-8002 or visiting our Web site at www.delawareinvestments.com/institutional/performance.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware Pooled Trust prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 231-8002. Read it carefully before you invest or send money.
| Portfolio performance | | | | | | | | | | |
| Average annual total returns (at NAV) | | | | | | | | | | |
| Periods ended Oct. 31, 2009 | | 1 year | | 3 years | | 5 years | | 10 years | | Lifetime |
| | +18.86% | | +10.33% | | +6.49% | | +7.86% | | +7.03% |
| Portfolio profile |
| Oct. 31, 2009 |
| |
| Total net assets |
| $19.5 million |
| |
| Number of holdings |
| 46 |
| |
| Inception date |
| April 11, 1997 |
Performance of $1,000,000
| | Starting value (Oct. 31, 1999) | | Ending value (Oct. 31, 2009) |
| The International Fixed Income Portfolio | $1,000,000 | | $2,130,587 |
| Citigroup Non-U.S. World Government Bond Index | $1,000,000 | | $1,909,641 |
2009 Annual report · Delaware Pooled Trust
62
The performance graph assumes $1 million invested on Oct. 31, 1999, and includes reinvestment of all distributions. The performance graph does not reflect the deduction of taxes the shareholder would pay on Portfolio distributions or redemptions of Portfolio shares.
Total return assumes reinvestment of dividends and capital gains, but does not reflect reductions for taxes. Returns and share values will fluctuate so that shares, when redeemed, may be worth more or less than their original cost.
The most recent prospectus designated the Portfolio’s total operating expenses as 0.72%. Management has volunteered to waive all or a portion of its management fees from March 1, 2009, until such time as the waiver is discontinued in order to prevent total annual Portfolio operating expenses from exceeding 0.60% of the Portfolio’s average daily net assets, as described in the most recent prospectus.
An expense limitation was in effect during the period shown. Performance would have been lower had the expense limitation not been in effect.
The Citigroup Non-U.S. World Government Bond Index is a market capitalization–weighted benchmark that tracks the performance of 22 world government bond markets. Index performance returns do not reflect any management fees, transaction costs, or expenses. Indices are unmanaged and one cannot invest directly in an index.
Past performance is not a guarantee of future results.
International investments entail risks not ordinarily associated with U.S. investments including fluctuation in currency values, differences in accounting principles, or economic or political instability in other nations. Investing in emerging markets can be riskier than investing in established foreign markets due to increased volatility and lower trading volume.
Fixed income securities and bond funds can lose value, and investors can lose principal, as interest rates rise. They also may be affected by economic conditions that hinder an issuer’s ability to make interest and principal payments on its debt.
The Portfolio may also be subject to prepayment risk, the risk that the principal of a fixed income security that is held by the Portfolio may be prepaid prior to maturity, potentially forcing the Portfolio to reinvest that money at a lower interest rate.
The Portfolio may invest in derivatives, which may involve additional expenses and are subject to risk, including the risk that an underlying security or securities index moves in the opposite direction from what the portfolio manager anticipated. A derivative transaction depends upon the counterparties’ ability to fulfill their contractual obligations.
The Portfolio is considered “nondiversified” as defined in the Investment Company Act of 1940, which means that it may allocate more of its net assets to investments in single securities than a “diversified” portfolio. Thus, adverse effects on any single investment may affect a larger portion of overall assets and subject the Portfolio to greater risks and volatility.
If and when we invest in forward foreign currency contracts or use other investments to hedge against currency risks, the Portfolio will be subject to special risks, including counterparty risk.
The Portfolio is presently closed to new investors.
2009 Annual report · Delaware Pooled Trust
63
Disclosure of Portfolio expenses
For the period May 1, 2009 to October 31, 2009
As a shareholder of a Portfolio, you incur two types of costs: (1) transaction costs, including reimbursement fees on The Emerging Markets Portfolio; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees on Class P shares of The Global Real Estate Securities Portfolio and other Portfolio expenses. The following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Portfolio and to compare these costs with the ongoing costs of investing in other mutual funds.
The Examples are based on an investment of $1,000 invested at the beginning of the period and held for the entire period from May 1, 2009 to October 31, 2009.
Actual Expenses
The first section of the table shown, “Actual Portfolio Return,” provides information about actual account values and actual expenses. You may use the information in this table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during the period.
Hypothetical Example for Comparison Purposes
The second section of the table shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on a Portfolio’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Portfolio’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Portfolio and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. Certain of the Portfolios’ actual expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.
In each case, “Expenses Paid During Period” are equal to a Portfolio’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
Delaware Pooled® Trust
Expense Analysis of an Investment of $1,000
| | | | | | | | | Expenses |
| | Beginning | | Ending | | | | Paid During |
| | Account | | Account | | Annualized | | Period |
| | Value | | Value | | Expense | | 5/1/09 to |
| | 5/1/09 | | 10/31/09 | | Ratio | | 10/31/09 |
| Actual Portfolio Return | | | | | | | | | |
| The Large-Cap | | | | | | | | | | | | |
| Value Equity | | | | | | | | | | | | |
| Portfolio | | $ | 1,000.00 | | $ | 1,183.40 | | 0.69% | | $ | 3.80 | |
| The Select 20 | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,185.70 | | 0.89% | | | 4.90 | |
| The Large-Cap | | | | | | | | | | | | |
| Growth Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,183.60 | | 0.65% | | | 3.58 | |
| The Small-Cap | | | | | | | | | | | | |
| Growth Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,405.90 | | 0.77% | | | 4.67 | |
| The Focus Smid-Cap | | | | | | | | | | | | |
| Growth Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,233.70 | | 0.92% | | | 5.18 | |
| The Real Estate | | | | | | | | | | | | |
| Investment Trust | | | | | | | | | | | | |
| Portfolio II | | | 1,000.00 | | | 1,213.70 | | 0.93% | | | 5.19 | |
| The Core Focus | | | | | | | | | | | | |
| Fixed Income | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,106.80 | | 0.43% | | | 2.28 | |
| The High-Yield | | | | | | | | | | | | |
| Bond Portfolio | | | 1,000.00 | | | 1,256.40 | | 0.59% | | | 3.36 | |
| The Core Plus | | | | | | | | | | | | |
| Fixed Income | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,169.70 | | 0.45% | | | 2.46 | |
| The International | | | | | | | | | | | | |
| Equity Portfolio | | | 1,000.00 | | | 1,271.30 | | 0.86% | | | 4.92 | |
| The Labor Select | | | | | | | | | | | | |
| International Equity | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,284.00 | | 0.86% | | | 4.95 | |
| The Emerging | | | | | | | | | | | | |
| Markets Portfolio | | | 1,000.00 | | | 1,356.80 | | 1.15% | | | 6.83 | |
| The Global Real Estate | | | | | | | | | |
| Securities Portfolio | | | | | | | | | | | | |
| Original Class | | | 1,000.00 | | | 1,332.50 | | 1.07% | | | 6.29 | |
2009 Annual report · Delaware Pooled Trust
64
| | | | | | | | | | Expenses |
| | Beginning | | Ending | | | | Paid During |
| | Account | | Account | | Annualized | | Period |
| | Value | | Value | | Expense | | 5/1/09 to |
| | 5/1/09 | | 10/31/09 | | Ratio | | 10/31/09 |
| Actual Portfolio Return (continued) | | | | | | |
| The Global Real | | | | | | | | | | | | |
| Estate Securities | | | | | | | | | | | | |
| Portfolio Class P | | $ | 1,000.00 | | $ | 1,333.30 | | 1.32% | | $ | 7.76 | |
| The Global Fixed | | | | | | | | | | | | |
| Income Portfolio | | | 1,000.00 | | | 1,129.10 | | 0.60% | | | 3.22 | |
| The International | | | | | | | | | | | | |
| Fixed Income | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,161.70 | | 0.60% | | | 3.27 | |
| Hypothetical 5% Return (5% return before expenses) | | | | |
| The Large-Cap | | | | | | | | | | | | |
| Value Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,021.73 | | 0.69% | | | 3.52 | |
| The Select 20 | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,020.72 | | 0.89% | | | 4.53 | |
| The Large-Cap | | | | | | | | | | | | |
| Growth Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,021.93 | | 0.65% | | | 3.31 | |
| The Small-Cap | | | | | | | | | | | | |
| Growth Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,021.32 | | 0.77% | | | 3.92 | |
| The Focus Smid-Cap | | | | | | | | | | | | |
| Growth Equity | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,020.57 | | 0.92% | | | 4.69 | |
| The Real Estate | | | | | | | | | | | | |
| Investment Trust | | | | | | | | | | | | |
| Portfolio II | | | 1,000.00 | | | 1,020.52 | | 0.93% | | | 4.74 | |
| The Core Focus | | | | | | | | | | | | |
| Fixed Income | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,023.04 | | 0.43% | | | 2.19 | |
| The High-Yield | | | | | | | | | | | | |
| Bond Portfolio | | | 1,000.00 | | | 1,022.23 | | 0.59% | | | 3.01 | |
| The Core Plus | | | | | | | | | | | | |
| Fixed Income | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,022.94 | | 0.45% | | | 2.29 | |
| The International | | | | | | | | | | | | |
| Equity Portfolio | | | 1,000.00 | | | 1,020.87 | | 0.86% | | | 4.38 | |
| The Labor Select | | | | | | | | | | | | |
| International | | | | | | | | | | | | |
| Equity Portfolio | | | 1,000.00 | | | 1,020.87 | | 0.86% | | | 4.38 | |
| The Emerging | | | | | | | | | | | | |
| Markets Portfolio | | | 1,000.00 | | | 1,019.41 | | 1.15% | | | 5.85 | |
| The Global Real Estate | | | | | | | | | |
| Securities Portfolio | | | | | | | | | | | | |
| Original Class | | | 1,000.00 | | | 1,019.81 | | 1.07% | | | 5.45 | |
| The Global Real Estate | | | | | | | | | |
| Securities Portfolio | | | | | | | | | | | | |
| Class P | | | 1,000.00 | | | 1,018.55 | | 1.32% | | | 6.72 | |
| The Global Fixed | | | | | | | | | | | | |
| Income Portfolio | | | 1,000.00 | | | 1,022.18 | | 0.60% | | | 3.06 | |
| The International | | | | | | | | | | | | |
| Fixed Income | | | | | | | | | | | | |
| Portfolio | | | 1,000.00 | | | 1,022.18 | | 0.60% | | | 3.06 | |
2009 Annual report · Delaware Pooled Trust
65
Sector allocations and top 10 holdings
Delaware Pooled® Trust
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| The Large-Cap Value Equity Portfolio | | |
| Percentage |
| Sector | of Net Assets |
| Common Stock | 95.78 | % |
| Consumer Discretionary | 6.03 | % |
| Consumer Staples | 18.29 | % |
| Energy | 12.30 | % |
| Financials | 8.56 | % |
| Health Care | 17.97 | % |
| Industrials | 6.03 | % |
| Information Technology | 11.69 | % |
| Materials | 3.31 | % |
| Telecommunications | 6.10 | % |
| Utilities | 5.50 | % |
| Discount Note | 4.11 | % |
| Total Value of Securities | 99.89 | % |
| Receivables and Other Assets Net of Liabilities | 0.11 | % |
| Total Net Assets | 100.00 | % |
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Percentage |
| Top 10 Holdings | of Net Assets |
| Pfizer | 3.63 | % |
| CVS Caremark | 3.35 | % |
| duPont (E.I.) deNemours | 3.31 | % |
| ConocoPhillips | 3.28 | % |
| Cardinal Health | 3.20 | % |
| Chevron | 3.18 | % |
| Mattel | 3.17 | % |
| Merck | 3.15 | % |
| Kraft Foods Class A | 3.13 | % |
| Waste Management | 3.10 | % |
| The Select 20 Portfolio | | |
| Percentage |
| Sector | of Net Assets |
| Common Stock² | 101.06 | % |
| Basic Industry/Capital Goods | 4.22 | % |
| Business Services | 8.56 | % |
| Consumer Services | 8.76 | % |
| Energy | 5.16 | % |
| Financials | 13.66 | % |
| Health Care | 19.20 | % |
| Technology | 41.50 | % |
| Discount Note | 4.46 | % |
| Total Value of Securities | 105.52 | % |
| Liabilities Net of Receivables and Other Assets | (5.52 | %) |
| Total Net Assets | 100.00 | % |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Percentage |
| Top 10 Holdings | of Net Assets |
| Apple | 7.48 | % |
| Allergan | 6.26 | % |
| Tandberg | 6.16 | % |
| Google Class A | 5.31 | % |
| MasterCard Class A | 5.26 | % |
| IntercontinentalExchange | 5.20 | % |
| Core Laboratories | 5.16 | % |
| Gilead Sciences | 5.09 | % |
| j2 Global Communications | 4.93 | % |
| Heartland Payment Systems | 4.76 | % |
2009 Annual report · Delaware Pooled Trust
66
Delaware Pooled® Trust
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| The Large-Cap Growth Equity Portfolio | | |
| Percentage |
| Sector | of Net Assets |
| Common Stock² | 99.22 | % |
| Basic Industry/Capital Goods | 4.92 | % |
| Business Services | 13.64 | % |
| Consumer Non-Durables | 14.05 | % |
| Consumer Services | 1.14 | % |
| Energy | 3.75 | % |
| Financials | 9.57 | % |
| Health Care | 16.06 | % |
| Technology | 36.09 | % |
| Discount Note | 0.54 | % |
| Securities Lending Collateral | 4.24 | % |
| Total Value of Securities | 104.00 | % |
| Obligation to Return Securities Lending Collateral | (4.35 | %) |
| Receivables and Other Assets Net of Liabilities | 0.35 | % |
| Total Net Assets | 100.00 | % |
²Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting.
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Percentage |
| Top 10 Holdings | of Net Assets |
| Apple | 5.31 | % |
| Google Class A | 4.96 | % |
| Visa Class A | 4.75 | % |
| Allergan | 4.48 | % |
| QUALCOMM | 4.29 | % |
| EOG Resources | 3.74 | % |
| Intuit | 3.71 | % |
| Medco Health Solutions | 3.69 | % |
| IntercontinentalExchange | 3.66 | % |
| Crown Castle International | 3.61 | % |
| The Small-Cap Growth Equity Portfolio | | |
| Percentage |
| Sector | of Net Assets |
| Common Stock² | 95.15 | % |
| Basic Industry/Capital Goods | 8.74 | % |
| Business Services | 8.69 | % |
| Consumer Durables | 1.78 | % |
| Consumer Non-Durables | 7.80 | % |
| Consumer Services | 7.05 | % |
| Energy | 3.62 | % |
| Financials | 3.45 | % |
| Health Care | 22.67 | % |
| Technology | 27.26 | % |
| Transportation | 4.09 | % |
| Discount Note | 5.60 | % |
| Total Value of Securities | 100.75 | % |
| Liabilities Net of Receivables and Other Assets | (0.75 | %) |
| Total Net Assets | 100.00 | % |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Percentage |
| Top 10 Holdings | of Net Assets |
| Cardtronics | 2.56 | % |
| Perrigo | 2.53 | % |
| Savient Pharmaceuticals | 2.48 | % |
| Abraxis BioScience | 2.35 | % |
| Ulta Salon Cosmetics & Fragrance | 2.29 | % |
| Sybase | 2.09 | % |
| CommScope | 2.04 | % |
| Veeco Instruments | 2.03 | % |
| TriQuint Semiconductor | 2.00 | % |
| Charles River Laboratories International | 1.93 | % |
2009 Annual report · Delaware Pooled Trust
(continues) 67
Sector allocations and top 10 holdings
Delaware Pooled® Trust
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| The Focus Smid-Cap Growth Equity Portfolio | | |
| Percentage |
| Sector | of Net Assets |
| Common Stock² | 96.62 | % |
| Basic Industry/Capital Goods | 2.80 | % |
| Business Services | 11.10 | % |
| Consumer Durables | 1.90 | % |
| Consumer Non-Durables | 16.38 | % |
| Consumer Services | 8.44 | % |
| Energy | 4.84 | % |
| Financials | 11.16 | % |
| Health Care | 10.04 | % |
| Technology | 26.44 | % |
| Transportation | 3.52 | % |
| Discount Note | 3.65 | % |
| Total Value of Securities | 100.27 | % |
| Liabilities Net of Receivables and Other Assets | (0.27 | %) |
| Total Net Assets | 100.00 | % |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Percentage |
| Top 10 Holdings | of Net Assets |
| Tandberg | 5.27 | % |
| Core Laboratories | 4.84 | % |
| Peet’s Coffee & Tea | 4.68 | % |
| priceline.com | 4.23 | % |
| NetFlix | 4.18 | % |
| VeriFone Holdings | 4.01 | % |
| Weight Watchers International | 3.92 | % |
| SBA Communications Class A | 3.88 | % |
| Affiliated Managers Group | 3.86 | % |
| Heartland Payment Systems | 3.78 | % |
| The Real Estate Investment Trust Portfolio II | | |
| Percentage |
| Sector | of Net Assets |
| Common Stock | 94.66 | % |
| Diversified REIT | 6.40 | % |
| Health Care REITs | 16.30 | % |
| Hotel REITs | 3.68 | % |
| Industrial REITs | 3.60 | % |
| Mall REITs | 13.41 | % |
| Manufactured Housing REIT | 2.07 | % |
| Multifamily REITs | 13.64 | % |
| Office REITs | 13.44 | % |
| Office/Industrial REITs | 3.34 | % |
| Self-Storage REITs | 4.45 | % |
| Shopping Center REITs | 9.26 | % |
| Single Family REIT | 1.53 | % |
| Specialty REITs | 3.54 | % |
| Discount Note | 5.30 | % |
| Total Value of Securities | 99.96 | % |
| Receivables and Other Assets Net of Liabilities | 0.04 | % |
| Total Net Assets | 100.00 | % |
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Percentage |
| Top 10 Holdings | of Net Assets |
| Simon Property Group | 10.93 | % |
| Vornado Realty Trust | 6.40 | % |
| Equity Residential | 4.67 | % |
| Public Storage | 4.35 | % |
| HCP | 4.31 | % |
| Boston Properties | 4.30 | % |
| Health Care REIT | 3.87 | % |
| Ventas | 3.86 | % |
| Nationwide Health Properties | 3.01 | % |
| Kimco Realty | 2.86 | % |
2009 Annual report · Delaware Pooled Trust
68
Security types and credit quality breakdowns
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Security types | of Net Assets |
| Agency Asset-Backed Security | 0.09 | % |
| Agency Collateralized Mortgage Obligations | 5.59 | % |
| Agency Mortgage-Backed Securities | 17.35 | % |
| Agency Obligation | 1.56 | % |
| Commercial Mortgage-Backed Securities | 8.09 | % |
| Corporate Bonds | 29.48 | % |
| Banking | 6.93 | % |
| Basic Industry | 1.59 | % |
| Brokerage | 2.03 | % |
| Capital Goods | 1.02 | % |
| Communications | 4.09 | % |
| Consumer Cyclical | 1.25 | % |
| Consumer Non-Cyclical | 3.12 | % |
| Electric | 1.87 | % |
| Energy | 1.23 | % |
| Finance Companies | 1.68 | % |
| Insurance | 1.30 | % |
| Natural Gas | 2.56 | % |
| Real Estate | 0.39 | % |
| Technology | 0.31 | % |
| Transportation | 0.11 | % |
| Foreign Agencies | 1.55 | % |
| Municipal Bonds | 0.75 | % |
| Non-Agency Asset-Backed Securities | 3.74 | % |
| Non-Agency Collateralized Mortgage Obligations | 3.91 | % |
| Regional Authority | 0.17 | % |
| Sovereign Agencies | 1.01 | % |
| Supranational Bank | 0.10 | % |
| U.S. Treasury Obligations | 23.49 | % |
| Preferred Stock | 0.21 | % |
| Discount Note | 21.71 | % |
| Securities Lending Collateral | 10.26 | % |
| Total Value of Securities | 129.06 | % |
| Obligation to Return Securities Lending Collateral | (10.51 | %) |
| Liabilities Net of Receivables and Other Assets | (18.55 | %) |
| Total Net Assets | 100.00 | % |
| Credit Quality Breakdown | | |
| (as a % of fixed income investments)* | | |
| AAA | 65.88 | % |
| AA | 5.63 | % |
| A | 9.78 | % |
| BBB | 18.71 | % |
| Total | 100.00 | % |
*Bond ratings are determined by independent, nationally recognized statistical rating organizations.
2009 Annual report · Delaware Pooled Trust
(continues) 69
Security types and credit quality breakdowns
Delaware Pooled® Trust — The High-Yield Bond Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Security types | of Net Assets |
| Convertible Bonds | 1.05 | % |
| Corporate Bonds | 94.70 | % |
| Basic Industry | 8.41 | % |
| Brokerage | 1.27 | % |
| Capital Goods | 7.43 | % |
| Consumer Cyclical | 11.79 | % |
| Consumer Non-Cyclical | 7.68 | % |
| Energy | 11.00 | % |
| Finance & Investments | 6.51 | % |
| Media | 6.40 | % |
| Real Estate | 1.76 | % |
| Services Cyclical | 7.07 | % |
| Services Non-Cyclical | 5.68 | % |
| Technology & Electronics | 3.23 | % |
| Telecommunications | 12.69 | % |
| Utilities | 3.78 | % |
| Senior Secured Loans | 1.25 | % |
| Common Stock | 0.59 | % |
| Convertible Preferred Stock | 0.37 | % |
| Preferred Stock | 0.00 | % |
| Warrant | 0.00 | % |
| Discount Note | 1.29 | % |
| Securities Lending Collateral | 6.61 | % |
| Total Value of Securities | 105.86 | % |
| Obligation to Return Securities Lending Collateral | (6.77 | %) |
| Receivables and Other Assets Net of Liabilities | 0.91 | % |
| Total Net Assets | 100.00 | % |
| Credit Quality Breakdown | | |
| (as a % of fixed income investments)* | | |
| AAA | 2.04 | % |
| AA | 0.40 | % |
| A | 0.34 | % |
| BBB | 3.44 | % |
| BB | 21.49 | % |
| B | 45.07 | % |
| CCC | 26.59 | % |
| Not Rated | 0.63 | % |
| Total | 100.00 | % |
*Bond ratings are determined by independent, nationally recognized statistical rating organizations.
2009 Annual report · Delaware Pooled Trust
70
Security types and credit quality breakdown
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Security types | of Net Assets |
| Agency Asset-Backed Securities | 0.25 | % |
| Agency Collateralized Mortgage Obligations | 3.15 | % |
| Agency Mortgage-Backed Securities | 14.84 | % |
| Commercial Mortgage-Backed Securities | 10.18 | % |
| Convertible Bonds | 0.37 | % |
| Corporate Bonds | 50.38 | % |
| Banking | 7.62 | % |
| Basic Industries | 3.61 | % |
| Brokerage | 3.11 | % |
| Capital Goods | 1.93 | % |
| Communications | 10.36 | % |
| Consumer Cyclical | 4.54 | % |
| Consumer Non-Cyclical | 5.14 | % |
| Electric | 4.12 | % |
| Energy | 4.35 | % |
| Finance Companies | 2.05 | % |
| Insurance | 0.84 | % |
| Natural Gas | 0.84 | % |
| Real Estate | 0.88 | % |
| Technology | 0.76 | % |
| Transportation | 0.23 | % |
| Foreign Agencies | 1.59 | % |
| Municipal Bonds | 0.70 | % |
| Non-Agency Asset-Backed Securities | 6.60 | % |
| Non-Agency Collateralized Mortgage Obligations | 3.42 | % |
| Regional Authorities | 0.32 | % |
| Senior Secured Loans | 3.09 | % |
| Sovereign Debt | 1.71 | % |
| Supranational Banks | 1.74 | % |
| U.S. Treasury Obligations | 0.84 | % |
| Preferred Stock | 0.21 | % |
| Discount Note | 7.31 | % |
| Securities Lending Collateral | 2.53 | % |
| Total Value of Securities | 109.23 | % |
| Obligation to Return Securities Lending Collateral | (2.65 | %) |
| Liabilities Net of Receivables and Other Assets | (6.58 | %) |
| Total Net Assets | 100.00 | % |
| Credit Quality Breakdown | | |
| (as a % of fixed income investments)* | | |
| AAA | 39.16 | % |
| AA | 3.14 | % |
| A | 15.12 | % |
| BBB | 20.18 | % |
| BB | 10.91 | % |
| B | 8.11 | % |
| CCC | 3.22 | % |
| C | 0.16 | % |
| Total | 100.00 | % |
*Bond ratings are determined by independent, nationally recognized statistical rating organizations.
2009 Annual report · Delaware Pooled Trust
71
Country and sector allocations
Delaware Pooled® Trust — The International Equity Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s or sub-advisor’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Country | of Net Assets |
| Common Stock | 99.26 | % |
| Australia | 11.34 | % |
| Belgium | 0.51 | % |
| Finland | 1.00 | % |
| France | 12.02 | % |
| Germany | 5.18 | % |
| Hong Kong | 2.46 | % |
| Italy | 2.91 | % |
| Japan | 20.29 | % |
| Netherlands | 2.75 | % |
| New Zealand | 0.62 | % |
| Singapore | 4.56 | % |
| South Africa | 0.84 | % |
| Spain | 8.09 | % |
| Switzerland | 4.56 | % |
| Taiwan | 2.29 | % |
| United Kingdom | 19.84 | % |
| Discount Note | 0.50 | % |
| Securities Lending Collateral | 6.38 | % |
| Total Value of Securities | 106.14 | % |
| Obligation to Return Securities Lending Collateral | (6.56 | %) |
| Receivables and Other Assets Net of Liabilities | 0.42 | % |
| Total Net Assets | 100.00 | % |
| | | |
| Sector | | |
| Consumer Discretionary | 6.00 | % |
| Consumer Staples | 15.09 | % |
| Energy | 12.10 | % |
| Financials | 17.61 | % |
| Health Care | 12.08 | % |
| Industrials | 3.65 | % |
| Information Technology | 4.60 | % |
| Materials | 3.53 | % |
| Telecommunication Services | 17.46 | % |
| Utilities | 7.14 | % |
| Total | 99.26 | % |
2009 Annual report · Delaware Pooled Trust
72
Delaware Pooled® Trust — The Labor Select International Equity Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s or sub-advisor’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Country | of Net Assets |
| Common Stock | 98.54 | % |
| Australia | 12.73 | % |
| Belgium | 0.44 | % |
| Finland | 1.18 | % |
| France | 10.43 | % |
| Germany | 3.41 | % |
| Hong Kong | 3.63 | % |
| Italy | 3.07 | % |
| Japan | 19.98 | % |
| Netherlands | 2.66 | % |
| New Zealand | 0.78 | % |
| Singapore | 4.51 | % |
| Spain | 8.38 | % |
| Switzerland | 5.00 | % |
| United Kingdom | 22.34 | % |
| Discount Note | 1.65 | % |
| Securities Lending Collateral | 1.45 | % |
| Total Value of Securities | 101.64 | % |
| Obligation to Return Securities Lending Collateral | (1.53 | %) |
| Liabilities Net of Receivables and Other Assets | (0.11 | %) |
| Total Net Assets | 100.00 | % |
| | | |
| Sector | | |
| Consumer Discretionary | 4.61 | % |
| Consumer Staples | 16.40 | % |
| Energy | 12.08 | % |
| Financials | 18.87 | % |
| Health Care | 12.48 | % |
| Industrials | 1.44 | % |
| Information Technology | 3.43 | % |
| Materials | 4.18 | % |
| Telecommunication Services | 16.85 | % |
| Utilities | 8.20 | % |
| Total | 98.54 | % |
2009 Annual report · Delaware Pooled Trust
(continues) 73
Country and sector allocations
Delaware Pooled® Trust — The Emerging Markets Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may represent the investment manager’s or sub-advisor’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Country | of Net Assets |
| Common Stock | 93.32 | % |
| Brazil | 8.73 | % |
| Chile | 3.22 | % |
| China | 19.93 | % |
| Colombia | 1.60 | % |
| Czech Republic | 4.30 | % |
| Egypt | 2.72 | % |
| India | 0.27 | % |
| Indonesia | 0.42 | % |
| Israel | 2.11 | % |
| Kazakhstan | 1.05 | % |
| Malaysia | 0.64 | % |
| Mexico | 3.95 | % |
| Philippines | 1.99 | % |
| Poland | 1.52 | % |
| Republic of Korea | 5.03 | % |
| Russia | 6.36 | % |
| Singapore | 2.43 | % |
| South Africa | 5.54 | % |
| Taiwan | 13.65 | % |
| Thailand | 2.30 | % |
| Turkey | 5.56 | % |
| Preferred Stock | 5.15 | % |
| Brazil | 2.20 | % |
| Republic of Korea | 2.95 | % |
| Discount Note | 0.88 | % |
| Securities Lending Collateral | 2.75 | % |
| Total Value of Securities | 102.10 | % |
| Obligation to Return Securities Lending Collateral | (2.88 | %) |
| Receivables and Other Assets Net of Liabilities | 0.78 | % |
| Total Net Assets | 100.00 | % |
| | | |
| Sector | | |
| Consumer Discretionary | 3.41 | % |
| Consumer Staples | 6.32 | % |
| Energy | 13.22 | % |
| Financials | 21.61 | % |
| Health Care | 0.27 | % |
| Industrials | 12.08 | % |
| Information Technology | 10.17 | % |
| Materials | 3.09 | % |
| Telecommunication Services | 20.49 | % |
| Utilities | 7.81 | % |
| Total | 98.47 | % |
2009 Annual report · Delaware Pooled Trust
74
Delaware Pooled® Trust — The Global Real Estate Securities Portfolio
As of October 31, 2009
Sector designations may be different than the sector designations presented in other Portfolio materials. The sector designations may also represent the investment manager’s internal sector classifications, which may result in the sector designations for one portfolio being different than another portfolio’s sector designations.
| Percentage |
| Country | of Net Assets |
| Common Stock | 92.11 | % |
| Australia | 11.92 | % |
| Canada | 2.73 | % |
| Finland | 0.59 | % |
| France | 6.38 | % |
| Germany | 0.91 | % |
| Hong Kong | 15.73 | % |
| Italy | 0.67 | % |
| Japan | 9.14 | % |
| Netherlands | 1.60 | % |
| Singapore | 3.73 | % |
| Sweden | 0.97 | % |
| Taiwan | 0.45 | % |
| United Kingdom | 7.20 | % |
| United States | 30.09 | % |
| Discount Note | 8.23 | % |
| Securities Lending Collateral | 18.40 | % |
| Total Value of Securities | 118.74 | % |
| Obligation to Return Securities Lending Collateral | (19.22 | %) |
| Receivables and Other Assets Net of Liabilities | 0.48 | % |
| Total Net Assets | 100.00 | % |
| | | |
| Sector² | | |
| Diversified REITs | 25.28 | % |
| Health Care REITs | 5.28 | % |
| Hotel REITs | 1.58 | % |
| Industrial REITs | 1.77 | % |
| Mall REITs | 5.54 | % |
| Manufactured Housing REITs | 0.65 | % |
| Multifamily REITs | 4.45 | % |
| Office REITs | 8.03 | % |
| Real Estate Operating Companies | 27.31 | % |
| Shopping Center REITs | 10.40 | % |
| Single Tenant REITs | 0.48 | % |
| Self-Storage REITs | 1.34 | % |
| Total | 92.11 | % |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
2009 Annual report · Delaware Pooled Trust
75
Country allocations and credit quality breakdowns
Delaware Pooled® Trust
As of October 31, 2009
The Global Fixed Income Portfolio
| Percentage |
| Country | of Net Assets |
| Bonds | 98.15 | % |
| Australia | 7.76 | % |
| Denmark | 1.55 | % |
| France | 4.75 | % |
| Germany | 6.40 | % |
| Greece | 2.75 | % |
| Ireland | 3.39 | % |
| Italy | 12.47 | % |
| Japan | 8.89 | % |
| Mexico | 4.85 | % |
| Netherlands | 4.41 | % |
| Norway | 4.80 | % |
| Poland | 3.88 | % |
| Spain | 1.44 | % |
| Supranational | 6.20 | % |
| Sweden | 4.92 | % |
| United Kingdom | 6.19 | % |
| United States | 13.50 | % |
| Discount Note | 0.24 | % |
| Total Value of Securities | 98.39 | % |
| Receivables and Other Assets Net of Liabilities | 1.61 | % |
| Total Net Assets | 100.00 | % |
| |
| Credit Quality Breakdown | | |
| (as a % of fixed income investments)* | | |
| AAA | 45.01 | % |
| AA | 18.12 | % |
| A | 34.90 | % |
| BBB | 1.97 | % |
| Total | 100.00 | % |
*Bond ratings are determined by independent, nationally recognized statistical rating organizations.
The International Fixed Income Portfolio
| Percentage |
| Country | of Net Assets |
| Bonds | 97.66 | % |
| Australia | 7.79 | % |
| Austria | 1.43 | % |
| Belgium | 0.43 | % |
| Finland | 2.17 | % |
| France | 13.91 | % |
| Germany | 12.61 | % |
| Greece | 3.38 | % |
| Ireland | 3.66 | % |
| Italy | 4.61 | % |
| Japan | 10.77 | % |
| Mexico | 4.44 | % |
| Netherlands | 4.56 | % |
| Norway | 6.24 | % |
| Poland | 3.88 | % |
| Slovenia | 2.85 | % |
| Supranational | 3.45 | % |
| Sweden | 4.89 | % |
| United Kingdom | 6.01 | % |
| United States | 0.58 | % |
| Discount Note | 1.19 | % |
| Total Value of Securities | 98.85 | % |
| Receivables and Other Assets Net of Liabilities | 1.15 | % |
| Total Net Assets | 100.00 | % |
| |
| Credit Quality Breakdown | | |
| (as a % of fixed income investments)* | | |
| AAA | 51.29 | % |
| AA | 24.18 | % |
| A | 23.21 | % |
| BBB | 1.32 | % |
| Total | 100.00 | % |
*Bond ratings are determined by independent, nationally recognized statistical rating organizations.
2009 Annual report • Delaware Pooled Trust
76
Statements of net assets
Delaware Pooled® Trust — The Large-Cap Value Equity Portfolio
October 31, 2009
| | Number of | | | | |
| | | Shares | | Value | |
| Common Stock – 95.78% | | | | | |
| Consumer Discretionary – 6.03% | | | | | |
| Lowe’s | 14,800 | | $ | 289,636 | |
| Mattel | 16,900 | | | 319,917 | |
| | | | | 609,553 | |
| Consumer Staples – 18.29% | | | | | |
| Archer-Daniels-Midland | 10,200 | | | 307,224 | |
| CVS Caremark | 9,600 | | | 338,879 | |
| Heinz (H.J.) | 7,500 | | | 301,800 | |
| Kimberly-Clark | 4,900 | | | 299,684 | |
| Kraft Foods Class A | 11,500 | | | 316,480 | |
| Safeway | 12,700 | | | 283,591 | |
| | | | | 1,847,658 | |
| Energy – 12.30% | | | | | |
| Chevron | 4,200 | | | 321,468 | |
| ConocoPhillips | 6,600 | | | 331,188 | |
| Marathon Oil | 9,500 | | | 303,715 | |
| † | National Oilwell Varco | 7,000 | | | 286,930 | |
| | | | | 1,243,301 | |
| Financials – 8.56% | | | | | |
| Allstate | 9,700 | | | 286,829 | |
| Bank of New York Mellon | 10,300 | | | 274,598 | |
| Travelers | 6,100 | | | 303,719 | |
| | | | | 865,146 | |
| Health Care – 17.97% | | | | | |
| Bristol-Myers Squibb | 12,800 | | | 279,040 | |
| Cardinal Health | 11,400 | | | 323,076 | |
| Johnson & Johnson | 4,400 | | | 259,820 | |
| Merck | 10,300 | | | 318,579 | |
| Pfizer | 21,512 | | | 366,341 | |
| Quest Diagnostics | 4,800 | | | 268,464 | |
| | | | | 1,815,320 | |
| Industrials – 6.03% | | | | | |
| Northrop Grumman | 5,900 | | | 295,767 | |
| Waste Management | 10,500 | | | 313,740 | |
| | | | | 609,507 | |
| Information Technology – 11.69% | | | | | |
| Intel | 15,100 | | | 288,561 | |
| International Business Machines | 2,500 | | | 301,525 | |
| Motorola | 35,800 | | | 306,806 | |
| Xerox | 37,800 | | | 284,256 | |
| | | | | 1,181,148 | |
| Materials – 3.31% | | | | | |
| duPont (E.I.) deNemours | 10,500 | | | 334,110 | |
| | | | | 334,110 | |
| Telecommunications – 6.10% | | | | | |
| AT&T | 11,800 | | | 302,906 | |
| Verizon Communications | 10,600 | | | 313,654 | |
| | | | | 616,560 | |
| Utilities – 5.50% | | | | | |
| Edison International | 9,100 | | | 289,562 | |
| Progress Energy | 7,100 | | | 266,463 | |
| | | | | 556,025 | |
| Total Common Stock | | | | | |
| (cost $10,301,910) | | | | 9,678,328 | |
| |
| | Principal | | | | |
| | Amount | | | | |
| ¹Discount Note – 4.11% | | | | | |
| Federal Home Loan Bank | | | | | |
| 0.02% 11/2/09 | $415,001 | | | 415,001 | |
| Total Discount Note | | | | | |
| (cost $415,001) | | | | 415,001 | |
| |
| Total Value of Securities – 99.89% | | | | | |
| (cost $10,716,911) | | | | 10,093,329 | |
| Receivables and Other Assets | | | | | |
| Net of Liabilities – 0.11% | | | | 11,577 | |
| Net Assets Applicable to 760,489 | | | | | |
| Shares Outstanding; Equivalent to | | | | | |
| $13.29 Per Share – 100.00% | | | $ | 10,104,906 | |
| |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | |
| (unlimited authorization – no par) | | | $ | 12,931,184 | |
| Undistributed net investment income | | | | 205,980 | |
| Accumulated net realized loss on investments | | | | (2,408,676 | ) |
| Net unrealized depreciation of investments | | | | (623,582 | ) |
| Total net assets | | | $ | 10,104,906 | |
| ¹ | The rate shown is the effective yield at time of purchase. |
| † | Non income producing security. |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 77
Statements of net assets
Delaware Pooled® Trust — The Select 20 Portfolio
October 31, 2009
| | | Number of | | | | |
| | | | Shares | | Value | |
| Common Stock – 101.06%² | | | | | | |
| Basic Industry/Capital Goods – 4.22% | | | | | | |
| Syngenta ADR | | 9,100 | | $ | 430,703 | |
| | | | | | 430,703 | |
| Business Services – 8.56% | | | | | | |
| Expeditors International of Washington | | 10,450 | | | 336,699 | |
| MasterCard Class A | | 2,450 | | | 536,599 | |
| | | | | | 873,298 | |
| Consumer Services – 8.76% | | | | | | |
| Heartland Payment Systems | | 39,500 | | | 485,455 | |
| Weight Watchers International | | 15,400 | | | 408,254 | |
| | | | | | 893,709 | |
| Energy – 5.16% | | | | | | |
| Core Laboratories | | 5,050 | | | 526,715 | |
| | | | | | 526,715 | |
| Financials – 13.66% | | | | | | |
| Bank of New York Mellon | | 17,700 | | | 471,882 | |
| † | IntercontinentalExchange | | 5,300 | | | 531,007 | |
| optionsXpress Holdings | | 25,000 | | | 390,750 | |
| | | | | | 1,393,639 | |
| Health Care – 19.20% | | | | | | |
| Allergan | | 11,350 | | | 638,437 | |
| † | Gilead Sciences | | 12,200 | | | 519,110 | |
| † | Medco Health Solutions | | 8,000 | | | 448,960 | |
| UnitedHealth Group | | 13,600 | | | 352,920 | |
| | | | | | 1,959,427 | |
| Technology – 41.50% | | | | | | |
| † | Apple | | 4,050 | | | 763,425 | |
| † | Crown Castle International | | 15,800 | | | 477,476 | |
| † | Google Class A | | 1,010 | | | 541,481 | |
| † | j2 Global Communications | | 24,600 | | | 503,070 | |
| QUALCOMM | | 11,700 | | | 484,497 | |
| † | Symantec | | 23,800 | | | 418,404 | |
| ± | Tandberg | | 23,500 | | | 628,596 | |
| † | VeriSign | | 18,300 | | | 417,423 | |
| | | | | | 4,234,372 | |
| Total Common Stock | | | | | | |
| (cost $9,392,958) | | | | | 10,311,863 | |
| | |
| | | Principal | | | | |
| | | Amount | | | | |
| ¹Discount Note – 4.46% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | | $455,001 | | | 455,001 | |
| Total Discount Note | | | | | | |
| (cost $455,001) | | | | | 455,001 | |
| | | | | | | |
| Total Value of Securities – 105.52% | | | | | | |
| (cost $9,847,959) | | | | $ | 10,766,864 | |
| Liabilities Net of Receivables and | | | | | | |
| Other Assets – (5.52%)z | | | | | (563,170 | ) |
| Net Assets Applicable to 2,048,675 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $4.98 Per Share – 100.00% | | | | $ | 10,203,694 | |
| |
| Components of Net Assets at October 31, 2009: | | | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 14,840,409 | |
| Accumulated net realized loss on investments | | | | | (5,555,620 | ) |
| Net unrealized appreciation of investments and | | | | | | |
| foreign currencies | | | | | 918,905 | |
| Total net assets | | | | $ | 10,203,694 | |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
| † | Non income producing security. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| z | Of this amount, $559,744 represents payable for securities purchased as of October 31, 2009. |
| ± | Security is being valued based on international fair value pricing. At October 31, 2009, the aggregate amount of international fair value priced securities was $628,596, which represented 6.16% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
ADR – American Depositary Receipts
See accompanying notes
2009 Annual report · Delaware Pooled Trust
78
Delaware Pooled® Trust — The Large-Cap Growth Equity Portfolio
October 31, 2009
| | | | Number of | | | | |
| | | | Shares | | Value | |
| Common Stock – 99.22%² | | | | | | |
| Basic Industry/Capital Goods – 4.92% | | | | | | |
| * | Praxair | | 80,000 | | $ | 6,355,200 | |
| Syngenta ADR | | 126,800 | | | 6,001,444 | |
| | | | | | 12,356,644 | |
| Business Services – 13.64% | | | | | | |
| * | Expeditors International | | | | | | |
| of Washington | | 215,000 | | | 6,927,300 | |
| * | MasterCard Class A | | 37,200 | | | 8,147,544 | |
| * | United Parcel Service Class B | | 135,000 | | | 7,246,800 | |
| * | Visa Class A | | 157,300 | | | 11,917,048 | |
| | | | | | 34,238,692 | |
| Consumer Non-Durables – 14.05% | | | | | | |
| Lowe’s | | 169,200 | | | 3,311,244 | |
| * | NIKE Class B | | 135,500 | | | 8,425,390 | |
| Procter & Gamble | | 110,000 | | | 6,380,000 | |
| * | Staples | | 375,000 | | | 8,137,500 | |
| Walgreen | | 238,400 | | | 9,018,672 | |
| | | | | | 35,272,806 | |
| Consumer Services – 1.14% | | | | | | |
| * | Weight Watchers International | | 108,100 | | | 2,865,731 | |
| | | | | | 2,865,731 | |
| Energy – 3.75% | | | | | | |
| EOG Resources | | 115,100 | | | 9,399,066 | |
| | | | | | 9,399,066 | |
| Financials – 9.57% | | | | | | |
| Bank of New York Mellon | | 260,000 | | | 6,931,600 | |
| CME Group | | 26,100 | | | 7,898,121 | |
| † | IntercontinentalExchange | | 91,700 | | | 9,187,423 | |
| | | | | | 24,017,144 | |
| Health Care – 16.06% | | | | | | |
| Allergan | | 200,000 | | | 11,250,000 | |
| † | Gilead Sciences | | 160,000 | | | 6,808,000 | |
| † | Medco Health Solutions | | 165,000 | | | 9,259,800 | |
| Novo Nordisk ADR | | 125,600 | | | 7,806,040 | |
| UnitedHealth Group | | 200,000 | | | 5,190,000 | |
| | | | | | 40,313,840 | |
| Technology – 36.09% | | | | | | |
| *† | Adobe Systems | | 213,200 | | | 7,022,808 | |
| † | Apple | | 70,700 | | | 13,326,951 | |
| *† | Crown Castle International | | 300,000 | | | 9,066,000 | |
| † | Google Class A | | 23,200 | | | 12,437,984 | |
| *† | Intuit | | 320,000 | | | 9,302,400 | |
| *† | priceline.com | | 31,900 | | | 5,033,501 | |
| QUALCOMM | | 260,000 | | | 10,766,600 | |
| *† | Symantec | | 398,900 | | | 7,012,662 | |
| † | Teradata | | 300,000 | | | 8,364,000 | |
| *† | VeriSign | | 362,100 | | | 8,259,501 | |
| | | | | | 90,592,407 | |
| Total Common Stock | | | | | | |
| (cost $256,334,938) | | | | | 249,056,330 | |
| | | | | | | |
| | | Principal | | | | |
| | | Amount | | | | |
| ¹Discount Note – 0.54% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | | $1,363,003 | | $ | 1,363,002 | |
| Total Discount Note | | | | | | |
| (cost $1,363,002) | | | | | 1,363,002 | |
| |
| Total Value of Securities Before Securities | | | | |
| Lending Collateral – 99.76% | | | | | | |
| (cost $257,697,940) | | | | | 250,419,332 | |
| |
| | | Number of | | | | |
| | | Shares | | | | |
| Securities Lending Collateral** – 4.24% | | | | |
| Investment Companies | | | | | | |
| Mellon GSL DBT II | | | | | | |
| Collateral Fund | | 7,026,134 | | | 7,026,134 | |
| BNY Mellon SL DBT II | | | | | | |
| Liquidating Fund | | 3,662,845 | | | 3,621,821 | |
| †@Mellon GSL Reinvestment Trust | | 224,466 | | | 22 | |
| Total Securities Lending Collateral | | | | | | |
| (cost $10,913,445) | | | | | 10,647,977 | |
| |
| Total Value of Securities – 104.00% | | | | | | |
| (cost $268,611,385) | | | | | 261,067,309 | © |
| Obligation to Return Securities | | | | | | |
| Lending Collateral** – (4.35%) | | | | | (10,913,445 | ) |
| Receivables and Other Assets | | | | | | |
| Net of Liabilities – 0.35% | | | | | 862,767 | |
| Net Assets Applicable to 34,161,563 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $7.35 Per Share – 100.00% | | | | $ | 251,016,631 | |
| |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 337,081,102 | |
| Undistributed net investment income | | | | | 477,181 | |
| Accumulated net realized loss on investments | | | (78,997,576 | ) |
| Net unrealized depreciation of investments | | | (7,544,076 | ) |
| Total net assets | | | | $ | 251,016,631 | |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
| † | Non income producing security. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| * | Fully or partially on loan. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $10,667,502 of securities loaned. |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $22, which represented 0.00% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
ADR – American Depositary Receipts
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 79
Statements of net assets
Delaware Pooled® Trust — The Small-Cap Growth Equity Portfolio
October 31, 2009
| | | Number of | | | |
| | | | Shares | | Value |
| Common Stock – 95.15%² | | | | | |
| Basic Industry/Capital Goods – 8.74% | | | | | |
| Bucyrus International Class A | | 256 | | $ | 11,371 |
| Dynamic Materials | | 350 | | | 6,748 |
| † | Itron | | 150 | | | 9,006 |
| † | Mettler-Toledo International | | 50 | | | 4,875 |
| † | Middleby | | 200 | | | 9,062 |
| † | Mistras Group | | 450 | | | 5,202 |
| † | SunPower Class A | | 100 | | | 2,481 |
| † | Tetra Tech | | 350 | | | 9,006 |
| | | | | | 57,751 |
| Business Services – 8.69% | | | | | |
| † | Clean Harbors | | 100 | | | 5,645 |
| † | Emergency Medical Services Class A | | 200 | | | 9,604 |
| † | FTI Consulting | | 150 | | | 6,122 |
| † | Geo Group | | 550 | | | 11,632 |
| † | Net 1 UEPS Technologies | | 450 | | | 7,871 |
| Solera Holdings | | 300 | | | 9,665 |
| † | SuccessFactors | | 450 | | | 6,881 |
| | | | | | 57,420 |
| Consumer Durables – 1.78% | | | | | |
| † | LKQ | | 450 | | | 7,772 |
| † | WMS Industries | | 100 | | | 3,998 |
| | | | | | 11,770 |
| Consumer Non-Durables – 7.80% | | | | | |
| † | Aeropostale | | 250 | | | 9,383 |
| †= | Dollarama | | 103 | | | 1,837 |
| † | FGX International Holdings | | 200 | | | 2,638 |
| † | Lululemon Athletica | | 450 | | | 11,304 |
| Penske Auto Group | | 200 | | | 3,132 |
| † | Titan Machinery | | 550 | | | 5,902 |
| † | Tractor Supply | | 50 | | | 2,235 |
| † | Ulta Salon Cosmetics & Fragrance | | 1,000 | | | 15,139 |
| | | | | | 51,570 |
| Consumer Services – 7.05% | | | | | |
| † | BJ’s Restaurants | | 450 | | | 7,182 |
| †@ | Cardtronics | | 1,700 | | | 16,915 |
| † | First Cash Financial Services | | 400 | | | 6,872 |
| † | Gaylord Entertainment | | 400 | | | 6,012 |
| †@ | RHI Entertainment | | 550 | | | 1,441 |
| Royal Caribbean Cruises | | 100 | | | 2,023 |
| † | Texas Roadhouse Class A | | 650 | | | 6,156 |
| | | | | | 46,601 |
| Energy – 3.62% | | | | | |
| Carbo Ceramics | | 100 | | | 5,839 |
| Core Laboratories | | 100 | | | 10,430 |
| † | Goodrich Petroleum | | 300 | | | 7,701 |
| | | | | | 23,970 |
| Financials – 3.45% | | | | | |
| Hanover Insurance Group | | 150 | | | 6,309 |
| Lazard Class A | | 100 | | | 3,775 |
| † | ProAssurance | | 150 | | | 7,542 |
| † | Stifel Financial | | 100 | | | 5,196 |
| | | | | | 22,822 |
| Health Care – 22.67% | | | | | |
| †@ | Abraxis BioScience | | 497 | | | 15,515 |
| † | Acorda Therapeutics | | 300 | | | 6,519 |
| † | CardioNet | | 1,350 | | | 7,979 |
| † | Celera | | 1,450 | | | 8,976 |
| † | Charles River Laboratories International | | 350 | | | 12,781 |
| † | Cypress Bioscience | | 450 | | | 2,763 |
| Healthcare Services Group | | 434 | | | 8,572 |
| † | Human Genome Sciences | | 450 | | | 8,411 |
| † | I-Flow | | 100 | | | 1,262 |
| † | Ligand Pharmaceuticals Class B | | 1,550 | | | 2,635 |
| † | Martek Biosciences | | 200 | | | 3,592 |
| † | Masimo | | 200 | | | 5,314 |
| PDL BioPharma | | 800 | | | 6,728 |
| Perrigo | | 450 | | | 16,735 |
| † | Regeneron Pharmaceuticals | | 200 | | | 3,140 |
| † | Savient Pharmaceuticals | | 1,300 | | | 16,379 |
| † | Syneron Medical | | 450 | | | 4,950 |
| † | Talecris Biotherapeutics Holdings | | 350 | | | 7,021 |
| † | Wright Medical Group | | 650 | | | 10,563 |
| | | | | | 149,835 |
| Technology – 27.26% | | | | | |
| Applied Signal Technology | | 350 | | | 7,172 |
| † | Arris Group | | 800 | | | 8,208 |
| † | Aruba Networks | | 950 | | | 7,429 |
| † | BigBand Networks | | 1,450 | | | 5,365 |
| † | Brocade Communications Systems | | 1,400 | | | 12,012 |
| † | Cogent | | 650 | | | 6,273 |
| † | CommScope | | 500 | | | 13,509 |
| † | F5 Networks | | 250 | | | 11,223 |
| Henry (Jack) & Associates | | 350 | | | 8,075 |
| † | Lam Research | | 200 | | | 6,744 |
| † | Nuance Communications | | 900 | | | 11,799 |
| † | Riverbed Technology | | 450 | | | 9,221 |
| † | SmartHeat | | 100 | | | 894 |
| † | Smith Micro Software | | 950 | | | 8,626 |
| † | Sybase | | 350 | | | 13,845 |
| † | Teradyne | | 1,100 | | | 9,207 |
| † | TriQuint Semiconductor | | 2,450 | | | 13,205 |
| † | Varian Semiconductor Equipment | | 200 | | | 5,678 |
| † | Veeco Instruments | | 550 | | | 13,392 |
| † | Volterra Semiconductor | | 600 | | | 8,310 |
| | | | | | 180,187 |
2009 Annual report · Delaware Pooled Trust
80
| | | Number of | | | | |
| | | | Shares | | Value | |
| Common Stock (continued) | | | | | | |
| Transportation – 4.09% | | | | | | |
| † | Echo Global Logistics | | 80 | | $ | 1,044 | |
| Genco Shipping & Trading | | 150 | | | 2,984 | |
| Hunt (J.B.) Transport Services | | 350 | | | 10,521 | |
| Knight Transportation | | 450 | | | 7,218 | |
| † | Marten Transport | | 300 | | | 5,262 | |
| | | | | | 27,029 | |
| Total Common Stock | | | | | | |
| (cost $529,499) | | | | | 628,955 | |
| |
| | | Principal | | | | |
| | | Amount | | | | |
| ¹Discount Note – 5.60% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | | $37,000 | | | 37,000 | |
| Total Discount Note | | | | | | |
| (cost $37,000) | | | | | 37,000 | |
| |
| Total Value of Securities – 100.75% | | | | | | |
| (cost $566,499) | | | | | 665,955 | |
| Liabilities Net of Receivables and | | | | | | |
| Other Assets – (0.75%) | | | | | (4,939 | ) |
| Net Assets Applicable to 196,481 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $3.36 per Share – 100.00% | | | | $ | 661,016 | |
| |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 2,756,310 | |
| Accumulated net investment loss | | | | | (994 | ) |
| Accumulated net realized loss on investments | | | | | (2,193,756 | ) |
| Net unrealized appreciation of investments | | | | | 99,456 | |
| Total net assets | | | | $ | 661,016 | |
| ¹ | The rate shown is the effective yield at time of purchase. |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
| † | Non income producing security. |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $33,871, which represented 5.12% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| = | Security is being fair valued in accordance with the Portfolio’s fair valuation policy. At October 31, 2009, the aggregate amount of fair valued securities was $1,837, which represented 0.28% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 81
Statements of net assets
Delaware Pooled® Trust — The Focus Smid-Cap Growth Equity Portfolio
October 31, 2009
| | Number of | | | | |
| | | Shares | | Value | |
| Common Stock – 96.62%² | | | | | | |
| Basic Industry/Capital Goods – 2.80% | | | | | | |
| Graco | | 3,500 | | $ | 96,390 | |
| | | | | | 96,390 | |
| Business Services – 11.10% | | | | | | |
| Expeditors International of Washington | | 3,550 | | | 114,381 | |
| Heartland Payment Systems | | 10,600 | | | 130,274 | |
| † | VeriFone Holdings | | 10,400 | | | 138,320 | |
| | | | | | 382,975 | |
| Consumer Durables – 1.90% | | | | | | |
| Gentex | | 4,100 | | | 65,641 | |
| | | | | | 65,641 | |
| Consumer Non-Durables – 16.38% | | | | | | |
| † | DineEquity | | 2,850 | | | 60,306 | |
| Fastenal | | 2,750 | | | 94,875 | |
| † | NetFlix | | 2,700 | | | 144,315 | |
| † | Peet’s Coffee & Tea | | 4,750 | | | 161,500 | |
| † | Whole Foods Market | | 3,250 | | | 104,195 | |
| | | | | | 565,191 | |
| Consumer Services – 8.44% | | | | | | |
| † | Interval Leisure Group | | 5,800 | | | 64,728 | |
| Strayer Education | | 450 | | | 91,337 | |
| Weight Watchers International | | 5,100 | | | 135,201 | |
| | | | | | 291,266 | |
| Energy – 4.84% | | | | | | |
| Core Laboratories | | 1,600 | | | 166,880 | |
| | | | | | 166,880 | |
| Financials – 11.16% | | | | | | |
| † | Affiliated Managers Group | | 2,100 | | | 133,329 | |
| † | IntercontinentalExchange | | 1,250 | | | 125,238 | |
| optionsXpress Holdings | | 8,100 | | | 126,603 | |
| | | | | | 385,170 | |
| Health Care – 10.04% | | | | | | |
| † | Abiomed | | 6,800 | | | 61,540 | |
| † | Intuitive Surgical | | 400 | | | 98,540 | |
| Perrigo | | 1,900 | | | 70,661 | |
| Techne | | 1,850 | | | 115,644 | |
| | | | | | 346,385 | |
| Technology – 26.44% | | | | | | |
| Blackbaud | | 4,500 | | | 99,855 | |
| † | j2 Global Communications | | 5,350 | | | 109,408 | |
| † | priceline.com | | 925 | | | 145,955 | |
| † | SBA Communications Class A | | 4,750 | | | 133,997 | |
| ±† | Tandberg | | 6,800 | | | 181,891 | |
| † | Teradata | | 4,150 | | | 115,702 | |
| † | VeriSign | | 5,500 | | | 125,455 | |
| | | | | | 912,263 | |
| Transportation – 3.52% | | | | | | |
| C.H. Robinson Worldwide | | 2,200 | | | 121,242 | |
| | | | | | 121,242 | |
| Total Common Stock | | | | | | |
| (cost $2,890,103) | | | | | 3,333,403 | |
| | | | | | |
| | Principal | | | | |
| | Amount | | | |
| ¹Discount Note – 3.65% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | $ | 126,000 | | | 126,000 | |
| Total Discount Note | | | | | | |
| (cost $126,000) | | | | | 126,000 | |
| | | | | | | |
| Total Value of Securities – 100.27% | | | | | | |
| (cost $3,016,103) | | | | | 3,459,403 | |
| Liabilities Net of Receivables and | | | | | | |
| Other Assets – (0.27%) | | | | | (9,269 | ) |
| Net Assets Applicable to 396,152 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $8.71 Per Share – 100.00% | | | | $ | 3,450,134 | |
| | | | | |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 5,117,939 | |
| Accumulated net realized loss on investments | | | (2,111,068 | ) |
| Net unrealized appreciation of investments and | | | | |
| foreign currencies | | | | | 443,263 | |
| Total net assets | | | | $ | 3,450,134 | |
| ² | Narrow industries are utilized for compliance purposes for diversification whereas broad sectors are used for financial reporting. |
| † | Non income producing security. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| ± | Security is being valued based on international fair value pricing. At October 31, 2009, the aggregate amount of international fair value priced securities was $181,891, which represented 5.27% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
82
Delaware Pooled® Trust — The Real Estate Investment Trust Portfolio II
October 31, 2009
| | Number of | | | | |
| | | Shares | | Value | |
| Common Stock – 94.66% | | | | | | |
| Diversified REIT – 6.40% | | | | | | |
| Vornado Realty Trust | | 5,625 | | $ | 335,025 | |
| | | | | | 335,025 | |
| Health Care REITs – 16.30% | | | | | | |
| HCP | | 7,625 | | | 225,623 | |
| Health Care REIT | | 4,560 | | | 202,326 | |
| Healthcare Realty Trust | | 1,925 | | | 40,098 | |
| LTC Properties | | 1,060 | | | 25,175 | |
| Nationwide Health Properties | | 4,890 | | | 157,703 | |
| Ventas | | 5,030 | | | 201,854 | |
| | | | | | 852,779 | |
| Hotel REITs – 3.68% | | | | | | |
| † | Gaylord Entertainment | | 1,050 | | | 15,782 | |
| Host Hotels & Resorts | | 13,390 | | | 135,373 | |
| LaSalle Hotel Properties | | 2,420 | | | 41,527 | |
| | | | | | 192,682 | |
| Industrial REITs – 3.60% | | | | | | |
| AMB Property | | 1,180 | | | 25,936 | |
| EastGroup Properties | | 1,480 | | | 54,479 | |
| ProLogis | | 9,540 | | | 108,088 | |
| | | | | | 188,503 | |
| Mall REITs – 13.41% | | | | | | |
| CBL & Associates Properties | | 5,430 | | | 44,309 | |
| Macerich | | 2,866 | | | 85,407 | |
| Simon Property Group | | 8,419 | | | 571,566 | |
| | | | | | 701,282 | |
| Manufactured Housing REIT – 2.07% | | | | | | |
| Equity Lifestyle Properties | | 2,330 | | | 108,229 | |
| | | | | | 108,229 | |
| Multifamily REITs – 13.64% | | | | | | |
| Apartment Investment & Management | | 1,760 | | | 21,736 | |
| AvalonBay Communities | | 1,552 | | | 106,747 | |
| Camden Property Trust | | 3,200 | | | 116,000 | |
| Equity Residential | | 8,455 | | | 244,179 | |
| Essex Property Trust | | 1,214 | | | 91,269 | |
| Mid-America Apartment Communities | | 500 | | | 21,910 | |
| Post Properties | | 2,490 | | | 41,060 | |
| UDR | | 4,911 | | | 70,620 | |
| | | | | | 713,521 | |
| Office REITs – 13.44% | | | | | | |
| Alexandria Real Estate Equities | | 2,105 | | | 114,028 | |
| Boston Properties | | 3,700 | | | 224,848 | |
| Brandywine Realty Trust | | 5,660 | | | 54,110 | |
| Corporate Office Properties Trust | | 1,115 | | | 37,007 | |
| Douglas Emmett | | 4,345 | | | 51,271 | |
| Government Properties Income Trust | | 1,520 | | | 35,386 | |
| Mack-Cali Realty | | 2,660 | | | 82,327 | |
| SL Green Realty | | 2,680 | | | 103,877 | |
| | | | | | 702,854 | |
| Office/Industrial REITs – 3.34% | | | | | | |
| Digital Realty Trust | | 1,670 | | | 75,368 | |
| Duke Realty | | 5,530 | | | 62,157 | |
| Liberty Property Trust | | 1,260 | | | 37,006 | |
| | | | | | 174,531 | |
| Self-Storage REITs – 4.45% | | | | | | |
| Public Storage | | 3,090 | | | 227,424 | |
| U-Store-It Trust | | 910 | | | 5,187 | |
| | | | | | 232,611 | |
| Shopping Center REITs – 9.26% | | | | | | |
| Cedar Shopping Centers | | 2,130 | | | 12,929 | |
| Federal Realty Investment Trust | | 1,788 | | | 105,546 | |
| Kimco Realty | | 11,825 | | | 149,467 | |
| Ramco-Gershenson Properties Trust | | 2,830 | | | 25,017 | |
| Regency Centers | | 1,045 | | | 35,060 | |
| Tanger Factory Outlet Centers | | 1,885 | | | 71,762 | |
| Weingarten Realty Investors | | 4,585 | | | 84,823 | |
| | | | | | 484,604 | |
| Single Family REIT – 1.53% | | | | | | |
| National Retail Properties | | 4,120 | | | 79,846 | |
| | | | | | 79,846 | |
| Specialty REITs – 3.54% | | | | | | |
| Entertainment Properties Trust | | 2,470 | | | 84,030 | |
| Plum Creek Timber | | 2,315 | | | 72,436 | |
| Rayonier | | 740 | | | 28,549 | |
| | | | | | 185,015 | |
| Total Common Stock (cost $4,389,561) | | | | | 4,951,482 | |
| | | | | | | |
| | Principal | | | | |
| | Amount | | | | |
| ¹Discount Note – 5.30% | | | | | | |
| Federal Home Loan Bank 0.02% 11/2/09 | $ | 277,001 | | | 277,000 | |
| Total Discount Note (cost $277,000) | | | | | 277,000 | |
| | | | | | | |
| Total Value of Securities – 99.96% | | | | | | |
| (cost $4,666,561) | | | | | 5,228,482 | |
| Receivables and Other Assets Net of | | | | | | |
| Liabilities – 0.04% | | | | | 2,306 | |
| Net Assets Applicable to 1,227,675 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $4.26 Per Share – 100.00% | | | | $ | 5,230,788 | |
| | | | | |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 9,271,477 | |
| Undistributed net investment income | | | | | 108,076 | |
| Accumulated net realized loss on investments | | | | | (4,710,686 | ) |
| Net unrealized appreciation of investments | | | | | 561,921 | |
| Total net assets | | | | $ | 5,230,788 | |
| † | Non income producing security. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
REIT — Real Estate Investment Trust
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 83
Statements of net assets
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
October 31, 2009
| | | Principal | | Value |
| | Amount (U.S. $) | | (U.S. $) |
| Agency Asset-Backed Security – 0.09% | | | | | |
| Fannie Mae Grantor Trust Series | | | | | |
| 2003-T4 2A5 5.407% 9/26/33 | $ | 20,809 | | $ | 19,116 |
| Total Agency Asset-Backed Security | | | | | |
| (cost $20,607) | | | | | 19,116 |
| |
| Agency Collateralized Mortgage Obligations – 5.59% | | | |
| · | Fannie Mae ACES Series 2006-M2 | | | | | |
| A2F 5.259% 5/25/20 | | 230,000 | | | 245,992 |
| Fannie Mae REMIC | | | | | |
| Series 2002-90 A1 6.50% 6/25/42 | | 2,592 | | | 2,813 |
| Series 2004-49 EB 5.00% 7/25/24 | | 215,000 | | | 225,648 |
| Series 2005-110 MB 5.50% 9/25/35 | | 107,133 | | | 112,928 |
| Freddie Mac REMIC | | | | | |
| Series 3027 DE 5.00% 9/15/25 | | 190,000 | | | 198,903 |
| Series 3123 HT 5.00% 3/15/26 | | 95,000 | | | 99,744 |
| Series 3173 PE 6.00% 4/15/35 | | 90,000 | | | 97,302 |
| Series 3416 GK 4.00% 7/15/22 | | 55,047 | | | 56,893 |
| GNMA | | | | | |
| Series 2002-28 B 5.779% 7/16/24 | | 18,361 | | | 18,880 |
| ·Series 2003-78 B 5.11% 10/16/27 | | 85,000 | | | 89,821 |
| Total Agency Collateralized Mortgage | | | | | |
| Obligations (cost $1,104,350) | | | | | 1,148,924 |
| |
| Agency Mortgage-Backed Securities – 17.35% | | | |
| Fannie Mae Relocation 30 yr | | | | | |
| 5.00% 2/1/36 | | 146,909 | | | 151,405 |
| Fannie Mae S.F. 15 yr | | | | | |
| 4.50% 8/1/19 | | 9,595 | | | 10,130 |
| 4.50% 6/1/23 | | 293,504 | | | 305,567 |
| 5.00% 1/1/20 | | 10,237 | | | 10,877 |
| 5.00% 6/1/20 | | 2,427 | | | 2,578 |
| 5.00% 2/1/21 | | 6,819 | | | 7,223 |
| 5.50% 4/1/23 | | 297,358 | | | 316,527 |
| Fannie Mae S.F. 30 yr | | | | | |
| 5.00% 5/1/34 | | 13,860 | | | 14,414 |
| 5.00% 1/1/35 | | 19,756 | | | 20,546 |
| 5.00% 5/1/35 | | 37,816 | | | 39,304 |
| 5.00% 6/1/35 | | 66,211 | | | 68,816 |
| 5.00% 4/1/36 | | 55,157 | | | 57,276 |
| 5.00% 12/1/36 | | 270,207 | | | 280,841 |
| 5.00% 12/1/37 | | 43,569 | | | 45,236 |
| 5.00% 2/1/38 | | 31,088 | | | 32,276 |
| 6.00% 10/1/35 | | 24,866 | | | 26,531 |
| Fannie Mae S.F. 30 yr TBA | | | | | |
| 4.50% 11/1/39 | | 500,000 | | | 506,094 |
| 6.50% 11/1/39 | | 1,000,000 | | | 1,073,439 |
| Freddie Mac S.F. 15 yr 5.00% 12/1/22 | | 221,098 | | | 234,469 |
| Freddie Mac S.F. 30 yr | | | | | |
| 5.00% 3/1/34 | | 40,600 | | | 42,211 |
| 5.00% 2/1/36 | | 18,088 | | | 18,791 |
| Freddie Mac S.F. 30 yr TBA | | | | | |
| 4.00% 11/1/39 | | 305,000 | | | 300,520 |
| | | | | | |
| Total Agency Mortgage-Backed | | | | | |
| Securities (cost $3,457,542) | | | | | 3,565,071 |
| | | | | | |
| Agency Obligation – 1.56% | | | | | |
| * | Freddie Mac 3.75% 3/27/19 | | 320,000 | | | 320,808 |
| Total Agency Obligation | | | | | |
| (cost $314,746) | | | | | 320,808 |
| | | | |
| Commercial Mortgage-Backed Securities – 8.09% | | | |
| # | American Tower Trust | | | | | |
| Series 2007-1A D 144A | | | | | |
| 5.957% 4/15/37 | | 25,000 | | | 25,000 |
| · | Bank of America Commercial Mortgage | | | | | |
| Series 2004-3 A5 5.398% 6/10/39 | | 15,000 | | | 15,419 |
| Series 2005-6 A4 5.179% 9/10/47 | | 115,000 | | | 115,798 |
| Series 2005-6 AM 5.179% 9/10/47 | | 50,000 | | | 43,559 |
| Series 2007-3 A4 5.658% 6/10/49 | | 20,000 | | | 16,783 |
| Series 2007-4 AM 5.811% 2/10/51 | | 55,000 | | | 42,838 |
| Bear Stearns Commercial | | | | | |
| Mortgage Securities | | | | | |
| ·Series 2005-PW10 A4 | | | | | |
| 5.405% 12/11/40 | | 80,000 | | | 79,589 |
| ·Series 2005-T20 A4A | | | | | |
| 5.15% 10/12/42 | | 35,000 | | | 35,414 |
| ·Series 2006-PW12 A4 | | | | | |
| 5.719% 9/11/38 | | 65,000 | | | 66,233 |
| Series 2006-PW14 A4 | | | | | |
| 5.201% 12/11/38 | | 45,000 | | | 42,746 |
| Series 2007-PW15 A4 | | | | | |
| 5.331% 2/11/44 | | 60,000 | | | 54,689 |
| ·w | Commercial Mortgage Pass | | | | | |
| Through Certificates | | | | | |
| #Series 2001-J1A A2 144A | | | | | |
| 6.457% 2/16/34 | | 20,933 | | | 21,648 |
| Series 2005-C6 A5A | | | | | |
| 5.116% 6/10/44 | | 75,000 | | | 74,325 |
| · | Credit Suisse Mortgage Capital | | | | | |
| Certificates Series 2006-C1 AAB | | | | | |
| 5.548% 2/15/39 | | 30,000 | | | 31,063 |
| # | Crown Castle Towers 144A | | | | | |
| ·Series 2005-1A AFL 0.62% 6/15/35 | | 110,000 | | | 109,450 |
| Series 2005-1A C 5.074% 6/15/35 | | 25,000 | | | 25,125 |
| Series 2006-1A B 5.362% 11/15/36 | | 55,000 | | | 56,100 |
| First Union National Bank- | | | | | |
| Bank of America Commercial | | | | | |
| Mortgage Trust Series 2001-C1 C | | | | | |
| 6.403% 3/15/33 | | 30,000 | | | 30,898 |
| General Electric Capital | | | | | |
| Commercial Mortgage | | | | | |
| Series 2002-1A A3 | | | | | |
| 6.269% 12/10/35 | | 95,000 | | | 101,129 |
2009 Annual report · Delaware Pooled Trust
84
| | | Principal | | Value |
| | Amount (U.S. $) | | (U.S. $) |
| Commercial Mortgage-Backed Securities (continued) | | | |
| Goldman Sachs Mortgage | | | | | |
| Securities II | | | | | |
| Series 2004-GG2 A3 4.602% 8/10/38 | $ | 35,163 | | $ | 35,122 |
| ·Series 2004-GG2 A6 5.396% 8/10/38 | | 45,000 | | | 43,180 |
| Series 2005-GG4 A4 4.761% 7/10/39 | | 160,000 | | | 148,781 |
| Series 2005-GG4 A4A 4.751% 7/10/39 | | 85,000 | | | 83,902 |
| ·Series 2006-GG6 A4 5.553% 4/10/38 | | 45,000 | | | 42,288 |
| JPMorgan Chase Commercial | | | | | |
| Mortgage Securities | | | | | |
| Series 2002-C1 A3 5.376% 7/12/37 | | 75,000 | | | 77,667 |
| ·Series 2005-LDP3 A4A 4.936% 8/15/42 | | 25,000 | | | 24,706 |
| ·Series 2005-LDP4 A4 4.918% 10/15/42 | | 35,000 | | | 34,751 |
| ·Series 2005-LDP5 A4 5.179% 12/15/44 | | 55,000 | | | 55,226 |
| Lehman Brothers-UBS | | | | | |
| Commercial Mortgage Trust | | | | | |
| Series 2001-C2 A1 6.27% 6/15/20 | | 1,485 | | | 1,492 |
| Series 2002-C1 A4 6.462% 3/15/31 | | 45,000 | | | 48,003 |
| · | Morgan Stanley Capital I Series | | | | | |
| 2007-T27 A4 5.65% 6/11/42 | | 80,000 | | | 79,169 |
| Total Commercial Mortgage-Backed | | | | | |
| Securities (cost $1,577,010) | | | | | 1,662,093 |
| | | | | | | |
| Corporate Bonds – 29.48% | | | | | |
| Banking – 6.93% | | | | | |
| Bank of America | | | | | |
| 4.90% 5/1/13 | | 50,000 | | | 52,103 |
| 5.125% 11/15/14 | | 23,000 | | | 23,855 |
| 5.30% 3/15/17 | | 45,000 | | | 44,024 |
| 5.75% 12/1/17 | | 25,000 | | | 25,461 |
| Barclays Bank | | | | | |
| 6.75% 5/22/19 | | 130,000 | | | 146,441 |
| #144A 2.70% 3/5/12 | | 105,000 | | | 107,818 |
| BB&T 5.25% 11/1/19 | | 25,000 | | | 24,402 |
| Capital One Financial | | | | | |
| 7.375% 5/23/14 | | 115,000 | | | 130,651 |
| Citigroup | | | | | |
| 4.625% 8/3/10 | | 100,000 | | | 102,215 |
| 6.375% 8/12/14 | | 60,000 | | | 63,718 |
| 6.50% 8/19/13 | | 10,000 | | | 10,729 |
| # | Commonwealth Bank of Australia | | | | | |
| 144A 5.00% 10/15/19 | | 30,000 | | | 30,193 |
| Credit Suisse New York | | | | | |
| 6.00% 2/15/18 | | 115,000 | | | 121,387 |
| JPMorgan Chase 6.30% 4/23/19 | | 75,000 | | | 82,462 |
| JPMorgan Chase Capital XVIII | | | | | |
| 6.95% 8/17/36 | | 15,000 | | | 14,710 |
| JPMorgan Chase Capital XXII | | | | | |
| 6.45% 2/2/37 | | 25,000 | | | 23,048 |
| JPMorgan Chase Capital XXV | | | | | |
| 6.80% 10/1/37 | | 56,000 | | | 55,231 |
| PNC Funding 5.625% 2/1/17 | | 138,000 | | | 136,286 |
| · | USB Capital IX 6.189% 4/15/49 | | 53,000 | | | 41,208 |
| Wachovia | | | | | |
| 5.25% 8/1/14 | | 20,000 | | | 20,812 |
| 5.625% 10/15/16 | | 70,000 | | | 71,925 |
| · | Wells Fargo Capital XIII 7.70% 12/29/49 | | 103,000 | | | 96,305 |
| | | | | | 1,424,984 |
| Basic Industry – 1.59% | | | | | |
| ArcelorMittal | | | | | |
| 6.125% 6/1/18 | | 48,000 | | | 47,488 |
| 9.00% 2/15/15 | | 15,000 | | | 17,336 |
| 9.85% 6/1/19 | | 25,000 | | | 29,511 |
| Cytec Industries 8.95% 7/1/17 | | 10,000 | | | 11,722 |
| Dow Chemical 8.55% 5/15/19 | | 105,000 | | | 120,071 |
| Lubrizol 8.875% 2/1/19 | | 58,000 | | | 72,433 |
| Reliance Steel & Aluminum | | | | | |
| 6.85% 11/15/36 | | 31,000 | | | 27,653 |
| | | | | | 326,214 |
| Brokerage – 2.03% | | | | | |
| Goldman Sachs Group | | | | | |
| 5.25% 10/15/13 | | 20,000 | | | 21,417 |
| 5.95% 1/18/18 | | 43,000 | | | 45,381 |
| 6.25% 9/1/17 | | 33,000 | | | 35,362 |
| Jefferies Group | | | | | |
| 6.25% 1/15/36 | | 10,000 | | | 7,853 |
| 6.45% 6/8/27 | | 59,000 | | | 50,021 |
| Lazard Group | | | | | |
| 6.85% 6/15/17 | | 37,000 | | | 37,513 |
| 7.125% 5/15/15 | | 7,000 | | | 7,195 |
| Morgan Stanley | | | | | |
| 6.00% 4/28/15 | | 198,000 | | | 212,114 |
| | | | | | 416,856 |
| Capital Goods – 1.02% | | | | | |
| Allied Waste North America | | | | | |
| 6.125% 2/15/14 | | 10,000 | | | 10,264 |
| 6.875% 6/1/17 | | 5,000 | | | 5,308 |
| 7.125% 5/15/16 | | 75,000 | | | 79,792 |
| # | BAE Systems Holdings 144A | | | | | |
| 4.95% 6/1/14 | | 45,000 | | | 46,741 |
| Tyco International Finance | | | | | |
| 8.50% 1/15/19 | | 50,000 | | | 61,085 |
| Waste Management 7.375% 3/11/19 | | 5,000 | | | 5,839 |
| | | | | | 209,029 |
| Communications – 4.09% | | | | | |
| # | American Tower 144A | | | | | |
| 4.625% 4/1/15 | | 35,000 | | | 35,457 |
| AT&T 6.50% 9/1/37 | | 20,000 | | | 21,397 |
| AT&T Wireless 8.125% 5/1/12 | | 74,000 | | | 84,602 |
| Comcast | | | | | |
| 4.95% 6/15/16 | | 35,000 | | | 35,917 |
| 5.30% 1/15/14 | | 20,000 | | | 21,349 |
2009 Annual report · Delaware Pooled Trust
(continues) 85
Statements of net assets
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
| | | Principal | | Value |
| | Amount (U.S. $) | | (U.S. $) |
| Corporate Bonds (continued) | | | | | |
| Communications (continued) | | | | | |
| # | Cox Communications 144A | | | | | |
| 5.875% 12/1/16 | $ | 25,000 | | $ | 26,079 |
| 6.95% 6/1/38 | | 15,000 | | | 15,760 |
| 8.375% 3/1/39 | | 45,000 | | | 54,114 |
| DirecTV Holdings/Finance | | | | | |
| 7.625% 5/15/16 | | 60,000 | | | 65,184 |
| Telecom Italia Capital | | | | | |
| 5.25% 10/1/15 | | 53,000 | | | 55,001 |
| 6.20% 7/18/11 | | 38,000 | | | 40,446 |
| 7.175% 6/18/19 | | 40,000 | | | 44,423 |
| Time Warner Cable 6.75% 7/1/18 | | 63,000 | | | 69,470 |
| # | Vivendi 144A | | | | | |
| 5.75% 4/4/13 | | 75,000 | | | 80,004 |
| 6.625% 4/4/18 | | 35,000 | | | 37,949 |
| Vodafone Group | | | | | |
| 5.00% 9/15/15 | | 13,000 | | | 13,768 |
| 5.375% 1/30/15 | | 110,000 | | | 118,185 |
| 5.45% 6/10/19 | | 20,000 | | | 21,010 |
| | | | | | 840,115 |
| Consumer Cyclical – 1.25% | | | | | |
| CVS Caremark 6.125% 9/15/39 | | 15,000 | | | 15,205 |
| w# | CVS Pass Through Trust 144A | | | | | |
| 8.353% 7/10/31 | | 94,615 | | | 107,727 |
| Darden Restaurants 6.80% 10/15/37 | | 55,000 | | | 56,930 |
| Nordstrom | | | | | |
| 6.25% 1/15/18 | | 25,000 | | | 26,449 |
| 6.75% 6/1/14 | | 45,000 | | | 50,195 |
| | | | | | 256,506 |
| Consumer Non-Cyclical – 3.12% | | | | | |
| # | Anheuser-Busch InBev Worldwide 144A | | | | | |
| 5.375% 11/15/14 | | 55,000 | | | 58,543 |
| 5.375% 1/15/20 | | 50,000 | | | 50,930 |
| 7.20% 1/15/14 | | 20,000 | | | 22,552 |
| Beckman Coulter | | | | | |
| 6.00% 6/1/15 | | 15,000 | | | 16,548 |
| 7.00% 6/1/19 | | 70,000 | | | 80,459 |
| # | CareFusion 144A 6.375% 8/1/19 | | 65,000 | | | 70,230 |
| Delhaize Group 5.875% 2/1/14 | | 33,000 | | | 35,570 |
| Hospira 6.40% 5/15/15 | | 85,000 | | | 94,569 |
| Medco Health Solutions | | | | | |
| 7.125% 3/15/18 | | 75,000 | | | 85,039 |
| Quest Diagnostics | | | | | |
| 5.45% 11/1/15 | | 95,000 | | | 100,530 |
| 6.40% 7/1/17 | | 25,000 | | | 27,420 |
| | | | | | 642,390 |
| Electric – 1.87% | | | | | |
| Duke Energy 5.05% 9/15/19 | | 30,000 | | | 30,307 |
| # | Enel Finance International 144A | | | | | |
| 5.125% 10/7/19 | | 100,000 | | | 102,087 |
| Illinois Power 9.75% 11/15/18 | | 110,000 | | | 137,849 |
| Indiana Michigan Power | | | | | |
| 7.00% 3/15/19 | | 30,000 | | | 33,920 |
| Pennsylvania Electric 5.20% 4/1/20 | | 45,000 | | | 45,296 |
| PPL Electric Utilities 7.125% 11/30/13 | | 30,000 | | | 34,382 |
| | | | | | 383,841 |
| Energy – 1.23% | | | | | |
| Nexen 7.50% 7/30/39 | | 55,000 | | | 60,932 |
| Noble Energy 8.25% 3/1/19 | | 50,000 | | | 60,062 |
| Petrobras International Finance | | | | | |
| 5.75% 1/20/20 | | 35,000 | | | 35,070 |
| 6.875% 1/20/40 | | 15,000 | | | 15,060 |
| Pride International 8.50% 6/15/19 | | 25,000 | | | 28,063 |
| Weatherford International | | | | | |
| 4.95% 10/15/13 | | 30,000 | | | 31,523 |
| 5.95% 6/15/12 | | 3,000 | | | 3,229 |
| 9.625% 3/1/19 | | 15,000 | | | 18,601 |
| | | | | | 252,540 |
| Finance Companies – 1.68% | | | | | |
| General Electric Capital 6.00% 8/7/19 | | 200,000 | | | 210,606 |
| ·# | ILFC E-Capital Trust II 144A | | | | | |
| 6.25% 12/21/65 | | 100,000 | | | 48,000 |
| International Lease Finance | | | | | |
| 5.35% 3/1/12 | | 37,000 | | | 30,351 |
| 5.875% 5/1/13 | | 39,000 | | | 29,831 |
| 6.625% 11/15/13 | | 35,000 | | | 27,029 |
| | | | | | 345,817 |
| Insurance – 1.30% | | | | | |
| MetLife 6.40% 12/15/36 | | 115,000 | | | 101,345 |
| UnitedHealth Group | | | | | |
| 5.50% 11/15/12 | | 43,000 | | | 45,697 |
| 5.80% 3/15/36 | | 13,000 | | | 12,224 |
| 6.00% 2/15/18 | | 35,000 | | | 36,777 |
| WellPoint | | | | | |
| 5.00% 1/15/11 | | 15,000 | | | 15,546 |
| 6.00% 2/15/14 | | 15,000 | | | 16,251 |
| 7.00% 2/15/19 | | 35,000 | | | 39,684 |
| | | | | | 267,524 |
| Natural Gas – 2.56% | | | | | |
| Enbridge Energy Partners | | | | | |
| 9.875% 3/1/19 | | 50,000 | | | 63,196 |
| Energy Transfer Partners | | | | | |
| 9.70% 3/15/19 | | 35,000 | | | 43,407 |
| Enterprise Products Operating | | | | | |
| 6.375% 2/1/13 | | 40,000 | | | 43,398 |
| 9.75% 1/31/14 | | 60,000 | | | 72,450 |
| Kinder Morgan Energy Partners | | | | | |
| 6.85% 2/15/20 | | 45,000 | | | 49,923 |
| 9.00% 2/1/19 | | 35,000 | | | 42,740 |
| # | Midcontinent Express Pipeline 144A | | | | | |
| 6.70% 9/15/19 | | 35,000 | | | 35,462 |
| Plains All American Pipeline | | | | | |
| 5.75% 1/15/20 | | 85,000 | | | 87,544 |
| Sempra Energy 6.00% 10/15/39 | | 50,000 | | | 50,269 |
| · | TransCanada Pipelines 6.35% 5/15/67 | | 40,000 | | | 37,286 |
| | | | | | 525,675 |
2009 Annual report · Delaware Pooled Trust
86
| | Principal | | Value |
| | | Amount (U.S. $) | | (U.S. $) |
| Corporate Bonds (continued) | | | | | |
| Real Estate – 0.39% | | | | | |
| ProLogis 7.375% 10/30/19 | $ | 50,000 | | $ | 50,245 |
| Regency Centers 5.875% 6/15/17 | | 32,000 | | | 30,188 |
| | | | | | 80,433 |
| Technology – 0.31% | | | | | |
| Xerox 8.25% 5/15/14 | | 55,000 | | | 63,431 |
| | | | | | 63,431 |
| Transportation – 0.11% | | | | | |
| CSX 6.25% 3/15/18 | | 20,000 | | | 21,840 |
| | | | | | 21,840 |
| Total Corporate Bonds | | | | | |
| (cost $5,680,033) | | | | | 6,057,195 |
| | | | | | |
| Foreign Agencies – 1.55% | | | | | |
| Germany – 1.25% | | | | | |
| KFW | | | | | |
| 2.25% 4/16/12 | | 105,000 | | | 107,229 |
| 2.75% 10/21/14 | | 100,000 | | | 100,304 |
| 4.875% 6/17/19 | | 45,000 | | | 48,990 |
| | | | | | 256,523 |
| Republic of Korea – 0.30% | | | | | |
| Korea Development Bank | | | | | |
| 5.30% 1/17/13 | | 60,000 | | | 62,248 |
| | | | | | 62,248 |
| Total Foreign Agencies | | | | | |
| (cost $311,815) | | | | | 318,771 |
| | | | | | | |
| Municipal Bonds – 0.75% | | | | | |
| California State 7.30% 10/1/39 | | 70,000 | | | 70,996 |
| California State Taxable Build | | | | | |
| America Bonds (Various Purposes) | | | | | |
| 7.55% 4/1/39 | | 80,000 | | | 83,902 |
| Total Municipal Bonds | | | | | |
| (cost $152,398) | | | | | 154,898 |
| | | | | |
| Non-Agency Asset-Backed Securities – 3.74% | | | |
| ·# | AH Mortgage Advance Trust | | | | | |
| Series 2009-ADV3 A1 144A | | | | | |
| 2.194% 10/6/21 | | 35,000 | | | 35,000 |
| · | Bank of America Credit Card | | | | | |
| Trust Series 2008-A5 A5 | | | | | |
| 1.44% 12/16/13 | | 130,000 | | | 131,079 |
| Capital Auto Receivables Asset | | | | | |
| Trust Series 2007-3 A3A | | | | | |
| 5.02% 9/15/11 | | 15,147 | | | 15,412 |
| Caterpillar Financial Asset Trust | | | | | |
| Series 2007-A A3A 5.34% 6/25/12 | | 14,625 | | | 14,895 |
| CNH Equipment Trust | | | | | |
| Series 2008-A A3 4.12% 5/15/12 | | 20,530 | | | 20,805 |
| Series 2008-A A4A 4.93% 8/15/14 | | 40,000 | | | 41,522 |
| Series 2008-B A3A 4.78% 7/16/12 | | 40,000 | | | 40,788 |
| Discover Card Master Trust | | | | | |
| Series 2008-A4 A4 5.65% 12/15/15 | | 110,000 | | | 120,805 |
| ·# | Golden Credit Card Trust | | | | | |
| Series 2008-3 A 144A | | | | | |
| 1.245% 7/15/17 | | 100,000 | | | 98,316 |
| · | MBNA Credit Card Master Note | | | | | |
| Trust Series 2005-A4 A4 | | | | | |
| 0.285% 11/15/12 | | 40,000 | | | 39,865 |
| · | Merrill Auto Trust Securitization Series | | | | | |
| 2007-1 A4 0.305% 12/15/13 | | 20,000 | | | 19,728 |
| Mid-State Trust | | | | | |
| Series 11 A1 4.864% 7/15/38 | | 12,738 | | | 11,570 |
| Series 2004-1 A 6.005% 8/15/37 | | 10,310 | | | 9,887 |
| Series 2005-1 A 5.745% 1/15/40 | | 15,214 | | | 14,619 |
| #Series 2006-1 A 144A | | | | | |
| 5.787% 10/15/40 | | 70,464 | | | 71,501 |
| Renaissance Home Equity Loan | | | | | |
| Trust Series 2006-1 AF3 | | | | | |
| 5.608% 5/25/36 | | 73,912 | | | 68,413 |
| Õ | Structured Asset Securities | | | | | |
| Series 2001-SB1 A2 | | | | | |
| 3.375% 8/25/31 | | 17,163 | | | 13,832 |
| Total Non-Agency Asset-Backed | | | | | |
| Securities (cost $762,965) | | | | | 768,037 |
| | |
| Non-Agency Collateralized Mortgage Obligations – 3.91% |
| Bank of America Alternative | | | | | |
| Loan Trust Series 2005-1 2A1 | | | | | |
| 5.50% 2/25/20 | | 140,571 | | | 139,560 |
| · | Bank of America Mortgage | | | | | |
| Securities Series 2004-L 4A1 | | | | | |
| 5.156% 1/25/35 | | 53,274 | | | 50,967 |
| w | Countrywide Home Loan | | | | | |
| Mortgage Pass Through Trust | | | | | |
| Series 2005-23 A1 5.50% 11/25/35 | | 141,767 | | | 130,780 |
| #Series 2005-R2 2A4 144A | | | | | |
| 8.50% 6/25/35 | | 86,004 | | | 81,973 |
| · | JPMorgan Mortgage Trust | | | | | |
| Series 2005-A4 1A1 | | | | | |
| 5.385% 7/25/35 | | 133,780 | | | 120,721 |
| Lehman Mortgage Trust | | | | | |
| Series 2005-2 2A3 | | | | | |
| 5.50% 12/25/35 | | 29,808 | | | 27,743 |
| ·# | MASTR Specialized Loan Trust | | | | | |
| Series 2005-2 A2 144A | | | | | |
| 5.006% 7/25/35 | | 15,067 | | | 12,443 |
| Residential Accredit Loans | | | | | |
| Series 2005-QR1 A | | | | | |
| 6.00% 10/25/34 | | 124,444 | | | 114,761 |
2009 Annual report · Delaware Pooled Trust
(continues) 87
Statements of net assets
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
| | Principal | | Value | |
| | | Amount (U.S. $) | | (U.S. $) | |
| Non-Agency Collateralized Mortgage Obligations (continued) | |
| Wells Fargo Mortgage-Backed | | | | | | |
| Securities Trust | | | | | | |
| ·Series 2005-AR16 6A4 | | | | | | |
| 5.00% 10/25/35 | $ | 158,243 | | $ | 61,610 | |
| Series 2006-4 1A8 | | | | | | |
| 5.75% 4/25/36 | | 68,020 | | | 62,251 | |
| Total Non-Agency Collateralized | | | | | | |
| Mortgage Obligations | | | | | | |
| (cost $944,314) | | | | | 802,809 | |
| | | | | | | | |
| Regional Authority – 0.17%D | | | | | | |
| Canada – 0.17% | | | | | | |
| Province of Ontario Canada | | | | | | |
| 4.00% 10/7/19 | | 35,000 | | | 34,528 | |
| Total Regional Authority (cost $34,940) | | | | | 34,528 | |
| | | | | | | | |
| Sovereign Agencies – 1.01%D | | | | | | |
| Canada – 0.52% | | | | | | |
| Export Development Canada | | | | | | |
| 3.125% 4/24/14 | | 105,000 | | | 108,011 | |
| | | | | | 108,011 | |
| Japan – 0.49% | | | | | | |
| Japan Bank for International | | | | | | |
| Cooperation 2.125% 11/5/12 | | 100,000 | | | 100,450 | |
| | | | | | 100,450 | |
| Total Sovereign Agencies | | | | | | |
| (cost $206,278) | | | | | 208,461 | |
| | | | | | | | |
| Supranational Bank – 0.10% | | | | | | |
| European Investment Bank | | | | | | |
| 3.125% 6/4/14 | | 20,000 | | | 20,526 | |
| Total Supranational Bank | | | | | | |
| (cost $19,921) | | | | | 20,526 | |
| | | | | | | | |
| U.S. Treasury Obligations – 23.49% | | | | | | |
| U.S. Treasury Bond 4.25% 5/15/39 | | 342,000 | | | 342,909 | |
| U.S. Treasury Notes | | | | | | |
| 1.00% 10/31/11 | | 905,000 | | | 906,985 | |
| *1.375% 10/15/12 | | 440,000 | | | 439,691 | |
| 2.375% 9/30/14 | | 20,000 | | | 20,086 | |
| 2.375% 10/31/14 | | 990,000 | | | 992,863 | |
| *3.625% 8/15/19 | | 2,084,000 | | | 2,124,704 | |
| Total U.S. Treasury Obligations | | | | | | |
| (cost $4,799,195) | | | | | 4,827,238 | |
| | | | | | |
| | | Number of | | | | |
| | Shares | | | | |
| Preferred Stock – 0.21% | | | | | | |
| ·PNC Financial Services Group 8.25% | | 43,000 | | | 43,148 | |
| Total Preferred Stock | | | | | | |
| (cost $39,774) | | | | | 43,148 | |
| | | | | | | |
| | Principal | | | | |
| | Amount (U.S. $) | | | | |
| ¹Discount Note – 21.71% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | $ | 4,462,009 | | | 4,462,007 | |
| Total Discount Note | | | | | | |
| (cost $4,462,007) | | | | | 4,462,007 | |
| | | | | | |
| Total Value of Securities Before Securities | | | | |
| Lending Collateral – 118.80% | | | | | | |
| (cost $23,887,895) | | | | | 24,413,630 | |
| | | | | | |
| | | Number of | | | | |
| | Shares | | | | |
| Securities Lending Collateral** – 10.26% | | | | |
| Investment Companies | | | | | | |
| Mellon GSL DBT II Collateral Fund | | 1,412,186 | | | 1,412,186 | |
| BNY Mellon SL DBT II Liquidating Fund | | 704,462 | | | 696,572 | |
| @† | Mellon GSL Reinvestment Trust II | | 43,827 | | | 4 | |
| Total Securities Lending Collateral | | | | | | |
| (cost $2,160,475) | | | | | 2,108,762 | |
| | | | | | | |
| Total Value of Securities – 129.06% | | | | | | |
| (cost $26,048,370) | | | | | 26,522,392 | © |
| Obligation to Return Securities | | | | | | |
| Lending Collateral** – (10.51%) | | | | | (2,160,475 | ) |
| Liabilities Net of Receivables and | | | | | | |
| Other Assets – (18.55%)z | | | | | (3,811,640 | ) |
| Net Assets Applicable to 2,253,991 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $9.12 Per Share – 100.00% | | | | $ | 20,550,277 | |
| | | | | | |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 20,514,674 | |
| Undistributed net investment income | | | | | 838,156 | |
| Accumulated net realized loss on investments | | | (1,262,016 | ) |
| Net unrealized appreciation of investments | | | | | 459,463 | |
| Total net assets | | | | $ | 20,550,277 | |
2009 Annual report · Delaware Pooled Trust
88
| |
| D | Securities have been classified by country of origin. |
| † | Non income producing security. |
| w | Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes. |
| · | Variable rate security. The rate shown is the rate as of October 31, 2009. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At October 31, 2009, the aggregate amount of Rule 144A securities was $1,466,202, which represented 7.13% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $4, which represented 0.00% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| Õ | Restricted Security. These investments are in securities not registered under the Securities Act of 1933, as amended, and have certain restrictions on resale which may limit their liquidity. At October 31, 2009, the aggregate amount of restricted securities was $13,832 or 0.07% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| * | Fully or partially on loan. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $2,116,511 of securities loaned. |
| z | Of this amount, $4,097,418 represents payable for securities purchased as of October 31, 2009. |
Summary of Abbreviations:
ACES — Automatic Common Exchange Security
CDS — Credit Default Swap
GNMA — Government National Mortgage Association
MASTR — Mortgage Asset Securitization Transactions, Inc.
REMIC — Real Estate Mortgage Investment Conduit
S.F. — Single Family
TBA — To be announced
yr — Year
1The following swap contracts were outstanding at October 31, 2009:
| Swap Contracts | | | | | | | | | | | | | |
| CDS Contracts | | | | | | | | | | | | | |
| | | | | Annual | | | | Unrealized |
| Swap Counterparty & | | Notional | | Protection | | Termination | | Appreciation |
| Referenced Obligation | | | Value | | Payments | | Date | | (Depreciation) |
| Protection Purchased: | | | | | | | | | | | | | |
| JPMorgan Securities | | | | | | | | | | | | | |
| Donnelley (R.R.) & | | | | | | | | | | | | | |
| Sons 5 yr CDS | | $ | 85,000 | | 5.00% | | 6/20/14 | | | $ | (13,591 | ) | |
| | | | | | | | | | | | | | |
| Protection Sold: | | | | | | | | | | | | | |
| JPMorgan Securities | | | | | | | | | | | | | |
| MetLife 5 yr CDS | | | 20,000 | | 1.00% | | 12/20/14 | | | | 68 | | |
| UnitedHealth Group | | | | | | | | | | | | | |
| 5 yr CDS | | | 25,000 | | 1.00% | | 12/20/14 | | | | (430 | ) | |
| 5 yr CDS | | | 15,000 | | 1.00% | | 12/20/14 | | | | (145 | ) | |
| | $ | 60,000 | | | | | | | | (507 | ) | |
| Total | | | | | | | | | | $ | (14,098 | ) | |
The use of swap contracts involves elements of market risk and risks in excess of the amounts recognized in the financial statements. The notional values presented above represent the Portfolio’s total exposure in such contracts, whereas only the net unrealized depreciation is reflected in the Portfolio’s net assets.
1See Note 8 in ”Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 89
Statements of net assets
Delaware Pooled® Trust — The High-Yield Bond Portfolio
October 31, 2009
| | Principal | | Value |
| | | Amount (U.S. $) | | (U.S. $) |
| Convertible Bonds – 1.05% | | | | | |
| Beazer Homes USA 4.625% | | | | | |
| exercise price $49.64, | | | | | |
| expiration date 6/15/24 | $ | 45,000 | | $ | 39,825 |
| Century Aluminum 1.75% | | | | | |
| exercise price $30.54, | | | | | |
| expiration date 8/1/24 | | 20,000 | | | 18,725 |
| # | Corporate Office Properties 144A | | | | | |
| 3.50% exercise price $53.12, | | | | | |
| expiration date 9/15/26 | | 25,000 | | | 23,844 |
| Developers Diversified Realty | | | | | |
| 3.00% exercise price $74.75, | | | | | |
| expiration date 3/15/12 | | 50,000 | | | 44,999 |
| 3.50% exercise price $64.23, | | | | | |
| expiration date 8/11/11 | | 15,000 | | | 13,988 |
| Φ | Hologic 2.00% exercise price $38.59, | | | | | |
| expiration date 12/15/37 | | 70,000 | | | 57,137 |
| Level 3 Communications 5.25% | | | | | |
| exercise price $3.98, | | | | | |
| expiration date 12/15/11 | | 35,000 | | | 31,938 |
| † | Mirant (Escrow) 2.50% | | | | | |
| exercise price $67.95, | | | | | |
| expiration date 6/15/21 | | 20,000 | | | 0 |
| Sinclair Broadcast Group 3.00% | | | | | |
| exercise price $19.65, | | | | | |
| expiration date 5/15/27 | | 17,000 | | | 16,703 |
| Total Convertible Bonds (cost $229,600) | | | | | 247,159 |
| | | | | | | |
| Corporate Bonds – 94.70% | | | | | |
| Basic Industry – 8.41% | | | | | |
| # | Algoma Acquisition 144A | | | | | |
| 9.875% 6/15/15 | | 95,000 | | | 81,700 |
| California Steel Industries | | | | | |
| 6.125% 3/15/14 | | 85,000 | | | 78,625 |
| Century Aluminum 7.50% 8/15/14 | | 95,000 | | | 86,450 |
| ·# | Cognis GmbH 144A 2.299% 9/15/13 | | 75,000 | | | 65,250 |
| # | Evraz Group 144A 9.50% 4/24/18 | | 125,000 | | | 123,750 |
| # | FMG Finance 144A 10.625% 9/1/16 | | 70,000 | | | 77,175 |
| Freeport-McMoRan Copper & Gold | | | | | |
| 8.25% 4/1/15 | | 120,000 | | | 128,841 |
| * | Huntsman International | | | | | |
| 7.875% 11/15/14 | | 65,000 | | | 61,425 |
| Innophos 8.875% 8/15/14 | | 105,000 | | | 106,575 |
| @# | Innophos Holdings 144A | | | | | |
| 9.50% 4/15/12 | | 80,000 | | | 80,000 |
| # | MacDermid 144A 9.50% 4/15/17 | | 150,000 | | | 142,500 |
| # | NewPage 144A 11.375% 12/31/14 | | 80,000 | | | 80,200 |
| · | Noranda Aluminium Acquisition PIK | | | | | |
| 5.413% 5/15/15 | | 114,040 | | | 80,683 |
| Norske Skog Canada | | | | | |
| 8.625% 6/15/11 | | 130,000 | | | 82,550 |
| @# | Norske Skogindustrier 144A | | | | | |
| 7.125% 10/15/33 | | 100,000 | | | 53,500 |
| # | Novelis 144A 11.50% 2/15/15 | | 55,000 | | | 57,475 |
| @= | Port Townsend 7.32% 8/27/12 | | 11,725 | | | 8,501 |
| Ryerson | | | | | |
| ·7.858% 11/1/14 | | 75,000 | | | 64,875 |
| 12.00% 11/1/15 | | 45,000 | | | 44,325 |
| # | Sappi Papier Holding 144A | | | | | |
| 6.75% 6/15/12 | | 80,000 | | | 74,687 |
| # | Steel Capital 144A 9.75% 7/29/13 | | 100,000 | | | 101,875 |
| # | Steel Dynamics 144A 8.25% 4/15/16 | | 100,000 | | | 101,000 |
| # | Teck Resources 144A | | | | | |
| 10.25% 5/15/16 | | 35,000 | | | 40,513 |
| 10.75% 5/15/19 | | 55,000 | | | 64,350 |
| *# | Vedanta Resources 144A | | | | | |
| 9.50% 7/18/18 | | 100,000 | | | 100,250 |
| | | | | | 1,987,075 |
| Brokerage – 1.27% | | | | | |
| E Trade Financial PIK | | | | | |
| 12.50% 11/30/17 | | 95,000 | | | 105,925 |
| LaBranche 11.00% 5/15/12 | | 200,000 | | | 193,250 |
| | | | | | 299,175 |
| Capital Goods – 7.43% | | | | | |
| Associated Materials | | | | | |
| 9.75% 4/15/12 | | 60,000 | | | 61,350 |
| #144A 9.875% 11/15/16 | | 15,000 | | | 15,450 |
| Building Materials 7.75% 8/1/14 | | 95,000 | | | 94,050 |
| # | BWAY 144A 10.00% 4/15/14 | | 105,000 | | | 112,088 |
| ·# | C8 Capital SPV 144A | | | | | |
| 6.64% 12/31/49 | | 100,000 | | | 70,700 |
| Casella Waste Systems | | | | | |
| 9.75% 2/1/13 | | 110,000 | | | 105,600 |
| #144A 11.00% 7/15/14 | | 10,000 | | | 10,725 |
| # | CPM Holdings 144A | | | | | |
| 10.625% 9/1/14 | | 20,000 | | | 21,000 |
| Eastman Kodak 7.25% 11/15/13 | | 85,000 | | | 66,725 |
| * | Graham Packaging | | | | | |
| 9.875% 10/15/14 | | 165,000 | | | 169,124 |
| *# | Graphic Packaging International | | | | | |
| 144A 9.50% 6/15/17 | | 105,000 | | | 110,775 |
| Intertape Polymer 8.50% 8/1/14 | | 75,000 | | | 58,875 |
| # | Plastipak Holdings 144A | | | | | |
| 8.50% 12/15/15 | | 55,000 | | | 55,275 |
| 10.625% 8/15/19 | | 60,000 | | | 66,000 |
| Pregis 12.375% 10/15/13 | | 140,000 | | | 135,800 |
| RBS Global/Rexnord | | | | | |
| 9.50% 8/1/14 | | 50,000 | | | 49,750 |
| *11.75% 8/1/16 | | 100,000 | | | 97,500 |
| Smurfit Kappa Funding 7.75% 4/1/15 | | 125,000 | | | 115,625 |
| Solo Cup 8.50% 2/15/14 | | 110,000 | | | 107,525 |
| Thermadyne Holdings | | | | | |
| 10.50% 2/1/14 | | 125,000 | | | 110,000 |
| USG | | | | | |
| 6.30% 11/15/16 | | 110,000 | | | 95,150 |
| #144A 9.75% 8/1/14 | | 25,000 | | | 26,375 |
| | | | | | 1,755,462 |
2009 Annual report · Delaware Pooled Trust
90
| | Principal | | Value |
| | | Amount (U.S. $) | | (U.S. $) |
| Corporate Bonds (continued) | | | | | |
| Consumer Cyclical – 11.79% | | | | | |
| *# | Allison Transmission 144A | | | | | |
| 11.00% 11/1/15 | $ | 185,000 | | $ | 189,624 |
| * | ArvinMeritor 8.125% 9/15/15 | | 140,000 | | | 122,850 |
| Beazer Homes USA 8.625% 5/15/11 | | 115,000 | | | 108,100 |
| Burlington Coat Factory Investment | | | | | |
| Holdings 14.50% 10/15/14 | | 185,000 | | | 185,000 |
| * | Burlington Coat Factory Warehouse | | | | | |
| 11.125% 4/15/14 | | 60,000 | | | 62,250 |
| Carrols 9.00% 1/15/13 | | 30,000 | | | 30,150 |
| Denny’s Holdings 10.00% 10/1/12 | | 45,000 | | | 46,125 |
| # | Duane Reade 144A 11.75% 8/1/15 | | 5,000 | | | 5,350 |
| Ford Motor 7.45% 7/16/31 | | 145,000 | | | 119,625 |
| Ford Motor Credit 12.00% 5/15/15 | | 185,000 | | | 208,554 |
| Interface | | | | | |
| 9.50% 2/1/14 | | 15,000 | | | 14,813 |
| #144A 11.375% 11/1/13 | | 40,000 | | | 43,400 |
| #Invista 144A 9.25% 5/1/12 | | 100,000 | | | 101,500 |
| K Hovnanian Enterprises | | | | | |
| 6.25% 1/15/15 | | 30,000 | | | 21,900 |
| | 7.50% 5/15/16 | | 60,000 | | | 41,700 |
| *#144A 10.625% 10/15/16 | | 60,000 | | | 60,000 |
| # | Landry’s Restaurants 144A | | | | | |
| 14.00% 8/15/11 | | 50,000 | | | 50,438 |
| Levi Strauss 9.75% 1/15/15 | | 55,000 | | | 57,750 |
| M/I Homes 6.875% 4/1/12 | | 60,000 | | | 56,700 |
| Macy’s Retail Holdings | | | | | |
| 6.375% 3/15/37 | | 90,000 | | | 73,800 |
| 6.70% 7/15/34 | | 15,000 | | | 12,306 |
| 7.875% 8/15/36 | | 40,000 | | | 34,300 |
| 10.625% 11/1/10 | | 35,000 | | | 36,819 |
| Meritage Homes | | | | | |
| 6.25% 3/15/15 | | 20,000 | | | 18,550 |
| 7.00% 5/1/14 | | 85,000 | | | 81,175 |
| * | Mobile Mini 6.875% 5/1/15 | | 80,000 | | | 75,200 |
| Navistar International 8.25% 11/1/21 | | 120,000 | | | 117,750 |
| Norcraft Holdings 9.75% 9/1/12 | | 125,000 | | | 118,438 |
| OSI Restaurant Partners | | | | | |
| 10.00% 6/15/15 | | 66,000 | | | 56,100 |
| Quiksilver 6.875% 4/15/15 | | 78,000 | | | 60,645 |
| Rite Aid 9.375% 12/15/15 | | 150,000 | | | 125,250 |
| * | Sally Holdings 10.50% 11/15/16 | | 130,000 | | | 138,450 |
| # | Standard Pacific Escrow 144A | | | | | |
| 10.75% 9/15/16 | | 65,000 | | | 64,025 |
| * | Tenneco 8.625% 11/15/14 | | 120,000 | | | 113,700 |
| *# | Toys R Us Property 144A | | | | | |
| 10.75% 7/15/17 | | 35,000 | | | 38,150 |
| *# | TRW Automotive 144A | | | | | |
| 7.00% 3/15/14 | | 100,000 | | | 93,500 |
| | | | | | 2,783,987 |
| Consumer Non-Cyclical – 7.68% | | | | | |
| Accellent 10.50% 12/1/13 | | 55,000 | | | 54,175 |
| # | Alliance One International 144A | | | | | |
| 10.00% 7/15/16 | | 110,000 | | | 114,950 |
| Bausch & Lomb 9.875% 11/1/15 | | 105,000 | | | 109,200 |
| Cornell 10.75% 7/1/12 | | 40,000 | | | 41,000 |
| DJO Finance 10.875% 11/15/14 | | 65,000 | | | 68,088 |
| # | Dole Food 144A | | | | | |
| 8.00% 10/1/16 | | 30,000 | | | 30,525 |
| 13.875% 3/15/14 | | 75,000 | | | 88,125 |
| # | Ingles Markets 144A 8.875% 5/15/17 | | 60,000 | | | 61,650 |
| Inverness Medical Innovations | | | | | |
| 9.00% 5/15/16 | | 85,000 | | | 86,488 |
| # | JBS USA Finance 144A | | | | | |
| 11.625% 5/1/14 | | 90,000 | | | 100,125 |
| JohnsonDiversey Holdings | | | | | |
| 10.67% 5/15/13 | | 95,000 | | | 96,900 |
| LVB Acquisition 11.625% 10/15/17 | | 60,000 | | | 66,075 |
| LVB Acquisition PIK | | | | | |
| 10.375% 10/15/17 | | 45,000 | | | 48,656 |
| # | M-Foods Holdings 144A | | | | | |
| 9.75% 10/1/13 | | 35,000 | | | 36,313 |
| PHH 7.125% 3/1/13 | | 120,000 | | | 108,600 |
| @# | Seminole Indian Tribe of Florida 144A | | | | | |
| 7.804% 10/1/20 | | 145,000 | | | 123,404 |
| # | ServiceMaster PIK 144A | | | | | |
| 10.75% 7/15/15 | | 130,000 | | | 129,999 |
| Smithfield Foods | | | | | |
| 7.75% 5/15/13 | | 130,000 | | | 117,000 |
| #144A 10.00% 7/15/14 | | 30,000 | | | 31,650 |
| # | Tops Markets 144A 10.125% 10/15/15 | | 120,000 | | | 123,300 |
| Universal Hospital Services PIK | | | | | |
| 8.50% 6/1/15 | | 60,000 | | | 59,700 |
| Yankee Acquisition 9.75% 2/15/17 | | 125,000 | | | 118,438 |
| | | | | | 1,814,361 |
| Energy – 11.00% | | | | | |
| Berry Petroleum 10.25% 6/1/14 | | 55,000 | | | 59,125 |
| Chesapeake Energy | | | | | |
| 6.625% 1/15/16 | | 40,000 | | | 38,650 |
| 9.50% 2/15/15 | | 45,000 | | | 48,938 |
| Complete Production Service | | | | | |
| 8.00% 12/15/16 | | 75,000 | | | 71,438 |
| Copano Energy 7.75% 6/1/18 | | 75,000 | | | 72,563 |
| Denbury Resources 9.75% 3/1/16 | | 60,000 | | | 64,650 |
| # | Drummond 144A 9.00% 10/15/14 | | 40,000 | | | 40,600 |
| Dynergy Holdings 7.75% 6/1/19 | | 135,000 | | | 114,413 |
| El Paso 6.875% 6/15/14 | | 105,000 | | | 105,049 |
| · | Enterprise Products Operating | | | | | |
| 8.375% 8/1/66 | | 25,000 | | | 24,531 |
| Forest Oil 7.25% 6/15/19 | | 75,000 | | | 70,313 |
| Geophysique-Veritas 7.75% 5/15/17 | | 95,000 | | | 94,525 |
| # | Headwaters 144A 11.375% 11/1/14 | | 120,000 | | | 120,900 |
| # | Helix Energy Solutions Group 144A | | | | | |
| 9.50% 1/15/16 | | 120,000 | | | 123,899 |
| # | Hercules Offshore 144A | | | | | |
| 10.50% 10/15/17 | | 120,000 | | | 120,300 |
2009 Annual report · Delaware Pooled Trust
(continues) 91
Statements of net assets
Delaware Pooled® Trust — The High-Yield Bond Portfolio
| | Principal | | Value |
| | | Amount (U.S. $) | | (U.S. $) |
| Corporate Bonds (continued) | | | | | |
| Energy (continued) | | | | | |
| # | Hilcorp Energy I 144A | | | | | |
| 7.75% 11/1/15 | $ | 110,000 | | $ | 105,600 |
| 9.00% 6/1/16 | | 5,000 | | | 5,025 |
| # | Holly 144A 9.875% 6/15/17 | | 100,000 | | | 104,000 |
| * | International Coal Group | | | | | |
| 10.25% 7/15/14 | | 135,000 | | | 128,924 |
| Key Energy Services 8.375% 12/1/14 | | 120,000 | | | 117,750 |
| Mariner Energy 8.00% 5/15/17 | | 150,000 | | | 141,749 |
| MarkWest Energy Partners | | | | | |
| 8.75% 4/15/18 | | 90,000 | | | 92,475 |
| Massey Energy 6.875% 12/15/13 | | 80,000 | | | 79,400 |
| # | Murray Energy 144A 10.25% 10/15/15 | | 70,000 | | | 69,650 |
| OPTI Canada | | | | | |
| 7.875% 12/15/14 | | 140,000 | | | 109,900 |
| 8.25% 12/15/14 | | 13,000 | | | 10,270 |
| PetroHawk Energy | | | | | |
| 7.875% 6/1/15 | | 25,000 | | | 25,375 |
| 9.125% 7/15/13 | | 60,000 | | | 62,400 |
| Petroleum Development | | | | | |
| 12.00% 2/15/18 | | 90,000 | | | 90,225 |
| Plains Exploration & Production | | | | | |
| 8.625% 10/15/19 | | 20,000 | | | 20,150 |
| Quicksilver Resources 11.75% 1/1/16 | | 100,000 | | | 111,500 |
| Regency Energy Partners | | | | | |
| 8.375% 12/15/13 | | 46,000 | | | 47,380 |
| # | SandRidge Energy 144A | | | | | |
| 9.875% 5/15/16 | | 100,000 | | | 107,500 |
| | | | | | 2,599,167 |
| Finance & Investments – 6.51% | | | | | |
| · | BAC Capital Trust XIV 5.63% 12/31/49 | | 180,000 | | | 126,450 |
| ·# | C5 Capital SPV 144A 6.196% 12/31/49 | | 100,000 | | | 71,041 |
| Capital One Capital V 10.25% 8/15/39 | | 105,000 | | | 120,136 |
| · | Citigroup Capital XXI 8.30% 12/21/57 | | 50,000 | | | 46,750 |
| # | GMAC 144A | | | | | |
| 6.00% 12/15/11 | | 60,000 | | | 56,850 |
| 6.625% 5/15/12 | | 72,000 | | | 68,580 |
| 6.875% 9/15/11 | | 25,000 | | | 24,250 |
| 6.875% 8/28/12 | | 150,000 | | | 143,250 |
| International Lease Finance | | | | | |
| 5.25% 1/10/13 | | 75,000 | | | 60,346 |
| 5.35% 3/1/12 | | 10,000 | | | 8,203 |
| 5.55% 9/5/12 | | 35,000 | | | 28,106 |
| 5.625% 9/20/13 | | 85,000 | | | 64,620 |
| *6.375% 3/25/13 | | 30,000 | | | 23,745 |
| 6.625% 11/15/13 | | 50,000 | | | 38,613 |
| JPMorgan Chase Capital XXV | | | | | |
| 6.80% 10/1/37 | | 15,000 | | | 14,794 |
| @# | Nuveen Investments 144A | | | | | |
| 10.50% 11/15/15 | | 220,000 | | | 195,799 |
| @ | Popular North America Capital Trust I | | | | | |
| 6.564% 9/15/34 | | 55,000 | | | 40,289 |
| ·# | Rabobank Nederland 144A | | | | | |
| 11.00% 12/29/49 | | 75,000 | | | 94,394 |
| # | Universal City Development | | | | | |
| Partners 144A | | | | | |
| 8.875% 11/15/15 | | 40,000 | | | 39,800 |
| 10.875% 11/15/16 | | 25,000 | | | 25,125 |
| · | USB Capital IX 6.189% 4/15/49 | | 85,000 | | | 66,088 |
| Zions Bancorporation | | | | | |
| 5.50% 11/16/15 | | 45,000 | | | 35,188 |
| 5.65% 5/15/14 | | 10,000 | | | 7,937 |
| 6.00% 9/15/15 | | 110,000 | | | 87,911 |
| 7.75% 9/23/14 | | 55,000 | | | 49,273 |
| | | | | | 1,537,538 |
| Media – 6.40% | | | | | |
| Affinion Group 11.50% 10/15/15 | | 55,000 | | | 57,750 |
| # | Cablevision Systems 144A | | | | | |
| 8.625% 9/15/17 | | 65,000 | | | 67,600 |
| # | Cengage Learning Acquisitions | | | | | |
| 144A 10.50% 1/15/15 | | 70,000 | | | 66,500 |
| # | Cequel Communications Holdings | | | | | |
| 144A 8.625% 11/15/17 | | 60,000 | | | 59,148 |
| # | Charter Communications | | | | | |
| Operating 144A | | | | | |
| 10.00% 4/30/12 | | 20,000 | | | 20,400 |
| 10.375% 4/30/14 | | 50,000 | | | 51,125 |
| 12.875% 9/15/14 | | 245,000 | | | 271,949 |
| # | DISH DBS 144A 7.875% 9/1/19 | | 60,000 | | | 61,725 |
| Lamar Media 6.625% 8/15/15 | | 70,000 | | | 66,500 |
| LIN Television 6.50% 5/15/13 | | 15,000 | | | 13,688 |
| # | MDC Partners 144A | | | | | |
| 11.00% 11/1/16 | | 60,000 | | | 60,375 |
| # | Mediacom Capital 144A | | | | | |
| 9.125% 8/15/19 | | 75,000 | | | 77,813 |
| Nielsen Finance | | | | | |
| 10.00% 8/1/14 | | 70,000 | | | 72,450 |
| 11.50% 5/1/16 | | 20,000 | | | 21,350 |
| *11.625% 2/1/14 | | 5,000 | | | 5,363 |
| W12.50% 8/1/16 | | 55,000 | | | 47,919 |
| *#144A 11.625% 2/1/14 | | 30,000 | | | 32,175 |
| * | Sinclair Broadcast Group | | | | | |
| 8.00% 3/15/12 | | 15,000 | | | 14,288 |
| # | Sinclair Television Group 144A | | | | | |
| 9.25% 11/1/17 | | 65,000 | | | 64,350 |
| # | Sirius XM Radio 144A 9.75% 9/1/15 | | 15,000 | | | 15,375 |
| # | Univision Communications 144A | | | | | |
| 12.00% 7/1/14 | | 85,000 | | | 92,331 |
| Videotron | | | | | |
| 6.375% 12/15/15 | | 20,000 | | | 19,600 |
| 9.125% 4/15/18 | | 95,000 | | | 103,312 |
| Visant Holding 8.75% 12/1/13 | | 60,000 | | | 61,650 |
| XM Satellite Radio Holdings PIK | | | | | |
| 10.00% 6/1/11 | | 90,000 | | | 85,725 |
| | | | | | 1,510,461 |
2009 Annual report · Delaware Pooled Trust
92
| | Principal | | Value |
| | | Amount (U.S. $) | | (U.S. $) |
| Corporate Bonds (continued) | | | | | |
| Real Estate – 1.76% | | | | | |
| Developers Diversified Realty | | | | | |
| 5.375% 10/15/12 | $ | 90,000 | | $ | 84,477 |
| 9.625% 3/15/16 | | 35,000 | | | 35,569 |
| # | Felcor Lodging 144A 10.00% 10/1/14 | | 120,000 | | | 119,100 |
| @ | Potlatch 12.50% 12/1/09 | | 175,000 | | | 175,983 |
| | | | | | 415,129 |
| Services Cyclical – 7.07% | | | | | |
| AMH Holdings 11.25% 3/1/14 | | 10,000 | | | 9,250 |
| Cardtronics 9.25% 8/15/13 | | 185,000 | | | 188,700 |
| Delta Air Lines | | | | | |
| 7.92% 11/18/10 | | 50,000 | | | 49,000 |
| #144A 9.50% 9/15/14 | | 55,000 | | | 56,375 |
| # | Galaxy Entertainment Finance 144A | | | | | |
| 9.875% 12/15/12 | | 140,000 | | | 137,900 |
| Gaylord Entertainment | | | | | |
| 6.75% 11/15/14 | | 50,000 | | | 46,250 |
| Global Cash Access 8.75% 3/15/12 | | 35,000 | | | 35,000 |
| # | Harrah’s Operating 144A | | | | | |
| 10.00% 12/15/18 | | 305,000 | | | 233,324 |
| Kansas City Southern Railway | | | | | |
| 13.00% 12/15/13 | | 40,000 | | | 46,100 |
| MGM MIRAGE | | | | | |
| *6.625% 7/15/15 | | 30,000 | | | 22,875 |
| *7.50% 6/1/16 | | 95,000 | | | 73,150 |
| *7.625% 1/15/17 | | 75,000 | | | 57,188 |
| #144A 11.125% 11/15/17 | | 45,000 | | | 49,725 |
| *#144A 11.375% 3/1/18 | | 30,000 | | | 27,150 |
| #144A 13.00% 11/15/13 | | 40,000 | | | 45,600 |
| Mohegan Tribal Gaming Authority | | | | | |
| 7.125% 8/15/14 | | 80,000 | | | 56,400 |
| Pinnacle Entertainment | | | | | |
| 7.50% 6/15/15 | | 175,000 | | | 158,374 |
| @# | Pokagon Gaming Authority 144A | | | | | |
| 10.375% 6/15/14 | | 110,000 | | | 114,400 |
| # | Reynolds Group Escrow 144A | | | | | |
| 7.75% 10/15/16 | | 100,000 | | | 100,500 |
| Royal Caribbean Cruises | | | | | |
| 6.875% 12/1/13 | | 65,000 | | | 61,913 |
| # | Shingle Springs Tribal Gaming | | | | | |
| Authority 144A 9.375% 6/15/15 | | 140,000 | | | 100,100 |
| | | | | | 1,669,274 |
| Services Non-Cyclical – 5.68% | | | | | |
| Alliance Imaging 7.25% 12/15/12 | | 120,000 | | | 117,600 |
| # | Ashtead Capital 144A 9.00% 8/15/16 | | 100,000 | | | 99,000 |
| Avis Budget Car Rental | | | | | |
| 7.625% 5/15/14 | | 160,000 | | | 144,799 |
| 7.75% 5/15/16 | | 65,000 | | | 58,013 |
| HCA 9.25% 11/15/16 | | 110,000 | | | 115,225 |
| · | HealthSouth 7.218% 6/15/14 | | 80,000 | | | 78,800 |
| * | Hertz 10.50% 1/1/16 | | 85,000 | | | 89,038 |
| Psychiatric Solutions | | | | | |
| *7.75% 7/15/15 | | 75,000 | | | 74,250 |
| #144A 7.75% 7/15/15 | | 30,000 | | | 28,950 |
| RSC Equipment Rental 9.50% 12/1/14 | | 115,000 | | | 114,138 |
| Select Medical 7.625% 2/1/15 | | 185,000 | | | 175,287 |
| Tenet Healthcare 7.375% 2/1/13 | | 115,000 | | | 112,700 |
| US Oncology Holdings PIK | | | | | |
| 6.428% 3/15/12 | | 150,000 | | | 132,750 |
| | | | | | 1,340,550 |
| Technology & Electronics – 3.23% | | | | | |
| Anixter 10.00% 3/15/14 | | 60,000 | | | 65,250 |
| Avago Technologies Finance | | | | | |
| 10.125% 12/1/13 | | 60,000 | | | 63,525 |
| * | First Data 9.875% 9/24/15 | | 245,000 | | | 227,238 |
| * | Freescale Semiconductor | | | | | |
| 8.875% 12/15/14 | | 140,000 | | | 114,450 |
| Sanmina-SCI 8.125% 3/1/16 | | 124,000 | | | 119,040 |
| * | SunGard Data Systems 10.25% 8/15/15 | | 104,000 | | | 107,770 |
| # | Unisys 144A 12.75% 10/15/14 | | 60,000 | | | 65,850 |
| | | | | | 763,123 |
| Telecommunications – 12.69% | | | | | |
| ‡=@ | Allegiance Telecom 11.75% 2/15/10 | | 10,000 | | | 0 |
| Cincinnati Bell | | | | | |
| 7.00% 2/15/15 | | 45,000 | | | 43,200 |
| 8.25% 10/15/17 | | 90,000 | | | 89,325 |
| * | Cricket Communications | | | | | |
| 9.375% 11/1/14 | | 160,000 | | | 156,000 |
| # | Digicel 144A | | | | | |
| *8.875% 1/15/15 | | 100,000 | | | 95,500 |
| 12.00% 4/1/14 | | 100,000 | | | 113,250 |
| # | DigitalGlobe 144A 10.50% 5/1/14 | | 50,000 | | | 54,250 |
| # | GCI 144A 8.625% 11/15/19 | | 120,000 | | | 120,600 |
| # | GeoEye 144A 9.625% 10/1/15 | | 55,000 | | | 57,063 |
| # | Global Crossing 144A 12.00% 9/15/15 | | 115,000 | | | 123,913 |
| Hughes Network Systems | | | | | |
| 9.50% 4/15/14 | | 110,000 | | | 112,475 |
| # | Intelsat Bermuda 144A | | | | | |
| 11.25% 2/4/17 | | 235,000 | | | 234,999 |
| Intelsat Jackson Holdings | | | | | |
| 11.25% 6/15/16 | | 190,000 | | | 203,300 |
| Level 3 Financing | | | | | |
| 9.25% 11/1/14 | | 55,000 | | | 49,225 |
| 12.25% 3/15/13 | | 55,000 | | | 57,613 |
| Lucent Technologies 6.45% 3/15/29 | | 141,000 | | | 111,390 |
| * | MetroPCS Wireless 9.25% 11/1/14 | | 118,000 | | | 119,475 |
| # | NII Capital 144A 10.00% 8/15/16 | | 110,000 | | | 116,600 |
| # | Nordic Telephone Holdings 144A | | | | | |
| 8.875% 5/1/16 | | 75,000 | | | 78,375 |
| *# | PAETEC Holding 144A 8.875% 6/30/17 | | 55,000 | | | 54,725 |
| Sprint Capital 8.75% 3/15/32 | | 255,000 | | | 221,849 |
| Sprint Nextel 6.00% 12/1/16 | | 105,000 | | | 90,825 |
| # | Telcordia Technologies 144A | | | | | |
| 10.00% 3/15/13 | | 70,000 | | | 59,325 |
| Telesat Canada | | | | | |
| 11.00% 11/1/15 | | 65,000 | | | 70,850 |
| 12.50% 11/1/17 | | 75,000 | | | 82,594 |
2009 Annual report · Delaware Pooled Trust
(continues) 93
Statements of net assets
Delaware Pooled® Trust — The High-Yield Bond Portfolio
| | Principal | | Value |
| | | Amount (U.S. $) | | (U.S. $) |
| Corporate Bonds (continued) | | | | | |
| Telecommunications (continued) | | | | | |
| # | Terremark Worldwide 144A | | | | | |
| 12.00% 6/15/17 | $ | 50,000 | | $ | 55,500 |
| # | Viasat 144A 8.875% 9/15/16 | | 60,000 | | | 61,200 |
| # | VimpelCom 144A 9.125% 4/30/18 | | 100,000 | | | 104,750 |
| Virgin Media Finance | | | | | |
| 9.50% 8/15/16 | | 100,000 | | | 106,250 |
| West 11.00% 10/15/16 | | 15,000 | | | 15,450 |
| # | Wind Acquisition Finance 144A | | | | | |
| 10.75% 12/1/15 | | 75,000 | | | 81,375 |
| 11.75% 7/15/17 | | 50,000 | | | 56,750 |
| | | | | | 2,997,996 |
| Utilities – 3.78% | | | | | |
| AES | | | | | |
| 7.75% 3/1/14 | | 24,000 | | | 24,240 |
| 8.00% 10/15/17 | | 85,000 | | | 85,850 |
| * | Edison Mission Energy | | | | | |
| 7.00% 5/15/17 | | 105,000 | | | 85,313 |
| Elwood Energy 8.159% 7/5/26 | | 70,495 | | | 63,093 |
| Energy Future Holdings | | | | | |
| 5.55% 11/15/14 | | 85,000 | | | 62,083 |
| 10.875% 11/1/17 | | 55,000 | | | 38,500 |
| Mirant Americas Generation | | | | | |
| 8.50% 10/1/21 | | 115,000 | | | 102,925 |
| w | Mirant Mid Atlantic Pass Through | | | | | |
| Trust Series A 8.625% 6/30/12 | | 50,381 | | | 51,578 |
| NRG Energy | | | | | |
| 7.375% 2/1/16 | | 120,000 | | | 119,549 |
| 7.375% 1/15/17 | | 20,000 | | | 19,850 |
| Orion Power Holdings | | | | | |
| 12.00% 5/1/10 | | 80,000 | | | 83,000 |
| · | Puget Sound Energy 6.974% 6/1/67 | | 85,000 | | | 74,602 |
| * | Texas Competitive Electric Holdings | | | | | |
| 10.25% 11/1/15 | | 115,000 | | | 82,225 |
| | | | | | 892,808 |
| Total Corporate Bonds | | | | | |
| (cost $20,884,246) | | | | | 22,366,106 |
| | | | | | |
| «Senior Secured Loans – 1.25% | | | | | |
| Chester Downs & Marina | | | | | |
| 12.375% 12/31/16 | | 58,000 | | | 57,928 |
| Dana Holdings Term Tranche B | | | | | |
| 9.00% 1/30/15 | | 121,007 | | | 105,982 |
| Energy Futures Holdings | | | | | |
| Term Tranche Loan B2 | | | | | |
| 6.579% 10/10/14 | | 90,768 | | | 70,506 |
| Univision Communications Term | | | | | |
| Tranche Loan B 5.049% 9/29/14 | | 75,000 | | | 60,344 |
| | | | | | |
| Total Senior Secured Loans | | | | | |
| (cost $259,937) | | | | | 294,760 |
| | Number of | | |
| | | Shares | | |
| Common Stock – 0.59% | | | | | |
| † | Alliance Imaging | | 4,213 | | | 22,919 |
| †∏= | Avado Brands | | 121 | | | 0 |
| Blackstone Group | | 2,000 | | | 26,839 |
| † | Century Communications | | 60,000 | | | 0 |
| *† | DIRECTV Group | | 800 | | | 21,040 |
| † | Flextronics International | | 3,700 | | | 23,976 |
| † | GeoEye | | 450 | | | 11,417 |
| † | Leap Wireless International | | 550 | | | 7,271 |
| † | MetroPCS Communications | | 1,250 | | | 7,788 |
| † | Mirant | | 21 | | | 294 |
| † | Mobile Mini | | 1,294 | | | 18,763 |
| †∏= | Port Townsend Holdings | | 40 | | | 0 |
| † | USGen | | 20,000 | | | 0 |
| Total Common Stock (cost $177,672) | | | | | 140,307 |
| | | | | | |
| Convertible Preferred Stock – 0.37% | | | | | |
| Crown Castle International 6.25% | | | | | |
| exercise price $36.88, | | | | | |
| expiration date 8/15/12 | | 1,600 | | | 86,800 |
| Total Convertible Preferred Stock | | | | | |
| (cost $68,886) | | | | | 86,800 |
| | | | | | |
| Preferred Stock – 0.00% | | | | | |
| = | Port Townsend | | 8 | | | 0 |
| Total Preferred Stock (cost $7,920) | | | | | 0 |
| | | | | | |
| Warrant – 0.00% | | | | | |
| †= | Port Townsend | | 8 | | | 0 |
| Total Warrant (cost $192) | | | | | 0 |
| | Principal | | | |
| | | Amount (U.S. $) | | | |
| ¹Discount Note – 1.29% | | | | | |
| Federal Home Loan Bank | | | | | |
| 0.02% 11/2/09 | $ | 305,001 | | | 305,000 |
| Total Discount Note (cost $305,000) | | | | | 305,000 |
| | | | | | |
| Total Value of Securities Before Securities | | | | | |
| Lending Collateral – 99.25% | | | | | |
| (cost $21,933,453) | | | | | 23,440,132 |
| | Number of | | |
| | | Shares | | |
| Securities Lending Collateral** – 6.61% | | | |
| Investment Companies | | | |
| Mellon GSL DBT II Collateral Fund | 1,016,168 | | 1,016,168 |
| BNY Mellon SL DBT II | | | |
| Liquidating Fund | 550,773 | | 544,604 |
| @† | Mellon GSL Reinvestment Trust II | 32,859 | | 3 |
| Total Securities Lending Collateral | | | |
| (cost $1,599,800) | | | 1,560,775 |
2009 Annual report · Delaware Pooled Trust
94
| | | | |
| Total Value of Securities – 105.86% | | | |
| | (cost $23,533,253) | $ | 25,000,907 | © |
| Obligation to Return Securities | | | |
| Lending Collateral** – (6.77%) | | (1,599,800 | ) |
| Receivables and Other Assets | | | |
| Net of Liabilities – 0.91% | | 215,812 | |
| Net Assets Applicable to 3,211,715 | | | |
| Shares Outstanding; Equivalent to | | | |
| $7.35 Per Share – 100.00% | $ | 23,616,919 | |
| | | | |
| Components of Net Assets at October 31, 2009: | | | |
| Shares of beneficial interest | | | |
| (unlimited authorization – no par) | $ | 25,879,489 | |
| Undistributed net investment income | | 1,756,679 | |
| Accumulated net realized loss on investments | | (5,486,903 | ) |
| Net unrealized appreciation of investments | | 1,467,654 | |
| Total net assets | $ | 23,616,919 | |
| Φ | Step coupon bond. Coupon increases periodically based on a predetermined schedule. Stated rate in effect at October 31, 2009. |
| ∏ | Restricted Security. These investments are in securities not registered under the Securities Act of 1933, as amended, and have certain restrictions on resale, which may limit their liquidity. At October 31, 2009, the aggregate amount of the restricted securities was $0.00, or 0.00% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At October 31,2009, the aggregate amount of Rule 144A securities was $8,346,063, which represented 35.34% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| · | Variable rate security. The rate shown is the rate as of October 31, 2009. |
| † | Non income producing security. |
| ‡ | Non income producing security. Security is currently in default. |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $791,879, which represented 3.35% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.�� |
| « | Senior Secured Loans generally pay interest at rates which are periodically predetermined by reference to a base lending rate plus a premium. These base lending rates are generally: (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate (LIBOR), and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale. |
| = | Security is being fair valued in accordance with the Portfolio’s fair valuation policy. At October 31, 2009, the aggregate amount of fair valued securities was $8,501, which represented 0.04% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| w | Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes. |
| * | Fully or partially on loan. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $1,583,329 of securities loaned. |
| ¹ | The rate shown is the effective yield at time of purchase. |
| W | Step coupon bond. Indicates security that has a zero coupon that remains in effect until a predetermined date at which time the stated interest rate becomes effective. |
Summary of Abbreviations:
PIK — Pay-in-kind
SPV — Special Purpose Vehicle
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 95
Statements of net assets
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
October 31, 2009
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Agency Asset-Backed Securities – 0.25% | | | | | | |
| Fannie Mae Grantor Trust | | | | | | |
| Series 2003-T4 2A5 | | | | | | |
| 5.407% 9/26/33 | USD | | 145,662 | | $ | 133,812 |
| Total Agency Asset-Backed | | | | | | |
| Securities (cost $144,484) | | | | | | 133,812 |
| | | | | | | |
| Agency Collateralized Mortgage Obligations – 3.15% | | | | | | |
| Fannie Mae Grantor Trust | | | | | | |
| Series 2001-T8 A2 | | | | | | |
| 9.50% 7/25/41 | | | 15,104 | | | 16,445 |
| Fannie Mae REMIC | | | | | | |
| Series 2002-90 A1 | | | | | | |
| 6.50% 6/25/42 | | | 24,194 | | | 26,251 |
| Series 2002-90 A2 | | | | | | |
| 6.50% 11/25/42 | | | 66,872 | | | 72,559 |
| Series 2003-122 AJ | | | | | | |
| 4.50% 2/25/28 | | | 96,326 | | | 99,172 |
| Fannie Mae Whole Loan | | | | | | |
| Series 2004-W11 1A2 | | | | | | |
| 6.50% 5/25/44 | | | 58,855 | | | 63,860 |
| Freddie Mac REMIC | | | | | | |
| Series 1730 Z | | | | | | |
| 7.00% 5/15/24 | | | 189,553 | | | 199,445 |
| Series 2326 ZQ | | | | | | |
| 6.50% 6/15/31 | | | 172,658 | | | 187,585 |
| Series 2662 MA | | | | | | |
| 4.50% 10/15/31 | | | 152,738 | | | 157,692 |
| Series 3022 MB | | | | | | |
| 5.00% 12/15/28 | | | 215,000 | | | 226,272 |
| Series 3123 HT | | | | | | |
| 5.00% 3/15/26 | | | 270,000 | | | 283,483 |
| Series 3131 MC | | | | | | |
| 5.50% 4/15/33 | | | 335,000 | | | 358,306 |
| Total Agency Collateralized | | | | | | |
| Mortgage Obligations | | | | | | |
| (cost $1,581,896) | | | | | | 1,691,070 |
| | | | |
| Agency Mortgage-Backed Securities – 14.84% | | | |
| Fannie Mae 6.50% 8/1/17 | | | 45,277 | | | 48,499 |
| · | Fannie Mae ARM | | | | | | |
| 3.416% 8/1/34 | | | 90,369 | | | 92,823 |
| 5.173% 3/1/38 | | | 350,154 | | | 367,440 |
| 5.383% 4/1/36 | | | 178,547 | | | 186,788 |
| Fannie Mae Relocation 30 yr | | | | | | |
| 5.00% 11/1/33 | | | 35,219 | | | 36,296 |
| Pool 763656 | | | | | | |
| 5.00% 1/1/34 | | | 32,557 | | | 33,554 |
| Pool 763742 | | | | | | |
| 5.00% 1/1/34 | | | 17,220 | | | 17,747 |
| 5.00% 11/1/34 | | | 70,727 | | | 72,892 |
| 5.00% 10/1/35 | | | 143,709 | | | 148,107 |
| 5.00% 1/1/36 | | | 242,495 | | | 249,916 |
| Fannie Mae S.F. 15 yr | | | | | | |
| 4.50% 1/1/20 | | | 37,603 | | | 39,700 |
| 5.00% 7/1/14 | | | 4,373 | | | 4,593 |
| 5.00% 12/1/16 | | | 6,383 | | | 6,818 |
| 5.00% 5/1/20 | | | 45,868 | | | 48,735 |
| 5.00% 7/1/20 | | | 16,606 | | | 17,644 |
| 5.00% 5/1/21 | | | 11,541 | | | 12,292 |
| 5.50% 5/1/20 | | | 1,790 | | | 1,914 |
| 5.50% 6/1/23 | | | 367,858 | | | 391,593 |
| 6.00% 8/1/22 | | | 205,485 | | | 220,574 |
| Fannie Mae S.F. 30 yr | | | | | | |
| 5.00% 3/1/34 | | | 28,595 | | | 29,760 |
| Pool 808130 | | | | | | |
| 5.00% 3/1/35 | | | 46,844 | | | 48,687 |
| Pool 814334 | | | | | | |
| 5.00% 3/1/35 | | | 26,266 | | | 27,316 |
| 5.00% 5/1/35 | | | 46,543 | | | 48,375 |
| 5.00% 6/1/35 | | | 73,070 | | | 75,945 |
| 5.00% 7/1/35 | | | 80,646 | | | 83,820 |
| 5.00% 12/1/37 | | | 78,425 | | | 81,426 |
| 5.00% 1/1/38 | | | 122,876 | | | 127,577 |
| 5.00% 2/1/38 | | | 60,233 | | | 62,534 |
| 6.50% 9/1/36 | | | 365,471 | | | 393,116 |
| 6.50% 2/1/37 | | | 167,129 | | | 179,770 |
| 6.50% 11/1/37 | | | 90,023 | | | 96,777 |
| 7.00% 12/1/33 | | | 31,916 | | | 35,329 |
| 7.00% 5/1/35 | | | 6,327 | | | 6,934 |
| 7.00% 6/1/35 | | | 11,564 | | | 12,673 |
| 7.00% 12/1/37 | | | 251,012 | | | 274,303 |
| 7.50% 6/1/31 | | | 3,786 | | | 4,288 |
| 7.50% 6/1/34 | | | 68,028 | | | 75,365 |
| Fannie Mae S.F. 30 yr TBA | | | | | | |
| 4.50% 11/1/39 | | | 2,055,000 | | | 2,080,045 |
| 6.50% 11/1/39 | | | 270,000 | | | 289,828 |
| · | Freddie Mac ARM | | | | | | |
| 4.48% 4/1/34 | | | 7,348 | | | 7,584 |
| Freddie Mac Relocation 30 yr | | | | | | |
| 5.00% 9/1/33 | | | 29,070 | | | 29,950 |
| Freddie Mac S.F. 30 yr | | | | | | |
| 7.00% 11/1/33 | | | 4,255 | | | 4,688 |
| Freddie Mac S.F. 30 yr TBA | | | | | | |
| 4.00% 11/1/39 | | | 755,000 | | | 743,911 |
| 5.00% 11/1/39 | | | 665,000 | | | 689,106 |
| GNMA I S.F. 30 yr | | | | | | |
| *7.00% 12/15/34 | | | 407,032 | | | 446,039 |
| 7.50% 1/15/30 | | | 1,521 | | | 1,728 |
| 7.50% 12/15/31 | | | 915 | | | 1,040 |
| 7.50% 2/15/32 | | | 863 | | | 980 |
| Total Agency Mortgage-Backed | | | | | | |
| Securities (cost $7,772,181) | | | | | | 7,956,819 |
2009 Annual report · Delaware Pooled Trust
96
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Commercial Mortgage-Backed Securities – 10.18% | | | | | | |
| # | American Tower Trust 144A | | | | | | |
| Series 2007-1A AFX | | | | | | |
| 5.42% 4/15/37 | USD | | 95,000 | | $ | 95,950 |
| Series 2007-1A D | | | | | | |
| 5.957% 4/15/37 | | | 55,000 | | | 55,000 |
| Bank of America Commercial | | | | | | |
| Mortgage Securities | | | | | | |
| ·Series 2005-1 A5 | | | | | | |
| 5.082% 11/10/42 | | | 55,000 | | | 55,303 |
| ·Series 2005-6 AM | | | | | | |
| 5.179% 9/10/47 | | | 95,000 | | | 82,761 |
| Series 2006-4 A4 | | | | | | |
| 5.634% 7/10/46 | | | 150,000 | | | 148,083 |
| ·Series 2007-3 A4 | | | | | | |
| 5.658% 6/10/49 | | | 80,000 | | | 67,132 |
| ·Series 2007-4 AM | | | | | | |
| 5.811% 2/10/51 | | | 105,000 | | | 81,781 |
| Bear Stearns Commercial | | | | | | |
| Mortgage Securities | | | | | | |
| Series 2005-PW10 AM | | | | | | |
| 5.449% 12/11/40 | | | 232,000 | | | 207,402 |
| Series 2005-PW10 A4 | | | | | | |
| 5.405% 12/11/40 | | | 245,000 | | | 243,741 |
| ·Series 2005-T20 A4A | | | | | | |
| 5.15% 10/12/42 | | | 105,000 | | | 106,243 |
| ·Series 2006-PW12 A4 | | | | | | |
| 5.719% 9/11/38 | | | 45,000 | | | 45,854 |
| Series 2006-PW14 A4 | | | | | | |
| 5.201% 12/11/38 | | | 150,000 | | | 142,486 |
| Series 2007-PW15 A4 | | | | | | |
| 5.331% 2/11/44 | | | 100,000 | | | 91,148 |
| ·Series 2007-PW16 A4 | | | | | | |
| 5.719% 6/11/40 | | | 105,000 | | | 99,952 |
| Series 2007-T28 A4 | | | | | | |
| 5.742% 9/11/42 | | | 180,000 | | | 181,219 |
| w | Commercial Mortgage Pass | | | | | | |
| Through Certificates | | | | | | |
| #Series 2001-J1A A2 | | | | | | |
| 144A 6.457% 2/16/34 | | | 154,907 | | | 160,193 |
| Series 2005-C6 A5A | | | | | | |
| 5.116% 6/10/44 | | | 160,000 | | | 158,560 |
| Series 2006-C7 A2 | | | | | | |
| 5.69% 6/10/46 | | | 160,000 | | | 163,759 |
| · | Credit Suisse Mortgage | | | | | | |
| Capital Certificates | | | | | | |
| Series 2006-C1 AAB | | | | | | |
| 5.548% 2/15/39 | | | 170,000 | | | 176,026 |
| # | Crown Castle Towers 144A | | | | | | |
| Series 2005-1A C | | | | | | |
| 5.074% 6/15/35 | | | 120,000 | | | 120,600 |
| Series 2006-1A B | | | | | | |
| 5.362% 11/15/36 | | | 100,000 | | | 102,000 |
| General Electric Capital | | | | | | |
| Commercial Mortgage | | | | | | |
| Series 2002-1A A3 | | | | | | |
| 6.269% 12/10/35 | | | 140,000 | | | 149,033 |
| Goldman Sachs Mortgage | | | | | | |
| Securities II | | | | | | |
| Series 2004-GG2 A6 | | | | | | |
| 5.396% 8/10/38 | | | 175,000 | | | 167,922 |
| Series 2005-GG4 A4A | | | | | | |
| 4.751% 7/10/39 | | | 140,000 | | | 138,191 |
| Series 2006-GG6 A4 | | | | | | |
| 5.553% 4/10/38 | | | 155,000 | | | 145,659 |
| @·#Series 2006-RR3 A1S 144A | | | | | | |
| 5.66% 7/18/56 | | | 560,000 | | | 151,200 |
| ·Series 2007-GG10 A4 | | | | | | |
| 5.805% 8/10/45 | | | 190,000 | | | 159,494 |
| Greenwich Capital | | | | | | |
| Commercial Funding | | | | | | |
| Series 2004-GG1 A7 | | | | | | |
| 5.317% 6/10/36 | | | 120,000 | | | 122,654 |
| JPMorgan Chase Commercial | | | | | | |
| Mortgage Securities | | | | | | |
| Series 2002-C1 A3 | | | | | | |
| 5.376% 7/12/37 | | | 115,000 | | | 119,090 |
| Series 2003-C1 A2 | | | | | | |
| 4.985% 1/12/37 | | | 114,000 | | | 117,262 |
| Series 2005-LDP4 A4 | | | | | | |
| 4.918% 10/15/42 | | | 110,000 | | | 109,217 |
| ·Series 2005-LDP5 A4 | | | | | | |
| 5.179% 12/15/44 | | | 205,000 | | | 205,844 |
| Series 2006-LDP9 A2 | | | | | | |
| 5.134% 5/15/47 | | | 100,000 | | | 95,894 |
| Lehman Brothers-UBS | | | | | | |
| Commercial Mortgage | | | | | | |
| Trust Series 2002-C1 A4 | | | | | | |
| 6.462% 3/15/31 | | | 20,000 | | | 21,335 |
| Morgan Stanley Capital I | | | | | | |
| #Series 1999-FNV1 G 144A | | | | | | |
| 6.12% 3/15/31 | | | 163,780 | | | 161,852 |
| ·Series 2007-T27 A4 | | | | | | |
| 5.65% 6/11/42 | | | 335,000 | | | 331,519 |
| Morgan Stanley Dean | | | | | | |
| Witter Capital I | | | | | | |
| ·#Series 2001-TOP1 E | | | | | | |
| 144A 7.366% 2/15/33 | | | 100,000 | | | 92,083 |
| Series 2003-TOP9 A2 | | | | | | |
| 4.74% 11/13/36 | | | 400,000 | | | 409,037 |
| # | Nationslink Funding | | | | | | |
| Series 1998-2 F 144A | | | | | | |
| 7.105% 8/20/30 | | | 35,593 | | | 36,883 |
| Wachovia Bank Commercial | | | | | | |
| Mortgage Trust | | | | | | |
| Series 2006-C28 A2 | | | | | | |
| 5.50% 10/15/48 | | | 135,000 | | | 137,453 |
| Total Commercial Mortgage-Backed | | | | | | |
| Securities (cost $5,587,727) | | | | | | 5,456,815 |
2009 Annual report · Delaware Pooled Trust
(continues) 97
Statements of net assets
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Convertible Bonds – 0.37% | | | | | | |
| Φ | Hologic 2.00% exercise | | | | | | |
| price $38.59, expiration | | | | | | |
| date 12/15/37 | USD | | 120,000 | | $ | 97,950 |
| # | Virgin Media 144A | | | | | | |
| 6.50% exercise price | | | | | | |
| $19.22, expiration | | | | | | |
| date 11/15/16 | | | 95,000 | | | 100,938 |
| Total Convertible Bonds | | | | | | |
| (cost $148,334) | | | | | | 198,888 |
| | | | | | | |
| Corporate Bonds – 50.38% | | | | | | |
| Banking – 7.62% | | | | | | |
| Bank of America | | | | | | |
| 5.125% 11/15/14 | | | 130,000 | | | 134,834 |
| 5.30% 3/15/17 | | | 250,000 | | | 244,576 |
| 5.75% 12/1/17 | | | 75,000 | | | 76,383 |
| Barclays Bank | | | | | | |
| 5.20% 7/10/14 | | | 180,000 | | | 192,138 |
| 6.75% 5/22/19 | | | 100,000 | | | 112,648 |
| #144A 6.05% 12/4/17 | | | 250,000 | | | 255,107 |
| BB&T 5.25% 11/1/19 | | | 152,000 | | | 148,365 |
| Capital One Financial | | | | | | |
| 7.375% 5/23/14 | | | 70,000 | | | 79,527 |
| @# | CoBank 144A | | | | | | |
| 7.875% 4/16/18 | | | 250,000 | | | 254,163 |
| # | Commonwealth Bank | | | | | | |
| of Australia 144A | | | | | | |
| 5.00% 10/15/19 | | | 85,000 | | | 85,547 |
| Credit Suisse/New York | | | | | | |
| 6.00% 2/15/18 | | | 105,000 | | | 110,832 |
| # | GMAC 144A | | | | | | |
| 6.875% 9/15/11 | | | 175,000 | | | 169,750 |
| JPMorgan Chase | | | | | | |
| 6.30% 4/23/19 | | | 25,000 | | | 27,487 |
| JPMorgan Chase Capital | | | | | | |
| XVIII 6.95% 8/17/36 | | | 90,000 | | | 88,263 |
| JPMorgan Chase Capital | | | | | | |
| XXII 6.45% 2/2/37 | | | 85,000 | | | 78,364 |
| JPMorgan Chase Capital | | | | | | |
| XXV 6.80% 10/1/37 | | | 325,000 | | | 320,537 |
| PNC Bank 6.875% 4/1/18 | | | 250,000 | | | 267,410 |
| PNC Funding | | | | | | |
| 5.25% 11/15/15 | | | 135,000 | | | 138,540 |
| ·# | Rabobank 144A | | | | | | |
| 11.00% 12/29/49 | | | 120,000 | | | 151,031 |
| Silicon Valley Bank | | | | | | |
| 5.70% 6/1/12 | | | 274,000 | | | 276,251 |
| · | USB Capital IX | | | | | | |
| 6.189% 4/15/49 | | | 165,000 | | | 128,288 |
| VTB Capital | | | | | | |
| 6.875% 5/29/18 | | | 125,000 | | | 125,469 |
| Wachovia | | | | | | |
| 5.25% 8/1/14 | | | 35,000 | | | 36,420 |
| 5.625% 10/15/16 | | | 165,000 | | | 169,538 |
| · | Wells Fargo Capital XIII | | | | | | |
| 7.70% 12/29/49 | | | 305,000 | | | 285,175 |
| Zions Bancorporation | | | | | | |
| 5.50% 11/16/15 | | | 115,000 | | | 89,924 |
| 7.75% 9/23/14 | | | 40,000 | | | 35,835 |
| | | | | | | 4,082,402 |
| Basic Industries – 3.61% | | | | | | |
| ArcelorMittal | | | | | | |
| 6.125% 6/1/18 | | | 115,000 | | | 113,772 |
| 9.85% 6/1/19 | | | 125,000 | | | 147,555 |
| Cytec Industries | | | | | | |
| 8.95% 7/1/17 | | | 35,000 | | | 41,029 |
| Dow Chemical | | | | | | |
| 8.55% 5/15/19 | | | 245,000 | | | 280,166 |
| # | Evraz Group 144A | | | | | | |
| 9.50% 4/24/18 | | | 242,000 | | | 239,580 |
| Freeport McMoRan Copper | | | | | | |
| & Gold 8.375% 4/1/17 | | | 90,000 | | | 96,884 |
| Lubrizol 8.875% 2/1/19 | | | 135,000 | | | 168,594 |
| * | Reliance Steel & Aluminum | | | | | | |
| 6.85% 11/15/36 | | | 82,000 | | | 73,146 |
| # | Severstal 144A | | | | | | |
| 9.75% 7/29/13 | | | 292,000 | | | 297,476 |
| Southern Copper | | | | | | |
| 7.50% 7/27/35 | | | 114,000 | | | 118,029 |
| Steel Dynamics | | | | | | |
| 6.75% 4/1/15 | | | 86,000 | | | 81,915 |
| # | Teck Resources 144A | | | | | | |
| 10.25% 5/15/16 | | | 40,000 | | | 46,300 |
| 10.75% 5/15/19 | | | 85,000 | | | 99,450 |
| Vale Overseas | | | | | | |
| 6.875% 11/21/36 | | | 129,000 | | | 130,109 |
| | | | | | | 1,934,005 |
| Brokerage – 3.11% | | | | | | |
| Citigroup | | | | | | |
| 6.375% 8/12/14 | | | 330,000 | | | 350,448 |
| 6.50% 8/19/13 | | | 175,000 | | | 187,749 |
| Goldman Sachs Group | | | | | | |
| 5.95% 1/18/18 | | | 105,000 | | | 110,815 |
| 6.25% 9/1/17 | | | 45,000 | | | 48,220 |
| Jefferies Group | | | | | | |
| 6.25% 1/15/36 | | | 10,000 | | | 7,853 |
| 6.45% 6/8/27 | | | 160,000 | | | 135,651 |
| LaBranche 11.00% 5/15/12 | | | 155,000 | | | 149,769 |
| Lazard Group | | | | | | |
| 6.85% 6/15/17 | | | 110,000 | | | 111,525 |
| 7.125% 5/15/15 | | | 14,000 | | | 14,389 |
| Morgan Stanley | | | | | | |
| 5.375% 10/15/15 | | | 150,000 | | | 155,786 |
| 6.00% 4/28/15 | | | 100,000 | | | 107,128 |
| 6.25% 8/28/17 | | | 275,000 | | | 288,846 |
| | | | | | | 1,668,179 |
2009 Annual report · Delaware Pooled Trust
98
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Corporate Bonds (continued) | | | | | | |
| Capital Goods – 1.93% | | | | | | |
| Allied Waste North America | | | | | | |
| 6.125% 2/15/14 | USD | | 30,000 | | $ | 30,791 |
| 6.875% 6/1/17 | | | 30,000 | | | 31,847 |
| 7.125% 5/15/16 | | | 170,000 | | | 180,861 |
| # | BAE Systems Holdings 144A | | | | | | |
| 4.95% 6/1/14 | | | 90,000 | | | 93,482 |
| # | Clean Harbors 144A | | | | | | |
| 7.625% 8/15/16 | | | 130,000 | | | 133,900 |
| # | Crown Americas 144A | | | | | | |
| 7.625% 5/15/17 | | | 45,000 | | | 46,350 |
| Graham Packaging | | | | | | |
| 9.875% 10/15/14 | | | 140,000 | | | 143,500 |
| # | Owens Brockway Glass | | | | | | |
| Container 144A | | | | | | |
| 7.375% 5/15/16 | | | 65,000 | | | 65,975 |
| Tyco International Finance | | | | | | |
| 8.50% 1/15/19 | | | 155,000 | | | 189,363 |
| USG | | | | | | |
| 6.30% 11/15/16 | | | 105,000 | | | 90,825 |
| #144A 9.75% 8/1/14 | | | 25,000 | | | 26,375 |
| | | | | | | 1,033,269 |
| Communications – 10.36% | | | | | | |
| America Movil | | | | | | |
| 5.625% 11/15/17 | | | 36,000 | | | 37,264 |
| # | American Tower 144A | | | | | | |
| 4.625% 4/1/15 | | | 85,000 | | | 86,111 |
| AT&T 6.50% 9/1/37 | | | 70,000 | | | 74,888 |
| * | AT&T Wireless | | | | | | |
| 8.125% 5/1/12 | | | 151,000 | | | 172,636 |
| # | Charter Communications | | | | | | |
| Operating 144A | | | | | | |
| 12.875% 9/15/14 | | | 156,000 | | | 173,160 |
| Cincinnati Bell | | | | | | |
| 7.00% 2/15/15 | | | 65,000 | | | 62,400 |
| Citizens Utilities | | | | | | |
| 7.125% 3/15/19 | | | 160,000 | | | 151,200 |
| * | Comcast 4.95% 6/15/16 | | | 105,000 | | | 107,751 |
| # | Cox Communications 144A | | | | | | |
| 5.875% 12/1/16 | | | 65,000 | | | 67,807 |
| 6.95% 6/1/38 | | | 30,000 | | | 31,519 |
| 8.375% 3/1/39 | | | 105,000 | | | 126,266 |
| * | Cricket Communications | | | | | | |
| 9.375% 11/1/14 | | | 138,000 | | | 134,550 |
| Crown Castle International | | | | | | |
| 9.00% 1/15/15 | | | 140,000 | | | 148,400 |
| # | CSC Holdings 144A | | | | | | |
| 8.50% 6/15/15 | | | 150,000 | | | 159,188 |
| Deutsche Telekom | | | | | | |
| International Finance | | | | | | |
| 5.25% 7/22/13 | | | 100,000 | | | 107,074 |
| DirecTV Holdings | | | | | | |
| 7.625% 5/15/16 | | | 165,000 | | | 179,257 |
| # | DISH DBS 144A | | | | | | |
| 7.875% 9/1/19 | | | 50,000 | | | 51,438 |
| EchoStar DBS | | | | | | |
| 7.125% 2/1/16 | | | 95,000 | | | 95,475 |
| Inmarsat Finance II | | | | | | |
| 10.375% 11/15/12 | | | 135,000 | | | 140,063 |
| # | Intelsat Bermuda 144A | | | | | | |
| 11.25% 2/4/17 | | | 185,000 | | | 185,000 |
| Intelsat Jackson Holdings | | | | | | |
| 11.25% 6/15/16 | | | 110,000 | | | 117,700 |
| # | Interpublic Group 144A | | | | | | |
| 10.00% 7/15/17 | | | 50,000 | | | 54,000 |
| Lamar Media Group | | | | | | |
| 6.625% 8/15/15 | | | 138,000 | | | 131,100 |
| Level 3 Financing | | | | | | |
| 9.25% 11/1/14 | | | 65,000 | | | 58,175 |
| MetroPCS Wireless | | | | | | |
| 9.25% 11/1/14 | | | 125,000 | | | 126,563 |
| #144A 9.25% 11/1/14 | | | 10,000 | | | 10,125 |
| # | Nielsen Finance 144A | | | | | | |
| 11.50% 5/1/16 | | | 15,000 | | | 16,013 |
| *11.625% 2/1/14 | | | 68,000 | | | 72,930 |
| # | Nordic Telephone Holdings | | | | | | |
| 144A 8.875% 5/1/16 | | | 100,000 | | | 104,500 |
| *# | PAETEC Holding 144A | | | | | | |
| 8.875% 6/30/17 | | | 75,000 | | | 74,625 |
| # | Qwest 144A | | | | | | |
| 8.375% 5/1/16 | | | 50,000 | | | 51,875 |
| Shaw Communications | | | | | | |
| 5.65% 10/1/19 | CAD | | 33,000 | | | 31,113 |
| Sprint Nextel | | | | | | |
| 6.00% 12/1/16 | USD | | 230,000 | | | 198,950 |
| Telecom Italia Capital | | | | | | |
| 5.25% 10/1/15 | | | 325,000 | | | 337,269 |
| 7.175% 6/18/19 | | | 105,000 | | | 116,611 |
| Telesat Canada | | | | | | |
| 11.00% 11/1/15 | | | 89,000 | | | 97,010 |
| Time Warner Cable | | | | | | |
| 6.75% 7/1/18 | | | 75,000 | | | 82,702 |
| # | VimpelCom 144A | | | | | | |
| 9.125% 4/30/18 | | | 155,000 | | | 162,363 |
| Virgin Media Finance | | | | | | |
| 8.75% 4/15/14 | | | 85,000 | | | 87,125 |
| # | Vivendi 144A | | | | | | |
| 5.75% 4/4/13 | | | 190,000 | | | 202,675 |
| 6.625% 4/4/18 | | | 75,000 | | | 81,318 |
| Vodafone Group | | | | | | |
| 5.00% 9/15/15 | | | 40,000 | | | 42,362 |
| 5.375% 1/30/15 | | | 290,000 | | | 311,579 |
| 5.45% 6/10/19 | | | 95,000 | | | 99,798 |
| # | Wind Acquisition Finance | | | | | | |
| 144A 11.75% 7/15/17 | | | 175,000 | | | 198,625 |
| Windstream 8.125% 8/1/13 | | | 140,000 | | | 145,950 |
| WPP Finance | | | | | | |
| 8.00% 9/15/14 | | | 225,000 | | | 249,871 |
| | | | | | | 5,554,374 |
2009 Annual report · Delaware Pooled Trust
(continues) 99
Statements of net assets
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Corporate Bonds (continued) | | | | | | |
| Consumer Cyclical – 4.54% | | | | | | |
| Burlington Coat | | | | | | |
| Factory Warehouse | | | | | | |
| 11.125% 4/15/14 | USD | | 130,000 | | $ | 134,875 |
| CVS Caremark | | | | | | |
| 6.125% 9/15/39 | | | 105,000 | | | 106,436 |
| #w | CVS Pass Through Trust | | | | | | |
| 144A 8.353% 7/10/31 | | | 154,372 | | | 175,765 |
| Darden Restaurants | | | | | | |
| 6.80% 10/15/37 | | | 170,000 | | | 175,964 |
| Ford Motor Credit | | | | | | |
| 7.25% 10/25/11 | | | 135,000 | | | 132,467 |
| 7.50% 8/1/12 | | | 100,000 | | | 97,445 |
| Goodyear Tire & Rubber | | | | | | |
| 10.50% 5/15/16 | | | 140,000 | | | 152,250 |
| Levi Strauss 9.75% 1/15/15 | | | 100,000 | | | 105,000 |
| Macy´s Retail Holdings | | | | | | |
| 6.65% 7/15/24 | | | 170,000 | | | 144,925 |
| 8.875% 7/15/15 | | | 135,000 | | | 143,438 |
| # | MGM Mirage 144A | | | | | | |
| 10.375% 5/15/14 | | | 25,000 | | | 26,750 |
| 11.125% 11/15/17 | | | 35,000 | | | 38,675 |
| 13.00% 11/15/13 | | | 40,000 | | | 45,600 |
| Nordstrom | | | | | | |
| 6.25% 1/15/18 | | | 85,000 | | | 89,928 |
| 6.75% 6/1/14 | | | 95,000 | | | 105,967 |
| OSI Restaurant Partners | | | | | | |
| 10.00% 6/15/15 | | | 155,000 | | | 131,750 |
| # | Pinnacle Entertainment 144A | | | | | | |
| 8.625% 8/1/17 | | | 75,000 | | | 75,000 |
| Ryland Group | | | | | | |
| 8.40% 5/15/17 | | | 80,000 | | | 85,600 |
| Sally Holdings | | | | | | |
| 10.50% 11/15/16 | | | 70,000 | | | 74,550 |
| Target | | | | | | |
| 5.125% 1/15/13 | | | 125,000 | | | 134,695 |
| 7.00% 1/15/38 | | | 100,000 | | | 117,097 |
| # | Volvo Treasury 144A | | | | | | |
| 5.95% 10/1/15 | | | 140,000 | | | 142,486 |
| | | | | | | 2,436,663 |
| Consumer Non-Cyclical – 5.14% | | | | | | |
| # | Anheuser-Busch InBev | | | | | | |
| Worldwide 144A | | | | | | |
| 5.375% 11/15/14 | | | 70,000 | | | 74,509 |
| 5.375% 1/15/20 | | | 155,000 | | | 157,882 |
| 7.20% 1/15/14 | | | 50,000 | | | 56,379 |
| ARMARK 8.50% 2/1/15 | | | 123,000 | | | 124,845 |
| Bausch & Lomb | | | | | | |
| 9.875% 11/1/15 | | | 70,000 | | | 72,800 |
| Beckman Coulter | | | | | | |
| 6.00% 6/1/15 | | | 115,000 | | | 126,871 |
| 7.00% 6/1/19 | | | 35,000 | | | 40,230 |
| # | Bio-Rad Laboratories 144A | | | | | | |
| 8.00% 9/15/16 | | | 30,000 | | | 30,975 |
| # | CareFusion 144A | | | | | | |
| 6.375% 8/1/19 | | | 155,000 | | | 167,471 |
| Community Health Systems | | | | | | |
| 8.875% 7/15/15 | | | 195,000 | | | 201,338 |
| HCA | | | | | | |
| 9.25% 11/15/16 | | | 165,000 | | | 172,838 |
| PIK 9.625% 11/15/16 | | | 85,000 | | | 90,419 |
| Hospira 6.40% 5/15/15 | | | 230,000 | | | 255,892 |
| Inverness Medical | | | | | | |
| Innovations | | | | | | |
| 9.00% 5/15/16 | | | 70,000 | | | 71,225 |
| Iron Mountain | | | | | | |
| 8.00% 6/15/20 | | | 90,000 | | | 92,025 |
| 8.75% 7/15/18 | | | 50,000 | | | 52,375 |
| * | Jarden 7.50% 5/1/17 | | | 95,000 | | | 94,050 |
| # | JBS USA Finance 144A | | | | | | |
| 11.625% 5/1/14 | | | 12,000 | | | 13,350 |
| Medco Health Solutions | | | | | | |
| 7.125% 3/15/18 | | | 210,000 | | | 238,109 |
| Quest Diagnostics | | | | | | |
| 5.45% 11/1/15 | | | 226,000 | | | 239,154 |
| 6.40% 7/1/17 | | | 60,000 | | | 65,809 |
| Select Medical | | | | | | |
| 7.625% 2/1/15 | | | 55,000 | | | 52,113 |
| Supervalu | | | | | | |
| 7.50% 11/15/14 | | | 95,000 | | | 95,238 |
| 8.00% 5/1/16 | | | 30,000 | | | 30,675 |
| Tenet Healthcare | | | | | | |
| 7.375% 2/1/13 | | | 140,000 | | | 137,200 |
| | | | | | | 2,753,772 |
| Electric – 4.12% | | | | | | |
| AES 8.00% 6/1/20 | | | 125,000 | | | 125,625 |
| # | Calpine Construction | | | | | | |
| Finance 144A | | | | | | |
| 8.00% 6/1/16 | | | 140,000 | | | 142,800 |
| # | Centrais Eletricas Brasileiras | | | | | | |
| 144A 6.875% 7/30/19 | | | 100,000 | | | 105,250 |
| Duke Energy | | | | | | |
| 5.05% 9/15/19 | | | 80,000 | | | 80,819 |
| # | Enel Finance International | | | | | | |
| 144A 5.125% 10/7/19 | | | 310,000 | | | 316,469 |
| Energy Future Holdings | | | | | | |
| 10.875% 11/1/17 | | | 50,000 | | | 35,000 |
| Illinois Power | | | | | | |
| 9.75% 11/15/18 | | | 310,000 | | | 388,479 |
| Indiana Michigan Power | | | | | | |
| 7.00% 3/15/19 | | | 90,000 | | | 101,761 |
| IPALCO Enterprises | | | | | | |
| 8.625% 11/14/11 | | | 30,000 | | | 30,975 |
| MidAmerican Funding | | | | | | |
| 6.75% 3/1/11 | | | 138,000 | | | 145,575 |
| w | Mirant Mid Atlantic Pass | | | | | | |
| Through Trust Series A | | | | | | |
| 8.625% 6/30/12 | | | 176,507 | | | 180,699 |
2009 Annual report · Delaware Pooled Trust
100
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Corporate Bonds (continued) | | | | | | |
| Electric (continued) | | | | | | |
| NRG Energy | | | | | | |
| 7.25% 2/1/14 | USD | | 40,000 | | $ | 39,800 |
| 7.375% 2/1/16 | | | 215,000 | | | 214,194 |
| Pennsylvania Electric | | | | | | |
| 5.20% 4/1/20 | | | 110,000 | | | 110,724 |
| @# | Power Receivables Finance | | | | | | |
| 144A 6.29% 1/1/12 | | | 39,446 | | | 40,247 |
| PPL Electric Utilities | | | | | | |
| 7.125% 11/30/13 | | | 95,000 | | | 108,878 |
| * | Texas Competitive | | | | | | |
| Electric Holdings | | | | | | |
| 10.25% 11/1/15 | | | 56,000 | | | 40,040 |
| | | | | | | 2,207,335 |
| Energy – 4.35% | | | | | | |
| Chesapeake Energy | | | | | | |
| 7.25% 12/15/18 | | | 71,000 | | | 69,048 |
| 9.50% 2/15/15 | | | 130,000 | | | 141,375 |
| Dynergy Holdings | | | | | | |
| 7.75% 6/1/19 | | | 40,000 | | | 33,900 |
| El Paso 7.00% 6/15/17 | | | 115,000 | | | 115,616 |
| Enbridge Energy Partners | | | | | | |
| 9.875% 3/1/19 | | | 135,000 | | | 170,627 |
| Energy Transfer Partners | | | | | | |
| 9.70% 3/15/19 | | | 100,000 | | | 124,021 |
| Massey Energy | | | | | | |
| 6.875% 12/15/13 | | | 143,000 | | | 141,928 |
| # | Midcontinent Express | | | | | | |
| Pipeline 144A | | | | | | |
| 6.70% 9/15/19 | | | 90,000 | | | 91,189 |
| Nexen 7.50% 7/30/39 | | | 135,000 | | | 149,561 |
| Noble Energy 8.25% 3/1/19 | | | 115,000 | | | 138,143 |
| OPTI Canada | | | | | | |
| 7.875% 12/15/14 | | | 151,000 | | | 118,535 |
| Petrobras International Finance | | | | | | |
| 5.75% 1/20/20 | | | 100,000 | | | 100,200 |
| 6.875% 1/20/40 | | | 35,000 | | | 35,140 |
| PetroHawk Energy | | | | | | |
| 7.875% 6/1/15 | | | 10,000 | | | 10,150 |
| 9.125% 7/15/13 | | | 35,000 | | | 36,400 |
| #144A 10.50% 8/1/14 | | | 91,000 | | | 99,645 |
| Plains All American Pipeline | | | | | | |
| 5.75% 1/15/20 | | | 210,000 | | | 216,284 |
| Pride International | | | | | | |
| 8.50% 6/15/19 | | | 65,000 | | | 72,963 |
| Range Resources | | | | | | |
| 8.00% 5/15/19 | | | 85,000 | | | 88,613 |
| Sempra Energy | | | | | | |
| 6.00% 10/15/39 | | | 135,000 | | | 135,725 |
| · | TransCanada Pipelines | | | | | | |
| 6.35% 5/15/67 | | | 110,000 | | | 102,537 |
| Weatherford International | | | | | | |
| 4.95% 10/15/13 | | | 85,000 | | | 89,316 |
| 5.95% 6/15/12 | | | 5,000 | | | 5,381 |
| 9.625% 3/1/19 | | | 35,000 | | | 43,402 |
| | | | | | | 2,329,699 |
| Finance Companies – 2.05% | | | | | | |
| Capital One Bank | | | | | | |
| 8.80% 7/15/19 | | | 255,000 | | | 302,539 |
| General Electric Capital | | | | | | |
| 6.00% 8/7/19 | | | 465,000 | | | 489,661 |
| ·# | ILFC E-Capital Trust II 144A | | | | | | |
| 6.25% 12/21/65 | | | 130,000 | | | 62,400 |
| International Lease Finance | | | | | | |
| 5.35% 3/1/12 | | | 99,000 | | | 81,210 |
| 5.875% 5/1/13 | | | 103,000 | | | 78,783 |
| 6.625% 11/15/13 | | | 110,000 | | | 84,948 |
| | | | | | | 1,099,541 |
| Insurance – 0.84% | | | | | | |
| ‡@#w | Twin Reefs Pass | | | | | | |
| Through Trust 144A | | | | | | |
| 1.386% 12/31/49 | | | 300,000 | | | 975 |
| UnitedHealth Group | | | | | | |
| 5.50% 11/15/12 | | | 142,000 | | | 150,907 |
| 5.80% 3/15/36 | | | 43,000 | | | 40,432 |
| 6.00% 2/15/18 | | | 70,000 | | | 73,554 |
| WellPoint | | | | | | |
| 5.00% 1/15/11 | | | 56,000 | | | 58,040 |
| 6.00% 2/15/14 | | | 50,000 | | | 54,171 |
| 7.00% 2/15/19 | | | 65,000 | | | 73,700 |
| | | | | | | 451,779 |
| Natural Gas – 0.84% | | | | | | |
| Enterprise Products | | | | | | |
| Operating | | | | | | |
| ·8.375% 8/1/66 | | | 95,000 | | | 93,218 |
| 9.75% 1/31/14 | | | 120,000 | | | 144,901 |
| Kinder Morgan | | | | | | |
| Energy Partners | | | | | | |
| 6.85% 2/15/20 | | | 80,000 | | | 88,751 |
| 9.00% 2/1/19 | | | 100,000 | | | 122,114 |
| | | | | | | 448,984 |
| Real Estate – 0.88% | | | | | | |
| Developers Diversified | | | | | | |
| Realty 9.625% 3/15/16 | | | 105,000 | | | 106,706 |
| ProLogis 7.375% 10/30/19 | | | 135,000 | | | 135,661 |
| Regency Centers | | | | | | |
| 5.875% 6/15/17 | | | 93,000 | | | 87,734 |
| ·# | USB Realty 144A | | | | | | |
| 6.091% 12/22/49 | | | 200,000 | | | 140,600 |
| | | | | | | 470,701 |
| Technology – 0.76% | | | | | | |
| First Data 9.875% 9/24/15 | | | 220,000 | | | 204,050 |
| Freescale Semiconductor | | | | | | |
| 8.875% 12/15/14 | | | 180,000 | | | 147,150 |
| Xerox 8.25% 5/15/14 | | | 50,000 | | | 57,664 |
| | | | | | | 408,864 |
2009 Annual report · Delaware Pooled Trust
(continues) 101
Statements of net assets
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Corporate Bonds (continued) | | | | | | |
| Transportation – 0.23% | | | | | | |
| CSX | | | | | | |
| 5.75% 3/15/13 | USD | | 55,000 | | $ | 58,944 |
| 6.25% 3/15/18 | | | 60,000 | | | 65,521 |
| | | | | | | 124,465 |
| Total Corporate Bonds | | | | | | |
| (cost $25,620,492) | | | | | | 27,004,032 |
| | | | | | | |
| Foreign Agencies – 1.59%D | | | | | | |
| Germany – 0.55% | | | | | | |
| KFW | | | | | | |
| 4.875% 6/17/19 | | | 145,000 | | | 157,859 |
| 6.00% 2/14/12 | RUB | | 1,770,000 | | | 59,365 |
| 10.00% 5/15/12 | BRL | | 140,000 | | | 79,614 |
| | | | | | | 296,838 |
| Netherlands – 0.22% | | | | | | |
| # | Majapahit Holding 144A | | | | | | |
| 8.00% 8/7/19 | USD | | 112,000 | | | 114,800 |
| | | | | | | 114,800 |
| Republic of Korea – 0.82% | | | | | | |
| Export-Import Bank of | | | | | | |
| Korea 5.875% 1/14/15 | | | 320,000 | | | 338,046 |
| Korea Development Bank | | | | | | |
| 5.30% 1/17/13 | | | 100,000 | | | 103,747 |
| | | | | | | 441,793 |
| Total Foreign Agencies | | | | | | |
| (cost $808,794) | | | | | | 853,431 |
| | | | | | | |
| Municipal Bonds – 0.70% | | | | | | |
| California State | | | | | | |
| 7.30% 10/1/39 | | | 110,000 | | | 111,565 |
| 7.55% 4/1/39 | | | 250,000 | | | 262,193 |
| Total Municipal Bonds | | | | | | |
| (cost $366,813) | | | | | | 373,758 |
| | | | | | | |
| Non-Agency Asset-Backed Securities – 6.60% | | | | | | |
| ·# | AH Mortgage Advance Trust | | | | | | |
| Series 2009-ADV3 A1 | | | | | | |
| 144A 2.194% 10/6/21 | | | 95,000 | | | 95,000 |
| · | Bank of America | | | | | | |
| Credit Card Trust | | | | | | |
| Series 2008-A5 A5 | | | | | | |
| 1.445% 12/16/13 | | | 120,000 | | | 120,995 |
| Capital Auto Receivables | | | | | | |
| Asset Trust | | | | | | |
| Series 2007-3 A3A | | | | | | |
| 5.02% 9/15/11 | | | 83,306 | | | 84,768 |
| Capital One Multi-Asset | | | | | | |
| Execution Trust | | | | | | |
| Series 2007-A7 A7 | | | | | | |
| 5.75% 7/15/20 | | | 150,000 | | | 165,329 |
| Caterpillar Financial Asset Trust | | | | | | |
| Series 2007-A A3A | | | | | | |
| 5.34% 6/25/12 | | | 34,124 | | | 34,755 |
| Series 2008-A A3 | | | | | | |
| 4.94% 4/25/14 | | | 130,000 | | | 132,804 |
| Chase Issuance Trust | | | | | | |
| Series 2005-A7 A7 | | | | | | |
| 4.55% 3/15/13 | | | 115,000 | | | 119,925 |
| Citibank Credit Card | | | | | | |
| Issuance Trust | | | | | | |
| Series 2007-A3 A3 | | | | | | |
| 6.15% 6/15/39 | | | 150,000 | | | 172,174 |
| ·Series 2009-A1 A1 | | | | | | |
| 1.995% 3/17/14 | | | 125,000 | | | 127,974 |
| Citicorp Residential | | | | | | |
| Mortgage Securities | | | | | | |
| Series 2006-3 A5 | | | | | | |
| 5.948% 11/25/36 | | | 300,000 | | | 190,269 |
| CNH Equipment Trust | | | | | | |
| ·Series 2007-A A4 | | | | | | |
| 0.285% 9/17/12 | | | 53,523 | | | 53,174 |
| Series 2008-A A3 | | | | | | |
| 4.12% 5/15/12 | | | 82,121 | | | 83,220 |
| Series 2008-A A4A | | | | | | |
| 4.93% 8/15/14 | | | 145,000 | | | 150,518 |
| Series 2008-B A3A | | | | | | |
| 4.78% 7/16/12 | | | 50,000 | | | 50,985 |
| Daimler Chrysler Auto Trust | | | | | | |
| Series 2008-B A3A | | | | | | |
| 4.71% 9/10/12 | | | 100,000 | | | 103,183 |
| Discover Card Master Trust | | | | | | |
| Series 2007-A1 A1 | | | | | | |
| 5.65% 3/16/20 | | | 150,000 | | | 164,292 |
| Series 2008-A4 A4 | | | | | | |
| 5.65% 12/15/15 | | | 100,000 | | | 109,823 |
| # | Dunkin Securitization | | | | | | |
| Series 2006-1 A2 144A | | | | | | |
| 5.779% 6/20/31 | | | 150,000 | | | 139,876 |
| · | Ford Credit Floorplan | | | | | | |
| Master Owner Trust | | | | | | |
| Series 2009-2 A | | | | | | |
| 1.794% 9/15/14 | | | 100,000 | | | 100,179 |
| General Electric Capital | | | | | | |
| Credit Card | | | | | | |
| Master Note Trust | | | | | | |
| Series 2009-3 A | | | | | | |
| 2.54% 9/15/14 | | | 100,000 | | | 100,171 |
| ·# | Golden Credit Card Trust | | | | | | |
| Series 2008-3 A 144A | | | | | | |
| 1.245% 7/15/17 | | | 150,000 | | | 147,475 |
| # | Harley-Davidson Motorcycle | | | | | | |
| Trust Series 2006-1 A2 | | | | | | |
| 144A 5.04% 10/15/12 | | | 56,442 | | | 58,296 |
2009 Annual report · Delaware Pooled Trust
102
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Non-Agency Asset-Backed Securities (continued) | | | | | | |
| Hyundai Auto Receivables Trust | | | | | | |
| Series 2007-A A3A | | | | | | |
| 5.04% 1/17/12 | USD | | 48,711 | | $ | 49,741 |
| Series 2008-A A3 | | | | | | |
| 4.93% 12/17/12 | | | 80,000 | | | 83,771 |
| John Deere Owner Trust | | | | | | |
| Series 2008-A A3 | | | | | | |
| 4.18% 6/15/12 | | | 100,000 | | | 101,278 |
| · | MBNA Credit Card | | | | | | |
| Master Note Trust | | | | | | |
| Series 2005-A4 A4 | | | | | | |
| 0.285% 11/15/12 | | | 140,000 | | | 139,527 |
| · | Merrill Auto Trust | | | | | | |
| Securitization | | | | | | |
| Series 2007-1 A4 | | | | | | |
| 0.305% 12/15/13 | | | 55,000 | | | 54,252 |
| Mid-State Trust | | | | | | |
| Series 11 A1 | | | | | | |
| 4.864% 7/15/38 | | | 15,285 | | | 13,884 |
| Series 2004-1 A | | | | | | |
| 6.005% 8/15/37 | | | 15,466 | | | 14,831 |
| Series 2005-1 A | | | | | | |
| 5.745% 1/15/40 | | | 173,441 | | | 166,657 |
| #Series 2006-1 A 144A | | | | | | |
| 5.787% 10/15/40 | | | 352,322 | | | 357,502 |
| ∏ | Structured Asset Securities | | | | | | |
| Series 2001-SB1 A2 | | | | | | |
| 3.375% 8/25/31 | | | 63,969 | | | 51,557 |
| Total Non-Agency Asset-Backed | | | | | | |
| Securities (cost $3,496,679) | | | | | | 3,538,185 |
| | | | | | | |
| Non-Agency Collateralized Mortgage Obligations – 3.42% | | | | | | |
| @ | American Home Mortgage | | | | | | |
| Investment Trust | | | | | | |
| Series 2005-2 5A1 | | | | | | |
| 5.064% 9/25/35 | | | 23,268 | | | 18,739 |
| Bank of America Alternative | | | | | | |
| Loan Trust | | | | | | |
| Series 2004-10 1CB1 | | | | | | |
| 6.00% 11/25/34 | | | 21,212 | | | 17,228 |
| Series 2005-5 2CB1 | | | | | | |
| 6.00% 6/25/35 | | | 2,691 | | | 1,809 |
| Bank of America Funding | | | | | | |
| Securities Series 2005-8 | | | | | | |
| 1A1 5.50% 1/25/36 | | | 116,977 | | | 107,912 |
| Citicorp Mortgage Securities | | | | | | |
| Series 2006-4 3A1 | | | | | | |
| 5.50% 8/25/21 | | | 10,157 | | | 9,780 |
| Countrywide Alternative | | | | | | |
| Loan Trust | | | | | | |
| Series 2004-28CB 6A1 | | | | | | |
| 6.00% 1/25/35 | | | 11,373 | | | 9,010 |
| w | Countrywide Home Loan | | | | | | |
| Mortgage Pass | | | | | | |
| Through Trust | | | | | | |
| @Series 2006-17 A5 | | | | | | |
| 6.00% 12/25/36 | | | 10,260 | | | 9,028 |
| ·Series 2006-HYB1 3A1 | | | | | | |
| 5.20% 3/20/36 | | | 157,690 | | | 103,752 |
| First Horizon Asset Securities | | | | | | |
| Series 2006-3 1A11 | | | | | | |
| 6.25% 11/25/36 | | | 293,471 | | | 283,726 |
| ·Series 2007-AR3 2A2 | | | | | | |
| 6.298% 11/25/37 | | | 20,763 | | | 14,060 |
| # | GSMPS Mortgage | | | | | | |
| Loan Trust 144A | | | | | | |
| Series 1999-2 A | | | | | | |
| 8.00% 9/19/27 | | | 48,652 | | | 49,819 |
| Lehman Mortgage Trust | | | | | | |
| Series 2005-2 2A3 | | | | | | |
| 5.50% 12/25/35 | | | 210,309 | | | 195,742 |
| # | MASTR Reperforming Loan | | | | | | |
| Trust Series 2005-1 1A5 | | | | | | |
| 144A 8.00% 8/25/34 | | | 107,027 | | | 100,873 |
| # | MASTR Specialized Loan | | | | | | |
| Trust Series 2005-2 A2 | | | | | | |
| 144A 5.006% 7/25/35 | | | 114,511 | | | 94,563 |
| · | MLCC Mortgage Investors | | | | | | |
| Series 2004-HB1 A1 | | | | | | |
| 0.604% 4/25/29 | | | 612,579 | | | 375,491 |
| Structured ARM Loan Trust | | | | | | |
| Series 2004-18 5A | | | | | | |
| 5.50% 12/25/34 | | | 14,356 | | | 11,016 |
| ·w | Washington Mutual | | | | | | |
| Mortgage Pass | | | | | | |
| Through Certificates | | | | | | |
| Series 2006-AR10 1A1 | | | | | | |
| 5.922% 9/25/36 | | | 23,160 | | | 17,636 |
| Wells Fargo Mortgage | | | | | | |
| Backed Securities Trust | | | | | | |
| ·Series 2005-AR16 2A1 | | | | | | |
| 4.25% 10/25/35 | | | 8,458 | | | 7,399 |
| Series 2006-1 A3 | | | | | | |
| 5.00% 3/25/21 | | | 15,641 | | | 14,443 |
| Series 2006-4 1A8 | | | | | | |
| 5.75% 4/25/36 | | | 103,390 | | | 94,621 |
| Series 2006-4 2A3 | | | | | | |
| 5.75% 4/25/36 | | | 232,723 | | | 84,289 |
| ·Series 2006-AR10 5A1 | | | | | | |
| 5.591% 7/25/36 | | | 15,417 | | | 11,850 |
| ·Series 2006-AR18 2A2 | | | | | | |
| 5.72% 11/25/36 | | | 325,789 | | | 85,468 |
| Series 2007-8 2A6 | | | | | | |
| 6.00% 7/25/37 | | | 160,000 | | | 114,237 |
| Total Non-Agency Collateralized | | | | | | |
| Mortgage Obligations | | | | | | |
| (cost $2,261,228) | | | | | | 1,832,491 |
2009 Annual report · Delaware Pooled Trust
(continues) 103
Statements of net assets
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
| | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Regional Authorities – 0.32%D |
| Canada – 0.32% | | | | | | |
| Province of Ontario Canada | | | | | | |
| 4.00% 10/7/19 | USD | | 95,000 | | $ | 93,718 |
| 4.40% 6/2/19 | CAD | | 84,000 | | | 79,422 |
| Total Regional Authorities | | | | | | |
| (cost $174,940) | | | | | | 173,140 |
| | | | | | | |
| «Senior Secured Loans – 3.09% | | | | | | |
| ARAMARK | | | | | | |
| 2.156% 1/26/14 | USD | | 159,320 | | | 146,508 |
| Term Tranche Loan B | | | | | | |
| 1.995% 1/26/14 | | | 10,454 | | | 9,613 |
| Bausch & Lomb | | | | | | |
| Term Tranche Loan B | | | | | | |
| 3.533% 4/11/15 | | | 54,233 | | | 51,804 |
| Term Tranche Loan DD | | | | | | |
| 3.519% 4/11/15 | | | 13,170 | | | 12,580 |
| Chester Downs & Marina | | | | | | |
| 12.375% 12/31/16 | | | 85,000 | | | 84,894 |
| Community Health Systems | | | | | | |
| Term Tranche Loan B | | | | | | |
| 2.611% 7/25/14 | | | 196,199 | | | 182,506 |
| Term Tranche Loan DD | | | | | | |
| 2.496% 7/25/14 | | | 10,009 | | | 9,321 |
| Flextronics International | | | | | | |
| Term B 3.79% 10/1/12 | | | 129,340 | | | 122,808 |
| Ford Motor Term | | | | | | |
| Tranche Loan B | | | | | | |
| 3.288% 12/15/13 | | | 202,409 | | | 180,638 |
| HCA Term Tranche Loan B | | | | | | |
| 2.533% 11/18/13 | | | 162,424 | | | 151,446 |
| Level 3 Communication | | | | | | |
| Term Tranche Loan B | | | | | | |
| 11.50% 3/13/14 | | | 135,000 | | | 144,113 |
| Nuveen Investment | | | | | | |
| 2nd Lien 12.50% 7/9/15 | | | 65,000 | | | 66,625 |
| Term Tranche Loan B | | | | | | |
| | 3.384% 11/13/14 | | | 66,131 | | | 57,392 |
| Texas Competitive Electric | | | | | | |
| Holdings Term | | | | | | |
| Tranche Loan B2 | | | | | | |
| 3.745% 10/10/14 | | | 221,236 | | | 171,849 |
| Toys R Us 4.494% 7/19/12 | | | 150,000 | | | 145,664 |
| Univision Communications | | | | | | |
| Term Tranche Loan B | | | | | | |
| 2.533% 9/29/14 | | | 150,000 | | | 120,688 |
| Total Senior Secured Loans | | | | | | |
| (cost $1,509,037) | | | | | | 1,658,449 |
| | | | | | | |
| Sovereign Debt – 1.71%D | | | | | | |
| Brazil – 0.60% | | | | | | |
| Republic of Brazil | | | | | | |
| *12.50% 1/5/16 | BRL | | 253,000 | | | 163,045 |
| 12.50% 1/5/22 | BRL | | 250,000 | | | 158,628 |
| | | | | | | 321,673 |
| Indonesia – 0.44% | | | | | | |
| Indonesia Treasury Bond | | | | | | |
| 10.75% 5/15/16 | IDR | | 1,345,000,000 | | | 148,469 |
| 12.80% 6/15/21 | IDR | | 700,000,000 | | | 85,972 |
| | | | | | | 234,441 |
| Mexico – 0.40% | | | | | | |
| Mexican Bonos | | | | | | |
| 7.25% 12/15/16 | MXN | | 253,000 | | | 18,654 |
| 10.00% 11/20/36 | MXN | | 2,290,000 | | | 198,136 |
| | | | | | | 216,790 |
| Poland – 0.08% | | | | | | |
| Poland Government Bond | | | | | | |
| 5.50% 10/25/19 | PLN | | 130,000 | | | 43,056 |
| | | | | | | 43,056 |
| Republic of Korea – 0.19% | | | | | | |
| # | Korea Expressway 144A | | | | | | |
| 4.50% 3/23/15 | USD | | 100,000 | | | 100,048 |
| | | | | | | 100,048 |
| Total Sovereign Debt | | | | | | |
| (cost $861,920) | | | | | | 916,008 |
| | | | | | | |
| Supranational Banks – 1.74% | | | | | | |
| European Investment Bank | | | | | | |
| 3.125% 6/4/14 | | | 85,000 | | | 87,234 |
| 6.125% 1/23/17 | AUD | | 66,000 | | | 58,709 |
| ^10.902% 3/30/16 | TRY | | 50,000 | | | 17,161 |
| 11.25% 2/14/13 | BRL | | 555,000 | | | 325,874 |
| Inter-American | | | | | | |
| Development Bank | | | | | | |
| 5.375% 5/27/14 | AUD | | 170,000 | | | 149,102 |
| International Bank for | | | | | | |
| Reconstruction & | | | | | | |
| Development | | | | | | |
| 5.50% 2/21/11 | MXN | | 700,000 | | | 52,979 |
| 7.50% 7/30/14 | NZD | | 309,000 | | | 238,832 |
| Total Supranational Banks | | | | | | |
| (cost $908,872) | | | | | | 929,891 |
| | | | | | |
| U.S. Treasury Obligations – 0.84% | | | | | |
| ¥ | U.S. Treasury Bonds | | | | | | |
| 4.25% 5/15/39 | USD | | 210,000 | | | 210,558 |
| U.S. Treasury Notes | | | | | | |
| 2.375% 9/30/14 | | | 50,000 | | | 50,215 |
| 2.375% 10/31/14 | | | 65,000 | | | 65,188 |
| 3.625% 8/15/19 | | | 122,000 | | | 124,383 |
| Total U.S. Treasury Obligations | | | | | | |
| (cost $448,440) | | | | | | 450,344 |
2009 Annual report · Delaware Pooled Trust
104
| | Number of | | Value | |
| | | Shares | | (U.S. $) | |
| Preferred Stock – 0.21% | | | | | | | |
| *· | PNC Financial Services | | | | | | | |
| Group 8.25% | | | 110,000 | | $ | 110,379 | |
| Total Preferred Stock | | | | | | | |
| (cost $108,414) | | | | | | 110,379 | |
| | | | | | | | |
| | Principal | | | | |
| | Amount° | | | | |
| ¹Discount Note – 7.31% | | | | | | | |
| Federal Home Loan Bank | | | | | | | |
| 0.02% 11/2/09 | USD | | 3,916,008 | | | 3,916,006 | |
| Total Discount Note | | | | | | | |
| (cost $3,916,006) | | | | | | 3,916,006 | |
| | | | | | | | |
| Total Value of Securities Before | | | | | | | |
| Securities Lending Collateral – 106.70% | | | | | | | |
| (cost $55,716,257) | | | | | | 57,193,518 | |
| | | | | | | | |
| | Number of | | | | |
| | Shares | | | | |
| Securities Lending Collateral** – 2.53% | | | | | | | |
| Investment Companies | | | | | | | |
| Mellon GSL DBT II | | | | | | | |
| Collateral Fund | | | 523,353 | | | 523,353 | |
| | BNY Mellon SL DBT II | | | | | | | |
| Liquidating Fund | | | 845,335 | | | 835,867 | |
| @†Mellon GSL | | | | | | | |
| Reinvestment Trust II | | | 51,711 | | | 5 | |
| Total Securities Lending Collateral | | | | | | | |
| (cost $1,420,399) | | | | | | 1,359,225 | |
| | | | | | | | |
| Total Value of Securities – 109.23% | | | | | | | |
| (cost $57,136,656) | | | | | | 58,552,743 | © |
| Obligation to Return Securities | | | | | | | |
| Lending Collateral** – (2.65%) | | | | | | (1,420,399 | ) |
| Liabilities Net of Receivables | | | | | | | |
| and Other Assets – (6.58%)z | | | | | | (3,529,026 | ) |
| Net Assets Applicable to 5,525,680 | | | | | | | |
| Shares Outstanding; Equivalent | | | | | | | |
| to $9.70 Per Share – 100.00% | | | | | $ | 53,603,318 | |
| | | | | | | | |
| Components of Net Assets at October 31, 2009: | | | | | | | |
| Shares of beneficial interest | | | | | | | |
| (unlimited authorization – no par) | | | | | $ | 56,468,472 | |
| Undistributed net investment income | | | | | | 3,580,383 | |
| Accumulated net realized loss on investments | | | | | | (7,843,076 | ) |
| Net unrealized appreciation of investments | | | | | | | |
| and foreign currencies | | | | | | 1,397,539 | |
| Total net assets | | | | | $ | 53,603,318 | |
°Principal amount shown is stated in U.S. Dollars unless noted that the security is denominated in another currency.
AUD — Australian Dollar
BRL — Brazilian Real
CAD — Canadian Dollar
CLP — Chilean Peso
COP — Colombian Peso
EUR — European Monetary Unit
GBP — British Pound Sterling
IDR — Indonesian Rupiah
INR — Indian Rupee
KRW — South Korean Won
MXN — Mexican Peso
MYR — Malaysian Ringgit
NOK — Norwegian Kroner
NZD — New Zealand Dollar
PLN — Polish Zloty
RUB — Russian Ruble
SEK — Swedish Krona
SGD — Singapore Dollar
TRY — Turkish Lira
TWD — Taiwan Dollar
USD — United States Dollar
ZAR — South African Rand
2009 Annual report · Delaware Pooled Trust
(continues) 105
Statements of net assets
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
| | |
| † | Non income producing security. |
| ‡ | Non income producing security. Security is currently in default. |
| w | Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes. |
| · | Variable rate security. The rate shown is the rate as of October 31, 2009. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| Φ | Step coupon bond. Coupon increases or decreases periodically based on a predetermined schedule. Stated rate in effect at October 31, 2009. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At October 31, 2009, the aggregate amount of Rule 144A securities was $8,213,392, which represented 15.29% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $474,357, which represented 0.88% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| ∏ | Restricted Security. These investments are in securities not registered under the Securities Act of 1933, as amended, and have certain restrictions on resale which may limit their liquidity. At October 31, 2009, the aggregate amount of the restricted securities was $51,557 or 0.10% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| « | Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally: (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate (LIBOR), and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale. |
| z | Of this amount, $5,015,880 represents payable for securities purchased and $696,262 represents receivable for securities sold as of October 31, 2009. |
| ^ | Zero coupon security. The rate shown is the yield at the time of purchase. |
| ¥ | Fully or partially pledged as collateral for financial futures contracts. |
| D | Securities have been classified by country of origin. |
| * | Fully or partially on loan. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $1,380,887 of securities loaned. |
Summary of Abbreviations:
ARM — Adjustable Rate Mortgage
CDS — Credit Default Swap
GNMA — Government National Mortgage Association
GSMPS — Goldman Sachs Reperforming Mortgage Securities
MASTR — Mortgage Asset Securitization Transactions, Inc.
PIK — Pay-in-kind
REMIC — Real Estate Mortgage Investment Conduit
S.F. — Single Family
TBA — To be announced
yr — Year
1The following foreign currency exchange contracts, financial futures contracts and swap contracts were outstanding at October 31, 2009:
Foreign Currency Exchange Contracts
| | | | | | | | Unrealized |
| Contracts to | | | | | | Settlement | | Appreciation |
| Receive (Deliver) | | In Exchange For | | Date | | (Depreciation) |
| AUD | 392,028 | | | USD | (359,812 | ) | | 12/1/09 | | | $ | (8,186 | ) | |
| BRL | 99,933 | | | USD | (58,151 | ) | | 12/1/09 | | | | (1,802 | ) | |
| CAD | 105,883 | | | USD | (100,082 | ) | | 12/1/09 | | | | (2,252 | ) | |
| CAD | 124,059 | | | USD | (117,206 | ) | | 12/1/09 | | | | (2,583 | ) | |
| CLP | 123,051,300 | | | USD | (228,000 | ) | | 11/30/09 | | | | 4,517 | | |
| COP | 320,308,000 | | | USD | (167,110 | ) | | 12/1/09 | | | | (7,356 | ) | |
| EUR | 150,963 | | | USD | (226,730 | ) | | 12/1/09 | | | | (4,605 | ) | |
| GBP | (5,951 | ) | | USD | 9,722 | | | 12/1/09 | | | | (47 | ) | |
| GBP | 107,375 | | | USD | (175,419 | ) | | 12/1/09 | | | | 840 | | |
| IDR | 285,880,000 | | | USD | (29,518 | ) | | 11/30/09 | | | | 241 | | |
| IDR | 569,940,000 | | | USD | (60,057 | ) | | 12/1/09 | | | | (741 | ) | |
| INR | 6,570,600 | | | USD | (141,000 | ) | | 10/20/10 | | | | (4,966 | ) | |
| KRW | 555,888,960 | | | USD | (473,097 | ) | | 12/1/09 | | | | (4,826 | ) | |
| MYR | 571,452 | | | USD | (168,000 | ) | | 11/30/09 | | | | (773 | ) | |
| NOK | 1,531,228 | | | USD | (275,812 | ) | | 12/1/09 | | | | (8,758 | ) | |
| NOK | 1,584,400 | | | USD | (285,405 | ) | | 12/1/09 | | | | (9,078 | ) | |
| NZD | (127,635 | ) | | USD | 95,854 | | | 12/1/09 | | | | 4,583 | | |
| NZD | (4,134 | ) | | USD | 3,106 | | | 12/1/09 | | | | 150 | | |
| PLN | (255,599 | ) | | USD | 91,751 | | | 12/1/09 | | | | 3,614 | | |
| PLN | 734,192 | | | USD | (263,576 | ) | | 12/1/09 | | | | (10,410 | ) | |
| SEK | 1,486,232 | | | USD | (218,764 | ) | | 12/1/09 | | | | (9,213 | ) | |
| SEK | 1,618,700 | | | USD | (238,268 | ) | | 12/1/09 | | | | (10,040 | ) | |
| SGD | 314,267 | | | USD | (225,000 | ) | | 11/30/09 | | | | (857 | ) | |
| TRY | 471,239 | | | USD | (314,831 | ) | | 12/1/09 | | | | (3,285 | ) | |
| TWD | 5,352,900 | | | USD | (168,000 | ) | | 11/30/09 | | | | (3,991 | ) | |
| ZAR | 1,680,118 | | | USD | (226,000 | ) | | 1/6/10 | | | | (13,662 | ) | |
| | | | | | | | | | | $ | (93,486 | ) | |
2009 Annual report · Delaware Pooled Trust
106
| | | | | | | | | | |
| Financial Futures Contracts | | | | | | | | | |
| Contract | Notional | | Notional | | Expiration | | Unrealized |
| to Sell | | Proceeds | | Value | | Date | | Depreciation |
| 22 U.S. Treasury | | | | | | | | | | | |
| 10 yr Notes | $ | 2,597,781 | | $ | 2,609,406 | | 12/21/09 | | $ | (11,625 | ) |
Swap Contracts
CDS Contracts
| | | | Annual | | | �� | Unrealized |
| Swap Counterparty & | | Notional | | Protection | | Termination | | Appreciation |
| Referenced Obligation | | | Value | | Payments | | Date | | (Depreciation) |
| Protection Purchased: | | | | | | | | | | | | | |
| Barclay’s | | | | | | | | | | | | | |
| Macy’s 10 yr CDS | | $ | 175,000 | | 5.00% | | 6/20/19 | | | $ | (11,556 | ) | |
| JPMorgan Securities | | | | | | | | | | | | | |
| Donnelley (R.R.) & | | | | | | | | | | | | | |
| Sons 5 yr CDS | | | 310,000 | | 5.00% | | 6/20/14 | | | | (49,568 | ) | |
| | $ | 485,000 | | | | | | | $ | (61,124 | ) | |
| Protection Sold: | | | | | | | | | | | | | |
| Barclay’s | | | | | | | | | | | | | |
| NA. HY. 12 | | $ | 1,104,500 | | 5.00% | | 6/20/14 | | | $ | 137,556 | | |
| Citigroup Global | | | | | | | | | | | | | |
| Markets MetLife | | | | | | | | | | | | | |
| 5 yr CDS | | | 55,000 | | 5.00% | | 9/20/14 | | | | 1,813 | | |
| JPMorgan Securities | | | | | | | | | | | | | |
| MetLife 5 yr CDS | | | 280,000 | | 1.00% | | 12/20/14 | | | | 948 | | |
| UnitedHealth Group | | | | | | | | | | | | | |
| 5 yr CDS | | | 75,000 | | 1.00% | | 12/20/14 | | | | (1,289 | ) | |
| | $ | 1,514,500 | | | | | | | $ | 139,028 | | |
| Total | | | | | | | | | | $ | 77,904 | | |
The use of foreign currency exchange contracts, financial futures contracts and swap contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional values presented above represent the Portfolio’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 107
Statements of net assets
Delaware Pooled® Trust — The International Equity Portfolio
October 31, 2009
| | Number of | | Value |
| | | Shares | | (U.S. $) |
| Common Stock – 99.26%D | | | | | |
| Australia – 11.34% | | | | | |
| ± | Amcor | | 2,904,049 | | $ | 14,946,189 |
| ± | Foster’s Group | | 3,874,447 | | | 18,990,895 |
| ± | National Australia Bank | | 341,157 | | | 9,008,953 |
| ± | QBE Insurance Group | | 669,106 | | | 13,467,548 |
| ± | Telstra | | 9,279,769 | | | 27,560,748 |
| ± | Wesfarmers | | 785,088 | | | 19,579,695 |
| | | | | | 103,554,028 |
| Belgium – 0.51% | | | | | |
| ± | Fortis | | 1,069,480 | | | 4,623,457 |
| †± | Fortis Strip | | 732,357 | | | 2,155 |
| | | | | | 4,625,612 |
| Finland – 1.00% | | | | | |
| *± | UPM-Kymmene | | 763,197 | | | 9,158,502 |
| | | | | | 9,158,502 |
| France – 12.02% | | | | | |
| ± | Carrefour | | 609,127 | | | 26,142,716 |
| *± | Compagnie de Saint-Gobain | | 329,064 | | | 16,033,577 |
| ± | France Telecom | | 901,803 | | | 22,343,294 |
| †± | GDF Suez | | 162,519 | | | 239 |
| ± | Societe Generale | | 239,657 | | | 15,916,362 |
| *± | Total | | 489,113 | | | 29,265,694 |
| | | | | | 109,701,882 |
| Germany – 5.18% | | | | | |
| ± | Deutsche Telekom | | 1,546,413 | | | 21,050,584 |
| ± | RWE | | 300,703 | | | 26,284,482 |
| | | | | | 47,335,066 |
| Hong Kong – 2.46% | | | | | |
| ± | Hong Kong Electric Holdings | | 1,945,900 | | | 10,406,429 |
| ± | Wharf Holdings | | 2,233,764 | | | 12,069,286 |
| | | | | | 22,475,715 |
| Italy – 2.91% | | | | | |
| ± | Intesa Sanpaolo | | 3,758,597 | | | 15,816,380 |
| ± | UniCreditio | | 3,223,099 | | | 10,796,951 |
| | | | | | 26,613,331 |
| Japan – 20.29% | | | | | |
| ± | Astellas Pharma | | 542,100 | | | 19,963,323 |
| ± | Canon | | 767,100 | | | 28,923,460 |
| ± | Kao | | 1,002,300 | | | 22,326,307 |
| ± | KDDI | | 2,925 | | | 15,525,254 |
| ± | Nitto Denko | | 267,900 | | | 8,090,977 |
| ± | Sekisui House | | 833,018 | | | 7,204,118 |
| ± | Seven & I Holdings | | 813,673 | | | 17,814,124 |
| *± | Takeda Pharmaceutical | | 676,800 | | | 27,069,130 |
| ± | Tokio Marine Holdings | | 616,852 | | | 15,774,018 |
| ± | Toyota Motor | | 369,800 | | | 14,599,388 |
| ± | West Japan Railway | | 2,250 | | | 7,973,898 |
| | | | | | 185,263,997 |
| Netherlands – 2.75% | | | | | |
| ± | ING Groep CVA | | 727,180 | | | 9,462,295 |
| ± | Reed Elsevier | | 1,338,725 | | | 15,599,164 |
| | | | | | 25,061,459 |
| New Zealand – 0.62% | | | | | |
| ± | Telecom Corporation of New Zealand | | 3,154,734 | | | 5,689,939 |
| | | | | | 5,689,939 |
| Singapore – 4.56% | | | | | |
| ± | Jardine Matheson Holdings | | 318,415 | | | 9,466,244 |
| *± | Oversea-Chinese Banking | | 1,747,787 | | | 9,417,943 |
| ± | Singapore Telecommunications | | 5,542,602 | | | 11,493,055 |
| ± | United Overseas Bank | | 939,000 | | | 11,254,859 |
| | | | | | 41,632,101 |
| South Africa – 0.84% | | | | | |
| ± | Sasol | | 203,678 | | | 7,630,856 |
| | | | | | 7,630,856 |
| Spain – 8.09% | | | | | |
| *± | Banco Santander | | 1,032,760 | | | 16,617,756 |
| *± | Iberdrola | | 3,173,022 | | | 28,740,156 |
| *± | Telefonica | | 1,020,050 | | | 28,483,539 |
| | | | | | 73,841,451 |
| Switzerland – 4.56% | | | | | |
| ± | Novartis | | 624,151 | | | 32,498,969 |
| ± | Zurich Financial Services | | 39,944 | | | 9,145,988 |
| | | | | | 41,644,957 |
| Taiwan – 2.29% | | | | | |
| Chunghwa Telecom ADR | | 484,167 | | | 8,414,822 |
| Taiwan Semiconductor | | | | | |
| Manufacturing ADR | | 1,310,732 | | | 12,504,384 |
| | | | | | 20,919,206 |
| United Kingdom – 19.84% | | | | | |
| ± | Aviva | | 1,061,562 | | | 6,643,997 |
| ± | BG Group | | 931,508 | | | 16,047,764 |
| ± | BP | | 3,137,877 | | | 29,418,574 |
| ± | Compass Group | | 2,717,962 | | | 17,239,176 |
| *± | GlaxoSmithKline | | 1,510,378 | | | 30,993,215 |
| ± | Royal Dutch Shell Class A | | 963,355 | | | 28,559,293 |
| ± | Unilever | | 1,101,724 | | | 32,926,888 |
| ± | Vodafone Group | | 8,761,848 | | | 19,323,842 |
| | | | | | 181,152,749 |
| Total Common Stock | | | | | |
| (cost $923,840,229) | | | | | 906,300,851 |
| | | | | | |
| Right – 0.00% | | | | | |
| = | Fortis Coupon 42 | | 1,549,365 | | | 0 |
| Total Right (cost $0) | | | | | 0 |
| | | | | |
| | Principal | | | |
| | Amount (U.S. $) | | | |
| ¹Discount Note – 0.50% | | | | | |
| Federal Home Loan Bank | | | | | |
| 0.02% 11/2/09 | $ | 4,594,010 | | | 4,594,007 |
| Total Discount Note | | | | | |
| (cost $4,594,007) | | | | | 4,594,007 |
| | | | |
| Total Value of Securities Before Securities | | | |
| Lending Collateral – 99.76% | | | | | |
| (cost $928,434,236) | | | | | 910,894,858 |
2009 Annual report · Delaware Pooled Trust
108
| | Number of | | Value | |
| | | Shares | | (U.S. $) | |
| Securities Lending Collateral** – 6.38% | | | | |
| Investment Companies | | | | | |
| Mellon GSL DBT II Collateral Fund | 41,470,132 | | $ | 41,470,132 | |
| BNY Mellon SL DBT II | | | | | |
| Liquidating Fund | 16,935,892 | | | 16,746,210 | |
| †@Mellon GSL Reinvestment Trust II | 1,507,218 | | | 151 | |
| Total Securities Lending Collateral | | | | | |
| (cost $59,913,242) | | | | 58,216,493 | |
| | | | | | |
| Total Value of Securities – 106.14% | | | | | |
| (cost $988,347,478) | | | | 969,111,351 | © |
| Obligation to Return Securities | | | | | |
| | Lending Collateral** – (6.56%) | | | | (59,913,242 | ) |
| Receivables and Other Assets | | | | | |
| Net of Liabilities – 0.42% | | | | 3,858,353 | |
| Net Assets Applicable to 70,370,197 | | | | | |
| Shares Outstanding; Equivalent to | | | | |
| $12.98 Per Share – 100.00% | | | $ | 913,056,462 | |
| | | | | | |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | |
| (unlimited authorization – no par) | | | $ | 1,077,428,145 | |
| Undistributed net investment income | | | | 25,053,862 | |
| Accumulated net realized loss on investments | | | (170,258,635 | ) |
| Net unrealized depreciation of investments | | | | |
| and foreign currencies | | | | (19,166,910 | ) |
| Total net assets | | | $ | 913,056,462 | |
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 72 in “Country and sector allocations.” |
| ± | Security is being valued based on international fair value pricing. At October 31, 2009, the aggregate amount of international fair value priced securities was $885,381,645, which represented 96.97% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| † | Non income producing security. |
| * | Fully or partially on loan. |
| = | Security is being fair valued in accordance with the Portfolio’s fair valuation policy. At October 31, 2009 the aggregate amount of fair valued securities was $0, which represented 0.00% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| ¹ | The rate shown is the effective yield at time of purchase. |
| ** | See Note 9 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $151, which represented 0.00% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| © | Includes $57,038,558 of securities loaned. |
| Summary of Abbreviations: |
| ADR — American Depositary Receipts |
| AUD — Australian Dollar |
| CVA — Dutch Certificate |
| GBP — British Pound Sterling |
| JPY — Japanese Yen |
| USD — United States Dollar |
1The following foreign currency exchange contracts were outstanding at October 31, 2009:
Foreign Currency Exchange Contracts
| | | | | | Unrealized |
| Contracts to | | | | Settlement | | Appreciation |
| Receive (Deliver) | | In Exchange For | | Date | | (Depreciation) |
| AUD | 161,249 | | | USD | (145,914 | ) | | 11/2/09 | | | $ | (887 | ) | |
| AUD | 143,757 | | | USD | (130,962 | ) | | 11/5/09 | | | | (1,704 | ) | |
| GBP | (304,685 | ) | | USD | 505,411 | | | 11/2/09 | | | | 5,174 | | |
| JPY | (167,208,831 | ) | | USD | 1,830,019 | | | 11/4/09 | | | | (27,698 | ) | |
| | | | | | | | | | | $ | (25,115 | ) | |
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amounts recognized in the financial statements. The notional values presented above represent the Portfolio’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 109
Statements of net assets
Delaware Pooled® Trust — The Labor Select International Equity Portfolio
October 31, 2009
| | Number of | | Value |
| | | Shares | | (U.S. $) |
| Common Stock – 98.54%D | | | | | |
| Australia – 12.73% | | | | | |
| ± | Amcor | | 3,363,448 | | $ | 17,310,566 |
| ± | Foster’s Group | | 3,731,317 | | | 18,289,332 |
| ± | National Australia Bank | | 295,553 | | | 7,804,685 |
| ± | QBE Insurance Group | | 579,901 | | | 11,672,059 |
| ± | Telstra | | 8,122,930 | | | 24,124,957 |
| ± | Wesfarmers | | 895,073 | | | 22,322,665 |
| | | | | | 101,524,264 |
| Belgium – 0.44% | | | | | |
| ± | Fortis | | 814,883 | | | 3,522,812 |
| ±† | Fortis Strip | | 305,506 | | | 899 |
| | | | | | 3,523,711 |
| Finland – 1.18% | | | | | |
| ± | UPM-Kymmene | | 782,731 | | | 9,392,914 |
| | | | | | 9,392,914 |
| France – 10.43% | | | | | |
| ±* | Carrefour | | 576,204 | | | 24,729,715 |
| ±* | France Telecom | | 1,169,643 | | | 28,979,364 |
| ±† | GDF Suez | | 101,871 | | | 150 |
| ±* | Societe Generale | | 237,675 | | | 15,784,731 |
| ±* | Total | | 229,588 | | | 13,737,219 |
| | | | | | 83,231,179 |
| Germany – 3.41% | | | | | |
| ± | RWE | | 310,913 | | | 27,176,939 |
| | | | | | 27,176,939 |
| Hong Kong – 3.63% | | | | | |
| ±* | Hong Kong Electric Holdings | | 2,311,500 | | | 12,361,611 |
| ± | Wharf Holdings | | 3,073,750 | | | 16,607,829 |
| | | | | | 28,969,440 |
| Italy – 3.07% | | | | | |
| ± | Intesa Sanpaolo | | 3,231,916 | | | 13,600,078 |
| ± | UniCredit | | 3,259,515 | | | 10,918,941 |
| | | | | | 24,519,019 |
| Japan – 19.98% | | | | | |
| ± | Astellas Pharma | | 474,200 | | | 17,462,844 |
| ± | Canon | | 725,400 | | | 27,351,164 |
| ± | Kao | | 899,000 | | | 20,025,292 |
| ± | KDDI | | 2,863 | | | 15,196,172 |
| ±* | Nitto Denko | | 219,000 | | | 6,614,125 |
| ± | Sekisui House | | 681,000 | | | 5,889,434 |
| ± | Seven & I Holdings | | 754,000 | | | 16,507,675 |
| ± | Takeda Pharmaceutical | | 597,800 | | | 23,909,465 |
| ± | Tokio Marine Holdings | | 583,400 | | | 14,918,590 |
| ± | West Japan Railway | | 3,246 | | | 11,503,676 |
| | | | | | 159,378,437 |
| Netherlands – 2.66% | | | | | |
| ± | ING Groep CVA | | 574,916 | | | 7,480,988 |
| ± | Reed Elsevier | | 1,178,107 | | | 13,727,602 |
| | | | | | 21,208,590 |
| New Zealand – 0.78% | | | | | |
| ± | Telecom Corporation of New Zealand | | 3,445,627 | | | 6,214,599 |
| | | | | | 6,214,599 |
| Singapore – 4.51% | | | | | |
| ± | Singapore Telecommunications | | 7,907,000 | | | 16,395,834 |
| ± | United Overseas Bank | | 1,636,000 | | | 19,609,106 |
| | | | | | 36,004,940 |
| Spain – 8.38% | | | | | |
| ±* | Banco Santander | | 888,042 | | | 14,289,153 |
| ±* | Iberdrola | | 2,852,659 | | | 25,838,417 |
| ±* | Telefonica | | 958,135 | | | 26,754,644 |
| | | | | | 66,882,214 |
| Switzerland – 5.00% | | | | | |
| ± | Novartis | | 614,205 | | | 31,981,090 |
| ± | Zurich Financial Services | | 34,346 | | | 7,864,213 |
| | | | | | 39,845,303 |
| United Kingdom – 22.34% | | | | | |
| ± | Aviva | | 1,032,588 | | | 6,462,658 |
| ± | BG Group | | 1,165,676 | | | 20,081,946 |
| ± | BP | | 3,474,005 | | | 32,569,878 |
| ± | Compass Group | | 2,708,902 | | | 17,181,712 |
| ±* | GlaxoSmithKline | | 1,277,328 | | | 26,210,989 |
| ± | Royal Dutch Shell Class A | | 1,010,562 | | | 29,958,775 |
| ± | Unilever | | 968,873 | | | 28,956,410 |
| ± | Vodafone Group | | 7,596,938 | | | 16,754,688 |
| | | | | | 178,177,056 |
| Total Common Stock | | | | | |
| (cost $817,219,807) | | | | | 786,048,605 |
| | | | | | | |
| Rights – 0.00% | | | | | |
| = | Fortis Rights Coupon 42 | | 814,883 | | | 0 |
| Total Rights (cost $0) | | | | | 0 |
| | | | | |
| | Principal | | | |
| | Amount (U.S. $) | | | |
| ¹Discount Note – 1.65% | | | | | |
| Federal Home Loan Bank | | | | | |
| 0.02% 11/2/09 | $ | 13,208,028 | | | 13,208,020 |
| Total Discount Note | | | | | |
| (cost $13,208,020) | | | | | 13,208,020 |
| | | | | | |
| Total Value of Securities Before | | | | | |
| Securities Lending Collateral – 100.19% | | | |
| (cost $830,427,827) | | | | | 799,256,625 |
2009 Annual report · Delaware Pooled Trust
110
| | Number of | | Value | |
| | | Shares | | (U.S. $) | |
| Securities Lending Collateral** – 1.45% | | | | |
| Investment Companies | | | | | |
| Mellon GSL DBT II Collateral Fund | 2,165,463 | | $ | 2,165,463 | |
| BNY Mellon SL DBT II | | | | | |
| Liquidating Fund | 9,531,003 | | | 9,424,256 | |
| @†Mellon GSL Reinvestment Trust II | 521,358 | | | 52 | |
| Total Securities Lending Collateral | | | | | |
| (cost $12,217,824) | | | | 11,589,771 | |
| | | | | | |
| Total Value of Securities – 101.64% | | | | | |
| | (cost $842,645,651) | | | | 810,846,396 | © |
| Obligation to Return Securities | | | | | |
| Lending Collateral** – (1.53%) | | | | (12,217,824 | ) |
| Liabilities Net of Receivables | | | | | |
| and Other Assets – (0.11%) | | | | (910,827 | ) |
| Net Assets Applicable to 61,684,055 | | | | | |
| Shares Outstanding; Equivalent to | | | | | |
| $12.93 Per Share – 100.00% | | | $ | 797,717,745 | |
| | | | | |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | | |
| (unlimited authorization – no par) | | | $ | 896,743,464 | |
| Undistributed net investment income | | | | 19,711,006 | |
| Accumulated net realized loss on investments | | | (86,972,773 | ) |
| Net unrealized depreciation of investments | | | | | |
| and foreign currencies | | | | (31,763,952 | ) |
| Total net assets | | | $ | 797,717,745 | |
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 73 in “Country and sector allocations.” |
| † | Non income producing security. |
| * | Fully or partially on loan. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $11,627,440 of securities loaned. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| ± | Security is being valued based on international fair value pricing. At October 31, 2009, the aggregate amount of international fair value priced securities was $786,048,605, which represented 98.54% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| = | Security is being fair valued in accordance with the Portfolio’s fair valuation policy. At October 31, 2009, the aggregate amount of fair valued securities was $0, which represented 0.00% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $52, which represented 0.00% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| Summary of Abbreviations: |
| AUD — Australian Dollar |
| CVA — Dutch Certificate |
| GBP — British Pound Sterling |
| USD — United States Dollar |
1The following foreign currency exchange contracts were outstanding at October 31, 2009:
Foreign Currency Exchange Contracts
| Contracts to | | | | Settlement | | Unrealized |
| Receive | | In Exchange For | | Date | | Depreciation |
| AUD | 152,351 | | USD | (137,863 | ) | | 11/2/09 | | | $ | (838 | ) | |
| AUD | 135,645 | | USD | (123,573 | ) | | 11/5/09 | | | | (1,608 | ) | |
| GBP | 293,199 | | USD | (486,711 | ) | | 11/2/09 | | | | (5,331 | ) | |
| | | | | | | | | | $ | (7,777 | ) | |
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional values presented above represent the Portfolio’s total exposure in such contracts, whereas only the net unrealized depreciation is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 111
Statements of net assets
Delaware Pooled® Trust — The Emerging Markets Portfolio
October 31, 2009
| | Number of | | Value |
| | | Shares | | (U.S. $) |
| Common Stock – 93.32%D | | | | |
| Brazil – 8.73% | | | | |
| AES Tiete | 198,594 | | $ | 2,118,772 |
| Companhia de Concessoes | | | | |
| Rodoviarias | 987,737 | | | 9,091,084 |
| Companhia Vale do Rio Doce ADR | 544,000 | | | 10,699,614 |
| CPFL Energia | 412,647 | | | 7,228,117 |
| Redecard | 792,600 | | | 11,637,881 |
| Santos Brasil Participacoes | 182,899 | | | 1,423,771 |
| * | Vale ADR | 431,400 | | | 9,965,340 |
| | | | | 52,164,579 |
| Chile – 3.22% | | | | |
| Banco Santander ADR | 94,500 | | | 4,974,480 |
| | Enersis ADR | 684,100 | | | 12,094,888 |
| # | Inversiones Aguas | | | | |
| Metropolitan 144A ADR | 92,800 | | | 2,188,660 |
| | | | | 19,258,028 |
| China – 19.93%n | | | | |
| ± | Beijing Enterprises Holdings | 717,628 | | | 4,295,685 |
| ± | China BlueChemical Class H | 6,522,000 | | | 3,470,003 |
| ± | China Construction Bank Class H | 23,638,000 | | | 20,379,069 |
| ± | China Merchants | | | | |
| Holdings International | 3,204,000 | | | 10,218,650 |
| ± | China Mobile | 1,276,000 | | | 11,961,771 |
| ± | China Power International | | | | |
| Development | 17,951,000 | | | 4,989,063 |
| ± | China Shenhua Energy Series H | 1,953,500 | | | 8,763,600 |
| ± | China Shipping Development | 7,154,000 | | | 10,041,595 |
| *± | China Yurun Food Group | 4,794,000 | | | 9,853,110 |
| *± | CNOOC | 4,172,000 | | | 6,248,138 |
| ± | COSCO Pacific | 2,094,000 | | | 2,892,576 |
| ± | Hengan International Group | 133,000 | | | 856,146 |
| ± | Industrial & Commercial | | | | |
| Bank of China Series H | 23,282,281 | | | 18,523,731 |
| ± | Jiangsu Expressway | 7,422,000 | | | 6,600,255 |
| | | | | 119,093,392 |
| Colombia – 1.60% | | | | |
| BanColombia ADR | 241,700 | | | 9,566,486 |
| | | | | 9,566,486 |
| Czech Republic – 4.30% | | | | |
| ± | CEZ | 191,719 | | | 9,448,068 |
| ± | Komercni Banka | 57,129 | | | 11,211,377 |
| *± | Telefonica o2 Czech Republic | 214,883 | | | 5,066,644 |
| | | | | 25,726,089 |
| Egypt – 2.72% | | | | |
| MobiNil-Egyptian Mobile Services | 108,819 | | | 4,194,293 |
| Orascom Telecom Holding GDR | 352,217 | | | 12,077,521 |
| | | | | 16,271,814 |
| India – 0.27% | | | | |
| ± | Sun Pharmaceutical Industries | 54,682 | | | 1,592,593 |
| | | | | 1,592,593 |
| Indonesia – 0.42% | | | | |
| ± | Perusahaan Gas Negara | 6,706,000 | | | 2,495,195 |
| | | | | 2,495,195 |
| Israel – 2.11% | | | | |
| ± | Bezeq Israeli Telecommunication | 5,665,070 | | | 12,637,129 |
| | | | | 12,637,129 |
| Kazakhstan – 1.05% | | | | |
| KazMunaiGas Exploration | | | | |
| Production GDR | 263,388 | | | 6,260,733 |
| | | | | 6,260,733 |
| Malaysia – 0.64% | | | | |
| ± | Tanjong | 864,000 | | | 3,823,037 |
| | | | | 3,823,037 |
| Mexico – 3.95% | | | | |
| * | Banco Compartamos | 1,390,600 | | | 5,698,895 |
| Grupo Aeroportuario del | | | | |
| Pacifico ADR | 243,100 | | | 6,196,619 |
| Grupo Televisa ADR | 421,300 | | | 8,156,369 |
| Kimberly-Clark de Mexico Class A | 897,800 | | | 3,556,249 |
| | | | | 23,608,132 |
| Philippines – 1.99% | | | | |
| * | Philippine Long Distance | | | | |
| Telephone ADR | 223,500 | | | 11,912,550 |
| | | | | 11,912,550 |
| Poland – 1.52% | | | | |
| ± | Bank Pekao | 168,761 | | | 9,057,018 |
| | | | | 9,057,018 |
| Republic of Korea – 5.03% | | | | |
| ±† | KB Financial Group | 251,295 | | | 12,042,952 |
| ± | KT&G | 310,995 | | | 18,045,222 |
| | | | | 30,088,174 |
| Russia – 6.36% | | | | |
| Gazprom ADR | 543,700 | | | 13,136,880 |
| LUKOIL ADR | 225,664 | | | 12,910,237 |
| Mobile TeleSystems ADR | 263,600 | | | 11,941,080 |
| | | | | 37,988,197 |
| Singapore – 2.43% | | | | |
| ± | Singapore Telecommunications | 6,998,000 | | | 14,510,946 |
| | | | | 14,510,946 |
| South Africa – 5.54% | | | | |
| ± | African Bank Investments | 3,539,352 | | | 13,819,043 |
| *± | Pretoria Portland Cement | 1,233,262 | | | 5,162,678 |
| ± | Sasol | 331,821 | | | 12,431,771 |
| ± | Telkom | 298,474 | | | 1,672,287 |
| | | | | 33,085,779 |
| Taiwan – 13.65% | | | | |
| ± | Asustek Computer | 5,817,566 | | | 10,644,931 |
| ± | Chinatrust Financial Holding | 10,699,307 | | | 6,402,768 |
| ± | Chunghwa Telecom | 1,204,000 | | | 2,105,442 |
| Chunghwa Telecom ADR | 598,453 | | | 10,401,113 |
| ± | Far EasTone Telecommunications | 5,401,765 | | | 6,054,821 |
| ± | Lite-On Technology | 9,831,331 | | | 12,900,077 |
| ± | MediaTek | 676,965 | | | 9,439,389 |
| ± | President Chain Store | 2,496,715 | | | 5,627,914 |
| ± | Taiwan Semiconductor Manufacturing | 9,980,588 | | | 18,037,111 |
| | | | | 81,613,566 |
2009 Annual report · Delaware Pooled Trust
112
| | Number of | | Value | |
| | | Shares | | (U.S. $) | |
| Common Stock (continued) | | | | | | |
| Thailand – 2.30% | | | | | | |
| ± | Kasikornbank Foreign | | 1,388,154 | | $ | 3,365,232 | |
| PTT PCL | | 1,443,300 | | | 10,363,261 | |
| | | | | | 13,728,493 | |
| Turkey – 5.56% | | | | | | |
| ± | Akbank | | 355,504 | | | 1,919,457 | |
| ± | Tofas Turk Otomobil Fabrikasi | | 1,521,071 | | | 3,819,695 | |
| ± | Tupras Turkiye Petrol Rafine | | 506,967 | | | 8,703,607 | |
| ± | Turkcell Iletisim Hizmet | | 2,838,771 | | | 18,773,598 | |
| | | | | | 33,216,357 | |
| Total Common Stock | | | | | | |
| (cost $536,387,660) | | | | | 557,698,287 | |
| | | | | | | |
| Preferred Stock – 5.15% | | | | | | |
| Brazil – 2.20% | | | | | | |
| AES Tiete | | 228,400 | | | 2,574,233 | |
| Investimentos Itau | | 1,845,463 | | | 10,551,790 | |
| | | | | | | 13,126,023 | |
| Republic of Korea – 2.95% | | | | | | |
| ± | Hyundai Motor | | 260,710 | | | 8,453,599 | |
| ± | Samsung Electronics | | 23,008 | | | 9,183,016 | |
| | | | | | 17,636,615 | |
| Total Preferred Stock | | | | | | |
| (cost $31,328,617) | | | | | 30,762,638 | |
| | | | | | |
| | Principal | | | | |
| | Amount | | | | |
| | (U.S. $) | | | | |
| ¹Discount Note – 0.88% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | $ | 5,278,011 | | | 5,278,008 | |
| Total Discount Note | | | | | | |
| (cost $5,278,008) | | | | | 5,278,008 | |
| | | | | | | |
| Total Value of Securities Before | | | | | | |
| Securities Lending Collateral – 99.35% | | | | |
| (cost $572,994,285) | | | | | 593,738,933 | |
| | | | | | |
| | Number of | | | | |
| | Shares | | | | |
| Securities Lending Collateral** – 2.75% | | | | |
| Investment Companies | | | | | | |
| Mellon GSL DBT II | | | | | | |
| Collateral Fund | | 6,447,380 | | | 6,447,380 | |
| BNY Mellon SL DBT II | | | | | | |
| Liquidating Fund | | 10,178,042 | | | 10,023,918 | |
| †@Mellon GSL Reinvestment | | | | | | |
| Trust II | | 575,855 | | | 58 | |
| Total Securities Lending Collateral | | | | | | |
| (cost $17,201,277) | | | | | 16,471,356 | |
| | | | | | | |
| Total Value of Securities – 102.10% | | | | | | |
| (cost $590,195,562) | | | | $ | 610,210,289 | © |
| Obligation to Return Securities | | | | | | |
| Lending Collateral** – (2.88%) | | | | | (17,201,277 | ) |
| Receivables and Other Assets | | | | | | |
| Net of Liabilities – 0.78% | | | | | 4,629,361 | |
| Net Assets Applicable to 63,402,204 | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | |
| $9.43 Per Share – 100.00% | | | | $ | 597,638,373 | |
| | | | | | | |
| Components of Net Assets at October 31, 2009: | | | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 617,140,896 | |
| Undistributed net investment income | | | | | 13,025,164 | |
| Accumulated net realized loss on investments | | | | | (52,520,623 | ) |
| Net unrealized appreciation of investments | | | | | | |
| and foreign currencies | | | | | 19,992,936 | |
| Total net assets | | | | $ | 597,638,373 | |
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 74 in “Country and sector allocations.” |
| * | Fully or partially on loan. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At October 31, 2009, the aggregate amount of Rule 144A securities was $2,188,660, which represented 0.37% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| n | Securities listed and traded on the Hong Kong Stock Exchange. These securities have significant business operations in China. |
| ± | Security is being valued based on international fair value pricing. At October 31, 2009, the aggregate amount of international fair value priced securities was $377,540,009, which represented 63.17% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| † | Non income producing security. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| ** | See Note 9 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $58, which represented 0.00% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| © | Includes $16,657,310 of securities loaned. |
Summary of Abbreviations:
ADR — American Depositary Receipts
GDR — Global Depositary Receipts
HKD — Hong Kong Dollar
USD — United States Dollar
2009 Annual report · Delaware Pooled Trust
(continues) 113
Statements of net assets
Delaware Pooled® Trust — The Emerging Markets Portfolio
| | |
| 1The following foreign currency exchange contracts were outstanding at October 31, 2009: | | |
| | | |
| Foreign Currency Exchange Contracts | | | | | | | |
| Contracts to | | | | Settlement | | Unrealized |
| Receive | | In Exchange For | | Date | | Depreciation |
| HKD | 9,497,105 | | USD | (1,225,433 | ) | | 11/2/09 | | | $ | (10 | ) | |
| HKD | 4,874,465 | | USD | (628,963 | ) | | 11/3/09 | | | | (1 | ) | |
| | | | | | | | | | $ | (11 | ) | |
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amounts recognized in the financial statements. The notional values presented above represent the Portfolio’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
114
Delaware Pooled® Trust — The Global Real Estate Securities Portfolio
October 31, 2009
| | | | Number of | | Value |
| | | Shares | | (U.S. $) |
| Common Stock – 92.11%D | | | | | |
| Australia – 11.92% | | | | | |
| ± | CFS Retail Property Trust | | 188,106 | | $ | 323,042 |
| ± | Dexus Property Group | | 542,907 | | | 383,361 |
| ± | Goodman Group | | 790,099 | | | 423,424 |
| ± | GPT Group | | 1,186,537 | | | 605,191 |
| =@† | GPT Group-In Specie Dividend | | 1,337,300 | | | 0 |
| ± | ING Office Fund | | 666,151 | | | 351,278 |
| ± | Mirvac Group | | 358,699 | | | 469,391 |
| ± | Stockland | | 278,882 | | | 925,913 |
| ± | Westfield Group | | 281,451 | | | 3,047,569 |
| | | | | | 6,529,169 |
| Canada – 2.73% | | | | | |
| Brookfield Properties | | 19,701 | | | 200,162 |
| Canadian Real Estate | | | | | |
| Investment Trust | | 10,293 | | | 242,988 |
| Dundee Real Estate Investment Trust | | 21,856 | | | 388,735 |
| * | RioCan Real Estate Investment Trust | | 39,028 | | | 661,345 |
| | | | | | 1,493,230 |
| Finland – 0.59% | | | | | |
| ±† | Sponda | | 90,433 | | | 323,997 |
| | | | | | 323,997 |
| France – 6.38% | | | | | |
| ± | Klepierre | | 18,742 | | | 776,784 |
| ±* | Unibail-Rodamco | | 12,285 | | | 2,720,183 |
| | | | | | 3,496,967 |
| Germany – 0.91% | | | | | |
| ± | Alstria Office REIT | | 48,873 | | | 499,588 |
| | | | | | 499,588 |
| Hong Kong – 15.73% | | | | | |
| ±* | China Overseas Land & Investment | | 337,164 | | | 726,895 |
| ± | China Resources Land | | 222,669 | | | 537,514 |
| ± | Great Eagle Holdings | | 135,000 | | | 356,114 |
| ± | Henderson Land Development | | 138,655 | | | 980,248 |
| ± | Kerry Properties | | 110,000 | | | 613,332 |
| ± | Kowloon Development | | 378,000 | | | 402,863 |
| ± | New World Development | | 180,323 | | | 388,135 |
| ±* | Shun Tak Holdings | | 856,830 | | | 576,375 |
| ± | Sino Land | | 258,000 | | | 490,708 |
| ± | Sun Hung Kai Properties | | 233,735 | | | 3,541,203 |
| | | | | | 8,613,387 |
| Italy – 0.67% | | | | | |
| ±* | Beni Stabili | | 404,879 | | | 364,853 |
| | | | | | 364,853 |
| Japan – 9.14% | | | | | |
| ±* | Japan Real Estate Investment | | 93 | | | 742,099 |
| ± | Mitsubishi Estate | | 82,512 | | | 1,246,406 |
| ± | Mitsui Fudosan | | 74,446 | | | 1,204,604 |
| ±* | Nippon Accommodations Fund | | 59 | | | 326,016 |
| ±* | Premier Investment | | 71 | | | 268,519 |
| ± | Sumitomo Realty & Development | | 39,000 | | | 739,536 |
| ±* | United Urban Investment | | 82 | | | 478,353 |
| | | | | | 5,005,533 |
| Netherlands – 1.60% | | | | | |
| ± | Corio | | 12,909 | | | 875,249 |
| | | | | | 875,249 |
| Singapore – 3.73% | | | | | |
| ± | CapitaLand | | 421,145 | | | 1,221,185 |
| ± | Parkway Life Real Estate | | | | | |
| Investment Trust | | 459,812 | | | 400,672 |
| ± | Suntec Real Estate Investment Trust | | 495,073 | | | 421,090 |
| | | | | | 2,042,947 |
| Sweden – 0.97% | | | | | |
| ± | Hufvudstaden Class A | | 67,349 | | | 530,231 |
| | | | | | 530,231 |
| Taiwan – 0.45% | | | | | |
| ± | Cathay Real Estate Development | | 629,000 | | | 248,126 |
| | | | | | 248,126 |
| United Kingdom – 7.20% | | | | | |
| ±† | Atrium European Real Estate | | 40,856 | | | 266,994 |
| ± | British Land | | 48,698 | | | 376,102 |
| ± | Great Portland Estates | | 91,989 | | | 372,529 |
| ± | Hammerson | | 106,970 | | | 708,216 |
| ± | Land Securities Group | | 101,511 | | | 1,098,756 |
| ±† | ProLogis European Properties | | 77,544 | | | 500,191 |
| ± | Segro | | 107,930 | | | 621,305 |
| ± | Shaftesbury | | 1 | | | 5 |
| | | | | | 3,944,098 |
| United States – 30.09% | | | | | |
| Alexandria Real Estate Equities | | 6,224 | | | 337,154 |
| AMB Property | | 3,882 | | | 85,326 |
| * | AvalonBay Communities | | 5,099 | | | 350,709 |
| * | Boston Properties | | 11,245 | | | 683,359 |
| Brandywine Realty Trust | | 10,613 | | | 101,460 |
| Camden Property Trust | | 13,705 | | | 496,806 |
| * | CBL & Associates Properties | | 32,867 | | | 268,195 |
| * | Cedar Shopping Centers | | 8,900 | | | 54,023 |
| Corporate Office Properties Trust | | 3,648 | | | 121,077 |
| * | Digital Realty Trust | | 10,765 | | | 485,824 |
| Duke Realty | | 23,673 | | | 266,085 |
| * | Entertainment Properties Trust | | 12,439 | | | 423,175 |
| Equity Lifestyle Properties | | 7,666 | | | 356,086 |
| Equity Residential | | 24,594 | | | 710,275 |
| * | Federal Realty Investment Trust | | 5,479 | | | 323,425 |
| *† | Gaylord Entertainment | | 11,081 | | | 166,547 |
| Government Properties Income Trust | | 9,500 | | | 221,160 |
| HCP | | 33,383 | | | 987,803 |
| * | Health Care REIT | | 14,984 | | | 664,840 |
| Host Hotels & Resorts | | 51,115 | | | 516,773 |
| * | Kimco Realty | | 52,817 | | | 667,607 |
| LaSalle Hotel Properties | | 10,681 | | | 183,286 |
| * | Macerich | | 16,827 | | | 501,445 |
| Mack-Cali Realty | | 7,318 | | | 226,492 |
| * | National Retail Properties | | 13,542 | | | 262,444 |
| Nationwide Health Properties | | 11,666 | | | 376,229 |
2009 Annual report · Delaware Pooled Trust
(continues) 115
Statements of net assets
Delaware Pooled® Trust — The Global Real Estate Securities Portfolio
| | | Number of | | Value | |
| | Shares | | (U.S. $) | |
| Common Stock (continued) | | | | | | |
| United States (continued) | | | | | | |
| Post Properties | | 14,011 | | $ | 231,041 | |
| ProLogis | | 33,890 | | | 383,974 | |
| * | Public Storage | | 9,968 | | | 733,645 | |
| Ramco-Gershenson Properties Trust | | 28,295 | | | 250,128 | |
| * | Simon Property Group | | 33,348 | | | 2,263,995 | |
| SL Green Realty | | 12,168 | | | 471,632 | |
| * | Tanger Factory Outlet Centers | | 9,664 | | | 367,908 | |
| UDR | | 22,400 | | | 322,112 | |
| Ventas | | 11,501 | | | 461,535 | |
| * | Vornado Realty Trust | | 19,411 | | | 1,156,118 | |
| | | | | | 16,479,693 | |
| Total Common Stock | | | | | | |
| (cost $46,506,011) | | | | | 50,447,068 | |
| | | | | | | |
| | Principal | | | | |
| | Amount (U.S. $) | | | | |
| ¹Discount Note – 8.23% | | | | | | |
| Federal Home Loan Bank | | | | | | |
| 0.02% 11/2/09 | $ | 4,506,009 | | | 4,506,007 | |
| Total Discount Note | | | | | | |
| (cost $4,506,007) | | | | | 4,506,007 | |
| | | | | |
| Total Value of Securities Before Securities | | | | |
| Lending Collateral – 100.34% | | | | | | |
| (cost $51,012,018) | | | | | 54,953,075 | |
| | | | | | |
| | Number of | | | | |
| | Shares | | | | |
| Securities Lending Collateral** – 18.40% | | | | |
| Investment Companies | | | | | | |
| Mellon GSL DBT II | | | | | | |
| Collateral Fund | | 7,009,584 | | | 7,009,584 | |
| BNY Mellon SL DBT II | | | | | | |
| Liquidating Fund | | 3,100,898 | | | 3,066,168 | |
| †@Mellon GSL | | | | | | |
| Reinvestment Trust II | | 415,589 | | | 42 | |
| Total Securities Lending Collateral | | | | | | |
| (cost $10,526,071) | | | | | 10,075,794 | |
| | | | | | | |
| Total Value of Securities – 118.74% | | | | | | |
| (cost $61,538,089) | | | | | 65,028,869 | © |
| Obligation to Return Securities | | | | | | |
| Lending Collateral** – (19.22%) | | | | | (10,526,071 | ) |
| Receivables and Other Assets | | | | | | |
| Net of Liabilities – 0.48% | | | | | 264,088 | |
| Net Assets Applicable to 10,837,627 | | | | | | |
| Shares Outstanding – 100.00% | | | | $ | 54,766,886 | |
| | | | | | | | |
| Net Asset Value – Delaware Pooled Trust – | | | | | | |
| The Global Real Estate Securities Portfolio | | | | | | |
| Original Class ($54,760,697 / 10,836,399 Shares) | | | | | | $5.05 | |
| Net Asset Value – Delaware Pooled Trust – | | | | | | |
| The Global Real Estate Securities Portfolio | | | | | | |
| | Class P ($6,189 / 1,228 Shares) | | | | | | $5.04 | |
| | | | | | | | |
| Components of Net Assets at October 31, 2009: | | | | | | |
| Shares of beneficial interest | | | | | | |
| (unlimited authorization – no par) | | | | $ | 167,180,629 | |
| Undistributed net investment income | | | | | 2,293,265 | |
| Accumulated net realized loss on investments | | | | | (118,195,706 | ) |
| Net unrealized appreciation of investments | | | | | | |
| and foreign currencies | | | | | 3,488,698 | |
| Total net assets | | | | $ | 54,766,886 | |
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 75 in “Country and sector allocations.” |
| ± | Security is being valued based on international fair value pricing. At October 31, 2009, the aggregate amount of international fair value priced securities was $32,474,145, which represented 59.30% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| = | Security is being fair valued in accordance with the Portfolio’s fair valuation policy. At October 31, 2009, the aggregate amount of fair valued securities was $0, which represented 0.00% of the Portfolio’s net assets. See Note 1 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $42, which represented 0.09% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
| † | Non income producing security. |
| * | Fully or partially on loan. |
| ¹ | The rate shown is the effective yield at time of purchase. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $10,202,570 of securities loaned. |
Summary of Abbreviations:
AUD — Australian Dollar
HKD — Hong Kong Dollar
JPY — Japanese Yen
NOK — Norwegian Kroner
REIT — Real Estate Investment Trust
USD — United States Dollar
2009 Annual report · Delaware Pooled Trust
116
| |
| 1The following foreign currency exchange contracts were outstanding at October 31, 2009: |
Foreign Currency Exchange Contracts
| | | | | | | | Unrealized |
| Contracts to | | | | | Settlement | | Appreciation |
| Receive (Deliver) | | In Exchange For | | Date | | (Depreciation) |
| AUD | 139,450 | | USD | (127,499 | ) | 11/5/09 | | | $(2,113 | ) |
| HKD | 4,062,515 | | USD | (524,162 | ) | 11/3/09 | | | 33 | |
| JPY | (18,717,490 | ) | USD | 205,101 | | 11/2/09 | | | (2,852 | ) |
| NOK | (1,316,811 | ) | USD | 230,252 | | 11/3/09 | | | 352 | |
| | | | | | | | | $(4,580 | ) |
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional values presented above represent the Portfolio’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 117
Statements of net assets
Delaware Pooled® Trust — The Global Fixed Income Portfolio
October 31, 2009
| | | | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Bonds – 98.15% | | | | | | | |
| Australia – 7.76% | | | | | | | |
| Australian Government | | | | | | | |
| 5.25% 3/15/19 | | AUD | | 6,100,000 | | $ | 5,372,307 |
| 6.00% 2/15/17 | | AUD | | 5,200,000 | | | 4,828,050 |
| Queensland Treasury | | | | | | | |
| 6.00% 8/14/13 | | AUD | | 1,000,000 | | | 911,314 |
| | | | | | | | 11,111,671 |
| Denmark – 1.55% | | | | | | | |
| Kingdom of Denmark | | | | | | | |
| 2.75% 11/15/11 | | USD | | 2,150,000 | | | 2,223,130 |
| | | | | | | | 2,223,130 |
| France – 4.75% | | | | | | | |
| Agence Francaise de | | | | | | | |
| Developement | | | | | | | |
| 1.80% 6/19/15 | | JPY | | 600,000,000 | | | 6,809,483 |
| | | | | | | | 6,809,483 |
| Germany – 6.40% | | | | | | | |
| KFW 5.25% 7/4/12 | | EUR | | 1,850,000 | | | 2,943,601 |
| Rentenbank | | | | | | | |
| 1.375% 4/25/13 | | JPY | | 429,000,000 | | | 4,850,732 |
| 5.00% 2/15/13 | | USD | | 1,260,000 | | | 1,371,437 |
| | | | | | | | 9,165,770 |
| Greece – 2.75% | | | | | | | |
| Hellenic Government | | | | | | | |
| 5.25% 5/18/12 | | EUR | | 2,499,000 | | | 3,941,333 |
| | | | | | | | 3,941,333 |
| Ireland – 3.39% | | | | | | | |
| Republic of Ireland | | | | | | | |
| 4.50% 10/18/18 | | EUR | | 101,829,000 | | | 2,707,481 |
| 5.00% 4/18/13 | | EUR | | 1,364,000 | | | 2,153,287 |
| | | | | | | | 4,860,768 |
| Italy – 12.47% | | | | | | | |
| Italy Buoni Poliennali | | | | | | | |
| Del Tesoro | | | | | | | |
| 3.75% 8/1/15 | | EUR | | 1,250,000 | | | 1,911,585 |
| 4.00% 2/1/37 | | EUR | | 4,900,000 | | | 6,343,673 |
| 4.75% 2/1/13 | | EUR | | 2,700,000 | | | 4,284,191 |
| Republic of Italy | | | | | | | |
| 3.70% 11/14/16 | | JPY | | 440,000,000 | | | 5,317,107 |
| | | | | | | | 17,856,556 |
| Japan – 8.89% | | | | | | | |
| Development Bank of Japan | | | | | | | |
| 2.30% 3/19/26 | | JPY | | 180,000,000 | | | 2,054,818 |
| Japan Finance Organization | | | | | | | |
| for Municipal Enterprises | | | | | | | |
| 1.55% 2/21/12 | | JPY | | 95,000,000 | | | 1,080,845 |
| 2.00% 5/9/16 | | JPY | | 360,000,000 | | | 4,204,621 |
| Japan Government | | | | | | | |
| 10 Year Bond | | | | | | | |
| 1.20% 6/20/11 | | JPY | | 350,000,000 | | | 3,948,557 |
| 30 Year Bond | | | | | | | |
| 2.30% 6/20/35 | | JPY | | 128,000,000 | | | 1,438,510 |
| | | | | | | | 12,727,351 |
| Mexico – 4.85% | | | | | | | |
| Mexican Bonos | | | | | | | |
| 7.75% 12/14/17 | | MXN | | 12,000,000 | | | 899,125 |
| 8.00% 12/23/10 | | MXN | | 2,634,100 | | | 207,061 |
| 9.00% 12/20/12 | | MXN | | 9,220,700 | | | 743,396 |
| 9.50% 12/18/14 | | MXN | | 15,500,000 | | | 1,277,237 |
| 10.00% 12/5/24 | | MXN | | 43,886,000 | | | 3,822,389 |
| | | | | | | | 6,949,208 |
| Netherlands – 4.41% | | | | | | | |
| Deutsche Telekom | | | | | | | |
| International Finance | | | | | | | |
| 8.25% 6/15/30 | | USD | | 758,000 | | | 979,955 |
| E.ON International Finance | | | | | | | |
| 5.80% 4/30/18 | | USD | | 1,350,000 | | | 1,477,781 |
| ING Bank | | | | | | | |
| 3.90% 3/19/14 | | USD | | 1,360,000 | | | 1,426,122 |
| ·6.125% 5/29/23 | | EUR | | 896,000 | | | 1,375,026 |
| Telefonica Europe | | | | | | | |
| 8.25% 9/15/30 | | USD | | 818,000 | | | 1,051,429 |
| | | | | | | | 6,310,313 |
| Norway – 4.80% | | | | | | | |
| Eksportfinans | | | | | | | |
| 1.80% 6/21/10 | | JPY | | 615,000,000 | | | 6,869,101 |
| | | | | | | | 6,869,101 |
| Poland – 3.88% | | | | | | | |
| Poland Government | | | | | | | |
| 5.25% 10/25/17 | | PLN | | 16,000,000 | | | 5,271,592 |
| 5.75% 9/23/22 | | PLN | | 860,000 | | | 287,316 |
| | | | | | | | 5,558,908 |
| Spain – 1.44% | | | | | | | |
| Instituto de Credito Oficial | | | | | | | |
| 5.375% 7/2/12 | | USD | | 1,290,000 | | | 1,409,942 |
| Telefonica Emisiones | | | | | | | |
| 5.877% 7/15/19 | | USD | | 600,000 | | | 649,731 |
| | | | | | | | 2,059,673 |
| Supranational – 6.20% | | | | | | | |
| European Investment Bank | | | | | | | |
| 1.25% 9/20/12 | | JPY | | 110,000,000 | | | 1,249,492 |
| 1.40% 6/20/17 | | JPY | | 360,000,000 | | | 4,043,967 |
| 1.90% 1/26/26 | | JPY | | 292,600,000 | | | 3,119,992 |
| Nordic Investment Bank | | | | | | | |
| 1.70% 4/27/17 | | JPY | | 40,000,000 | | | 459,649 |
| | | | | | | | 8,873,100 |
| Sweden – 4.92% | | | | | | | |
| Sweden Government Bond | | | | | | | |
| 3.00% 7/12/16 | | SEK | | 1,020,000,000 | | | 2,819,244 |
| 4.25% 3/12/19 | | SEK | | 18,500,000 | | | 2,816,667 |
| 6.75% 5/5/14 | | SEK | | 8,500,000 | | | 1,409,308 |
| | | | | | | | 7,045,219 |
2009 Annual report · Delaware Pooled Trust
118
| | | | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Bonds (continued) | | | | | | | |
| United Kingdom – 6.19% | | | | | | | |
| HSBC Holdings | | | | | | | |
| 6.25% 3/19/18 | | EUR | | 900,000 | | $ | 1,495,026 |
| · | Lloyds TSB Bank | | | | | | | |
| 5.625% 3/5/18 | | EUR | | 1,237,000 | | | 1,747,751 |
| # | Royal Bank of Scotland | | | | | | | |
| 144A 4.875% 8/25/14 | | USD | | 2,150,000 | | | 2,190,518 |
| Standard Chartered Bank | | | | | | | |
| 5.875% 9/26/17 | | EUR | | 850,000 | | | 1,334,384 |
| · | Standard Life | | | | | | | |
| 6.375% 7/12/22 | | EUR | | 540,000 | | | 774,745 |
| Tesco 5.50% 11/15/17 | | USD | | 1,262,000 | | | 1,329,273 |
| | | | | | | | 8,871,697 |
| United States – 13.50% | | | | | | | |
| Bank of America | | | | | | | |
| 5.65% 5/1/18 | | USD | | 2,000,000 | | | 2,024,844 |
| 7.625% 6/1/19 | | USD | | 425,000 | | | 491,269 |
| U.S. Treasury Bonds | | | | | | | |
| 4.50% 5/15/38 | | USD | | 594,000 | | | 620,637 |
| 7.50% 11/15/24 | | USD | | 896,000 | | | 1,245,160 |
| U.S. Treasury Notes | | | | | | | |
| 1.75% 1/31/14 | | USD | | 1,000,000 | | | 989,454 |
| 2.375% 3/31/16 | | USD | | 5,000,000 | | | 4,868,755 |
| 3.625% 6/15/10 | | USD | | 1,300,000 | | | 1,327,626 |
| 3.75% 11/15/18 | | USD | | 5,480,000 | | | 5,651,255 |
| 4.00% 8/15/18 | | USD | | 1,400,000 | | | 1,472,736 |
| · | Zurich Finance USA | | | | | | | |
| 4.50% 6/15/25 | | EUR | | 450,000 | | | 634,883 |
| | | | | | | | 19,326,619 |
| Total Bonds | | | | | | | |
| (cost $130,698,930) | | | | | | | 140,559,900 |
| | | | | | | | |
| ¹Discount Note – 0.24% | | | | | | | |
| Federal Home Loan Bank | | | | | | | |
| 0.02% 11/2/09 | | USD | | 336,001 | | | 336,001 |
| Total Discount Note | | | | | | | |
| (cost $336,001) | | | | | | | 336,001 |
| | | | | | | | |
| Total Value of Securities – 98.39% | | | | | | | |
| (cost $131,034,931) | | | | | | | 140,895,901 |
| Receivables and Other Assets | | | | | | | |
| Net of Liabilities – 1.61% | | | | | | | 2,308,489 |
| Net Assets Applicable to 12,690,053 | | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | | |
| $11.28 Per Share – 100.00% | | | | | | $ | 143,204,390 |
| Components of Net Assets at October 31, 2009: | | | | |
| Shares of beneficial interest | | | | |
| (unlimited authorization – no par) | | $ | 128,492,772 | |
| Undistributed net investment income | | | 6,336,270 | |
| Accumulated net realized loss on investments | | | (1,744,649 | ) |
| Net unrealized appreciation of investments | | | | |
| and foreign currencies | | | 10,119,997 | |
| Total net assets | | $ | 143,204,390 | |
°Principal amount is stated in the currency in which each security is denominated.
AUD — Australian Dollar
EUR — European Monetary Unit
GBP — British Pound Sterling
JPY — Japanese Yen
PLN — Polish Zloty
MXN — Mexican Peso
SEK — Swedish Krona
USD — United States Dollar
| · | Variable rate security. The rate shown is the rate as of October 31, 2009. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At October 31, 2009, the aggregate amount of Rule 144A securities was $2,190,518, which represented 1.53% of the Portfolio’s net assets. See Note 10 in “Notes to financial statements.” |
1 The following foreign cross currency exchange contract was outstanding at October 31, 2009:
Foreign Currency Exchange Contract
| | | | | | | Unrealized |
| Contracts to Deliver | | In Exchange For | | Settlement Date | | Appreciation |
| EUR | (12,509,090 | ) | GBP | 11,353,500 | | 1/29/10 | | | $ | 230,976 | |
The use of foreign cross currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional value presented above represents the Portfolio’s total exposure in such contracts, whereas only the net unrealized appreciation is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 119
Statements of net assets
Delaware Pooled® Trust — The International Fixed Income Portfolio
October 31, 2009
| | | | Principal | | Value |
| | | Amount° | | (U.S. $) |
| Bonds – 97.66% | | | | | | | |
| Australia – 7.79% | | | | | | | |
| Australian Government | | | | | | | |
| 5.25% 3/15/19 | | AUD | | 1,100,000 | | $ | 968,777 |
| 6.00% 2/15/17 | | AUD | | 400,000 | | | 371,388 |
| Queensland Treasury | | | | | | | |
| 6.00% 8/14/13 | | AUD | | 200,000 | | | 182,263 |
| | | | | | | | 1,522,428 |
| Austria – 1.43% | | | | | | | |
| Oesterreichische Kontrollbank | | | | | | | |
| 1.80% 3/22/10 | | JPY | | 25,000,000 | | | 278,599 |
| | | | | | | | 278,599 |
| Belgium – 0.43% | | | | | | | |
| Belgian Government | | | | | | | |
| 5.50% 3/28/28 | | EUR | | 50,000 | | | 84,669 |
| | | | | | | | 84,669 |
| Finland – 2.17% | | | | | | | |
| Finnish Government | | | | | | | |
| 5.375% 7/4/13 | | EUR | | 260,000 | | | 425,075 |
| | | | | | | | 425,075 |
| France – 13.91% | | | | | | | |
| Agence Francaise de | | | | | | | |
| Developement | | | | | | | |
| 1.80% 6/19/15 | | JPY | | 70,000,000 | | | 794,439 |
| Compagnie de Financement | | | | | | | |
| Foncier 0.60% 3/23/10 | | JPY | | 60,000,000 | | | 663,272 |
| Dexia Municipal Agency | | | | | | | |
| 1.55% 10/31/13 | | JPY | | 5,000,000 | | | 54,564 |
| 1.80% 5/9/17 | | JPY | | 35,000,000 | | | 374,187 |
| France Government | | | | | | | |
| 5.75% 10/25/32 | | EUR | | 460,000 | | | 832,408 |
| | | | | | | | 2,718,870 |
| Germany – 12.61% | | | | | | | |
| Bayerische Landesbank | | | | | | | |
| 1.40% 4/22/13 | | JPY | | 28,000,000 | | | 313,351 |
| Deutschland Republic | | | | | | | |
| 6.50% 7/4/27 | | EUR | | 430,000 | | | 829,015 |
| KFW 5.00% 7/4/11 | | EUR | | 340,000 | | | 530,942 |
| Rentenbank 1.375% 4/25/13 | | JPY | | 70,000,000 | | | 791,495 |
| | | | | | | | 2,464,803 |
| Greece – 3.38% | | | | | | | |
| Hellenic Republic Government | | | | | | | |
| 4.60% 7/20/18 | | EUR | | 440,000 | | | 659,659 |
| | | | | | | | 659,659 |
| Ireland – 3.66% | | | | | | | |
| Irish Government | | | | | | | |
| 4.50% 10/18/18 | | EUR | | 120,000 | | | 177,637 |
| 5.00% 4/18/13 | | EUR | | 340,000 | | | 536,743 |
| | | | | | | | 714,380 |
| Italy – 4.61% | | | | | | | |
| Italy Buoni Poliennali Del | | | | | | | |
| Tesoro 5.25% 8/1/17 | | EUR | | 400,000 | | | 660,798 |
| Republic of Italy 4.50% 6/8/15 | | JPY | | 19,000,000 | | | 239,279 |
| | | | | | | | 900,077 |
| Japan – 10.77% | | | | | | | |
| Development Bank of Japan | | | | | | | |
| 1.05% 6/20/23 | | JPY | | 55,000,000 | | | 547,132 |
| Japan Finance Organization | | | | | | | |
| Municipal Enterprises | | | | | | | |
| 1.35% 11/26/13 | | JPY | | 63,000,000 | | | 718,042 |
| Japan Government 20 Year | | | | | | | |
| Bond 1.90% 3/22/21 | | JPY | | 73,000,000 | | | 839,103 |
| | | | | | | | 2,104,277 |
| Mexico – 4.44% | | | | | | | |
| Mexican Bonos | | | | | | | |
| 8.00% 12/23/10 | | MXN | | 1,600,000 | | | 125,773 |
| 8.00% 12/7/23 | | MXN | | 5,000,000 | | | 369,977 |
| 9.50% 12/18/14 | | MXN | | 2,600,000 | | | 214,246 |
| 10.00% 12/5/24 | | MXN | | 1,800,000 | | | 156,777 |
| | | | | | | | 866,773 |
| Netherlands – 4.56% | | | | | | | |
| Bank Nederlandse Gemeenten | | | | | | | |
| 1.85% 11/7/16 | | JPY | | 40,000,000 | | | 460,314 |
| · | ING Bank 6.125% 5/29/23 | | EUR | | 160,000 | | | 245,540 |
| Netherlands Government | | | | | | | |
| 3.75% 7/15/14 | | EUR | | 120,000 | | | 186,028 |
| | | | | | | | 891,882 |
| Norway – 6.24% | | | | | | | |
| Eksportfinans | | | | | | | |
| 1.60% 3/20/14 | | JPY | | 84,000,000 | | | 928,843 |
| 1.80% 6/21/10 | | JPY | | 26,000,000 | | | 290,401 |
| | | | | | | | 1,219,244 |
| Poland – 3.88% | | | | | | | |
| Poland Government | | | | | | | |
| 5.25% 10/25/17 | | PLN | | 1,700,000 | | | 560,107 |
| 5.75% 9/23/22 | | PLN | | 590,000 | | | 197,112 |
| | | | | | | | 757,219 |
| Slovenia – 2.85% | | | | | | | |
| Republic of Slovenia | | | | | | | |
| 6.00% 3/24/10 | | EUR | | 370,000 | | | 556,930 |
| | | | | | | | 556,930 |
| Supranational – 3.45% | | | | | | | |
| Asian Development Bank | | | | | | | |
| 2.35% 6/21/27 | | JPY | | 40,000,000 | | | 456,962 |
| European Investment Bank | | | | | | | |
| 2.15% 1/18/27 | | JPY | | 20,000,000 | | | 217,204 |
| | | | | | | | 674,166 |
| Sweden – 4.89% | | | | | | | |
| Sweden Government | | | | | | | |
| 3.00% 7/12/16 | | SEK | | 4,400,000 | | | 620,234 |
| 4.25% 3/12/19 | | SEK | | 2,200,000 | | | 334,955 |
| | | | | | | | 955,189 |
| United Kingdom – 6.01% | | | | | | | |
| HSBC Holdings | | | | | | | |
| 6.25% 3/19/18 | | EUR | | 150,000 | | | 249,171 |
| · | Lloyds TSB Bank | | | | | | | |
| 5.625% 3/5/18 | | EUR | | 175,000 | | | 247,257 |
2009 Annual report · Delaware Pooled Trust
120
| | | | Principal | | Value | |
| | | Amount° | | (U.S. $) | |
| Bonds (continued) | | | | | | | | |
| United Kingdom (continued) | | | | | | | | |
| Royal Bank of Scotland | | | | | | | | |
| 5.375% 9/30/19 | | EUR | | 200,000 | | $ | 298,701 | |
| Standard Chartered Bank | | | | | | | | |
| 5.875% 9/26/17 | | EUR | | 150,000 | | | 235,480 | |
| · | Standard Life Finance | | | | | | | | |
| 6.375% 7/12/22 | | EUR | | 100,000 | | | 143,471 | |
| | | | | | | | 1,174,080 | |
| United States – 0.58% | | | | | | | | |
| · | Zurich Finance USA | | | | | | | | |
| 4.50% 6/15/25 | | EUR | | 80,000 | | | 112,868 | |
| | | | | | | | 112,868 | |
| Total Bonds | | | | | | | | |
| (cost $17,096,959) | | | | | | | 19,081,188 | |
| | | | | | | | | |
| ¹Discount Note – 1.19% | | | | | | | | |
| Federal Home Loan Bank | | | | | | | | |
| 0.02% 11/2/09 | | USD | | 232,000 | | | 232,000 | |
| Total Discount Note | | | | | | | | |
| (cost $232,000) | | | | | | | 232,000 | |
| | | | | | | | | |
| Total Value of Securities – 98.85% | | | | | | | | |
| (cost $17,328,959) | | | | | | | 19,313,188 | |
| Receivables and Other Assets | | | | | | | | |
| Net of Liabilities – 1.15% | | | | | | | 225,284 | |
| Net Assets Applicable to 1,571,559 | | | | | | | | |
| Shares Outstanding; Equivalent to | | | | | | | | |
| $12.43 Per Share – 100.00% | | | | | | $ | 19,538,472 | |
| | | | | | | | | |
| Components of Net Assets at October 31, 2009: | | | | | | | | |
| Shares of beneficial interest | | | | | | | | |
| (unlimited authorization – no par) | | | | | | $ | 16,308,995 | |
| Undistributed net investment income | | | | | | | 1,762,634 | |
| Accumulated net realized loss on investments | | | (553,756 | ) |
| Net unrealized appreciation of investments | | | | | | | | |
| and foreign currencies | | | | | | | 2,020,599 | |
| Total net assets | | | | | | $ | 19,538,472 | |
°Principal amount shown is stated in the currency in which each security is denominated.
AUD — Australian Dollar
EUR — European Monetary Unit
GBP — British Pound Sterling
JPY — Japanese Yen
MXN — Mexican Peso
PLN — Polish Zloty
SEK — Swedish Krona
USD — United States Dollar
| · | Variable rate security. The rate shown is the rate as of October 31, 2009. |
| ¹ | The rate shown is the effective yield at the time of purchase. |
| 1The following foreign cross currency exchange contract was outstanding at October 31, 2009: |
| | | | | | | |
| Foreign Currency Exchange Contract | | | |
| | | | | | | Unrealized |
| Contracts to Deliver | | In Exchange For | | Settlement Date | | Appreciation |
| EUR | (1,703,356 | ) | GBP | 1,546,000 | | 1/29/10 | | | $ | 31,451 | |
The use of foreign cross currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional value presented above represents the Portfolio’s total exposure in such contracts, whereas only the net unrealized appreciation is reflected in the Portfolio’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
121
Statements of operations
Delaware Pooled® Trust
Year Ended October 31, 2009
| | The | | | | The | | The |
| | Large-Cap | | The | | Large-Cap | | Small-Cap |
| | Value Equity | | Select 20 | | Growth Equity | | Growth Equity |
| | Portfolio | | Portfolio | | Portfolio | | Portfolio |
| Investment Income: | | | | | | | | | | | | | | | | |
| Dividends | | $ | 329,699 | | | $ | 51,313 | | | $ | 2,203,422 | | | $ | 4,497 | |
| Interest | | | 334 | | | | 845 | | | | 6,587 | | | | 196 | |
| Securities lending income | | | — | | | | 2,673 | | | | 61,223 | | | | 2,351 | |
| Foreign tax withheld | | | — | | | | (1,437 | ) | | | (36,885 | ) | | | (22 | ) |
| | | 330,033 | | | | 53,394 | | | | 2,234,347 | | | | 7,022 | |
| Expenses: | | | | | | | | | | | | | | | | |
| Management fees | | | 49,287 | | | | 66,955 | | | | 1,270,873 | | | | 12,499 | |
| Accounting and administration expenses | | | 3,584 | | | | 3,571 | | | | 92,427 | | | | 666 | |
| Reports and statements to shareholders | | | 1,289 | | | | 768 | | | | 16,019 | | | | 47 | |
| Registration fees | | | 14,397 | | | | 13,930 | | | | 21,760 | | | | 14,251 | |
| Legal fees | | | 1,292 | | | | 1,356 | | | | 33,159 | | | | 68 | |
| Dividend disbursing and transfer agent fees and expenses | | | 4,216 | | | | 4,736 | | | | 21,251 | | | | 4,590 | |
| Custodian fees | | | 347 | | | | 969 | | | | 5,537 | | | | 1,287 | |
| Trustees’ fees | | | 604 | | | | 601 | | | | 15,739 | | | | 132 | |
| Dues and services | | | 569 | | | | 413 | | | | 2,186 | | | | 576 | |
| Audit and tax | | | 11,426 | | | | 11,467 | | | | 25,254 | | | | 9,431 | |
| Consulting fees | | | 118 | | | | 115 | | | | 3,330 | | | | 22 | |
| Trustees’ expenses | | | 44 | | | | 42 | | | | 1,174 | | | | 10 | |
| Pricing fees | | | 665 | | | | 662 | | | | 683 | | | | 986 | |
| Insurance fees | | | 246 | | | | 211 | | | | 7,596 | | | | 11 | |
| | | | 88,084 | | | | 105,796 | | | | 1,516,988 | | | | 44,576 | |
| Less fees absorbed or waived | | | (26,017 | ) | | | (26,457 | ) | | | (17,841 | ) | | | (30,592 | ) |
| | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 62,067 | | | | 79,339 | | | | 1,499,147 | | | | 13,984 | |
| | | | | | | | | | | | | | | | | |
| Net Investment Income (Loss) | | | 267,966 | | | | (25,945 | ) | | | 735,200 | | | | (6,962 | ) |
| | | | | | | | | | | | | | | | | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | | | | | |
| on Investments and Foreign Currencies: | | | | | | | | | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | | | | | | | | | |
| Investments | | | (737,530 | ) | | | (2,571,359 | ) | | | (59,658,707 | ) | | | (2,007,606 | ) |
| Foreign currencies | | | — | | | | 1,106 | | | | — | | | | (42 | ) |
| Net realized loss | | | (737,530 | ) | | | (2,570,253 | ) | | | (59,658,707 | ) | | | (2,007,648 | ) |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | | | | | |
| of investments and foreign currencies | | | 1,568,873 | | | | 4,572,319 | | | | 96,061,499 | | | | 1,305,958 | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | | | | | |
| on Investments and Foreign Currencies | | | 831,343 | | | | 2,002,066 | | | | 36,402,792 | | | | (701,690 | ) |
| | | | | | | | | | | | | | | | | |
| Net Increase (Decrease) In Net Assets | | | | | | | | | | | | | | | | |
| Resulting from Operations | | $ | 1,099,309 | | | $ | 1,976,121 | | | $ | 37,137,992 | | | $ | (708,652 | ) |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
122
| | The | | The | | The | | The |
| | Focus Smid-Cap | | Real Estate | | Core Focus | | High-Yield |
| | Growth Equity | | Investment | | Fixed Income | | Bond |
| | Portfolio | | Trust Portfolio II | | Portfolio | | Portfolio |
| Investment Income: | | | | | | | | | | | | | | | | |
| Dividends | | $ | 33,284 | | | $ | 195,637 | | | $ | 10,740 | | | $ | 22,387 | |
| Interest | | | 172 | | | | 325 | | | | 1,210,256 | | | | 2,317,636 | |
| Securities lending income | | | 2,759 | | | | 809 | | | | 14,611 | | | | 13,224 | |
| Foreign tax witheld | | | (408 | ) | | | — | | | | — | | | | — | |
| | | | 35,807 | | | | 196,771 | | | | 1,235,607 | | | | 2,353,247 | |
| Expenses: | | | | | | | | | | | | | | | | |
| Management fees | | | 24,069 | | | | 32,905 | | | | 91,913 | | | | 90,901 | |
| Accounting and administration expenses | | | 1,284 | | | | 1,755 | | | | 9,191 | | | | 8,080 | |
| Reports and statements to shareholders | | | 1,340 | | | | 366 | | | | 2,340 | | | | 1,558 | |
| Registration fees | | | 2,298 | | | | 12,582 | | | | 16,136 | | | | 14,800 | |
| Legal fees | | | 423 | | | | 639 | | | | 3,312 | | | | 3,610 | |
| Dividend disbursing and transfer agent fees and expenses | | | 3,794 | | | | 3,782 | | | | 5,278 | | | | 6,087 | |
| Custodian fees | | | 600 | | | | 2,378 | | | | 5,681 | | | | 3,143 | |
| Trustees’ fees | | | 226 | | | | 293 | | | | 1,661 | | | | 1,357 | |
| Dues and services | | | 1,534 | | | | 615 | | | | 158 | | | | 607 | |
| Audit and tax | | | 11,135 | | | | 10,943 | | | | 12,042 | | | | 14,210 | |
| Consulting fees | | | 39 | | | | 60 | | | | 314 | | | | 269 | |
| Trustees’ expenses | | | 16 | | | | 22 | | | | 136 | | | | 107 | |
| Pricing fees | | | 689 | | | | 762 | | | | 13,333 | | | | 12,814 | |
| Insurance fees | | | 128 | | | | 130 | | | | 1,001 | | | | 571 | |
| | | | 47,575 | | | | 67,232 | | | | 162,496 | | | | 158,114 | |
| Less fees waived | | | (18,022 | ) | | | (27,145 | ) | | | (63,575 | ) | | | (38,866 | ) |
| | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 29,553 | | | | 40,087 | | | | 98,921 | | | | 119,248 | |
| | | | | | | | | | | | | | | | | |
| Net Investment Income | | | 6,254 | | | | 156,684 | | | | 1,136,686 | | | | 2,233,999 | |
| | | | | | | | | | | | | | | | | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | | | | | |
| on Investments and Foreign Currencies: | | | | | | | | | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | | | | | | | | | |
| Investments | | | (1,419,238 | ) | | | (2,692,436 | ) | | | (640,805 | ) | | | (2,039,019 | ) |
| Futures contracts | | | — | | | | — | | | | 62,315 | | | | — | |
| Written options | | | — | | | | — | | | | (279,416 | ) | | | — | |
| Swap contracts | | | — | | | | — | | | | (2,717 | ) | | | 18,257 | |
| Foreign currencies | | | (4,835 | ) | | | — | | | | (3 | ) | | | — | |
| Net realized loss | | | (1,424,073 | ) | | | (2,692,436 | ) | | | (860,626 | ) | | | (2,020,762 | ) |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | | | | | |
| of investments and foreign currencies | | | 1,982,627 | | | | 2,420,886 | | | | 3,214,236 | | | | 7,482,317 | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | | | | | |
| on Investments and Foreign Currencies | | | 558,554 | | | | (271,550 | ) | | | 2,353,610 | | | | 5,461,555 | |
| | | | | | | | | | | | | | | | | |
| Net Increase (Decrease) In Net Assets | | | | | | | | | | | | | | | | |
| Resulting from Operations | | $ | 564,808 | | | $ | (114,866 | ) | | $ | 3,490,296 | | | $ | 7,695,554 | |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 123
Statements of operations
Delaware Pooled® Trust
| | | | | | The | | |
| | The | | The | | Labor Select | | The |
| | Core Plus | | International | | International | | Emerging |
| | Fixed Income | | Equity | | Equity | | Markets |
| | Portfolio | | Portfolio | | Portfolio | | Portfolio |
| Investment Income: | | | | | | | | | | | | | | | | |
| Dividends | | $ | 40,637 | | | $ | 37,823,611 | | | $ | 28,843,254 | | | $ | 21,689,171 | |
| Interest | | | 4,598,525 | | | | 18,955 | | | | 20,865 | | | | 17,502 | |
| Securities lending income | | | 23,522 | | | | 716,672 | | | | 633,372 | | | | 297,720 | |
| Foreign tax withheld | | | — | | | | (3,139,197 | ) | | | (2,225,601 | ) | | | (1,851,748 | ) |
| | | 4,662,684 | | | | 35,420,041 | | | | 27,271,890 | | | | 20,152,645 | |
| Expenses: | | | | | | | | | | | | | | | | |
| Management fees | | | 313,033 | | | | 6,284,878 | | | | 4,948,345 | | | | 5,205,411 | |
| Accounting and administration expenses | | | 29,119 | | | | 335,193 | | | | 263,912 | | | | 208,216 | |
| Reports and statements to shareholders | | | 6,252 | | | | 55,132 | | | | 42,662 | | | | 34,698 | |
| Registration fees | | | 15,550 | | | | 17,077 | | | | 20,360 | | | | 23,430 | |
| Legal fees | | | 10,923 | | | | 123,018 | | | | 96,547 | | | | 75,969 | |
| Dividend disbursing and transfer agent fees and expenses | | | 9,112 | | | | 71,726 | | | | 54,199 | | | | 43,000 | |
| Custodian fees | | | 13,453 | | | | 310,748 | | | | 252,633 | | | | 350,351 | |
| Trustees’ fees | | | 5,221 | | | | 57,895 | | | | 43,793 | | | | 34,489 | |
| Dues and services | | | 591 | | | | 8,255 | | | | 4,998 | | | | 4,850 | |
| Audit and tax | | | 16,190 | | | | 46,680 | | | | 47,236 | | | | 44,041 | |
| Consulting fees | | | 1,116 | | | | 12,762 | | | | 8,931 | | | | 7,436 | |
| Trustees’ expenses | | | 423 | | | | 4,328 | | | | 3,236 | | | | 2,473 | |
| Pricing fees | | | 20,246 | | | | 4,889 | | | | 4,360 | | | | 4,700 | |
| Insurance fees | | | 2,059 | | | | 25,812 | | | | 18,672 | | | | 14,930 | |
| | | | 443,288 | | | | 7,358,393 | | | | 5,809,884 | | | | 6,053,994 | |
| Less fees waived | | | (114,788 | ) | | | — | | | | — | | | | — | |
| | | | | | | | | | | | | | | | | |
| Total operating expenses | | | 328,500 | | | | 7,358,393 | | | | 5,809,884 | | | | 6,053,994 | |
| | | | | | | | | | | | | | | | | |
| Net Investment Income | | | 4,334,184 | | | | 28,061,648 | | | | 21,462,006 | | | | 14,098,651 | |
| | | | | | | | | | | | | | | | | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | | | | | |
| on Investments and Foreign Currencies: | | | | | | | | | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | | | | | | | | | |
| Investments | | | (2,111,148 | ) | | | (167,255,403 | ) | | | (85,355,469 | ) | | | (51,450,697 | ) |
| Redemptions in kind* | | | — | | | | (10,754,867 | ) | | | — | | | | — | |
| Futures contracts | | | (35,582 | ) | | | — | | | | — | | | | — | |
| Swap contracts | | | (66,021 | ) | | | — | | | | — | | | | — | |
| Written options | | | 27 | | | | — | | | | — | | | | — | |
| Foreign currencies | | | (254,350 | ) | | | 1,012,043 | | | | 656,048 | | | | (925,501 | ) |
| Net realized loss | | | (2,467,074 | ) | | | (176,998,227 | ) | | | (84,699,421 | ) | | | (52,376,198 | ) |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | | | | | |
| of investments and foreign currencies | | | 13,639,895 | | | | 272,398,584 | | | | 177,115,167 | | | | 281,676,826 | |
| Net Realized and Unrealized Gain | | | | | | | | | | | | | | | | |
| on Investments and Foreign Currencies | | | 11,172,821 | | | | 95,400,357 | | | | 92,415,746 | | | | 229,300,628 | |
| | | | | | | | | | | | | | | | | |
| Net Increase In Net Assets | | | | | | | | | | | | | | | | |
| Resulting from Operations | | $ | 15,507,005 | | | $ | 123,462,005 | | | $ | 113,877,752 | | | $ | 243,399,279 | |
*See Note 12 in “Notes to Financial Statements”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
124
| | The | | | | |
| | Global | | The | | The |
| | Real Estate | | Global Fixed | | International |
| | Securities | | Income | | Fixed Income |
| | Portfolio | | Portfolio | | Portfolio |
| Investment Income: | | | | | | | | | | | | |
| Dividends | | $ | 2,539,221 | | | $ | — | | | $ | — | |
| Interest | | | 6,061 | | | | 5,480,996 | | | | 1,657,040 | |
| Securities lending income | | | 80,111 | | | | 722 | | | | 104 | |
| Foreign tax withheld | | | (112,672 | ) | | | — | | | | — | |
| | | | 2,512,721 | | | | 5,481,718 | | | | 1,657,144 | |
| Expenses: | | | | | | | | | | | | |
| Management fees | | | 549,078 | | | | 748,720 | | | | 99,411 | |
| Accounting and administration expenses | | | 22,185 | | | | 59,898 | | | | 7,953 | |
| Reports and statements to shareholders | | | 5,110 | | | | 11,576 | | | | 2,278 | |
| Registration fees | | | 20,249 | | | | 12,580 | | | | 9,835 | |
| Legal fees | | | 6,786 | | | | 22,797 | | | | 2,873 | |
| Dividend disbursing and transfer agent fees and expenses | | | 13,251 | | | | 14,975 | | | | 4,992 | |
| Custodian fees | | | 29,659 | | | | 68,093 | | | | 11,454 | |
| Trustees’ fees | | | 3,890 | | | | 10,279 | | | | 1,398 | |
| Dues and services | | | 864 | | | | 1,109 | | | | 118 | |
| Audit and tax | | | 14,019 | | | | 15,993 | | | | 11,652 | |
| Consulting fees | | | 850 | | | | 2,443 | | | | 279 | |
| Trustees’ expenses | | | 288 | | | | 816 | | | | 115 | |
| Pricing fees | | | 4,835 | | | | 3,927 | | | | 3,249 | |
| Insurance fees | | | 2,135 | | | | 4,798 | | | | 628 | |
| Distribution expenses – Class P | | | 12 | | | | — | | | | — | |
| | | | 673,211 | | | | 978,004 | | | | 156,235 | |
| Less fees waived | | | (77,434 | ) | | | (79,790 | ) | | | (36,687 | ) |
| | | | | | | | | | | | | |
| Total operating expenses | | | 595,777 | | | | 898,214 | | | | 119,548 | |
| | | | | | | | | | | | | |
| Net Investment Income | | | 1,916,944 | | | | 4,583,504 | | | | 1,537,596 | |
| | | | | | | | | | | | | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | |
| on Investments and Foreign Currencies: | | | | | | | | | | | | |
| Net realized gain (loss) on: | | | | | | | | | | | | |
| Investments | | | (48,772,935 | ) | | | 3,303,081 | | | | (542,837 | ) |
| Redemptions in kind* | | | — | | | | (127,221 | ) | | | — | |
| Foreign currencies | | | (271,714 | ) | | | 2,113,393 | | | | 1,342,914 | |
| Net realized gain (loss) | | | (49,044,649 | ) | | | 5,289,253 | | | | 800,077 | |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | |
| of investments and foreign currencies | | | 47,409,914 | | | | 13,784,058 | | | | 1,059,368 | |
| | | | | | | | | | | | | |
| Net Realized and Unrealized Gain (Loss) | | | | | | | | | | | | |
| on Investments and Foreign Currencies | | | (1,634,735 | ) | | | 19,073,311 | | | | 1,859,445 | |
| | | | | | | | | | | | | |
| Net Increase In Net Assets | | | | | | | | | | | | |
| Resulting from Operations | | $ | 282,209 | | | $ | 23,656,815 | | | $ | 3,397,041 | |
*See Note 12 in “Notes to Financial Statements”
See accompanying notes
2009 Annual report · Delaware Pooled Trust
125
Statements of changes in net assets
Delaware Pooled® Trust
| | The | | | | | | | | | | The |
| | Large-Cap | | The | | Large-Cap |
| | Value Equity | | Select 20 | | Growth Equity |
| | Portfolio | | Portfolio | | Portfolio |
| | Year | | Year | | Year | | Year | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 |
| Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| from Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | 267,966 | | | $ | 220,200 | | | $ | (25,945 | ) | | $ | 8,228 | | | $ | 735,200 | | | $ | 783,976 | |
| Net realized loss on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | (737,530 | ) | | | (1,610,572 | ) | | | (2,570,253 | ) | | | (178,780 | ) | | | (59,658,707 | ) | | | (17,955,538 | ) |
| Net change in unrealized appreciation/ | | | | | | | | | | | | | | | | | | | | | | | | |
| depreciation of investments and | | | | | | | | | | | | | | | | | | | | | | | | |
| foreign currencies | | | 1,568,873 | | | | (3,407,972 | ) | | | 4,572,319 | | | | (4,323,181 | ) | | | 96,061,499 | | | | (172,056,990 | ) |
| Net increase (decrease) in net assets | | | | | | | | | | | | | | | | | | | | | | | | |
| resulting from operations | | | 1,099,309 | | | | (4,798,344 | ) | | | 1,976,121 | | | | (4,493,733 | ) | | | 37,137,992 | | | | (189,228,552 | ) |
| |
| Dividends and Distributions to | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (237,317 | ) | | | (281,600 | ) | | | (8,262 | ) | | | — | | | | (1,012,945 | ) | | | (611,041 | ) |
| Return of capital | | | — | | | | — | | | | (7,220 | ) | | | — | | | | — | | | | — | |
| Net realized gain on investments | | | — | | | | (819,533 | ) | | | — | | | | — | | | | — | | | | (3,840,827 | ) |
| | | | (237,317 | ) | | | (1,101,133 | ) | | | (15,482 | ) | | | — | | | | (1,012,945 | ) | | | (4,451,868 | ) |
| Capital Share Transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 129,918 | | | | 4,000,002 | | | | 13,741 | | | | 10,793,983 | | | | 18,048,099 | | | | 44,699,387 | |
| Net asset value of shares issued upon | | | | | | | | | | | | | | | | | | | | | | | | |
| reinvestment of dividends and distributions | | | 210,805 | | | | 1,056,003 | | | | — | | | | — | | | | 776,299 | | | | 4,189,550 | |
| | | | 340,723 | | | | 5,056,005 | | | | 13,741 | | | | 10,793,983 | | | | 18,824,398 | | | | 48,888,937 | |
| Cost of shares repurchased | | | (86,008 | ) | | | (446,258 | ) | | | (703,650 | ) | | | — | | | | (62,458,425 | ) | | | (57,582,596 | ) |
| Increase (decrease) in net assets derived | | | | | | | | | | | | | | | | | | | | | | | | |
| from capital share transactions | | | 254,715 | | | | 4,609,747 | | | | (689,909 | ) | | | 10,793,983 | | | | (43,634,027 | ) | | | (8,693,659 | ) |
| |
| Net Increase (Decrease) In Net Assets | | | 1,116,707 | | | | (1,289,730 | ) | | | 1,270,730 | | | | 6,300,250 | | | | (7,508,980 | ) | | | (202,374,079 | ) |
| |
| Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning of year | | | 8,988,199 | | | | 10,277,929 | | | | 8,932,964 | | | | 2,632,714 | | | | 258,525,611 | | | | 460,899,690 | |
| End of year | | $ | 10,104,906 | | | $ | 8,988,199 | | | $ | 10,203,694 | | | $ | 8,932,964 | | | $ | 251,016,631 | | | $ | 258,525,611 | |
| |
| Undistributed net investment income | | $ | 205,980 | | | $ | 175,331 | | | $ | — | | | $ | 8,262 | | | $ | 477,181 | | | $ | 754,926 | |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
126
| | The | | The | | The |
| | Small-Cap | | Focus Smid-Cap | | Real Estate |
| | Growth Equity | | Growth Equity | | Investment Trust |
| | Portfolio | | Portfolio | | Portfolio II |
| | Year | | Year | | Year | | Year | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 |
| Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| from Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income (loss) | | $ | (6,962 | ) | | $ | (18,535 | ) | | $ | 6,254 | | | $ | 40,333 | | | $ | 156,684 | | | $ | 209,017 | |
| Net realized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | (2,007,648 | ) | | | 1,106,654 | | | | (1,424,073 | ) | | | (691,830 | ) | | | (2,692,436 | ) | | | (1,868,092 | ) |
| Net change in unrealized appreciation/ | | | | | | | | | | | | | | | | | | | | | | | | |
| depreciation of investments | | | 1,305,958 | | | | (7,116,413 | ) | | | 1,982,627 | | | | (2,200,067 | ) | | | 2,420,886 | | | | (2,092,438 | ) |
| Net increase (decrease) in net assets | | | | | | | | | | | | | | | | | | | | | | | | |
| resulting from operations | | | (708,652 | ) | | | (6,028,294 | ) | | | 564,808 | | | | (2,851,564 | ) | | | (114,866 | ) | | | (3,751,513 | ) |
| |
| Dividends and Distributions to | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | — | | | | — | | | | (36,642 | ) | | | (23,963 | ) | | | (295,942 | ) | | | (125,724 | ) |
| Net realized gain on investments | | | (1,114,784 | ) | | | (10,616,858 | ) | | | — | | | | (561,191 | ) | | | — | | | | (5,218,577 | ) |
| | | | (1,114,784 | ) | | | (10,616,858 | ) | | | (36,642 | ) | | | (585,154 | ) | | | (295,942 | ) | | | (5,344,301 | ) |
| Capital Share Transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 409,649 | | | | 1,205,410 | | | | 544,671 | | | | 3,893,376 | | | | — | | | | 2,167,811 | |
| Net asset value of shares issued upon | | | | | | | | | | | | | | | | | | | | | | | | |
| reinvestment of dividends and distributions | | | 999,280 | | | | 8,901,015 | | | | 30,427 | | | | 186,778 | | | | 295,942 | | | | 4,855,495 | |
| | | | 1,408,929 | | | | 10,106,425 | | | | 575,098 | | | | 4,080,154 | | | | 295,942 | | | | 7,023,306 | |
| Cost of shares repurchased | | | (4,812,057 | ) | | | (6,137,995 | ) | | | (1,957,935 | ) | | | (5,119,784 | ) | | | — | | | | (6,370,864 | ) |
| Increase (decrease) in net assets derived | | | | | | | | | | | | | | | | | | | | | | | | |
| from capital share transactions | | | (3,403,128 | ) | | | 3,968,430 | | | | (1,382,837 | ) | | | (1,039,630 | ) | | | 295,942 | | | | 652,442 | |
| |
| Net Decrease In Net Assets | | | (5,226,564 | ) | | | (12,676,722 | ) | | | (854,671 | ) | | | (4,476,348 | ) | | | (114,866 | ) | | | (8,443,372 | ) |
| |
| Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning of year | | | 5,887,580 | | | | 18,564,302 | | | | 4,304,805 | | | | 8,781,153 | | | | 5,345,654 | | | | 13,789,026 | |
| End of year | | $ | 661,016 | | | $ | 5,887,580 | | | $ | 3,450,134 | | | $ | 4,304,805 | | | $ | 5,230,788 | | | $ | 5,345,654 | |
| |
| Undistributed net investment income | | $ | — | | | $ | — | | | $ | — | | | $ | 27,839 | | | $ | 108,076 | | | $ | 247,334 | |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 127
Statements of changes in net assets
Delaware Pooled® Trust
| | The | | The | | The |
| | Core Focus | | High-Yield | | Core Plus |
| | Fixed Income | | Bond | | Fixed Income |
| | Portfolio | | Portfolio | | Portfolio |
| | Year | | Year | | Year | | Year | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 |
| Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| from Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 1,136,686 | | | $ | 1,580,537 | | | $ | 2,233,999 | | | $ | 1,748,658 | | | $ | 4,334,184 | | | $ | 7,087,240 | |
| Net realized loss on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | (860,626 | ) | | | (53,556 | ) | | | (2,020,762 | ) | | | (2,886,572 | ) | | | (2,467,074 | ) | | | (755,821 | ) |
| Net change in unrealized appreciation/ | | | | | | | | | | | | | | | | | | | | | | | | |
| depreciation of investments and | | | | | | | | | | | | | | | | | | | | | | | | |
| foreign currencies | | | 3,214,236 | | | | (2,738,646 | ) | | | 7,482,317 | | | | (5,810,362 | ) | | | 13,639,895 | | | | (12,094,663 | ) |
| Net increase (decrease) in net assets | | | | | | | | | | | | | | | | | | | | | | | | |
| resulting from operations | | | 3,490,296 | | | | (1,211,665 | ) | | | 7,695,554 | | | | (6,948,276 | ) | | | 15,507,005 | | | | (5,763,244 | ) |
| |
| Dividends and Distributions to | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (1,521,244 | ) | | | (2,889,431 | ) | | | (1,797,338 | ) | | | (1,527,622 | ) | | | (7,498,499 | ) | | | (12,533,870 | ) |
| | | | (1,521,244 | ) | | | (2,889,431 | ) | | | (1,797,338 | ) | | | (1,527,622 | ) | | | (7,498,499 | ) | | | (12,533,870 | ) |
| Capital Share Transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 2,318,488 | | | | 560,001 | | | | 1,629,639 | | | | 14,842,905 | | | | 2,343,320 | | | | 15,578,695 | |
| Net asset value of shares issued upon | | | | | | | | | | | | | | | | | | | | | | | | |
| reinvestment of dividends and distributions | | | 797,612 | | | | 1,765,343 | | | | 1,797,337 | | | | 1,527,622 | | | | 7,498,498 | | | | 12,533,869 | |
| | | | 3,116,100 | | | | 2,325,344 | | | | 3,426,976 | | | | 16,370,527 | | | | 9,841,818 | | | | 28,112,564 | |
| Cost of shares repurchased | | | (14,645,434 | ) | | | (9,424,972 | ) | | | (5,522,499 | ) | | | (9,577,452 | ) | | | (75,743,292 | ) | | | (88,626,690 | ) |
| Increase (decrease) in net assets derived | | | | | | | | | | | | | | | | | | | | | | | | |
| from capital share transactions | | | (11,529,334 | ) | | | (7,099,628 | ) | | | (2,095,523 | ) | | | 6,793,075 | | | | (65,901,474 | ) | | | (60,514,126 | ) |
| |
| Net Increase (Decrease) In Net Assets | | | (9,560,282 | ) | | | (11,200,724 | ) | | | 3,802,693 | | | | (1,682,823 | ) | | | (57,892,968 | ) | | | (78,811,240 | ) |
| |
| Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning of year | | | 30,110,559 | | | | 41,311,283 | | | | 19,814,226 | | | | 21,497,049 | | | | 111,496,286 | | | | 190,307,526 | |
| End of year | | $ | 20,550,277 | | | $ | 30,110,559 | | | $ | 23,616,919 | | | $ | 19,814,226 | | | $ | 53,603,318 | | | $ | 111,496,286 | |
| |
| Undistributed net investment income | | $ | 838,156 | | | $ | 1,214,453 | | | $ | 1,756,679 | | | $ | 1,442,648 | | | $ | 3,580,383 | | | $ | 6,892,719 | |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
128
| | The | | The | | The |
| | International | | Labor Select | | Emerging |
| | Equity | | International Equity | | Markets |
| | Portfolio | | Portfolio | | Portfolio |
| | Year | | Year | | Year | | Year | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 |
| Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| from Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 28,061,648 | | | $ | 67,326,608 | | | $ | 21,462,006 | | | $ | 32,756,727 | | | $ | 14,098,651 | | | $ | 21,141,012 | |
| Net realized gain (loss) | | | | | | | | | | | | | | | | | | | | | | | | |
| on investments and | | | | | | | | | | | | | | | | | | | | | | | | |
| foreign currencies | | | (176,998,227 | ) | | | 208,699,822 | | | | (84,699,421 | ) | | | 36,536,883 | | | | (52,376,198 | ) | | | 87,366,325 | |
| Net change in unrealized | | | | | | | | | | | | | | | | | | | | | | | | |
| appreciation/ depreciation | | | | | | | | | | | | | | | | | | | | | | | | |
| of investments and | | | | | | | | | | | | | | | | | | | | | | | | |
| foreign currencies | | | 272,398,584 | | | | (1,127,406,379 | ) | | | 177,115,167 | | | | (497,970,809 | ) | | | 281,676,826 | | | | (550,397,184 | ) |
| Net increase (decrease) in net | | | | | | | | | | | | | | | | | | | | | | | | |
| assets resulting from operations | | | 123,462,005 | | | | (851,379,949 | ) | | | 113,877,752 | | | | (428,677,199 | ) | | | 243,399,279 | | | | (441,889,847 | ) |
| |
| Dividends and Distributions to | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | (88,843,079 | ) | | | (52,306,336 | ) | | | (45,431,913 | ) | | | (21,149,627 | ) | | | (18,560,863 | ) | | | (19,955,704 | ) |
| Net realized gain on investments | | | (115,309,708 | ) | | | (196,558,829 | ) | | | (21,957,887 | ) | | | (137,405,507 | ) | | | (77,673,850 | ) | | | (171,112,712 | ) |
| | | | (204,152,787 | ) | | | (248,865,165 | ) | | | (67,389,800 | ) | | | (158,555,134 | ) | | | (96,234,713 | ) | | | (191,068,416 | ) |
| Capital Share Transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | 175,739,074 | | | | 146,915,734 | | | | 57,798,530 | | | | 60,433,150 | | | | 35,854,925 | | | | 26,698,016 | |
| Purchase reimbursement fees | | | — | | | | — | | | | — | | | | — | | | | 175,506 | | | | 146,568 | |
| Net asset value of shares issued | | | | | | | | | | | | | | | | | | | | | | | | |
| upon reinvestment of | | | | | | | | | | | | | | | | | | | | | | | | |
| dividends and distributions | | | 117,359,230 | | | | 155,210,426 | | | | 67,389,800 | | | | 158,555,131 | | | | 95,274,293 | | | | 187,766,920 | |
| | | | 293,098,304 | | | | 302,126,160 | | | | 125,188,330 | | | | 218,988,281 | | | | 131,304,724 | | | | 214,611,504 | |
| Cost of shares repurchased | | | (386,145,988 | ) | | | (634,846,734 | ) | | | (13,477,969 | ) | | | (85,328,116 | ) | | | (151,006,679 | ) | | | (76,994,359 | ) |
| Redemption reimbursement fees | | | — | | | | — | | | | — | | | | — | | | | 783,765 | | | | 422,654 | |
| | | | (386,145,988 | ) | | | (634,846,734 | ) | | | (13,477,969 | ) | | | (85,328,116 | ) | | | (150,222,914 | ) | | | (76,571,705 | ) |
| Increase (decrease) in net assets | | | | | | | | | | | | | | | | | | | | | | | | |
| derived from capital share | | | | | | | | | | | | | | | | | | | | | | | | |
| transactions | | | (93,047,684 | ) | | | (332,720,574 | ) | | | 111,710,361 | | | | 133,660,165 | | | | (18,918,190 | ) | | | 138,039,799 | |
| |
| Net Increase (Decrease) In | | | | | | | | | | | | | | | | | | | | | | | | |
| Net Assets | | | (173,738,466 | ) | | | (1,432,965,688 | ) | | | 158,198,313 | | | | (453,572,168 | ) | | | 128,246,376 | | | | (494,918,464 | ) |
| |
| Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning of year | | | 1,086,794,928 | | | | 2,519,760,616 | | | | 639,519,432 | | | | 1,093,091,600 | | | | 469,391,997 | | | | 964,310,461 | |
| End of year | | $ | 913,056,462 | | | $ | 1,086,794,928 | | | $ | 797,717,745 | | | $ | 639,519,432 | | | $ | 597,638,373 | | | $ | 469,391,997 | |
| |
| Undistributed net | | | | | | | | | | | | | | | | | | | | | | | | |
| investment income | | $ | 25,053,862 | | | $ | 84,194,637 | | | $ | 19,711,006 | | | $ | 43,032,842 | | | $ | 13,025,164 | | | $ | 18,280,029 | |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 129
Statements of changes in net assets
Delaware Pooled® Trust
| | The | | | | |
| | Global | | The | | The |
| | Real Estate | | Global | | International |
| | Securities | | Fixed Income | | Fixed Income |
| | Portfolio | | Portfolio | | Portfolio |
| | Year | | Year | | Year | | Year | | Year | | Year |
| | Ended | | Ended | | Ended | | Ended | | Ended | | Ended |
| | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 | | 10/31/09 | | 10/31/08 |
| Increase (Decrease) in Net Assets | | | | | | | | | | | | | | | | | | | | | | | | |
| from Operations: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | $ | 1,916,944 | | | $ | 4,428,162 | | | $ | 4,583,504 | | | $ | 7,026,495 | | | $ | 1,537,596 | | | $ | 693,119 | |
| Net realized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | (49,044,649 | ) | | | (65,074,322 | ) | | | 5,289,253 | | | | 25,095,659 | | | | 800,077 | | | | 1,473,704 | |
| Net change in unrealized appreciation/ | | | | | | | | | | | | | | | | | | | | | | | | |
| depreciation of investments and | | | | | | | | | | | | | | | | | | | | | | | | |
| foreign currencies | | | 47,409,914 | | | | (58,405,986 | ) | | | 13,784,058 | | | | (20,053,367 | ) | | | 1,059,368 | | | | (846,582 | ) |
| Net increase (decrease) in net assets | | | | | | | | | | | | | | | | | | | | | | | | |
| resulting from operations | | | 282,209 | | | | (119,052,146 | ) | | | 23,656,815 | | | | 12,068,787 | | | | 3,397,041 | | | | 1,320,241 | |
| |
| Dividends and Distributions to | | | | | | | | | | | | | | | | | | | | | | | | |
| Shareholders from: | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income Original Class | | | (169,854 | ) | | | (11,757,994 | ) | | | (31,311,090 | ) | | | (12,715,444 | ) | | | (2,146,073 | ) | | | (1,709,358 | ) |
| Net investment income Class P | | | — | | | | (371 | ) | | | — | | | | — | | | | — | | | | — | |
| | | | (169,854 | ) | | | (11,758,365 | ) | | | (31,311,090 | ) | | | (12,715,444 | ) | | | (2,146,073 | ) | | | (1,709,358 | ) |
| Capital Share Transactions: | | | | | | | | | | | | | | | | | | | | | | | | |
| Proceeds from shares sold | | | | | | | | | | | | | | | | | | | | | | | | |
| Pooled Trust Class | | | 14,409,334 | | | | 91,695,325 | | | | 12,873,471 | | | | 22,121,887 | | | | — | | | | — | |
| Net asset value of shares issued upon | | | | | | | | | | | | | | | | | | | | | | | | |
| reinvestment of dividends and | | | | | | | | | | | | | | | | | | | | | | | | |
| distributions Original Class | | | 162,140 | | | | 11,757,994 | | | | 27,155,323 | | | | 9,998,614 | | | | 2,146,072 | | | | 1,709,358 | |
| Net asset value of shares issued upon | | | | | | | | | | | | | | | | | | | | | | | | |
| reinvestment of dividends and | | | | | | | | | | | | | | | | | | | | | | | | |
| distributions Class P | | | — | | | | 371 | | | | — | | | | — | | | | — | | | | — | |
| | | | 14,571,474 | | | | 103,453,690 | | | | 40,028,794 | | | | 32,120,501 | | | | 2,146,072 | | | | 1,709,358 | |
| Cost of shares repurchased | | | | | | | | | | | | | | | | | | | | | | | | |
| Original Class | | | (47,867,643 | ) | | | (220,906,637 | ) | | | (60,331,787 | ) | | | (143,211,487 | ) | | | (13,674,014 | ) | | | (3,673,566 | ) |
| Decrease in net assets derived from | | | | | | | | | | | | | | | | | | | | | | | | |
| capital share transactions | | | (33,296,169 | ) | | | (117,452,947 | ) | | | (20,302,993 | ) | | | (111,090,986 | ) | | | (11,527,942 | ) | | | (1,964,208 | ) |
| |
| Net Decrease In Net Assets | | | (33,183,814 | ) | | | (248,263,458 | ) | | | (27,957,268 | ) | | | (111,737,643 | ) | | | (10,276,974 | ) | | | (2,353,325 | ) |
| |
| Net Assets: | | | | | | | | | | | | | | | | | | | | | | | | |
| Beginning of year | | | 87,950,700 | | | | 336,214,158 | | | | 171,161,658 | | | | 282,899,301 | | | | 29,815,446 | | | | 32,168,771 | |
| End of year | | $ | 54,766,886 | | | $ | 87,950,700 | | | $ | 143,204,390 | | | $ | 171,161,658 | | | $ | 19,538,472 | | | $ | 29,815,446 | |
| |
| Undistributed net investment income | | $ | 2,293,265 | | | $ | — | | | $ | 6,336,270 | | | $ | 30,306,815 | | | $ | 1,762,634 | | | $ | 2,009,075 | |
See accompanying notes
2009 Annual report · Delaware Pooled Trust
130
Financial highlights
Delaware Pooled® Trust — The Large-Cap Value Equity Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| Year Ended |
| | 10/31/09 | | | 10/31/08 | | | 10/31/07 | | | 10/31/06 | | | 10/31/05 | |
| Net asset value, beginning of period | | $12.190 | | | $22.370 | | | $20.960 | | | $17.330 | | | $16.260 | |
| | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | |
| Net investment income1 | | 0.354 | | | 0.403 | | | 0.439 | | | 0.353 | | | 0.255 | |
| Net realized and unrealized gain (loss) on investments | | 1.067 | | | (8.186 | ) | | 1.315 | | | 3.531 | | | 0.990 | |
| Total from investment operations | | 1.421 | | | (7.783 | ) | | 1.754 | | | 3.884 | | | 1.245 | |
| | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | |
| Net investment income | | (0.321 | ) | | (0.613 | ) | | (0.344 | ) | | (0.254 | ) | | (0.175 | ) |
| Net realized gain on investments | | — | | | (1.784 | ) | | — | | | — | | | — | |
| Total dividends and distributions | | (0.321 | ) | | (2.397 | ) | | (0.344 | ) | | (0.254 | ) | | (0.175 | ) |
| | |
| Net asset value, end of period | | $13.290 | | | $12.190 | | | $22.370 | | | $20.960 | | | $17.330 | |
| | |
| Total return2 | | 12.12% | | | (38.48% | ) | | 8.49% | | | 22.66% | | | 7.69% | |
| | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | $10,105 | | | $8,988 | | | $10,278 | | | $16,317 | | | $9,640 | |
| Ratio of expenses to average net assets | | 0.69% | | | 0.68% | | | 0.69% | | | 0.68% | | | 0.69% | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 0.98% | | | 1.16% | | | 1.00% | | | 1.15% | | | 1.29% | |
| Ratio of net investment income to average net assets | | 2.99% | | | 2.43% | | | 2.00% | | | 1.88% | | | 1.49% | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 2.70% | | | 1.95% | | | 1.69% | | | 1.41% | | | 0.89% | |
| Portfolio turnover | | 26% | | | 34% | | | 14% | | | 109% | | | 49% | |
| |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 131
Financial highlights
Delaware Pooled® Trust — The Select 20 Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| Year Ended |
| | 10/31/09 | | | 10/31/08 | | | 10/31/07 | | | 10/31/06 | | | 10/31/05 | |
| Net asset value, beginning of period | | $4.040 | | | $6.880 | | | $5.770 | | | $5.590 | | | $4.960 | |
| | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | |
| Net investment income (loss)1 | | (0.012 | ) | | 0.008 | | | (0.016 | ) | | (0.011 | ) | | (0.008 | ) |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | |
| and foreign currencies | | 0.959 | | | (2.848 | ) | | 1.126 | | | 0.191 | | | 0.638 | |
| Total from investment operations | | 0.947 | | | (2.840 | ) | | 1.110 | | | 0.180 | | | 0.630 | |
| | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | |
| Net investment income | | (0.004 | ) | | — | | | — | | | — | | | — | |
| Return of capital | | (0.003 | ) | | — | | | — | | | — | | | — | |
| Total dividends and distributions | | (0.007 | ) | | — | | | — | | | — | | | — | |
| | |
| Net asset value, end of period | | $4.980 | | | $4.040 | | | $6.880 | | | $5.770 | | | $5.590 | |
| | |
| Total return2 | | 23.51% | | | (41.28% | ) | | 19.24% | | | 3.22% | | | 12.70% | |
| | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | $10,204 | | | $8,933 | | | $2,633 | | | $7,983 | | | $14,522 | |
| Ratio of expenses to average net assets | | 0.89% | | | 0.89% | | | 0.90% | | | 0.89% | | | 0.90% | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 1.18% | | | 1.64% | | | 1.23% | | | 1.06% | | | 1.15% | |
| Ratio of net investment income (loss) to average net assets | | (0.29% | ) | | 0.15% | | | (0.26% | ) | | (0.20% | ) | | (0.14% | ) |
| Ratio of net investment loss to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | (0.58% | ) | | (0.60% | ) | | (0.59% | ) | | (0.37% | ) | | (0.39% | ) |
| Portfolio turnover | | 53% | | | 61% | | | 47% | | | 55% | | | 220% | |
| |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
132
Delaware Pooled® Trust — The Large-Cap Growth Equity Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | | | | | | | | | | 11/1/051 | |
| Year Ended | | to | |
| | 10/31/09 | | | 10/31/08 | | | 10/31/07 | | | 10/31/06 | |
| Net asset value, beginning of period | | $6.220 | | | $10.560 | | | $8.780 | | | $8.500 | |
| | |
| Income (loss) from investment operations: | | | | | | | | | | | | |
| Net investment income2 | | 0.020 | | | 0.018 | | | 0.016 | | | 0.008 | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | |
| and foreign currencies | | 1.135 | | | (4.256 | ) | | 1.768 | | | 0.277 | |
| Total from investment operations | | 1.155 | | | (4.238 | ) | | 1.784 | | | 0.285 | |
| | |
| Less dividends and distributions from: | | | | | | | | | | | | |
| Net investment income | | (0.025 | ) | | (0.014 | ) | | (0.004 | ) | | (0.005 | ) |
| Net realized gain on investments | | — | | | (0.088 | ) | | — | | | — | |
| Total dividends and distributions | | (0.025 | ) | | (0.102 | ) | | (0.004 | ) | | (0.005 | ) |
| | |
| Net asset value, end of period | | $7.350 | | | $6.220 | | | $10.560 | | | $8.780 | |
| | |
| Total return3 | | 18.51% | | | (40.50% | ) | | 20.33% | 3.35% | |
| | |
| Ratios and supplemental data: | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | $251,017 | | | $258,526 | | | $460,900 | $286,848 | |
| Ratio of expenses to average net assets | | 0.65% | | | 0.65% | | | 0.64% | 0.65% | |
| Ratio of expenses to average net assets | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 0.66% | | | 0.65% | | | 0.64% | 0.71% | |
| Ratio of net investment income to average net assets | | 0.32% | | | 0.20% | | | 0.17% | 0.10% | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 0.31% | | | 0.20% | | | 0.17% | 0.04% | |
| Portfolio turnover | | 30% | | | 38% | | | 25% | | | 25% | |
| |
1 Date of commencement of operations.
2 The average shares outstanding method has been applied for per share information.
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 133
Financial highlights
Delaware Pooled® Trust — The Small-Cap Growth Equity Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| Year Ended |
| | 10/31/09 | | | 10/31/08 | | | 10/31/07 | | | 10/31/06 | | | 10/31/05 | |
| Net asset value, beginning of period | | $3.440 | | | $18.090 | | | $17.290 | | | $15.460 | | | $14.300 | |
| | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | |
| Net investment loss1 | | (0.011 | ) | | (0.010 | ) | | (0.055 | ) | | (0.068 | ) | | (0.050 | ) |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | |
| and foreign currencies | | 0.630 | | | (3.709 | ) | | 3.417 | | | 1.898 | | | 1.210 | |
| Total from investment operations | | 0.619 | | | (3.719 | ) | | 3.362 | | | 1.830 | | | 1.160 | |
| | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | |
| Net realized gain on investments | | (0.699 | ) | | (10.931 | ) | | (2.562 | ) | | — | | | — | |
| Total dividends and distributions | | (0.699 | ) | | (10.931 | ) | | (2.562 | ) | | — | | | — | |
| | |
| Net asset value, end of period | | $3.360 | | | $3.440 | | | $18.090 | | | $17.290 | | | $15.460 | |
| | |
| Total return2 | | 29.20% | | | (45.02% | ) | | 22.01% | | | 11.84% | | | 8.11% | |
| | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | $661 | | | $5,888 | | | $18,564 | | | $68,037 | | | $77,896 | |
| Ratio of expenses to average net assets | | 0.84% | | | 0.90% | | | 0.91% | | | 0.89% | | | 0.86% | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 2.67% | | | 1.21% | | | 0.91% | | | 0.90% | | | 0.86% | |
| Ratio of net investment loss to average net assets | | (0.42% | ) | | (0.17% | ) | | (0.34% | ) | | (0.40% | ) | | (0.34% | ) |
| Ratio of net investment loss to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | (2.25% | ) | | (0.48% | ) | | (0.34% | ) | | (0.41% | ) | | (0.34% | ) |
| Portfolio turnover | | 111% | | | 89% | | | 72% | | | 69% | | | 61% | |
| |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager, as applicable. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
134
Delaware Pooled® Trust — The Focus Smid-Cap Growth Equity Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| Year Ended |
| | 10/31/09 | | | 10/31/08 | | | 10/31/07 | | | 10/31/06 | | | 10/31/05 | |
| Net asset value, beginning of period | | $6.580 | | | $11.360 | | | $10.290 | | | $9.460 | | | $8.360 | |
| | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | |
| Net investment income (loss)1 | | 0.013 | | | 0.056 | | | 0.018 | | | 0.018 | | | (0.054 | ) |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | |
| and foreign currencies | | 2.173 | | | (4.079 | ) | | 1.527 | | | 0.812 | | | 1.154 | |
| Total from investment operations | | 2.186 | | | (4.023 | ) | | 1.545 | | | 0.830 | | | 1.100 | |
| | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | |
| Net investment income | | (0.056 | ) | | (0.031 | ) | | (0.013 | ) | | — | | | — | |
| Net realized gain on investments | | — | | | (0.726 | ) | | (0.462 | ) | | — | | | — | |
| Total dividends and distributions | | (0.056 | ) | | (0.757 | ) | | (0.475 | ) | | — | | | — | |
| | |
| Net asset value, end of period | | $8.710 | | | $6.580 | | | $11.360 | | | $10.290 | | | $9.460 | |
| | |
| Total return2 | | 33.07% | | | (37.44% | ) | | 15.77% | | | 8.77% | | | 13.16% | |
| | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | $3,450 | | | $4,305 | | | $8,781 | | | $6,099 | | | $2,226 | |
| Ratio of expenses to average net assets | | 0.92% | | | 0.92% | | | 0.93% | | | 0.92% | 3 | | 0.93% | 3 |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 1.48% | | | 1.12% | | | 1.11% | | | 1.36% | | | 1.93% | |
| Ratio of net investment income (loss) to average net assets | | 0.19% | | | 0.63% | | | 0.18% | | | 0.18% | | | (0.60% | ) |
| Ratio of net investment income (loss) to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | (0.37% | ) | | 0.43% | | | (0.01% | ) | | (0.26% | ) | | (1.60% | ) |
| Portfolio turnover | | 51% | | | 43% | | | 33% | | | 113% | | | 86% | |
| |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
3 Ratios for the years ended October 31, 2006 and 2005, including fees paid indirectly in accordance with Securities and Exchange Commission rules, were 0.98% and 0.95%, respectively.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 135
Financial highlights
Delaware Pooled® Trust — The Real Estate Investment Trust Portfolio II
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| Year Ended |
| | 10/31/09 | | | 10/31/08 | | | 10/31/07 | | | 10/31/06 | | | 10/31/05 | |
| Net asset value, beginning of period | | $4.680 | | | $13.600 | | | $30.730 | | | $26.430 | | | $26.220 | |
| | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | |
| Net investment income1 | | 0.129 | | | 0.157 | | | 0.150 | | | 0.589 | | | 0.712 | |
| Net realized and unrealized gain (loss) on investments | | (0.290 | ) | | (3.806 | ) | | 0.763 | | | 7.423 | | | 2.409 | |
| Total from investment operations | | (0.161 | ) | | (3.649 | ) | | 0.913 | | | 8.012 | | | 3.121 | |
| | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | |
| Net investment income | | (0.259 | ) | | (0.124 | ) | | (0.205 | ) | | (1.101 | ) | | (0.172 | ) |
| Net realized gain on investments | | — | | | (5.147 | ) | | (17.838 | ) | | (2.611 | ) | | (2.739 | ) |
| Total dividends and distributions | | (0.259 | ) | | (5.271 | ) | | (18.043 | ) | | (3.712 | ) | | (2.911 | ) |
| | |
| Net asset value, end of period | | $4.260 | | | $4.680 | | | $13.600 | | | $30.730 | | | $26.430 | |
| | |
| Total return2 | | (2.62% | ) | | (37.42% | ) | | 2.41% | | | 34.27% | | | 12.33% | |
| | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | $5,231 | | | $5,346 | | | $13,789 | | | $25,417 | | | $55,382 | |
| Ratio of expenses to average net assets | | 0.91% | | | 0.86% | | | 0.88% | | | 0.86% | | | 0.86% | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 1.53% | | | 1.20% | | | 0.98% | | | 0.94% | | | 0.89% | |
| Ratio of net investment income to average net assets | | 3.57% | | | 2.27% | | | 0.97% | | | 2.22% | | | 2.73% | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | 2.95% | | | 1.93% | | | 0.87% | | | 2.14% | | | 2.70% | |
| Portfolio turnover | | 169% | | | 121% | | | 93% | | | 68% | | | 41% | |
| |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
136
Delaware Pooled® Trust — The Core Focus Fixed Income Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $8.150 | | | | $9.140 | | | | $9.100 | | | | $8.820 | | | | $8.850 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.414 | | | | 0.403 | | | | 0.444 | | | | 0.405 | | | | 0.332 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 0.968 | | | | (0.753 | ) | | | (0.030 | ) | | | 0.035 | | | | (0.216 | ) | |
| Total from investment operations | | | | 1.382 | | | | (0.350 | ) | | | 0.414 | | | | 0.440 | | | | 0.116 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (0.412 | ) | | | (0.640 | ) | | | (0.374 | ) | | | (0.160 | ) | | | (0.085 | ) | |
| Net realized gain on investments | | | | — | | | | — | | | | — | | | | — | | | | (0.061 | ) | |
| Total dividends and distributions | | | | (0.412 | ) | | | (0.640 | ) | | | (0.374 | ) | | | (0.160 | ) | | | (0.146 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $9.120 | | | | $8.150 | | | | $9.140 | | | | $9.100 | | | | $8.820 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 17.41% | | | | (4.13% | ) | | | 4.70% | | | | 5.06% | | | | 1.33% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $20,550 | | | | $30,111 | | | | $41,311 | | | | $53,842 | | | | $17,923 | | |
| Ratio of expenses to average net assets | | | | 0.43% | | | | 0.42% | | | | 0.37% | | | | 0.43% | 3 | | | 0.44% | 3 | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 0.71% | | | | 0.63% | | | | 0.56% | | | | 0.66% | | | | 0.85% | | |
| Ratio of net investment income to average net assets | | | | 4.94% | | | | 4.63% | | | | 4.96% | | | | 4.60% | | | | 3.75% | | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 4.66% | | | | 4.39% | | | | 4.75% | | | | 4.37% | | | | 3.34% | | |
| Portfolio turnover | | | | 299% | | | | 359% | | | | 505% | | | | 555% | | | | 455% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
3 Ratios for the years ended October 31, 2006 and 2005, including fees paid indirectly in accordance with Securities and Exchange Commission rules, were 0.47% and 0.45%, respectively.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 137
Financial highlights
Delaware Pooled® Trust — The High-Yield Bond Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $5.580 | | | | $8.060 | | | | $8.160 | | | | $7.430 | | | | $7.780 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.656 | | | | 0.590 | | | | 0.595 | | | | 0.621 | | | | 0.539 | | |
| Net realized and unrealized gain (loss) on investments | | | | 1.634 | | | | (2.492 | ) | | | (0.062 | ) | | | 0.210 | | | | (0.139 | ) | |
| Total from investment operations | | | | 2.290 | | | | (1.902 | ) | | | 0.533 | | | | 0.831 | | | | 0.400 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (0.520 | ) | | | (0.578 | ) | | | (0.633 | ) | | | (0.101 | ) | | | (0.750 | ) | |
| Total dividends and distributions | | | | (0.520 | ) | | | (0.578 | ) | | | (0.633 | ) | | | (0.101 | ) | | | (0.750 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $7.350 | | | | $5.580 | | | | $8.060 | | | | $8.160 | | | | $7.430 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 46.38% | | | | (25.30% | ) | | | 6.89% | | | | 11.33% | | | | 5.24% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $23,617 | | | | $19,814 | | | | $21,497 | | | | $6,166 | | | | $5,265 | | |
| Ratio of expenses to average net assets | | | | 0.59% | | | | 0.54% | | | | 0.43% | | | | 0.59% | | | | 0.62% | | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 0.78% | | | | 0.77% | | | | 0.70% | | | | 1.03% | | | | 1.34% | | |
| Ratio of net investment income to average net assets | | | | 11.05% | | | | 8.25% | | | | 7.45% | | | | 8.05% | | | | 7.03% | | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 10.86% | | | | 8.02% | | | | 7.18% | | | | 7.61% | | | | 6.31% | | |
| Portfolio turnover | | | | 119% | | | | 132% | | | | 177% | | | | 142% | | | | 267% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
138
Delaware Pooled® Trust — The Core Plus Fixed Income Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $8.290 | | | | $9.540 | | | | $9.550 | | | | $9.260 | | | | $9.260 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.506 | | | | 0.467 | | | | 0.495 | | | | 0.450 | | | | 0.360 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 1.474 | | | | (0.991 | ) | | | (0.065 | ) | | | 0.110 | | | | (0.169 | ) | |
| Total from investment operations | | | | 1.980 | | | | (0.524 | ) | | | 0.430 | | | | 0.560 | | | | 0.191 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (0.570 | ) | | | (0.726 | ) | | | (0.440 | ) | | | (0.270 | ) | | | (0.136 | ) | |
| Net realized gain on investments | | | | — | | | | — | | | | — | | | | — | | | | (0.055 | ) | |
| Total dividends and distributions | | | | (0.570 | ) | | | (0.726 | ) | | | (0.440 | ) | | | (0.270 | ) | | | (0.191 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $9.710 | | | | $8.290 | | | | $9.540 | | | | $9.550 | | | | $9.260 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 25.55% | | | | (5.91% | ) | | | 4.66% | | | | 6.20% | | | | 2.09% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $53,603 | | | | $111,496 | | | | $190,308 | | | | $204,874 | | | | $167,892 | | |
| Ratio of expenses to average net assets | | | | 0.45% | | | | 0.42% | | | | 0.38% | | | | 0.45% | 3 | | | 0.48% | 3 | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 0.61% | | | | 0.57% | | | | 0.54% | | | | 0.56% | | | | 0.63% | | |
| Ratio of net investment income to average net assets | | | | 5.95% | | | | 5.19% | | | | 5.29% | | | | 4.89% | | | | 3.87% | | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 5.79% | | | | 5.03% | | | | 5.12% | | | | 4.78% | | | | 3.72% | | |
| Portfolio turnover | | | | 218% | | | | 315% | | | | 503% | | | | 421% | | | | 620% | | |
| | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
3 Ratios for the years ended October 31, 2006 and 2005, including fees paid indirectly in accordance with Securities and Exchange Commission rules, were 0.47% and 0.49%, respectively.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 139
Financial highlights
Delaware Pooled® Trust — The International Equity Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $14.480 | | | | $27.200 | | | | $25.330 | | | | $20.460 | | | | $17.650 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.382 | | | | 0.757 | | | | 0.680 | | | | 0.671 | | | | 0.554 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 1.296 | | | | (10.746 | ) | | | 4.632 | | | | 5.247 | | | | 2.500 | | |
| Total from investment operations | | | | 1.678 | | | | (9.989 | ) | | | 5.312 | | | | 5.918 | | | | 3.054 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (1.383 | ) | | | (0.574 | ) | | | (0.707 | ) | | | (0.531 | ) | | | (0.244 | ) | |
| Net realized gain on investments | | | | (1.795 | ) | | | (2.157 | ) | | | (2.735 | ) | | | (0.517 | ) | | | — | | |
| Total dividends and distributions | | | | (3.178 | ) | | | (2.731 | ) | | | (3.442 | ) | | | (1.048 | ) | | | (0.244 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $12.980 | | | | $14.480 | | | | $27.200 | | | | $25.330 | | | | $20.460 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 16.11% | | | | (40.40% | ) | | | 23.35% | | | | 30.13% | | | | 17.45% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $913,056 | | | | $1,086,795 | | | | $2,519,761 | | | | $2,167,690 | | | | $1,853,300 | | |
| Ratio of expenses to average net assets | | | | 0.88% | | | | 0.87% | | | | 0.88% | | | | 0.90% | | | | 0.88% | | |
| Ratio of net investment income to average net assets | | | | 3.35% | | | | 3.58% | | | | 2.73% | | | | 2.98% | | | | 2.84% | | |
| Portfolio turnover | | | | 18% | | | | 9% | | | | 17% | | | | 19% | | | | 10% | | |
| | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
140
Delaware Pooled® Trust — The Labor Select International Equity Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $12.410 | | | | $24.530 | | | | $22.380 | | | | $17.630 | | | | $15.360 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.364 | | | | 0.647 | | | | 0.616 | | | | 0.612 | | | | 0.470 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 1.445 | | | | (9.221 | ) | | | 3.980 | | | | 4.701 | | | | 2.152 | | |
| Total from investment operations | | | | 1.809 | | | | (8.574 | ) | | | 4.596 | | | | 5.313 | | | | 2.622 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (0.869 | ) | | | (0.473 | ) | | | (0.549 | ) | | | (0.454 | ) | | | (0.153 | ) | |
| Net realized gain on investments | | | | (0.420 | ) | | | (3.073 | ) | | | (1.897 | ) | | | (0.109 | ) | | | (0.199 | ) | |
| Total dividends and distributions | | | | (1.289 | ) | | | (3.546 | ) | | | (2.446 | ) | | | (0.563 | ) | | | (0.352 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $12.930 | | | | $12.410 | | | | $24.530 | | | | $22.380 | | | | $17.630 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 16.76% | | | | (40.31% | ) | | | 22.43% | | | | 30.91% | | | | 17.30% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $797,718 | | | | $639,519 | | | | $1,093,092 | | | | $955,535 | | | | $650,549 | | |
| Ratio of expenses to average net assets | | | | 0.88% | | | | 0.87% | | | | 0.88% | | | | 0.89% | | | | 0.89% | | |
| Ratio of net investment income to average net assets | | | | 3.26% | | | | 3.59% | | | | 2.75% | | | | 3.09% | | | | 2.78% | | |
| Portfolio turnover | | | | 11% | | | | 10% | | | | 28% | | | | 21% | | | | 7% | | |
| | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 141
Financial highlights
Delaware Pooled® Trust — The Emerging Markets Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $7.580 | | | | $18.780 | | | | $15.360 | | | | $17.150 | | | | $13.740 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.200 | | | | 0.347 | | | | 0.379 | | | | 0.397 | | | | 0.486 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 3.208 | | | | (7.707 | ) | | | 6.084 | | | | 2.963 | | | | 4.040 | | |
| Total from investment operations | | | | 3.408 | | | | (7.360 | ) | | | 6.463 | | | | 3.360 | | | | 4.526 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (0.303 | ) | | | (0.402 | ) | | | (0.369 | ) | | | (0.540 | ) | | | (0.242 | ) | |
| Net realized gain on investments | | | | (1.268 | ) | | | (3.447 | ) | | | (2.727 | ) | | | (4.637 | ) | | | (0.948 | ) | |
| Total dividends and distributions | | | | (1.571 | ) | | | (3.849 | ) | | | (3.096 | ) | | | (5.177 | ) | | | (1.190 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Reimbursement fees: | | | | | | | | | | | | | | | | | | | | | | |
| Purchase reimbursement fees1,2 | | | | 0.002 | | | | 0.002 | | | | 0.038 | | | | 0.003 | | | | 0.012 | | |
| Redemption reimbursement fees1,2 | | | | 0.011 | | | | 0.007 | | | | 0.015 | | | | 0.024 | | | | 0.062 | | |
| | | | 0.013 | | | | 0.009 | | | | 0.053 | | | | 0.027 | | | | 0.074 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $9.430 | | | | $7.580 | | | | $18.780 | | | | $15.360 | | | | $17.150 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return3 | | | | 57.05% | | | | (48.23% | ) | | | 49.98% | | | | 25.12% | | | | 35.36% | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $597,638 | | | | $469,392 | | | | $964,310 | | | | $717,464 | | | | $698,291 | | |
| Ratio of expenses to average net assets | | | | 1.16% | | | | 1.15% | | | | 1.28% | | | | 1.27% | | | | 1.28% | | |
| Ratio of net investment income to average net assets | | | | 2.71% | | | | 2.66% | | | | 2.46% | | | | 2.70% | | | | 3.11% | | |
| Portfolio turnover | | | | 40% | | | | 43% | | | | 47% | | | | 30% | | | | 48% | | |
| | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 The Portfolio charges a 0.55% purchase reimbursement fee and a 0.55% redemption reimbursement fee which are retained by the Portfolio.
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return does not reflect the purchase reimbursement fee and redemption reimbursement fee.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
142
Delaware Pooled® Trust — The Global Real Estate Securities Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Original Class | | Class P |
| | | | | | | | | | | 1/10/071 | | | | | | | | | | | | 1/10/071 | |
| | | Year Ended | | to | | | | Year Ended | | to | |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | | | 10/31/09 | | 10/31/08 | | 10/31/07 | |
| Net asset value, beginning of period | | | | $4.430 | | | | $9.020 | | | | $8.500 | | | | | | $4.420 | | | | $9.000 | | | | $8.500 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income2 | | | | 0.139 | | | | 0.155 | | | | 0.118 | | | | | | 0.129 | | | | 0.137 | | | | 0.101 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 0.490 | | | | (4.409 | ) | | | 0.402 | | | | | | 0.491 | | | | (4.402 | ) | | | 0.399 | | |
| Total from investment operations | | | | 0.629 | | | | (4.254 | ) | | | 0.520 | | | | | | 0.620 | | | | (4.265 | ) | | | 0.500 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (0.009 | ) | | | (0.336 | ) | | | — | | | | | | — | | | | (0.315 | ) | | | — | | |
| Total dividends and distributions | | | | (0.009 | ) | | | (0.336 | ) | | | — | | | | | | — | | | | (0.315 | ) | | | — | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $5.050 | | | | $4.430 | | | | $9.020 | | | | | | $5.040 | | | | $4.420 | | | | $9.000 | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Total return3 | | | | 13.75% | | | | (48.74% | ) | | | 6.12% | | | | | | 14.03% | | | | (48.88% | ) | | | 5.88% | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $54,761 | | | | $87,945 | | | | $336,203 | | | | | | $6 | | | | $6 | | | | $11 | | |
| Ratio of expenses to average net assets | | | | 1.07% | | | | 1.09% | | | | 1.09% | | | | | | 1.32% | | | | 1.34% | | | | 1.34% | | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 1.21% | | | | 1.12% | | | | 1.10% | | | | | | 1.46% | | | | 1.37% | | | | 1.35% | | |
| Ratio of net investment income to average net assets | | | | 3.45% | | | | 2.21% | | | | 1.71% | | | | | | 3.20% | | | | 1.96% | | | | 1.46% | | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 3.31% | | | | 2.17% | | | | 1.70% | | | | | | 3.06% | | | | 1.92% | | | | 1.45% | | |
| Portfolio turnover | | | | 124% | | | | 96% | | | | 56% | | | | | | 124% | | | | 96% | | | | 56% | | |
| | | | | | | | | | | | | | | | | | | | | | | | | | | | |
1 Date of commencement of operations; ratios and portfolio turnover have been annualized and total return has not been annualized.
2 The average shares outstanding method has been applied for per share information.
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a contractual waiver by the manager. Performance would have been lower had the contractual waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
(continues) 143
Financial highlights
Delaware Pooled® Trust — The Global Fixed Income Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $11.730 | | | | $11.820 | | | | $11.330 | | | | $11.570 | | | | $12.380 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.324 | | | | 0.304 | | | | 0.266 | | | | 0.244 | | | | 0.297 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 1.494 | | | | 0.143 | | | | 0.695 | | | | 0.358 | | | | (0.458 | ) | |
| Total from investment operations | | | | 1.818 | | | | 0.447 | | | | 0.961 | | | | 0.602 | | | | (0.161 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (2.268 | ) | | | (0.537 | ) | | | (0.471 | ) | | | (0.751 | ) | | | (0.649 | ) | |
| Net realized gain on investments | | | | — | | | | — | | | | — | | | | (0.091 | ) | | | — | | |
| Total dividends and distributions | | | | (2.268 | ) | | | (0.537 | ) | | | (0.471 | ) | | | (0.842 | ) | | | (0.649 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $11.280 | | | | $11.730 | | | | $11.820 | | | | $11.330 | | | | $11.570 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 17.52% | | | | 3.81% | | | | 8.80% | | | | 5.55% | | | | (1.64% | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $143,204 | | | | $171,162 | | | | $282,899 | | | | $275,806 | | | | $289,976 | | |
| Ratio of expenses to average net assets | | | | 0.60% | | | | 0.60% | | | | 0.61% | | | | 0.60% | | | | 0.60% | | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 0.65% | | | | 0.62% | | | | 0.63% | | | | 0.63% | | | | 0.64% | | |
| Ratio of net investment income to average net assets | | | | 3.06% | | | | 2.51% | | | | 2.38% | | | | 2.22% | | | | 2.43% | | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 3.01% | | | | 2.49% | | | | 2.36% | | | | 2.19% | | | | 2.39% | | |
| Portfolio turnover | | | | 100% | | | | 54% | | | | 44% | | | | 41% | | | | 50% | | |
| | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
144
Delaware Pooled® Trust — The International Fixed Income Portfolio
Selected data for each share of the Portfolio outstanding throughout each period were as follows:
| | Year Ended |
| | | 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| Net asset value, beginning of period | | | | $11.570 | | | | $11.740 | | | | $10.940 | | | | $11.200 | | | | $12.290 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Income (loss) from investment operations: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income1 | | | | 0.876 | | | | 0.265 | | | | 0.245 | | | | 0.204 | | | | 0.245 | | |
| Net realized and unrealized gain (loss) on investments | | | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | | 1.173 | | | | 0.189 | | | | 0.686 | | | | 0.300 | | | | (0.512 | ) | |
| Total from investment operations | | | | 2.049 | | | | 0.454 | | | | 0.931 | | | | 0.504 | | | | (0.267 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Less dividends and distributions from: | | | | | | | | | | | | | | | | | | | | | | |
| Net investment income | | | | (1.189 | ) | | | (0.624 | ) | | | (0.131 | ) | | | (0.764 | ) | | | (0.823 | ) | |
| Total dividends and distributions | | | | (1.189 | ) | | | (0.624 | ) | | | (0.131 | ) | | | (0.764 | ) | | | (0.823 | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net asset value, end of period | | | | $12.430 | | | | $11.570 | | | | $11.740 | | | | $10.940 | | | | $11.200 | | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Total return2 | | | | 18.86% | | | | 4.04% | | | | 8.60% | | | | 4.77% | | | | (2.69% | ) | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Ratios and supplemental data: | | | | | | | | | | | | | | | | | | | | | | |
| Net assets, end of period (000 omitted) | | | | $19,538 | | | | $29,815 | | | | $32,169 | | | | $39,273 | | | | $62,411 | | |
| Ratio of expenses to average net assets | | | | 0.60% | | | | 0.60% | | | | 0.61% | | | | 0.60% | | | | 0.60% | | |
| Ratio of expenses to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 0.79% | | | | 0.72% | | | | 0.72% | | | | 0.68% | | | | 0.67% | | |
| Ratio of net investment income to average net assets | | | | 7.73% | | | | 2.22% | | | | 2.22% | | | | 1.92% | | | | 2.05% | | |
| Ratio of net investment income to average net assets | | | | | | | | | | | | | | | | | | | | | | |
| prior to fees waived and expense paid indirectly | | | | 7.54% | | | | 2.10% | | | | 2.11% | | | | 1.84% | | | | 1.98% | | |
| Portfolio turnover | | | | 98% | | | | 26% | | | | 49% | | | | 38% | | | | 42% | | |
| | | | | | | | | | | | | | | | | | | | | | |
1 The average shares outstanding method has been applied for per share information.
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a voluntary waiver by the manager. Performance would have been lower had the voluntary waiver not been in effect.
See accompanying notes
2009 Annual report · Delaware Pooled Trust
145
Notes to financial statements
Delaware Pooled® Trust
October 31, 2009
Delaware Pooled Trust (Trust) is organized as a Delaware statutory trust and offers 16 separate Portfolios. These financial statements and the related notes pertain to The Large-Cap Value Equity Portfolio, The Select 20 Portfolio, The Large-Cap Growth Equity Portfolio, The Small-Cap Growth Equity Portfolio, The Focus Smid-Cap Growth Equity Portfolio, The Real Estate Investment Trust Portfolio II, The Core Focus Fixed Income Portfolio, The High-Yield Bond Portfolio, The Core Plus Fixed Income Portfolio, The International Equity Portfolio, The Labor Select International Equity Portfolio, The Emerging Markets Portfolio, The Global Real Estate Securities Portfolio, The Global Fixed Income Portfolio, and The International Fixed Income Portfolio (each, a Portfolio, or collectively, Portfolios). The Real Estate Investment Trust Portfolio is included in a separate report. The Trust is an open-end investment company. Each Portfolio is considered diversified under the Investment Company Act of 1940, as amended, except for The Select 20, The Real Estate Investment Trust II, The Global Real Estate Securities, The Global Fixed Income, and The International Fixed Income Portfolios, which are nondiversified. Each Portfolio offers one class of shares except for The Global Real Estate Securities Portfolio which offers Original Class and Class P shares. The Original Class shares do not carry a 12b-1 fee and the Class P shares carry a 12b-1 fee.
The investment objective of The Large-Cap Value Equity Portfolio is to seek long-term capital appreciation.
The investment objective of The Select 20 Portfolio is to seek long-term capital appreciation.
The investment objective of The Large-Cap Growth Equity Portfolio is to seek capital appreciation.
The investment objective of The Small-Cap Growth Equity Portfolio is to seek long-term capital appreciation.
The investment objective of The Focus Smid-Cap Growth Equity Portfolio is to seek long-term capital appreciation.
The investment objective of The Real Estate Investment Trust Portfolio II is to seek maximum long-term total return, with capital appreciation as a secondary objective.
The investment objective of The Core Focus Fixed Income Portfolio is to seek maximum long-term total return, consistent with reasonable risk.
The investment objective of The High-Yield Bond Portfolio is to seek high total return.
The investment objective of The Core Plus Fixed Income Portfolio is to seek maximum long-term total return, consistent with reasonable risk.
The investment objective of The International Equity Portfolio is to seek maximum long-term total return.
The investment objective of The Labor Select International Equity Portfolio is to seek maximum long-term total return.
The investment objective of The Emerging Markets Portfolio is to seek long-term capital appreciation.
The investment objective of The Global Real Estate Securities Portfolio is to seek maximum long-term total return through a combination of current income and capital appreciation.
The investment objective of The Global Fixed Income Portfolio is to seek current income consistent with the preservation of principal.
The investment objective of The International Fixed Income Portfolio is to seek current income consistent with the preservation of principal.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles (GAAP) and are consistently followed by the Portfolios.
Security Valuation — Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and ask prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price on the valuation date. U.S. government and agency securities are valued at the mean between the bid and ask prices. Other debt securities, credit default swap (CDS) contracts and interest rate swap contracts are valued by an independent pricing service or broker. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Investment companies are valued at net asset value per share. Foreign currency exchange contracts and foreign cross currency exchange contracts are valued at the mean between the bid and ask prices. Interpolated values are derived when the settlement date of the contract is an interim date for which quotations are not available. Financial futures contracts and options on futures contracts are valued at the daily quoted settlement prices. 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 ask prices. Generally, index swap contracts and other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Trust’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. The Portfolios may use fair value pricing more frequently for securities traded primarily in non-U.S. markets because, among other things, most foreign markets close well before the Portfolios value their securities
2009 Annual report · Delaware Pooled Trust
146
1. Significant Accounting Policies (continued)
at 4:00 p.m. Eastern time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading, or news events may have occurred in the interim. To account for this, the Portfolios may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing).
Federal Income Taxes — No provision for federal income taxes has been made as each Portfolio intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Portfolios evaluate tax positions taken or expected to be taken in the course of preparing the Portfolios’ tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold would be recorded as a tax benefit or expense in the current year. Management has analyzed the Portfolios’ tax positions taken on federal income tax returns for all open tax years (tax years ended October 31, 2006 – October 31, 2009), and has concluded that no provision for federal income tax is required in the Portfolios’ financial statements.
Class Accounting — Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the classes of The Global Real Estate Securities Portfolio on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
Repurchase Agreements — Each Portfolio may invest in a pooled cash account along with other members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by each Portfolio’s custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings. At October 31, 2009, the Portfolios held no investments in repurchase agreements.
Foreign Currency Transactions — Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies is translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. 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. The Portfolios isolate that portion of realized gains and losses on investments in debt securities which is due to changes in foreign exchange rates from that which is due to changes in market prices of debt securities. For foreign equity securities, these changes are included in realized gains (losses) on investments. The Portfolios report certain foreign currency related transactions as components of realized gains (losses) 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 U.S. GAAP 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.
Reimbursement Fees — The Emerging Markets Portfolio may charge a 0.55% purchase reimbursement fee and a 0.55% redemption reimbursement fee. These fees are designed to reflect an approximation of the brokerage and other transaction costs associated with the investment of an investor’s purchase amount or the disposition of assets to meet redemptions, and to limit the extent to which the Portfolio (and, indirectly, the Portfolio’s existing shareholders) would have to bear such costs. These fees are accounted for as an addition to paid-in capital for the Portfolio in the statements of changes in net assets.
Other — Expenses directly attributable to the Portfolios are charged directly to the Portfolios. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Interest income is recorded on the accrual basis. Discounts and premiums on non-convertible bonds are amortized to interest income over the lives of the respective securities. Dividend income is recorded on the ex-dividend date. Realized gains (losses) on paydowns of mortgage- and asset-backed securities are classified as interest income. Distributions received from investments in Real Estate Investment Trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distribution by the issuer. The financial statements reflect an estimate of the reclassification of the distribution character for The Real Estate Investment Trust Portfolio II and The Global Real Estate Securities Portfolio. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that a Portfolio is aware of such dividends, net of all nonrebatable tax withholdings. Withholding taxes on foreign dividends have been recorded in accordance with each Portfolio’s understanding of the applicable country’s tax rules and rates.
2009 Annual report · Delaware Pooled Trust
continues) 147
Notes to financial statements
Delaware Pooled® Trust
1. Significant Accounting Policies (continued)
Each Portfolio declares and pays dividends from net investment income, if any, annually. All Portfolios declare and pay distributions from net realized gain on investments, if any, annually.
Subject to seeking best execution, the Portfolios may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to each Portfolio in cash. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Portfolio on the transaction. Such commission rebates are included in realized gain on investments in the accompanying financial statements. The total commission rebates for the year ended October 31, 2009 are as follows:
| | Commission Rebates |
| The Large-Cap Value Equity Portfolio | | | $ | 195 | |
| The Select 20 Portfolio | | | | 1,200 | |
| The Large-Cap Growth Equity Portfolio | | | | 21,045 | |
| The Focus Smid-Cap Growth Equity Portfolio | | | | 609 | |
The Portfolios may receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the year ended October 31, 2009.
On July 1, 2009, the Financial Accounting Standards Board (FASB) issued the FASB Accounting Standards Codification (Codification). The Codification became the single source of authoritative nongovernmental U.S. GAAP, superseding existing literature of the FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force, and other sources. The Codification is effective for interim and annual periods ending after September 15, 2009. The Portfolios adopted the Codification for the year ended October 31, 2009. There was no impact to the financial statements as the Codification requirements are disclosure-only in nature.
Management has evaluated whether any events or transactions occurred subsequent to October 31, 2009 through December 22, 2009, the date of issuance of the Portfolios’ financial statements, and determined that there were no material events or transactions that would require recognition or disclosure in the Portfolios’ financial statements.
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates
In accordance with the terms of the investment management agreements, Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager of the Portfolios, will receive an annual fee which is calculated daily based on the average daily net assets of each Portfolio.
DMC has voluntarily agreed to waive that portion, if any, of its management fees and reimburse each Portfolio (except for The International Equity Portfolio, The Labor Select International Equity Portfolio, The Emerging Markets Portfolio, and The Global Real Estate Securities Portfolio) to the extent necessary to ensure that annual operating expenses, (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, nonroutine expenses)) do not exceed specified percentages of average daily net assets of each such Portfolio until such time as the waiver is discontinued. For purposes of these waivers and reimbursements, nonroutine expenses may also include such additional costs and expenses, as may be agreed upon from time to time by the Portfolios’ Board and DMC. These expense waivers and reimbursements apply only to expenses paid directly by the Portfolios.
2009 Annual report · Delaware Pooled Trust
148
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
The management fee rates, the operating expense limitation rates in effect for the year ended October 31, 2009, and the operating expense limitation rates in effect prior to March 1, 2009 are as follows:
| | Management
fee as a percentage
of average daily
net assets (per annum) | | Voluntary
operating expense
limitation as
a percentage
of average daily
net assets (per annum)† | | Prior to 3/1/09
voluntary (unless
otherwise noted)
operating expense
limitation as
a percentage
of average daily
net assets (per annum) †* |
| The Large-Cap Value Equity Portfolio | | | 0.55 | % | | | | 0.70 | % | | | | 0.68 | % | |
| The Select 20 Portfolio | | | 0.75 | % | | | | 0.89 | % | | | | — | | |
| The Large-Cap Growth Equity Portfolio | | | 0.55 | % | | | | 0.65 | % | | | | — | | |
| The Small-Cap Growth Equity Portfolio | | | 0.75 | % | | | | 0.95 | % | | | | 0.89 | % | |
| The Focus Smid-Cap Growth Equity Portfolio | | | 0.75 | % | | | | 0.92 | % | | | | — | | |
| The Real Estate Investment Trust Portfolio II | | | 0.75 | % | | | | 0.95 | % | | | | 0.86 | % | |
| The Core Focus Fixed Income Portfolio | | | 0.40 | % | | | | 0.43 | % | | | | — | | |
| The High-Yield Bond Portfolio | | | 0.45 | % | | | | 0.59 | % | | | | — | | |
| The Core Plus Fixed Income Portfolio | | | 0.43 | % | | | | 0.45 | % | | | | — | | |
| The International Equity Portfolio | | | 0.75 | % | | | | — | | | | | — | | |
| The Labor Select International Equity Portfolio | | | 0.75 | % | | | | — | | | | | 0.96 | % | |
| The Emerging Markets Portfolio | | | 1.00 | % | | | | — | | | | | 1.55 | % | |
| The Global Real Estate Securities Portfolio | | | 0.99 | % | ** | | | — | *** | | | | 1.06 | % | *** |
| The Global Fixed Income Portfolio | | | 0.50 | % | | | | 0.60 | % | | | | — | | |
| The International Fixed Income Portfolio | | | 0.50 | % | | | | 0.60 | % | | | | — | | |
† | These operating expense limitations exclude certain expenses, such as 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations. |
* | This information is provided for those Portfolios that had a change in the operating expense limitation during the period. |
** | 0.99% on the first $100 million; 0.90% on the next $150 million; 0.80% on assets in excess of $250 million. |
*** | From 3/1/09 to 9/10/09 the waiver was 1.07% of average daily net assets. This waiver was removed effective 9/11/09. This was a contractual waiver prior to 3/1/09. |
Mondrian Investment Partners Limited (Mondrian) furnishes investment sub-advisory services to The International Equity Portfolio, The Labor Select International Equity Portfolio, The Emerging Markets Portfolio, The Global Fixed Income Portfolio, and The International Fixed Income Portfolio. For these services, DMC, not the Portfolios, pays Mondrian the following percentages of the Portfolios’ average daily net assets.
| | Sub-advisory fee as a
percentage of average daily
net assets (per annum) |
| The International Equity Portfolio | | | 0.36 | % | |
| The Labor Select International Equity Portfolio | | | 0.30 | % | |
| The Emerging Markets Portfolio | | | 0.75 | % | |
| The Global Fixed Income Portfolio | | | 0.30 | % | |
| The International Fixed Income Portfolio | | | 0.30 | % | |
2009 Annual report · Delaware Pooled Trust
(continues) 149
Notes to financial statements
Delaware Pooled® Trust
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Portfolios. For these services, the Portfolios pay DSC fees based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DSC under the service agreement described above are allocated among all Funds in the Delaware Investments® Family of Funds on a relative net asset value basis. For the year ended October 31, 2009, the Portfolios were charged $130,879 for these services.
The Bank of New York Mellon (BNY Mellon) provides custody, fund accounting and financial administration services to the Portfolios.
DSC also provides dividend disbursing and transfer agency services. The Portfolios pay DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services.
Pursuant to a distribution agreement and distribution plan, The Global Real Estate Securities Portfolio pays Delaware Distributors, L.P. (DDLP), the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.25% of the average daily net assets of the Class P shares. Original Class shares pay no distribution and service expenses.
At October 31, 2009, each Portfolio had receivables due from or liabilities payable to affiliates as follows:
| | Investment management
fee payable to
DMC | | Dividend
disbursing,
transfer
agent and
fund accounting
oversight
fees and
other expenses
payable to DSC | | Other expenses
payable to DMC
and affiliates* | | Receivable
from DMC
under
expense limitation
agreement |
| The Large-Cap Value Equity Portfolio | | | $ | 6,544 | | | | $ | 329 | | | | $ | 115 | | | | $ | — | |
| The Select 20 Portfolio | | | | 5,332 | | | | | 336 | | | | | 118 | | | | | — | |
| The Large-Cap Growth Equity Portfolio | | | | 119,301 | | | | | 2,956 | | | | | 2,451 | | | | | — | |
| The Small-Cap Growth Equity Portfolio | | | | 289 | | | | | 225 | | | | | 69 | | | | | — | |
| The Focus Smid-Cap Growth Equity Portfolio | | | | 1,416 | | | | | 256 | | | | | 53 | | | | | — | |
| The Real Estate Investment Trust Portfolio II | | | | — | | | | | 275 | | | | | 236 | | | | | 786 | |
| The Core Focus Fixed Income Portfolio | | | | 5,000 | | | | | 438 | | | | | 1,138 | | | | | — | |
| The High-Yield Bond Portfolio | | | | 4,450 | | | | | 469 | | | | | 1,447 | | | | | — | |
| The Core Plus Fixed Income Portfolio | | | | 12,079 | | | | | 818 | | | | | 2,410 | | | | | — | |
| The International Equity Portfolio | | | | 599,723 | | | | | 10,563 | | | | | 9,274 | | | | | — | |
| The Labor Select International Equity Portfolio | | | | 520,031 | | | | | 8,971 | | | | | 8,058 | | | | | — | |
| The Emerging Markets Portfolio | | | | 534,274 | | | | | 6,925 | | | | | 6,290 | | | | | — | |
| The Global Real Estate Securities Portfolio | | | | 49,806 | | | | | 1,038 | | | | | 893 | | | | | — | |
| The Global Fixed Income Portfolio | | | | 56,627 | | | | | 1,762 | | | | | 1,688 | | | | | — | |
| The International Fixed Income Portfolio | | | | 10,104 | | | | | 424 | | | | | 422 | | | | | — | |
* | DMC, as part of its administrative services, pays operating expenses on behalf of the Portfolios and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees, and trustees’ fees. |
2009 Annual report · Delaware Pooled Trust
150
2. Investment Management, Administration Agreements, and Other Transactions with Affiliates (continued)
As provided in the investment management agreement, the Portfolios bear the cost of certain legal and tax services, including internal legal and tax services provided to the Portfolios by DMC and/or its affiliates’ employees. For the year ended October 31, 2009, the Portfolios were charged for internal legal and tax services by DMC and/or its affiliates’ employees as follows:
| The Large-Cap Value Equity Portfolio | $ | 770 |
| The Select 20 Portfolio | | 773 |
| The Large-Cap Growth Equity Portfolio | | 19,745 |
| The Small-Cap Growth Equity Portfolio | | 115 |
| The Focus Smid-Cap Growth Equity Portfolio | | 273 |
| The Real Estate Investment Trust Portfolio II | | 377 |
| The Core Focus Fixed Income Portfolio | | 1,942 |
| The High-Yield Bond Portfolio | | 1,737 |
| The Core Plus Fixed Income Portfolio | | 6,212 |
| The International Equity Portfolio | | 71,437 |
| The Labor Select International Equity Portfolio | | 56,489 |
| The Emerging Markets Portfolio | | 44,221 |
| The Global Real Estate Securities Portfolio | | 4,677 |
| The Global Fixed Income Portfolio | | 12,940 |
| The International Fixed Income Portfolio | | 1,636 |
Trustees’ fees include expenses accrued by each Portfolio for each Trustee’s retainer and meeting fees. Certain officers of DMC, DSC, and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Portfolios.
3. Investments
For the year ended October 31, 2009, each Portfolio made purchases and sales of investment securities other than short-term investments as follows:
| | Purchases
other than
U.S. government
securities | | Purchases of
U.S. government
securities | | Sales
other than
U.S. government
securities | | Sales of
U.S. government
securities |
| The Large-Cap Value Equity Portfolio | | | $ | 2,482,335 | | | | $ | — | | | | $ | 2,288,434 | | | | $ | — | |
| The Select 20 Portfolio | | | | 4,422,232 | | | | | — | | | | | 4,543,216 | | | | | — | |
| The Large-Cap Growth Equity Portfolio | | | | 68,086,989 | | | | | — | | | | | 108,092,018 | | | | | — | |
| The Small-Cap Growth Equity Portfolio | | | | 1,827,621 | | | | | — | | | | | 5,877,380 | | | | | — | |
| The Focus Smid-Cap Growth Equity Portfolio | | | | 1,601,309 | | | | | — | | | | | 3,114,639 | | | | | — | |
| The Real Estate Investment Trust Portfolio II | | | | 7,581,693 | | | | | — | | | | | 7,171,993 | | | | | — | |
| The Core Focus Fixed Income Portfolio | | | | 39,376,186 | | | | | 26,901,566 | | | | | 55,857,430 | | | | | 22,586,526 | |
| The High-Yield Bond Portfolio | | | | 23,394,398 | | | | | — | | | | | 24,814,499 | | | | | — | |
| The Core Plus Fixed Income Portfolio | | | | 135,164,984 | | | | | 22,060,058 | | | | | 200,017,362 | | | | | 23,942,900 | |
| The International Equity Portfolio | | | | 151,744,479 | | | | | — | | | | | 406,991,386 | | | | | — | |
| The Labor Select International Equity Portfolio | | | | 155,043,587 | | | | | — | | | | | 73,401,929 | | | | | — | |
| The Emerging Markets Portfolio | | | | 196,828,632 | | | | | — | | | | | 291,810,704 | | | | | — | |
| The Global Real Estate Securities Portfolio | | | | 66,159,321 | | | | | — | | | | | 93,663,247 | | | | | — | |
| The Global Fixed Income Portfolio | | | | 112,931,284 | | | | | 28,931,473 | | | | | 165,417,264 | | | | | 14,175,501 | |
| The International Fixed Income Portfolio | | | | 18,836,133 | | | | | — | | | | | 31,598,561 | | | | | — | |
2009 Annual report · Delaware Pooled Trust
(continues) 151
Notes to financial statements
Delaware Pooled® Trust
3. Investments (continued)
At October 31, 2009, the cost of investments for federal income tax purposes and unrealized appreciation (depreciation) for each Portfolio were as follows:
| | Cost of
investments | | Aggregate
unrealized
appreciation | | Aggregate
unrealized
depreciation | | Net unrealized
appreciation
(depreciation) |
| The Large-Cap Value Equity Portfolio | | | $ | 10,718,155 | | | | $ | 427,114 | | | | $ | (1,051,940 | ) | | | | $ | (624,826 | ) | |
| The Select 20 Portfolio | | | | 9,985,245 | | | | | 1,231,558 | | | | | (449,939 | ) | | | | | 781,619 | | |
| The Large-Cap Growth Equity Portfolio | | | | 271,451,289 | | | | | 15,544,940 | | | | | (25,928,920 | ) | | | | | (10,383,980 | ) | |
| The Small-Cap Growth Equity Portfolio | | | | 595,622 | | | | | 110,248 | | | | | (39,915 | ) | | | | | 70,333 | | |
| The Focus Smid-Cap Growth Equity Portfolio | | | | 3,285,452 | | | | | 523,494 | | | | | (349,543 | ) | | | | | 173,951 | | |
| The Real Estate Investment Trust Portfolio II | | | | 6,611,138 | | | | | 72,358 | | | | | (1,455,014 | ) | | | | | (1,382,656 | ) | |
| The Core Focus Fixed Income Portfolio | | | | 26,121,406 | | | | | 691,003 | | | | | (290,017 | ) | | | | | 400,986 | | |
| The High-Yield Bond Portfolio | | | | 23,532,789 | | | | | 1,875,069 | | | | | (406,951 | ) | | | | | 1,468,118 | | |
| The Core Plus Fixed Income Portfolio | | | | 57,287,630 | | | | | 3,026,184 | | | | | (1,761,071 | ) | | | | | 1,265,113 | | |
| The International Equity Portfolio | | | | 990,752,013 | | | | | 90,754,518 | | | | | (112,395,180 | ) | | | | | (21,640,662 | ) | |
| The Labor Select International Equity Portfolio | | | | 844,262,955 | | | | | 68,234,826 | | | | | (101,651,385 | ) | | | | | (33,416,559 | ) | |
| The Emerging Markets Portfolio | | | | 595,060,104 | | | | | 64,658,684 | | | | | (49,508,499 | ) | | | | | 15,150,185 | | |
| The Global Real Estate Securities Portfolio | | | | 75,527,660 | | | | | 2,296,478 | | | | | (12,795,269 | ) | | | | | (10,498,791 | ) | |
| The Global Fixed Income Portfolio | | | | 131,801,555 | | | | | 10,999,430 | | | | | (1,905,084 | ) | | | | | 9,094,346 | | |
| The International Fixed Income Portfolio | | | | 17,520,091 | | | | | 1,971,077 | | | | | (177,980 | ) | | | | | 1,793,097 | | |
Effective November 1, 2008, the Portfolios adopted the provisions, as amended to date, of Accounting Standards Codification 820 (ASC 820), Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that each Portfolio would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. ASC 820 also establishes a framework for measuring fair value and a three level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. Each Portfolio’s investment in its entirety is assigned a level based upon the observability of the inputs, which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
Level 1 – inputs are quoted prices in active markets Level 2 – inputs are observable, directly or indirectly
Level 3 – inputs are unobservable and reflect assumptions on the part of the reporting entity
The following table summarizes the valuation of The Large-Cap Value Equity Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| | Level 1 | | Level 2 | | Total |
| Common Stock | | $ | 9,678,328 | | $ | — | | $ | 9,678,328 |
| Short-Term | | | — | | | 415,001 | | | 415,001 |
| Total | | $ | 9,678,328 | | $ | 415,001 | | $ | 10,093,329 |
There were no Level 3 securities at the end of the period.
2009 Annual report · Delaware Pooled Trust
152
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Large-Cap Value Equity Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 23 | | |
| Net realized loss | | | (426 | ) | |
| Net change in unrealized appreciation/depreciation | | | 403 | | |
| Balance as of 10/31/09 | | $ | — | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation from investments | | | | | |
| still held as of 10/31/09 | | $ | — | | |
The following table summarizes the valuation of The Select 20 Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Total |
| Common Stock | $ | 9,683,267 | | $ | 628,596 | | $ | 10,311,863 |
| Short-Term | | — | | | 455,001 | | | 455,001 |
| Total | $ | 9,683,267 | | $ | 1,083,597 | | $ | 10,766,864 |
| There were no Level 3 securities at the end of the period. | | | | | | | | |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Select 20 Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 918 | | |
| Net realized loss | | | (17,004 | ) | |
| Net change in unrealized appreciation/depreciation | | | 16,086 | | |
| Balance as of 10/31/09 | | $ | — | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation from investments still | | | | | |
| held as of 10/31/09 | | $ | — | | |
The following table summarizes the valuation of The Large-Cap Growth Equity Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | $ | 249,056,330 | | $ | — | | | $ | — | | | $ | 249,056,330 |
| Short-Term | | — | | | 1,363,002 | | | | — | | | | 1,363,002 |
| Securities Lending Collateral | | 7,026,134 | | | 3,621,821 | | | | 22 | | | | 10,647,977 |
| Total | $ | 256,082,464 | | $ | 4,984,823 | | | $ | 22 | | | $ | 261,067,309 |
| 2009 Annual report · Delaware Pooled Trust |
| |
| (continues) 153 |
Notes to financial statements
Delaware Pooled® Trust
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Large-Cap Growth Equity Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 12,121 | | |
| Net change in unrealized appreciation/depreciation | | | (12,099 | ) | |
| Balance as of 10/31/09 | | $ | 22 | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | (12,099 | ) | |
The following table summarizes the valuation of The Small-Cap Growth Equity Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | $ | 627,118 | | $ | — | | $ | 1,837 | | $ | 628,955 |
| Short-Term | | — | | | 37,000 | | | — | | | 37,000 |
| Total | $ | 627,118 | | $ | 37,000 | | $ | 1,837 | | $ | 665,955 |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Small-Cap Growth Equity Portfolio |
| | | | | | Securities | | | | |
| | | | | | Lending | | | | |
| Common Stock | | Collateral | | Total |
| Balance as of 10/31/08 | | $ | — | | | $ | 347 | | | $ | 347 | |
| Net purchases, sales, and settlements | | | 1,713 | | | | — | | | | 1,713 | |
| Net realized loss | | | — | | | | (6,426 | ) | | | (6,426 | ) |
| Net change in unrealized appreciation/depreciation | | | 124 | | | | 6,079 | | | | 6,203 | |
| Balance as of 10/31/09 | | $ | 1,837 | | | $ | — | | | $ | 1,837 | |
| | | | | | | | | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | |
| from investments still held as of 10/31/09 | | $ | 124 | | | $ | — | | | $ | 124 | |
The following table summarizes the valuation of The Focus Smid-Cap Growth Equity Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Total |
| Common Stock | $ | 3,151,512 | | $ | 181,891 | | $ | 3,333,403 |
| Short-Term | | — | | | 126,000 | | | 126,000 |
| Total | $ | 3,151,512 | | $ | 307,891 | | $ | 3,459,403 |
There were no Level 3 securities at the end of the period.
2009 Annual report · Delaware Pooled Trust
154
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Focus Smid-Cap Growth Equity Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 745 | | |
| Net realized loss | | | (13,796 | ) | |
| Net change in unrealized appreciation/depreciation | | | 13,051 | | |
| Balance as of 10/31/09 | | $ | — | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | — | | |
The following table summarizes the valuation of The Real Estate Investment Trust Portfolio II investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Total |
| Common Stock | $ | 4,951,482 | | $ | — | | $ | 4,951,482 |
| Short-Term | | — | | | 277,000 | | | 277,000 |
| Total | $ | 4,951,482 | | $ | 277,000 | | | 5,228,482 |
There were no Level 3 securities at the end of the period.
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Real Estate Investment Trust Portfolio II |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 355 | | |
| Net realized loss | | | (6,565 | ) | |
| Net change in unrealized appreciation/depreciation | | | 6,210 | | |
| Balance as of 10/31/09 | | $ | — | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | — | | |
The following table summarizes the valuation of The Core Focus Fixed Income Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Agency, Asset-Backed & Mortgage-Backed Securities | $ | — | | $ | 8,153,542 | | | $ | 133,316 | | $ | 8,286,858 | |
| Corporate Debt | | — | | | 6,057,195 | | | | — | | | 6,057,195 | |
| Foreign Debt | | — | | | 582,286 | | | | — | | | 582,286 | |
| Municipal Bonds | | — | | | 154,898 | | | | — | | | 154,898 | |
| U.S. Treasury Obligations | | 4,827,238 | | | — | | | | — | | | 4,827,238 | |
| Short-Term | | — | | | 4,462,007 | | | | — | | | 4,462,007 | |
| Securities Lending Collateral | | 1,412,186 | | | 696,572 | | | | 4 | | | 2,108,762 | |
| Other | | — | | | 43,148 | | | | — | | | 43,148 | |
| Total | $ | 6,239,424 | | $ | 20,149,648 | | | $ | 133,320 | | $ | 26,522,392 | |
| Derivatives | $ | — | | $ | (14,098 | ) | | $ | — | | $ | (14,098 | ) |
2009 Annual report · Delaware Pooled Trust
(continues) 155
Notes to financial statements
Delaware Pooled® Trust
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Core Focus Fixed Income Portfolio |
| Agency, Asset- | | | | | | | | |
| Backed and | | | | | | | | |
| Mortgage- | | Securities | | | | |
| Backed | | Lending | | | | |
| Securities | | Collateral | | Total |
| Balance as of 10/31/08 | $ | 396,771 | | | $ | 2,367 | | | $ | 399,138 | |
| Net purchases, sales, and settlements | | (72,837 | ) | | | — | | | | (72,837 | ) |
| Net realized loss | | (14,568 | ) | | | — | | | | (14,568 | ) |
| Net transfers into and/or out of Level 3 | | (220,256 | ) | | | — | | | | (220,256 | ) |
| Net change in unrealized appreciation/depreciation | | 44,206 | | | | (2,363 | ) | | | 41,843 | |
| Balance as of 10/31/09 | $ | 133,316 | | | $ | 4 | | | $ | 133,320 | |
| | | | | | | | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | |
| from investments still held as of 10/31/09 | $ | 10,716 | | | $ | (2,363 | ) | | $ | 8,353 | |
The following table summarizes the valuation of The High-Yield Bond Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | $ | 140,307 | | $ | — | | $ | — | | $ | 140,307 |
| Corporate Debt | | — | | | 22,986,324 | | | 8,501 | | | 22,994,825 |
| Short-Term | | — | | | 305,000 | | | — | | | 305,000 |
| Securities Lending Collateral | | 1,016,168 | | | 544,604 | | | 3 | | | 1,560,775 |
| Total | $ | 1,156,475 | | $ | 23,835,928 | | $ | 8,504 | | $ | 25,000,907 |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The High Yield Bond Portfolio |
| | | | | Securities | | | | | | | | |
| Corporate | | Lending | | | | | | | | |
| Debt | | Collateral | | Other | | Total |
| Balance as of 10/31/08 | $ | 11,088 | | | $ | 1,774 | | | $ | 1,948 | | | $ | 14,810 | |
| Net purchases, sales, and settlements | | 381 | | | | — | | | | — | | | | 381 | |
| Net realized loss | | — | | | | — | | | | (4,679 | ) | | | (4,679 | ) |
| Net change in unrealized appreciation/depreciation | | (2,968 | ) | | | (1,771 | ) | | | 2,731 | | | | (2,008 | ) |
| Balance as of 10/31/09 | $ | 8,501 | | | $ | 3 | | | $ | — | | | $ | 8,504 | |
| | | | | | | | | | | | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | | | | |
| from investments still held as of 10/31/09 | $ | (2,968 | ) | | $ | (1,771 | ) | | $ | (1,948 | ) | | $ | (6,687 | ) |
2009 Annual report · Delaware Pooled Trust
156
3. Investments (continued)
The following table summarizes the valuation of The Core Plus Fixed Income Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Agency, Asset-Backed & Mortgage-Backed Securities | $ | — | | $ | 20,215,517 | | | $ | 393,675 | | $ | 20,609,192 | |
| Corporate Debt | | — | | | 28,861,369 | | | | — | | | 28,861,369 | |
| Foreign Debt | | — | | | 2,493,618 | | | | 378,852 | | | 2,872,470 | |
| Municipal Bonds | | — | | | 373,758 | | | | — | | | 373,758 | |
| U.S. Treasury Obligations | | 450,344 | | | — | | | | — | | | 450,344 | |
| Short-Term | | — | | | 3,916,006 | | | | — | | | 3,916,006 | |
| Securities Lending Collateral | | 523,353 | | | 835,867 | | | | 5 | | | 1,359,225 | |
| Other | | — | | | 110,379 | | | | — | | | 110,379 | |
| Total | $ | 973,697 | | $ | 56,806,514 | | | $ | 772,532 | | $ | 58,552,743 | |
| | | | | | | | | | | | | | |
| Derivatives | $ | — | | $ | (27,207 | ) | | $ | — | | $ | (27,207 | ) |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Core Plus Fixed Income Portfolio |
| Agency, Asset- | | | | | | | | | | | | | | | | | | | |
| Backed and | | | | | | | | | | | | | | | | | | | |
| Mortgage- | | | | | | | | | Securities | | | | | | | | |
| Backed | | Corporate | | Foreign | | Lending | | | | | | | | |
| Securities | | Debt | | Debt | | Collateral | | Other | | Total |
| Balance as of 10/31/08 | $ | 2,192,482 | | | $ | 202,579 | | | $ | 222,036 | | $ | 2,792 | | | $ | — | | | $ | 2,619,889 | |
| Net purchases, sales, and settlements | | (1,320,714 | ) | | | (229,284 | ) | | | 53,167 | | | — | | | | — | | | | (1,496,831 | ) |
| Net realized loss | | (106,938 | ) | | | (296,646 | ) | | | — | | | — | | | | (1,711 | ) | | | (405,295 | ) |
| Net transfers into and/or out of Level 3 | | (586,647 | ) | | | — | | | | — | | | — | | | | — | | | | (586,647 | ) |
| Net change in unrealized appreciation/depreciation | | 215,492 | | | | 323,351 | | | | 103,649 | | | (2,787 | ) | | | 1,711 | | | | 641,416 | |
| Balance as of 10/31/09 | $ | 393,675 | | | $ | — | | | $ | 378,852 | | $ | 5 | | | $ | — | | | | 772,532 | |
| | | | | | | | | | | | | | | | | | | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | | | | | | | | | | | |
| from investments still held as of 10/31/09 | $ | 45,675 | | | $ | — | | | | 103,649 | | $ | (2,787 | ) | | $ | — | | | $ | 146,537 | |
The following table summarizes the valuation of The International Equity Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | $ | 20,919,206 | | $ | 885,381,645 | | | $ | — | | $ | 906,300,851 | |
| Short-Term | | — | | | 4,594,007 | | | | — | | | 4,594,007 | |
| Securities Lending Collateral | | 41,470,132 | | | 16,746,210 | | | | 151 | | | 58,216,493 | |
| Total | $ | 62,389,338 | | $ | 906,721,862 | | | $ | 151 | | $ | 969,111,351 | |
| | | | | | | | | | | | | | |
| Derivatives | $ | — | | $ | (25,115 | ) | | $ | — | | $ | (25,115 | ) |
2009 Annual report · Delaware Pooled Trust
(continues) 157
Notes to financial statements
Delaware Pooled® Trust
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The International Equity Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 81,390 | | |
| Net change in unrealized appreciation/depreciation | | | (81,239 | ) | |
| Balance as of 10/31/09 | | $ | 151 | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | (81,239 | ) | |
The following table summarizes the valuation of The Labor Select International Equity Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | $ | — | | $ | 786,048,605 | | | $ | — | | $ | 786,048,605 | |
| Short-Term | | — | | | 13,208,020 | | | | — | | | 13,208,020 | |
| Securities Lending Collateral | | 2,165,463 | | | 9,424,256 | | | | 52 | | | 11,589,771 | |
| Total | $ | 2,165,463 | | $ | 808,680,881 | | | $ | 52 | | $ | 810,846,396 | |
| | | | | | | | | | | | | | |
| Derivatives | $ | — | | $ | (7,777 | ) | | $ | — | | $ | (7,777 | ) |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Labor Select |
| International Equity Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 28,153 | | |
| Net change in unrealized appreciation/depreciation | | | (28,101 | ) | |
| Balance as of 10/31/09 | | $ | 52 | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | (28,101 | ) | |
The following table summarizes the valuation of The Emerging Markets Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | $ | 195,606,232 | | $ | 362,092,055 | | | $ | — | | $ | 557,698,287 | |
| Short-Term | | — | | | 5,278,008 | | | | — | | | 5,278,008 | |
| Securities Lending Collateral | | 6,447,380 | | | 10,023,918 | | | | 58 | | | 16,471,356 | |
| Other | | 13,126,024 | | | 17,636,614 | | | | — | | | 30,762,638 | |
| Total | $ | 215,179,636 | | $ | 395,030,595 | | | $ | 58 | | $ | 610,210,289 | |
| | | | | | | | | | | | | | |
| Derivatives | $ | — | | $ | (11 | ) | | $ | — | | $ | (11 | ) |
2009 Annual report · Delaware Pooled Trust
158
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
|
| The Emerging Markets Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 31,096 | | |
| Net change in unrealized appreciation/depreciation | | | (31,038 | ) | |
| Balance as of 10/31/09 | | $ | 58 | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | (31,038 | ) | |
The following table summarizes the valuation of The Global Real Estate Securities Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | | $ | 17,972,924 | | $ | 32,474,144 | | | | $ | — | | | $ | 50,447,068 | |
| Short-Term | | | — | | | 4,506,007 | | | | | — | | | | 4,506,007 | |
| Securities Lending Collateral | | | 7,009,584 | | | 3,066,168 | | | | | 42 | | | | 10,075,794 | |
| Total | | $ | 24,982,508 | | $ | 40,046,319 | | | | $ | 42 | | | $ | 65,028,869 | |
| | | | | | | | | | | | | | | | | |
| Derivatives | | $ | — | | $ | (4,580 | ) | | | $ | — | | | $ | (4,580 | ) |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Global Real Estate Securities Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 22,442 | | |
| Net change in unrealized appreciation/depreciation | | | (22,400 | ) | |
| Balance as of 10/31/09 | | $ | 42 | | |
| | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | |
| from investments still held as of 10/31/09 | | $ | (22,400 | ) | |
The following table summarizes the valuation of The Global Fixed Income Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| Level 1 | | Level 2 | | Total |
| Foreign Debt | $ | — | | $ | 121,233,281 | | $ | 121,233,281 |
| U.S. Treasury Obligations | | 16,175,623 | | | — | | | 16,175,623 |
| Corporate Debt | | — | | | 3,150,996 | | | 3,150,996 |
| Short-Term | | — | | | 336,001 | | | 336,001 |
| Total | $ | 16,175,623 | | $ | 124,720,278 | | $ | 140,895,901 |
| | | | | | | | | |
| Derivatives | $ | — | | $ | 230,976 | | $ | 230,976 |
There were no Level 3 securities at the end of the period.
2009 Annual report · Delaware Pooled Trust
(continues) 159
Notes to financial statements
Delaware Pooled® Trust
3. Investments (continued)
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| The Global Fixed Income Portfolio |
| Securities |
| Lending |
| Collateral |
| Balance as of 10/31/08 | | $ | 908 | |
| Net realized loss | | | (16,817 | ) |
| Net change in unrealized appreciation/depreciation | | | 15,909 | |
| Balance as of 10/31/09 | | $ | — | |
| | | | | |
| Net change in unrealized appreciation/depreciation | | | | |
| from investments still held as of 10/31/09 | | $ | — | |
The following table summarizes the valuation of The International Fixed Income Portfolio’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| | Level 2 | | Level 3 | | Total |
| Foreign Debt | | $ | 18,508,006 | | $ | 460,314 | | $ | 18,968,320 |
| Corporate Debt | | | 112,868 | | | — | | | 112,868 |
| Short-Term | | | 232,000 | | | — | | | 232,000 |
| Total | | $ | 18,852,874 | | $ | 460,314 | | $ | 19,313,188 |
| | | | | | | | | | |
| Derivatives | | $ | 31,451 | | $ | — | | $ | 31,451 |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| | The International Fixed Income Portfolio |
| | | | | | Securities | | |
| | | | | | Lending | | |
| | Foreign Debt | | Collateral | | Total |
| Balance as of 10/31/08 | | $ | 336,260 | | | $ | 1,291 | | | $ | 337,551 | |
| Net purchases, sales, and settlements | | | (159,550 | ) | | | — | | | | (159,550 | ) |
| Net realized gain (loss) | | | 39,433 | | | | (23,899 | ) | | | 15,534 | |
| Net transfers into and/or out of Level 3 | | | 193,121 | | | | — | | | | 193,121 | |
| Net change in unrealized appreciation/depreciation | | | 51,050 | | | | 22,608 | | | | 73,658 | |
| Balance as of 10/31/09 | | $ | 460,314 | | | $ | — | | | $ | 460,314 | |
| | | | | | | | | | | | | |
| Net change in unrealized appreciation/depreciation | | | | | | | | | | | | |
| from investments still held as of 10/31/09 | | $ | 107,034 | | | $ | — | | | $ | 107,034 | |
2009 Annual report · Delaware Pooled Trust
160
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Additionally, distributions from net gains on foreign currency transactions and net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended October 31, 2009 and 2008 was as follows:
| | Ordinary | | Long-Term | | Return | | | |
| | Income | | Capital Gain | | of Capital | | Total |
| Year ended October 31, 2009: | | | | | | | | |
| The Large-Cap Value Equity Portfolio | | $ | 237,317 | | $ | — | | $ | — | | $ | 237,317 |
| The Select 20 Portfolio | | | 8,262 | | | — | | | 7,220 | | | 15,482 |
| The Large-Cap Growth Equity Portfolio | | | 1,012,945 | | | — | | | — | | | 1,012,945 |
| The Small-Cap Growth Equity Portfolio | | | — | | | 1,105,271 | | | 9,513 | | | 1,114,784 |
| The Focus Smid-Cap Growth Equity Portfolio | | | 29,258 | | | — | | | 7,384 | | | 36,642 |
| The Real Estate Investment Trust Portfolio II | | | 295,942 | | | — | | | — | | | 295,942 |
| The Core Focus Fixed Income Portfolio | | | 1,521,244 | | | — | | | — | | | 1,521,244 |
| The High-Yield Bond Portfolio | | | 1,797,338 | | | — | | | — | | | 1,797,338 |
| The Core Plus Fixed Income Portfolio | | | 7,498,499 | | | — | | | — | | | 7,498,499 |
| The International Equity Portfolio | | | 88,883,940 | | | 115,268,847 | | | — | | | 204,152,787 |
| The Labor Select International Equity Portfolio | | | 45,429,859 | | | 21,959,941 | | | — | | | 67,389,800 |
| The Emerging Markets Portfolio | | | 18,520,513 | | | 77,714,200 | | | — | | | 96,234,713 |
| The Global Real Estate Securities Portfolio | | | 169,854 | | | — | | | — | | | 169,854 |
| The Global Fixed Income Portfolio | | | 31,311,090 | | | — | | | — | | | 31,311,090 |
| The International Fixed Income Portfolio | | | 2,146,073 | | | — | | | — | | | 2,146,073 |
| | | | | | | | | | | | |
| | Ordinary | | Long-Term | | Return | | | |
| | Income | | Capital Gain | | of Capital | | Total |
| Year ended October 31, 2008: | | | | | | | | |
| The Large-Cap Value Equity Portfolio | | $ | 281,784 | | $ | 819,349 | | $ | — | | $ | 1,101,133 |
| The Large-Cap Growth Equity Portfolio | | | 615,128 | | | 3,836,740 | | | — | | | 4,451,868 |
| The Small-Cap Growth Equity Portfolio | | | 1,422,074 | | | 9,194,784 | | | — | | | 10,616,858 |
| The Focus Smid-Cap Growth Equity Portfolio | | | 361,429 | | | 223,725 | | | — | | | 585,154 |
| The Real Estate Investment Trust Portfolio II | | | 1,886,204 | | | 3,458,097 | | | — | | | 5,344,301 |
| The Core Focus Fixed Income Portfolio | | | 2,889,431 | | | — | | | — | | | 2,889,431 |
| The High-Yield Bond Portfolio | | | 1,527,622 | | | — | | | — | | | 1,527,622 |
| The Core Plus Fixed Income Portfolio | | | 12,533,870 | | | — | | | — | | | 12,533,870 |
| The International Equity Portfolio | | | 54,942,491 | | | 193,922,674 | | | — | | | 248,865,165 |
| The Labor Select International Equity Portfolio | | | 27,454,273 | | | 131,100,861 | | | — | | | 158,555,134 |
| The Emerging Markets Portfolio | | | 68,206,808 | | | 122,861,608 | | | — | | | 191,068,416 |
| The Global Real Estate Securities Portfolio | | | 10,635,311 | | | — | | | 1,123,054 | | | 11,758,365 |
| The Global Fixed Income Portfolio | | | 12,715,444 | | | — | | | — | | | 12,715,444 |
| The International Fixed Income Portfolio | | | 1,709,358 | | | — | | | — | | | 1,709,358 |
5. Components of Net Assets on a Tax Basis
As of October 31, 2009, the components of net assets on a tax basis were as follows:
| | The | | | | | | The | | The | | The |
| | Large-Cap | | The | | Large-Cap | | Small-Cap | | Focus Smid-Cap |
| | Value Equity | | Select 20 | | Growth Equity | | Growth Equity | | Growth Equity |
| | Portfolio | | Portfolio | | Portfolio | | Portfolio | | Portfolio |
| Shares of beneficial interest | | $ | 12,931,184 | | | $ | 14,840,409 | | | $ | 337,081,102 | | | $ | 2,756,310 | | | $ | 5,117,939 | |
| Undistributed ordinary income | | | 205,980 | | | | — | | | | 477,181 | | | | — | | | | — | |
| Capital loss carryforwards | | | (2,407,432 | ) | | | (5,418,334 | ) | | | (76,157,672 | ) | | | (2,165,627 | ) | | | (1,841,719 | ) |
| Unrealized appreciation (depreciation) of investments | | | | | | | | | | | | | | | | | | | | |
| and foreign currencies | | | (624,826 | ) | | | 781,619 | | | | (10,383,980 | ) | | | 70,333 | | | | 173,914 | |
| Net assets | | $ | 10,104,906 | | | $ | 10,203,694 | | | $ | 251,016,631 | | | $ | 661,016 | | | $ | 3,450,134 | |
2009 Annual report · Delaware Pooled Trust
(continues) 161
Notes to financial statements
Delaware Pooled® Trust
5. Components of Net Assets on a Tax Basis (continued)
| | The | | The | | The | | The | | The |
| | Real Estate | | Core Focus | | High-Yield | | Core Plus | | International |
| | Investment Trust | | Fixed Income | | Bond | | Fixed Income | | Equity |
| | Portfolio II* | | Portfolio | | Portfolio | | Portfolio | | Portfolio |
| Shares of beneficial interest | | $ | 9,271,477 | | | $ | 20,514,674 | | | $ | 25,879,489 | | | $ | 56,468,472 | | | $ | 1,077,428,145 | |
| Undistributed ordinary income | | | 108,076 | | | | 823,597 | | | | 1,756,679 | | | | 3,592,909 | | | | 25,227,214 | |
| Capital loss carryforwards | | | (2,766,109 | ) | | | (1,160,937 | ) | | | (5,487,367 | ) | | | (7,701,823 | ) | | | (168,057,741 | ) |
| Other temporary differences | | | — | | | | (28,043 | ) | | | — | | | | (19,472 | ) | | | — | |
| Unrealized appreciation/depreciation of | | | | | | | | | | | | | | | | | | | | |
| investments and foreign currencies | | | (1,382,656 | ) | | | 400,986 | | | | 1,468,118 | | | | 1,263,232 | | | | (21,541,156 | ) |
| Net assets | | $ | 5,230,788 | | | $ | 20,550,277 | | | $ | 23,616,919 | | | $ | 53,603,318 | | | $ | 913,056,462 | |
| | | | | | | | | | | | | | | | | | | | |
| | The | | | | | | The | | The | | The |
| | Labor Select | | The | | Global | | Global | | International |
| | International | | Emerging | | Real Estate | | Fixed | | Fixed |
| | Equity | | Markets | | Securities | | Income | | Income |
| | Portfolio | | Portfolio | | Portfolio* | | Portfolio | | Portfolio |
| Shares of beneficial interest | | $ | 896,743,464 | | | $ | 617,140,896 | | | $ | 167,180,629 | | | $ | 128,492,772 | | | $ | 16,308,995 | |
| Undistributed ordinary income | | | 19,709,398 | | | | 13,025,164 | | | | 3,902,782 | | | | 7,242,862 | | | | 1,974,033 | |
| Capital loss carryforwards | | | (85,355,469 | ) | | | (47,656,081 | ) | | | (105,820,265 | ) | | | (978,025 | ) | | | (362,624 | ) |
| Other temporary differences | | | — | | | | — | | | | — | | | | (675,616 | ) | | | (179,948 | ) |
| Unrealized appreciation (depreciation) of | | | | | | | | | | | | | | | | | | | | |
| investments and foreign currencies | | | (33,379,648 | ) | | | 15,128,394 | | | | (10,496,260 | ) | | | 9,122,397 | | | | 1,798,016 | |
| Net assets | | $ | 797,717,745 | | | $ | 597,638,373 | | | $ | 54,766,886 | | | $ | 143,204,390 | | | $ | 19,538,472 | |
*The undistributed earnings for The Real Estate Investment Trust Portfolio II and The Global Real Estate Securities Portfolio are estimated pending final notification of the tax character of distributions received from investments in Real Estate Investment Trusts.
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, mark-to-market on futures contracts, mark to market on forward foreign currency contracts, straddle loss deferrals, tax recognition of unrealized gain on passive foreign investment companies, contingent payment debt instruments, the tax treatment of market discount and premium on debt instruments, and CDS contracts.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of net operating losses, in-kind distributions of shareholder redemptions, gain (loss) on foreign currency transactions, expiration of capital loss carryforwards, dividends and distributions, market discount and premium on certain debt instruments, passive foreign investment companies, CDS and interest rate swaps and paydown gains (losses) on mortgage- and asset-backed securities. Results of operations and net assets were not affected by these reclassifications. For the year ended October 31, 2009, the following Portfolios recorded the following reclassifications.
| | Undistributed | | Accumulated | | | | |
| | (distributions in excess of) | | net realized | | Paid-in |
| | net investment income (loss) | | gain (loss) | | capital |
| The Select 20 Portfolio | | | $ | 33,165 | | | | $ | 2,002,200 | | | $ | (2,035,365 | ) |
| The Small-Cap Growth Equity Portfolio | | | | 5,968 | | | | | 5,182 | | | | (11,150 | ) |
| The Focus Smid-Cap Growth Equity Portfolio | | | | 2,549 | | | | | 4,835 | | | | (7,384 | ) |
| The Core Focus Fixed Income Portfolio | | | | 8,261 | | | | | (8,261 | ) | | | — | |
| The High-Yield Bond Portfolio | | | | (122,630 | ) | | | | 735,444 | | | | (612,814 | ) |
| The Core Plus Fixed Income Portfolio | | | | (148,021 | ) | | | | 148,021 | | | | — | |
| The International Equity Portfolio | | | | 1,640,656 | | | | | 9,177,476 | | | | (10,818,132 | ) |
| The Labor Select International Equity Portfolio | | | | 658,102 | | | | | (658,102 | ) | | | — | |
| The Emerging Markets Portfolio | | | | (792,653 | ) | | | | 792,653 | | | | — | |
| The Global Real Estate Securities Portfolio | | | | 546,175 | | | | | (635,035 | ) | | | 88,860 | |
| The Global Fixed Income Portfolio | | | | 2,757,041 | | | | | (2,629,485 | ) | | | (127,556 | ) |
| The International Fixed Income Portfolio | | | | 362,036 | | | | | 533,199 | | | | (895,235 | ) |
2009 Annual report · Delaware Pooled Trust
162
5. Components of Net Assets on a Tax Basis (continued)
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. In 2009, the Portfolios utilized capital loss carryforwards as follows:
| Capital loss |
| carryforwards utilized |
| The Global Fixed Income Portfolio | | $ | 196,658 | |
| | | | |
| In 2009, the following capital loss carryforwards expired: | | | | |
| |
| Capital loss |
| carryforwards expired |
| The Select 20 Portfolio | | $ | 2,003,306 | |
| The International Fixed Income Portfolio | | | 895,235 | |
| The High-Yield Bond Portfolio | | | 612,814 | |
Capital loss carryforwards remaining at October 31, 2009 will expire as follows:
| | Year of Expiration |
| | 2010 | | 2011 | | 2013 | | 2014 | | 2015 | | 2016 | | 2017 | | Total |
| The Large-Cap Value Equity Portfolio | | $ | — | | $ | — | | $ | — | | $ | — | | $ | — | | $ | 1,656,222 | | $ | 751,210 | | $ | 2,407,432 |
| The Select 20 Portfolio | | | 2,008,163 | | | 596,717 | | | — | | | 76,954 | | | — | | | 106,744 | | | 2,629,756 | | | 5,418,334 |
| The Large-Cap Growth Equity Portfolio | | | — | | | — | | | — | | | — | | | — | | | 16,131,381 | | | 60,026,291 | | | 76,157,672 |
| The Small-Cap Growth Equity Portfolio | | | — | | | — | | | — | | | — | | | — | | | — | | | 2,165,627 | | | 2,165,627 |
| The Focus Smid-Cap Growth Equity Portfolio | | | — | | | — | | | — | | | — | | | — | | | 636,923 | | | 1,204,796 | | | 1,841,719 |
| The Real Estate Investment Trust Portfolio II | | | — | | | — | | | — | | | — | | | — | | | 1,246,201 | | | 1,519,908 | | | 2,766,109 |
| The Core Focus Fixed Income Portfolio | | | — | | | — | | | — | | | 289,534 | | | — | | | 133,275 | | | 738,128 | | | 1,160,937 |
| The High-Yield Bond Portfolio | | | 331,046 | | | — | | | — | | | — | | | 358,729 | | | 2,582,251 | | | 2,215,341 | | | 5,487,367 |
| The Core Plus Fixed Income Portfolio | | | — | | | — | | | 394,175 | | | 1,651,932 | | | 1,588,204 | | | 1,786,993 | | | 2,280,519 | | | 7,701,823 |
| The International Equity Portfolio | | | — | | | — | | | — | | | — | | | — | | | — | | | 168,057,741 | | | 168,057,741 |
| The Labor Select International Equity Portfolio | | | — | | | — | | | — | | | — | | | — | | | — | | | 85,355,469 | | | 85,355,469 |
| The Emerging Markets Portfolio | | | — | | | — | | | — | | | — | | | — | | | — | | | 47,656,081 | | | 47,656,081 |
| The Global Real Estate Securities Portfolio | | | — | | | — | | | — | | | — | | | 1,245,667 | | | 53,802,495 | | | 50,772,103 | | | 105,820,265 |
| The Global Fixed Income Portfolio | | | — | | | — | | | — | | | — | | | — | | | 978,025 | | | — | | | 978,025 |
| The International Fixed Income Portfolio | | | — | | | — | | | — | | | 318,010 | | | — | | | 21,289 | | | 23,325 | | | 362,624 |
6. Capital Shares
Transactions in capital shares were as follows:
| | | | Shares issued | | | | | | |
| | | | upon reinvestment | | | | | Net |
| | Shares | | of dividends | | Shares | | increase |
| | sold | | and distributions | | repurchased | | (decrease) |
| Year ended October 31, 2009: | | | | | | | | | | |
| The Large-Cap Value Equity Portfolio | | 10,927 | | 18,672 | | (6,536 | ) | | 23,063 | |
| The Select 20 Portfolio | | 3,828 | | — | | (166,897 | ) | | (163,069 | ) |
| The Large-Cap Growth Equity Portfolio | | 2,973,390 | | 140,889 | | (10,494,430 | ) | | (7,380,151 | ) |
| The Small-Cap Growth Equity Portfolio | | 159,512 | | 466,953 | | (2,139,313 | ) | | (1,512,848 | ) |
| The Focus Smid-Cap Growth Equity Portfolio | | 66,060 | | 5,376 | | (329,604 | ) | | (258,168 | ) |
| The Real Estate Investment Trust Portfolio II | | — | | 85,041 | | — | | | 85,041 | |
| The Core Focus Fixed Income Portfolio | | 269,861 | | 100,328 | | (1,808,538 | ) | | (1,438,349 | ) |
| The High-Yield Bond Portfolio | | 293,459 | | 391,577 | | (1,025,030 | ) | | (339,994 | ) |
| The Core Plus Fixed Income Portfolio | | 245,889 | | 947,977 | | (9,110,977 | ) | | (7,917,111 | ) |
| The International Equity Portfolio | | 16,249,143 | | 10,937,486 | | (31,852,141 | ) | | (4,665,512 | ) |
| The Labor Select International Equity Portfolio | | 5,040,439 | | 6,309,906 | | (1,217,209 | ) | | 10,133,136 | |
| The Emerging Markets Portfolio | | 4,528,942 | | 16,012,486 | | (19,084,860 | ) | | 1,456,568 | |
| The Global Real Estate Securities Portfolio – Original Class | | 3,842,799 | | 43,008 | | (12,915,622 | ) | | (9,029,815 | ) |
| The Global Real Estate Securities Portfolio – Class P | | — | | — | | — | | | — | |
| The Global Fixed Income Portfolio | | 1,197,079 | | 2,646,717 | | (5,750,573 | ) | | (1,906,777 | ) |
| The International Fixed Income Portfolio | | — | | 191,956 | | (1,196,911 | ) | | (1,004,955 | ) |
2009 Annual report · Delaware Pooled Trust
(continues) 163
Notes to financial statements
Delaware Pooled® Trust
6. Capital Shares (continued)
| | | | Shares issued | | | | | | |
| | | | upon reinvestment | | | | | Net |
| | Shares | | of dividends | | Shares | | increase |
| | sold | | and distributions | | repurchased | | (decrease) |
| Year ended October 31, 2008: | | | | | | | | | | |
| The Large-Cap Value Equity Portfolio | | 248,293 | | 57,050 | | (27,297 | ) | | 278,046 | |
| The Select 20 Portfolio | | 1,828,814 | | — | | — | | | 1,828,814 | |
| The Large-Cap Growth Equity Portfolio | | 4,759,131 | | 414,807 | | (7,286,730 | ) | | (2,112,792 | ) |
| The Small-Cap Growth Equity Portfolio | | 236,832 | | 1,534,658 | | (1,088,549 | ) | | 682,941 | |
| The Focus Smid-Cap Growth Equity Portfolio | | 429,881 | | 19,682 | | (568,234 | ) | | (118,671 | ) |
| The Real Estate Investment Trust Portfolio II | | 321,257 | | 750,463 | | (942,993 | ) | | 128,727 | |
| The Core Focus Fixed Income Portfolio | | 65,344 | | 206,232 | | (1,099,355 | ) | | (827,779 | ) |
| The High-Yield Bond Portfolio | | 2,061,827 | | 208,977 | | (1,384,747 | ) | | 886,057 | |
| The Core Plus Fixed Income Portfolio | | 1,746,891 | | 1,424,303 | | (9,685,072 | ) | | (6,513,878 | ) |
| The International Equity Portfolio | | 7,078,732 | | 6,768,880 | | (31,445,785 | ) | | (17,598,173 | ) |
| The Labor Select International Equity Portfolio | | 3,669,212 | | 8,073,072 | | (4,743,799 | ) | | 6,998,485 | |
| The Emerging Markets Portfolio | | 2,463,167 | | 13,786,118 | | (5,657,977 | ) | | 10,591,308 | |
| The Global Real Estate Securities Portfolio – Original Class | | 12,913,905 | | 1,555,290 | | (31,861,897 | ) | | (17,392,702 | ) |
| The Global Real Estate Securities Portfolio – Class P | | — | | 49 | | — | | | 49 | |
| The Global Fixed Income Portfolio | | 1,793,544 | | 877,071 | | (12,010,423 | ) | | (9,339,808 | ) |
| The International Fixed Income Portfolio | | — | | 152,485 | | (315,327 | ) | | (162,842 | ) |
7. Line of Credit
The Portfolios, along with certain other funds in the Delaware Investments® Family of Funds (Participants), were participants in a $225,000,000 revolving line of credit with BNY Mellon to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, Participants were charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant’s allocation of the entire facility. Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. The agreement expired on November 18, 2008.
Effective November 18, 2008, the Portfolios along with the other Participants entered into an amendment to the agreement with BNY Mellon for a $35,000,000 revolving line of credit. The agreement, as amended, is to be used as described above and operates in substantially the same manner as the original agreement. The agreement, as amended, expires on November 16, 2010. The Portfolios had no amounts outstanding as of October 31, 2009, or at any time during the year then ended.
8. Derivatives
The Portfolios apply the provisions, as amended to date, of Accounting Standards Codification 815 (ASC 815), Derivatives and Hedging Activities. ASC 815 is intended to improve financial reporting about derivative instruments by requiring enhanced disclosures that enable investors to understand: 1) how and why an entity uses derivatives, 2) how they are accounted for, and 3) how they affect an entity’s results of operations and financial position.
Foreign Currency Exchange Contracts — The Select 20, The Large-Cap Growth Equity, The Small-Cap Growth Equity, The Focus Smid-Cap Growth Equity, The Real Estate Investment Trust II, The Core Focus Fixed Income, The High-Yield Bond, The Core Plus Fixed Income, The International Equity, The Labor Select International Equity, The Emerging Markets, The Global Real Estate Securities, The Global Fixed Income, and The International Fixed Income Portfolios may enter into foreign currency exchange contracts and foreign cross-currency exchange contracts as a way of managing foreign exchange rate risk. The Portfolios may enter into these contracts to fix the U.S. dollar value of a security that they have 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. The Portfolios may also use these contracts to hedge the U.S. dollar value of securities they already own that are denominated in foreign currencies. The change in market value is recorded as an unrealized gain or loss. When the contract is closed, a realized gain or loss is recorded 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 foreign currency exchange contracts and foreign cross-currency exchange contracts does not eliminate fluctuations in the underlying prices of the securities, but does establish a rate of exchange that can be achieved in the future. Although foreign currency exchange 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 Portfolios could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The Portfolios’ maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between a Portfolio and the counterparty and by the posting of collateral by the counterparty to a Portfolio to cover a Portfolio’s exposure to the counterparty.
2009 Annual report · Delaware Pooled Trust
164
8. Derivatives (continued)
Financial Futures Contracts — The Select 20, The Large-Cap Growth Equity, The Small-Cap Growth Equity, The Focus Smid-Cap Growth Equity, The Real Estate Investment Trust II, The Core Focus Fixed Income, The Core Plus Fixed Income, The Emerging Markets, The Global Real Estate Securities, and The International Fixed Income Portfolios may use futures in the normal course of pursuing their investment objectives. Each Portfolio may invest in financial futures contracts to hedge their existing portfolio securities against fluctuations in fair value caused by changes in prevailing market interest rates. Upon entering into a futures contract, a Portfolio deposits cash or pledges U.S. government securities to a broker, equal to the minimum “initial margin” requirements of the exchange on which the contract is traded. Subsequent payments are received from the broker or paid to the broker each day, based on the daily fluctuation in the market value of the contract. These receipts or payments are known as “variation margin” and are recorded daily by each Portfolio as unrealized gains or losses until the contracts are closed. When the contracts are closed, the Portfolio 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. Risks of entering into futures contracts include potential imperfect correlation between the futures contracts and the underlying securities and the possibility of an illiquid secondary market for these instruments. When investing in futures, there is minimal counterparty credit risk to a Portfolio because futures are exchange traded and the exchange’s clearinghouse, as counterparty to all exchange traded futures, guarantees against default.
Options Contracts — During the year ended October 31, 2009, The Core Focus Fixed Income Portfolio and The Core Plus Fixed Income Portfolio entered into options contracts in accordance with their investment objectives. The Portfolios may buy or write options contracts for any number of reasons, including: to manage a Portfolio’s exposure to changes in securities prices and foreign currencies; as an efficient means of adjusting a Portfolio’s overall exposure to certain markets; in an effort to enhance income; to protect the value of portfolio securities; and as a cash management tool. A Portfolio may buy or write call or put options on securities, financial indices, and foreign currencies. When a Portfolio buys an option, a premium is paid and an asset is recorded and adjusted on a daily basis to reflect the current market value of the options purchased. When a Portfolio writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the options written. Premiums received from writing options that expire unexercised are treated by a Portfolio on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as 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 Portfolio has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Portfolio. A Portfolio, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. When writing options, a Portfolio is subject to minimal counterparty risk.
Transactions in written options during the year ended October 31, 2009 for each Portfolio were as follows:
|
| The Core Focus Fixed Income Portfolio |
| Number of | | |
| contracts | | Premiums |
| Options outstanding at October 31, 2008 | | 210 | | | | $ | 143,417 | |
| Options terminated in closing purchase transactions | | (210 | ) | | | | (143,417 | ) |
| Options outstanding at October 31, 2009 | | — | | | | $ | — | |
| | | |
|
| The Core Plus Fixed Income Portfolio |
| Number of | | |
| contracts | | Premiums |
| Options outstanding at October 31, 2008 | | — | | | | $ | — | |
| Option written | | 1 | | | | | 1,654 | |
| Options terminated in closing purchase transaction | | (1 | ) | | | | (1,654 | ) |
| Options outstanding at October 31, 2009 | | — | | | | $ | — | |
Swap Contracts — The Core Focus Fixed Income Portfolio and The Core Plus Fixed Income Portfolio may enter into interest rate swap contracts and index swap contracts in accordance with their investment objectives. These Portfolios and The High-Yield Bond Portfolio may enter into credit default swap (CDS) contracts in accordance with their investment objectives. The Portfolios may use interest rate swaps to adjust the Portfolios’ sensitivity to interest rates or to hedge against changes in interest rates. Index swaps may be used to gain exposure to markets that the Portfolios invest in, such as the corporate bond market. The Portfolios may also use index swaps as a substitute for futures or options contracts if such contracts are not directly available to the Portfolios on favorable terms. The Portfolios may enter into CDS contracts in order to hedge against a credit event, to enhance total return, or to gain exposure to certain securities or markets.
2009 Annual report · Delaware Pooled Trust
(continues) 165
Notes to financial statements
Delaware Pooled® Trust
8. Derivatives (continued)
Interest Rate Swaps. An interest rate swap involves payments received by a Portfolio from another party based on a variable or floating interest rate, in return for making payments based on a fixed interest rate. An interest rate swap can also work in reverse with a Portfolio receiving payments based on a fixed interest rate and making payments based on a variable or floating interest rate. Interest rate swaps may be used to adjust a Portfolio’s sensitivity to interest rates or to hedge against changes in interest rates. Periodic payments on such contracts are accrued daily and recorded as unrealized appreciation/depreciation on swap contracts. Upon periodic payment/receipt or termination of the contract, such amounts are recorded as realized gains or losses on swap contracts. A Portfolio’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the interest rate swap contract’s remaining life, to the extent that the amount is positive. This risk is mitigated by having a netting arrangement between a Portfolio and the counterparty and by the posting of collateral by the counterparty to a Portfolio to cover a Portfolio’s exposure to the counterparty.
Index swaps. Index swaps involve commitments to pay interest in exchange for a market-linked return based on a notional amount. To the extent the total return of the security, instrument or basket of instruments underlying the transaction exceeds the offsetting interest obligation, a Portfolio will receive a payment from the counterparty. To the extent the total return of the security, instrument or basket of instruments underlying the transaction falls short of the offsetting interest obligation, a Portfolio will make a payment to the counterparty. The change in value of swap contracts outstanding, if any, is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded on maturity or termination of the swap contract. A Portfolio’s maximum risk of loss from counterparty credit risk is the discounted net value of the cash flows to be received from/paid to the counterparty over the index swap contract’s remaining life, to the extent that the amount is positive. This risk is mitigated by having a netting arrangement between a Portfolio and the counterparty and by the posting of collateral by the counterparty to a Portfolio to cover a Portfolio’s exposure to the counterparty.
Credit Default Swaps. A CDS contract is a risk-transfer instrument through which one party (purchaser of protection) transfers to another party (seller of protection) the financial risk of a credit event (as defined in the CDS agreement), as it relates to a particular referenced security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional amount of the CDS contract. In addition, an upfront payment may be made or received by a Portfolio in connection with an unwinding or assignment of a CDS contract. Upon the occurrence of a credit event, the seller of protection would pay the par (or other agreed-upon) value of the referenced security (or basket of securities) to the counterparty.
During the year ended October 31, 2009, the Portfolios entered into CDS contracts as purchasers and sellers of protection. Periodic payments (receipts) on such contracts are accrued daily and recorded as unrealized losses (gains) on swap contracts. Upon payment, such amounts are recorded as realized losses (gains) on swap contracts. Upfront payments made or received in connection with CDS contracts are amortized over the expected life of the CDS contracts as realized losses (gains) on swap contracts. The change in value of CDS contracts is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded upon a credit event or the maturity or termination of the agreement.
The Portfolios may sell credit default swaps which expose them to risk of loss from credit risk related events specified in the contract. Credit events generally include, among others, bankruptcy, failure to pay, and obligation default. As disclosed in the footnotes to the schedule of investments for The Core Focus Fixed Income Portfolio, the aggregate fair value of credit default swaps in a net liability position as of October 31, 2009 was $14,166. The aggregate fair value of assets posted as collateral, net of assets received as collateral, for these swaps was $0 . If a credit event had occurred as of October 31, 2009, the swaps’ credit-risk-related contingent features would have been triggered and the Portfolio would have been required to pay $25,000 less the value of the contracts’ related reference obligations. As disclosed in the footnotes to the schedule of investments for The Core Plus Fixed Income Portfolio, the aggregate fair value of credit default swaps in a net liability position as of October 31, 2009 was $ 62,413. The aggregate fair value of assets posted as collateral, net of assets received as collateral, for these swaps was $340,000. If a credit event had occurred as of October 31, 2009, the swaps’ credit-risk-related contingent features would have been triggered and the Portfolio would have been required to pay $ 1,029,500 less the value of the contracts’ related reference obligations.
Credit default swaps may involve greater risks than if a Portfolio had invested in the referenced obligation directly. Credit default swaps are subject to general market risk, liquidity risk, counterparty risk and credit risk. A Portfolio’s maximum risk of loss from counterparty credit risk, either as the seller of protection or the buyer of protection, is the fair value of the contract. This risk is mitigated by having a netting arrangement between a Portfolio and the counterparty and by the posting of collateral by the counterparty to a Portfolio to cover a Portfolio’s exposure to the counterparty.
Swaps Generally. Because there is no organized market for swap contracts, the value of open swaps may differ from that which would be realized in the event a Portfolio terminated its position in the agreement. Risks of entering into these agreements include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movements in the value of the underlying security, instrument, or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the unrealized amounts shown on the statements of net assets.
2009 Annual report · Delaware Pooled Trust
166
8. Derivatives (continued)
Fair values of derivative instruments as of October 31, 2009 was as follows:
| | The Core Plus Fixed Income Portfolio |
| | Asset Derivatives | | Liability Derivatives |
| | Statement of Net Assets Location | | Fair Value | | Statement of Net Assets Location | | Fair Value |
| Foreign exchange contracts (Currency) | | Liabilities net of receivables | | | | | Liabilities net of receivables | | | | |
| | | and other assets | | $ | 13,945 | | and other assets | | $ | (107,431 | ) |
| Futures contracts (Futures) | | Liabilities net of receivables | | | | | Liabilities net of receivables | | | | |
| | and other assets | | | — | | and other assets | | | (11,625 | ) |
| Credit contracts (Swaps) | | Liabilities net of receivables | | | | | Liabilities net of receivables | | | | |
| | and other assets | | | 140,317 | | and other assets | | | (62,413 | ) |
| Total | | | | $ | 154,262 | | | | $ | (181,469 | ) |
The effect of derivative instruments on the statement of operations for the year ended October 31, 2009 was as follows:
| | The Core Plus Fixed Income Portfolio |
| | | | | | Change in Unrealized |
| | | | | | Appreciation |
| | | | | Realized Gain or | | or Depreciation |
| | | | | Loss on Derivatives | | on Derivatives |
| | | Location of Gain or Loss on Derivatives Recognized in Income | | Recognized in Income | | Recognized in Income |
| | | Net realized and unrealized loss on investments and | | | | | | | | | | | | |
| Foreign exchange contracts (Currency) | | foreign currencies from foreign currency contracts | | | $ | (254,350 | ) | | | | $ | (96,875 | ) | |
| | | Net realized and unrealized gain (loss) on investments and | | | | | | | | | | | | |
| Interest rate contracts (Futures) | | foreign currencies from futures contracts | | | | (35,582 | ) | | | | | (16,213 | ) | |
| | Net realized and unrealized gain on investments and | | | | | | | | | | | | |
| Written options contracts (Options) | | foreign currencies from options contracts | | | | 27 | | | | | | — | | |
| | Net realized and unrealized gain (loss) on investments and | | | | | | | | | | | | |
| Credit contracts (Swaps) | | foreign currencies from swap contracts | | | | (66,021 | ) | | | | | 43,568 | | |
| Total | | | | | $ | (355,926 | ) | | | | $ | (69,520 | ) | |
9. Securities Lending
The Portfolios, along with other funds in the Delaware Investments® Family of Funds, may lend their securities pursuant to a security lending agreement (Lending Agreement) with BNY Mellon. With respect to each loan, if the aggregate market value of securities collateral held plus cash collateral received on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is generally invested in the Mellon GSL DBT II Collateral Fund (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of clients participating in its securities lending programs. The Collective Trust may invest in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top three tiers by Standard & Poor’s Ratings Group (S&P) or Moody’s Investors Service, Inc. (Moody’s) or repurchase agreements collateralized by such securities. The Collective Trust seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. At October 31, 2009, the Collective Trust held only cash and assets with a maturity of one business day or less (Cash/Overnight Assets). The Portfolios may incur investment losses as a result of investing securities lending collateral in the Collective Trust. This could occur if an investment in the Collective Trust defaulted or if it were necessary to liquidate assets in the Collective Trust to meet returns on outstanding security loans at a time when the Collective Trust’s net asset value per unit was less than $1.00. Under those circumstances, the Portfolios may not receive an amount from the Collective Trust that is equal in amount to the collateral the Portfolios would be required to return to the borrower of the securities and the Portfolios would be required to make up for this shortfall. Effective April 20, 2009, BNY Mellon transferred the assets of the Collective Trust other than the Cash/Overnight Assets to the BNY Mellon SL DBT II Liquidating Fund (Liquidating Fund), effectively bifurcating the collateral investment pool. The Portfolios’ exposure to the Liquidating Fund is expected to decrease as the Liquidating Fund’s assets mature or are sold. In October 2008, BNY Mellon transferred certain distressed securities from the Collective Trust into the Mellon GSL Reinvestment Trust II. The Portfolios can also accept U.S. government securities and letters of credit (non-cash collateral) in connection with securities loans. In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Portfolios, or at the discretion of the lending agent, replace the loaned securities.
2009 Annual report · Delaware Pooled Trust
(continues) 167
Notes to financial statements
Delaware Pooled® Trust
9. Securities Lending (continued)
The Portfolios continue to record dividends or interest, as applicable, on the securities loaned and are subject to change in value of the securities loaned that may occur during the term of the loan. The Portfolios have the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by non-cash collateral, the Portfolios receive loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Portfolios, the security lending agent and the borrower. The Portfolios record security lending income net of allocations to the security lending agent and the borrower.
At October 31, 2009, the market value of securities on loan is presented below, for which the Portfolios received collateral, comprised of non-cash collateral and cash collateral. Investments purchased with cash collateral are presented on the statements of net assets under the caption “Securities Lending Collateral.”
| | Market value | | | | Cash |
| | of securities | | Non-cash | | collateral |
| | on loan | | collateral | | received |
| The Large-Cap Growth Equity Portfolio | | $ | 10,667,502 | | $ | — | | $ | 10,913,445 |
| The Core Focus Fixed Income Portfolio | | | 2,116,511 | | | — | | | 2,160,475 |
| The High-Yield Bond Portfolio | | | 1,583,329 | | | 20,000 | | | 1,599,800 |
| The Core Plus Fixed Income Portfolio | | | 1,380,887 | | | — | | | 1,420,399 |
| The International Equity Portfolio | | | 57,038,558 | | | — | | | 59,913,242 |
| The Labor Select International Equity Portfolio | | | 11,627,440 | | | — | | | 12,217,824 |
| The Emerging Markets Portfolio | | | 16,657,310 | | | — | | | 17,201,277 |
| The Global Real Estate Securities Portfolio | | | 10,202,570 | | | — | | | 10,526,071 |
10. Credit and Market Risk
Some countries in which The International Equity, The Labor Select International Equity, The Emerging Markets, The Global Real Estate Securities, The Global Fixed Income, and The International Fixed Income Portfolios 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 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 Portfolios may be inhibited. In addition, a significant portion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets is held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Portfolios.
The High-Yield Bond Portfolio and The Core Plus Fixed Income Portfolio invest a portion of their assets 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 are generally 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 Core Focus Fixed Income, The Core Plus Fixed Income, The Global Real Estate Securities, and The Global Fixed Income Portfolios invest in fixed income securities whose value is derived from an underlying pool of mortgages or consumer loans. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates. Investors receive principal and interest payments as the underlying mortgages and consumer loans are paid back. Some of these securities are collateralized mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government agencies or by financial institutions and other mortgage lenders, which are collateralized by a pool of mortgages held under an indenture. Prepayment of mortgages may shorten the stated maturity of the obligations and can result in a loss of premium, if any has been paid. Certain of these securities may be stripped (securities which provide only the principal or interest feature of the underlying security). The yield to maturity on an interest-only CMO is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments (including prepayments) on the related underlying mortgage assets. A rapid rate of principal payments may have a material adverse effect on the Portfolios’ yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Portfolios may fail to fully recoup their initial investments in these securities even if the securities are rated in the highest rating categories.
2009 Annual report · Delaware Pooled Trust
168
10. Credit and Market Risk (continued)
The International Equity and The Global Fixed Income Portfolios may invest up to 10% of each Portfolio’s net 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 Large-Cap Value Equity, The Select 20, The Large-Cap Growth Equity, The Small-Cap Growth Equity, The Focus Smid-Cap Growth Equity, The Real Estate Investment Trust II, The Core Focus Fixed Income, The High-Yield Bond, The Core Plus Fixed Income, The Labor Select International Equity, The Emerging Markets, The Global Real Estate Securities, and The International Fixed Income Portfolios may invest up to 15% of each Portfolio’s net assets in such securities. The relative illiquidity of these securities may impair each Portfolio from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Portfolios’ Board of Trustees has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Portfolios’ limitation on investments in illiquid assets. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Portfolios’ limit on investments in illiquid securities. Rule 144A and illiquid securities have been identified on the statements of net assets.
The Select 20, The Small-Cap Growth Equity, The Focus Smid-Cap Growth Equity, and The Global Real Estate Securities Portfolios invest a significant portion of their assets in small- and mid-sized companies and may be subject to certain risks associated with ownership of securities of such companies. Investments in small- or mid-sized companies may be more volatile than investments in larger companies for a number of reasons, which include more limited financial resources or a dependence on narrow product lines.
The Real Estate Investment Trust Portfolio II and The Global Real Estate Securities Portfolio concentrate their investments in the real estate industry and are subject to the risks associated with that industry. If a Portfolio holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. These Portfolios are also affected by interest rate changes, particularly if the real estate investment trusts they hold use floating rate debt to finance their ongoing operations. Each Portfolio’s investments may also tend to fluctuate more in value than a portfolio that invests in a broader range of industries.
11. Contractual Obligations
The Portfolios enter into contracts in the normal course of business that contain a variety of indemnifications. The Portfolios’ maximum exposure under these arrangements is unknown. However, the Portfolios have not had prior claims or losses pursuant to these contracts. Management has reviewed the Portfolios’ existing contracts and expects the risk of loss to be remote.
12. In-Kind Redemptions
During the year ended October 31, 2009, the International Equity Portfolio satisfied withdrawal requests with transfers of securities and cash totaling $62,543,893, resulting in a net realized loss of $10,754,867 and the Global Fixed Income Portfolio satisfied withdrawal requests with transfers of securities and cash totaling $18,643,044, resulting in a net realized loss of $127,221.
13. Sale of Delaware Investments to Macquarie Group
On August 18, 2009, Lincoln National Corporation (parent company of Delaware Investments) and Macquarie Group (Macquarie) entered into an agreement pursuant to which Delaware Investments, including DMC, Delaware Distributors, L.P. (DDLP), and Delaware Service Company (DSC), will be acquired by Macquarie, an Australia-based global provider of banking, financial, advisory, investment and funds management services (Transaction). Upon completion of the Transaction, DMC, DDLP and DSC will be wholly-owned subsidiaries of Macquarie.
The Transaction will result in a change of control of DMC which, in turn, will cause the termination of the investment advisory agreement between DMC and the Portfolios. As a result, a Special Meeting of Shareholders (Meeting) of the Portfolios has been scheduled for the purpose of asking shareholders to approve a new investment advisory agreement between DMC and the Portfolios (New Agreement). If approved by shareholders, the New Agreement will take effect upon the closing of the Transaction, which is currently anticipated to occur on or about December 31, 2009. Shareholders of the Portfolios have received proxy materials including more detailed information about the Meeting, the Transaction and the proposed New Agreement.
14. Subsequent Event
Effective 11/19/09, DMC has voluntarily agreed to implement an expense limitation for The International Equity Portfolio of 0.90% of average daily net assets.
2009 Annual report · Delaware Pooled Trust
(continues) 169
Notes to financial statements
Delaware Pooled® Trust
15. Tax Information (Unaudited)
The information set forth below is for each Portfolio’s fiscal year as required by federal laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.
For the fiscal year ended October 31, 2009, each Portfolio designates distributions paid during the year as follows:
| | (A) | (B) | | | | | |
| | Long-Term | Ordinary | (C) | | | |
| | Capital Gains | Income | Return of | Total | (D) |
| | Distributions | Distributions* | Capital | Distribution | Qualifying |
| | (Tax Basis) | (Tax Basis) | (Tax Basis) | (Tax Basis) | Dividends1 |
| The Large-Cap Value Equity Portfolio | — | | 100 | % | — | | 100% | 100 | % |
| The Select 20 Portfolio | — | | 53 | % | 47 | % | 100% | 53 | % |
| The Large-Cap Growth Equity Portfolio | — | | 100 | % | — | | 100% | 100 | % |
| The Small-Cap Growth Equity Portfolio | 99 | % | — | | 1 | % | 100% | — | |
| The Focus Smid-Cap Growth Equity Portfolio | — | | 80 | % | 20 | % | 100% | 100 | % |
| The Real Estate Investment Trust Portfolio II | — | | 100 | % | — | | 100% | — | |
| The Core Focus Fixed Income Portfolio | — | | 100 | % | — | | 100% | — | |
| The High-Yield Bond Portfolio | — | | 100 | % | — | | 100% | — | |
| The Core Plus Fixed Income Portfolio | — | | 100 | % | — | | 100% | — | |
| The International Equity Portfolio | 56 | % | 44 | % | — | | 100% | — | |
| The Labor Select International Equity Portfolio | 33 | % | 67 | % | — | | 100% | — | |
| The Emerging Markets Portfolio | 81 | % | 19 | % | — | | 100% | — | |
| The Global Real Estate Securities Portfolio | — | | 100 | % | — | | 100% | — | |
| The Global Fixed Income Portfolio | — | | 100 | % | — | | 100% | — | |
| The International Fixed Income Portfolio | — | | 100 | % | — | | 100% | — | |
| (A), (B) and (C) are based on a percentage of each Portfolio’s total distributions. |
| (D) is based on a percentage of each Portfolio’s ordinary income distributions. |
| | 1Qualifying dividends represent dividends which qualify for the corporate dividends received deduction. |
| *For the fiscal year ended October 31, 2009, certain dividends paid by the Portfolios may be subject to a maximum tax rate of 15%, as provided for by the Jobs and Growth Tax Relief Reconciliation Act of 2003. The Portfolios intend to designate the following amounts to be taxed at a maximum rate of 15%. Complete information will be computed and reported in conjunction with your 2008 Form 1099-DIV. |
| | Maximum amount to be |
| | Taxed at a maximum rate of 15% |
| The Large-Cap Value Equity Portfolio | $ | 237,317 | |
| The Select 20 Portfolio | | 15,482 | |
| The Large-Cap Growth Equity Portfolio | | 1,012,945 | |
| The Focus Smid-Cap Growth Equity Portfolio | | 29,258 | |
| The Core Focus Fixed Income Portfolio | | 10,738 | |
| The Core Plus Fixed Income Portfolio | | 40,637 | |
| The International Equity Portfolio | | 27,001,501 | |
| The Labor Select International Equity Portfolio | | 21,348,915 | |
| The Emerging Markets Portfolio | | 3,309,854 | |
2009 Annual report · Delaware Pooled Trust
170
15. Tax Information (continued)
The International Equity Portfolio, The Labor Select International Equity Portfolio, The Emerging Markets Portfolio and The Global Real Estate Securities Portfolio intend to pass through foreign tax credits in the maximum amount of $1,900,565, $1,582,982, $911,243, and $42,267, respectively. The gross foreign source income earned during the fiscal year 2009 was $37,529,702, $28,843,254, $21,163,442, and $1,456,976, respectively. Complete information will be computed and reported in conjunction with your 2009 Form 1099-DIV.
For the fiscal year ended October 31, 2009, certain interest income paid by the Portfolios, determined to be Qualified Interest Income and Short-Term Capital Gains, may be subject to relief from U.S. withholding for foreign shareholders, as provided by the American Jobs Creation Act of 2004. For the fiscal year ended October 31, 2009, each Portfolio has designated maximum distributions of Qualified Interest Income as follows:
| | Maximum Distributions of |
| | Qualified Interest Income |
| The High-Yield Bond Portfolio | $ | 1,797,338 | |
| The Core Focus Fixed Income Portfolio | | 1,106,621 | |
| The International Fixed Income Portfolio | | 640,021 | |
2009 Annual report · Delaware Pooled Trust
171
Report of independent
registered public accounting firm
To the Shareholders and Board of Trustees
Delaware Pooled® Trust
We have audited the accompanying statements of net assets of The Large-Cap Value Equity Portfolio, The Select 20 Portfolio, The Large-Cap Growth Equity Portfolio, The Small-Cap Growth Equity Portfolio, The Focus Smid-Cap Growth Equity Portfolio, The Real Estate Investment Trust Portfolio II, The Core Focus Fixed Income Portfolio, The High-Yield Bond Portfolio, The Core Plus Fixed Income Portfolio, The International Equity Portfolio, The Labor Select International Equity Portfolio, The Emerging Markets Portfolio, The Global Real Estate Securities Portfolio, The Global Fixed Income Portfolio, and The International Fixed Income Portfolio (fifteen of the series constituting Delaware Pooled Trust) (the “Portfolios”) as of October 31, 2009, and the related statements of operations for the year then ended, statements of changes in net assets for each of the two years in the period then ended and financial highlights for each of the periods indicated therein. These financial statements and financial highlights are the responsibility of the Portfolios’ management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Portfolios’ internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Portfolios’ internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2009 by correspondence with the custodian and brokers or by other appropriate auditing procedures when replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of the above listed Portfolios of Delaware Pooled Trust at October 31, 2009, and the results of their operations for the year then ended, the changes in their net assets for each of the two years in the period then ended and their financial highlights for each of the periods indicated therein, in conformity with U.S. generally accepted accounting principles.
Philadelphia, Pennsylvania
December 22, 2009
2009 Annual report · Delaware Pooled Trust
172
Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Board Consideration of Delaware Pooled Trust Investment Advisory Agreement
At a meeting held on May 19–21, 2009 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements and Sub-Advisory Agreements, as applicable, for each of the series of Delaware Pooled Trust (each, a “Portfolio” and together, the “Portfolios”). In making its decision, the Board considered information furnished specifically in connection with the renewal of the Investment Advisory Agreements with Delaware Management Company (“DMC”) and Sub-Advisory Agreements with Mondrian Investment Partners Limited (“Mondrian”), which included materials provided by DMC and its affiliates (“Delaware Investments”) concerning, among other things, the nature, extent and quality of services provided to the Portfolios, the costs of such services to the Portfolios, economies of scale and the financial condition and profitability of Delaware Investments. Reference was made to information furnished at regular quarterly Board meetings, including reports detailing Portfolio performance, investment strategies and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. In addition, in connection with the Annual Meeting, reports were provided in February 2009 and included independent historical and comparative reports prepared by Lipper Inc. (“Lipper”), an independent statistical compilation organization. The Lipper reports compared each Portfolio’s investment performance and expenses with those of other comparable mutual funds. The independent Trustees reviewed and discussed the Lipper reports with counsel to the independent Trustees. The Board requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; the investment manager’s profitability; and any constraints or limitations on the availability of securities in certain investment styles which had in the past year inhibited, or which were likely in the future to inhibit, DMC’s or Mondrian’s ability to invest fully in accordance with Portfolio policies.
In considering information relating to the approval of each Portfolio’s advisory and sub-advisory agreement, the independent Trustees received assistance and advice from and met separately with counsel to the independent Trustees. Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.
Nature, Extent and Quality of Service. The Board considered the services provided by Delaware Investments to the Portfolios and their shareholders. In reviewing the nature, extent and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Portfolio, compliance of portfolio managers with the investment policies, strategies and restrictions for the Portfolios, compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Investments® Family of Funds complex and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of the Portfolios’ investment advisor and the emphasis placed on research in the investment process. The Board gave favorable consideration to DMC’s efforts to control expenditures while maintaining service levels committed to fund matters. The Board also considered the transfer agent and shareholder services provided to Portfolio shareholders by DMC’s affiliate, Delaware Service Company, Inc. (“DSC”), noting DSC’s high level of service. The Board noted that Management finished upgrading investment accounting functions through outsourcing to improve the quality and lower the cost of delivering investment accounting services to the Portfolios. The Board once again noted the benefits provided to Portfolio shareholders through each shareholder’s ability to exchange investments between Portfolios or the institutional class shares of other Delaware Investments funds and to reinvest Portfolio dividends into additional shares of the Portfolio or into additional shares of other Delaware Investments funds. The Board was satisfied with the nature, extent and quality of the overall services provided by Delaware Investments.
Investment Performance. The Board placed significant emphasis on the investment performance of the Portfolios in view of its importance to shareholders. Although the Board gave appropriate consideration to performance reports and discussions with portfolio managers at Board meetings throughout the year, the Board gave particular weight to the Lipper reports furnished for the Annual Meeting. The Lipper reports prepared for each Portfolio showed the investment performance of its shares in comparison to a group of similar funds as selected by Lipper (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for the Portfolios was shown for the past one-, three-, five- and ten-year periods, as applicable, ended December 31, 2008. The Board’s objective is that each Portfolio’s performance for the periods considered be at or above the median of its Performance Universe. The following paragraphs summarize the performance results for the Portfolios and the Board’s view of such performance.
The Core Focus Fixed Income Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional intermediate investment-grade debt funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one- and three-year periods was in the second quartile of its Performance Universe. The Board was satisfied with performance.
The Core Plus Fixed Income Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional intermediate investment-grade debt funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-year period was in the third quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the three- and five-year periods was in the second quartile. The Board noted that the Portfolio’s performance results were mixed but overall tended toward median, which was acceptable.
2009 Annual report · Delaware Pooled Trust
(continues) 173
Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Board Consideration of Delaware Pooled Trust Investment Advisory Agreement (continued)
The Emerging Markets Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional emerging markets funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. The Board was very satisfied with performance.
The Focus Smid-Cap Growth Equity Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional small cap growth funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-year period was in the first quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the three- and five-year periods was in the second quartile. The Board was satisfied with performance.
The Global Fixed Income Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional global income funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. The Board was very satisfied with performance.
The Global Real Estate Securities Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional global real estate funds as selected by Lipper. The Fund was created in January 2007 and the Lipper report comparison showed that the Portfolio’s total return for the one-year period was in the third quartile of its Performance Universe. However, in evaluating the Portfolio’s performance, the Board considered the Portfolio’s short existence. The Board was satisfied that Management was taking effective action to improve Portfolio performance and meet the Board’s performance objective.
The High-Yield Bond Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional high current yield funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one- and three-year periods was in the second quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the five- and ten-year periods was in the first quartile. The Board was satisfied with performance.
The International Equity Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional international multi-cap core funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. The Board was very satisfied with performance.
The International Fixed Income Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional international income funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. The Board was very satisfied with performance.
The Labor Select International Equity Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional international multi-cap value funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. The Board was very satisfied with performance.
The Large Cap Growth Equity Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional multi-cap growth funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-year period was in the third quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the three-year period was in the fourth quartile. The Board noted that the Portfolio’s performance results were not in line with the Board’s objective. In evaluating the Portfolio’s performance, the Board considered Management’s efforts to increase portfolio management depth.
The Large-Cap Value Equity Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional large-cap value funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-year period was in the first quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the three-, five- and ten-year periods was in the second quartile. The Board was satisfied with performance.
The Real Estate Investment Trust Portfolio II — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional real estate funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one- and three-year periods was in the first quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the five- and ten-year periods was in the second quartile. The Board was satisfied with the Portfolio’s improved performance.
The Select 20 Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional multi-cap growth funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-year period was in the second quartile of its Performance Universe. The report further showed that the Portfolio’s total return for three- and five-year periods was in the fourth quartile. The Portfolio’s performance results were not in line with the Board’s objective. In evaluating the Portfolio’s performance, the Board considered strategy changes implemented in early 2008 and improved performance for the one-year period. The Board was satisfied that Management was taking aggressive action to enhance Portfolio performance and to meet the Board’s performance objective.
2009 Annual report · Delaware Pooled Trust
174
Board Consideration of Delaware Pooled® Trust Investment Advisory Agreement (continued)
The Small-Cap Growth Equity Portfolio — The Performance Universe for the Portfolio consisted of the Portfolio and all retail and institutional small-cap growth funds as selected by Lipper. The Lipper report comparison showed that the Portfolio’s total return for the one-, three- and five-year periods was in the fourth quartile of its Performance Universe. The report further showed that the Portfolio’s total return for the ten-year period was in the third quartile. The Portfolio’s performance results were not in line with the Board’s objective. In evaluating the Portfolio’s performance, the Board considered Management’s efforts to increase portfolio management depth. The Board was satisfied that Management was taking action to enhance Portfolio performance and meet the Board’s performance objective.
Comparative Expenses. The Board considered expense comparison data for the Delaware Investments® Family of Funds. Management provided the Board with information on pricing levels and fee structures for the Portfolios as of October 31, 2008 and, for comparative funds, information as of their respective fiscal year end occurring on or before August 31, 2008. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Portfolio versus effective management fees and expense ratios of a group of similar funds as selected by Lipper (the “Expense Group”). In reviewing comparative costs, each Portfolio’s contractual management fee and the actual management fee incurred by the Portfolio were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Portfolio) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Portfolio’s total expenses were also compared with those of its Expense Group. The Board considered fees paid to Delaware Investments for non-management services. The Board’s objective is to limit each Portfolio’s total expense ratio to be competitive with that of the Expense Group. The following paragraphs summarize the expense results for the Portfolios and the Board’s view of such expenses.
The Core Focus Fixed Income Portfolio — The expense comparisons for the Portfolio showed that its actual management fee was in the quartile with the second highest expenses of its Expense Group and its total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the total expenses of the Portfolio in comparison to those of its Expense Group.
The Core Plus Fixed Income Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Emerging Markets Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Focus Smid-Cap Growth Equity Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Global Fixed Income Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Global Real Estate Securities Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the second highest expenses of its Expense Group. The Board noted that the Portfolio’s total expenses were not in line with the Boards’ objective. In evaluating the total expenses, the Board considered various initiatives implemented by Management, such as the outsourcing of certain transfer agency and investment accounting services, creating an opportunity for a reduction in expenses. The Board was satisfied with Management’s efforts to improve the Portfolio’s total expense ratio and bring it in line with the Board’s objective.
The High-Yield Bond Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The International Equity Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The International Fixed Income Portfolio — The expense comparisons for the Portfolio showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Labor Select International Equity Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
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Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Board Consideration of Delaware Pooled Trust Investment Advisory Agreement (continued)
The Large-Cap Growth Equity Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Large-Cap Value Equity Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Real Estate Investment Trust Portfolio II — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of the Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Select 20 Portfolio — The expense comparisons for the Portfolio showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
The Small-Cap Growth Equity Portfolio — The expense comparisons for the Portfolio showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Portfolio in comparison to those of its Expense Group.
Management Profitability. The Board considered the level of profits, if any, realized by Delaware Investments in connection with the operation of the Portfolios. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of Delaware Investments’ business in providing management and other services to each of the individual funds and the Delaware Investments® Family of Funds as a whole. Specific attention was given to the methodology followed in allocating costs for the purpose of determining profitability. Management stated that the level of profits of Delaware Investments, to a certain extent, reflect recent operational cost savings and efficiencies initiated by Delaware Investments. The Board considered Delaware Investments’ efforts to improve services provided to fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services rendered and the profitability of Delaware Investments.
Economies of Scale. The Trustees considered whether economies of scale are realized by Delaware Investments as each Portfolio’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the standardized advisory fee pricing and structure approved by the Board and shareholders which, for The Global Real Estate Securities Portfolio, includes breakpoints. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case on all assets when the asset levels specified are exceeded. Benchmarking analysis indicated that less than one quarter of competing funds in the institutional market employ breakpoints. Management believed, and the Board agreed, that the Portfolios were priced with relatively low management fees to reflect potential economies of scale at all asset levels. The Board noted that the fee under The Core Plus Fixed Income and The Global Real Estate Securities Portfolios’ management contracts did not fall within the standard structure. With respect to The Core Plus Fixed Income Portfolio, Management explained that the fee schedule for the Portfolio is lower than the applicable standard fee level because it is treated as a “Special Domestic Fixed Income Fund” under the pricing structure applied to Delaware Pooled Trust Portfolios with a significant “Standard Domestic Fixed Income” component. With respect to The Global Real Estate Securities Portfolio, the Board noted that the fee under the Portfolio’s management contract did not fall within the standard structure. Management explained that the Portfolio’s fee is based on the combination of special international equity and special domestic equity features within the Portfolio. Although the Global Real Estate Securities Portfolio has not reached a size at which it can take advantage of breakpoints, the Board recognized that the fee was structured so that if the Portfolio grows, economies of scale may be shared.
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Fund management
Robert Akester
Senior Portfolio Manager — Mondrian Investment Partners Ltd.
The Emerging Markets Portfolio
Prior to joining Mondrian Investment Partners Ltd. in 1996, Robert Akester was a director of Hill Samuel Investment Management where he had responsibility for significant overseas clients and Far Eastern markets. He has more than 40 years of investment experience, including more than 30 years of involvement in emerging markets. Akester is a graduate of University College, London, and is an associate of the Institute of Actuaries, with a certificate in finance and investment.
Damon J. Andres, CFA
Vice President, Senior Portfolio Manager
The Global Real Estate Securities Portfolio
The Real Estate Investment Trust Portfolio II
Damon J. Andres, who joined Delaware Investments in 1994 as an analyst, currently serves as a portfolio manager for REIT investments and convertibles. He also serves as a portfolio manager for the firm’s Dividend Income products. From 1991 to 1994, he performed investment-consulting services as a consulting associate with Cambridge Associates. Andres earned a bachelor’s degree in business administration with an emphasis in finance and accounting from the University of Richmond.
Kristen E. Bartholdson
Vice President, Portfolio Manager
Kristen E. Bartholdson is a portfolio manager with the firm’s Large-Cap Value Focus team. Prior to joining the firm in 2006 as an associate portfolio manager, she worked at Susquehanna International Group from 2004 to 2006, where she was an equity research salesperson. From 2000 to 2004 she worked in equity research at Credit Suisse, most recently as an associate analyst in investment strategy. Bartholdson earned her bachelor’s degree in economics from Princeton University.
Fiona A. Barwick
Deputy Head — Mondrian Investment Partners Ltd.
The International Equity Portfolio
Fiona A. Barwick joined Mondrian Investment Partners Ltd. in the spring of 1993 to cover the Pacific Basin markets. Prior to this, she spent three years at Touche, Remnant & Co. in London as an assistant portfolio manager and research analyst. Barwick is a graduate of University College, London, and is a member of the CFA Institute and the CFA Society of the U.K.
Marshall T. Bassett
Senior Vice President, Chief Investment Officer — Emerging Growth Equity
The Small-Cap Growth Equity Portfolio
Marshall T. Bassett leads the firm’s Emerging Growth Equity team, which focuses on small-, mid-, and smid-cap investment products and strategies. Before taking over leadership of the Emerging Growth Equity team, Bassett spent eight years as a portfolio manager and analyst, focusing on consumer and retail stocks in the growth area. Prior to joining Delaware Investments in 1997 as a portfolio manager and analyst, he worked for eight years at Morgan Stanley Asset Management Group, where he most recently served as a vice president in its Emerging Growth group, analyzing small-cap companies. Before that, he worked at a community bank in Hopkinsville, Ky., which eventually became part of The Sovran Bank and Trust Company. He received his bachelor’s degree from Duke University and an MBA from The Fuqua School of Business at Duke University. Bassett is a member of The Fuqua School’s alumni board.
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Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Joanna Bates
Senior Portfolio Manager — Mondrian Investment Partners Ltd.
The Global Fixed Income Portfolio
The International Fixed Income Portfolio
Joanna Bates joined the Mondrian Investment Partners Ltd. Fixed Income team in 1997, before which she was associate director of Fixed Interest at Hill Samuel Investment Management. She has also worked for Fidelity International and Save & Prosper as a fund manager and analyst for global bond markets. At Mondrian, Bates is a senior portfolio manager with many client relationships including those based in Japan. Her research specialties are emerging market currencies and debt. Bates is a graduate of London University. She holds the ASIP designation and is a member of the CFA Institute and the CFA Society of the U.K.
Nigel Bliss
Senior Portfolio Manager — Mondrian Investment Partners Ltd.
The Labor Select International Equity Portfolio
Nigel Bliss joined Mondrian Investment Partners Ltd. in July 1995 and is currently a member of the Pacific Equity team where his country research focus lies with Greater China. His sector coverage includes property, utilities, energy, and industrials. He commenced his career at Cazenove & Co. after graduating from the University of Manchester. Bliss holds the ASIP designation and is a member of the CFA Institute and the CFA Society of the U.K.
Christopher J. Bonavico, CFA
Vice President, Senior Portfolio Manager, Equity Analyst
The Select 20 Portfolio
The Focus Smid-Cap Growth Equity Portfolio
The Large-Cap Growth Equity Portfolio
Christopher J. Bonavico joined Delaware Investments in April 2005 as a senior portfolio manager on the firm’s Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. He was most recently a principal and portfolio manager at Transamerica Investment Management, where he managed sub-advised funds and institutional separate accounts. Before joining Transamerica in 1993, he was a research analyst for Salomon Brothers. Bonavico received his bachelor’s degree in economics from the University of Delaware.
Kenneth F. Broad, CFA
Vice President, Senior Portfolio Manager, Equity Analyst
The Select 20 Portfolio
The Focus Smid-Cap Growth Equity Portfolio
Kenneth F. Broad joined Delaware Investments in April 2005 as a senior portfolio manager on the firm’s Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. Most recently, he was a principal and portfolio manager at Transamerica Investment Management, where he also managed sub-advised funds and institutional separate accounts. Before joining Transamerica in 2000, he was a portfolio manager with The Franklin Templeton Group and was a consultant in the business valuation and merger and acquisition group at KPMG Peat Marwick. He received an MBA from the University of California at Los Angeles and his bachelor’s degree in economics from Colgate University.
2009 Annual report · Delaware Pooled Trust
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Thomas H. Chow, CFA
Senior Vice President, Senior Portfolio Manager
The Core Focus Fixed Income Portfolio
The Core Plus Fixed Income Portfolio
Thomas H. Chow is a member of the firm’s taxable fixed income portfolio management team, with primary responsibility for portfolio construction and strategic asset allocation in investment grade credit exposures. He is the lead portfolio manager for Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund, as well as several institutional mandates. His experience includes significant exposure to asset liability management strategies and credit risk opportunities. Prior to joining Delaware Investments in 2001 as a portfolio manager working on the Lincoln General Account, he was a trader of high grade and high yield securities, and was involved in the portfolio management of collateralized bond obligations (CBOs) and insurance portfolios at SunAmerica/AIG from 1997 to 2001. Before that, he was an analyst, trader, and portfolio manager at Conseco Capital Management from 1989 to 1997. Chow received a bachelor’s degree in business analysis from Indiana University, and he is a Fellow of Life Management Institute.
Elizabeth A. Desmond
Director and Chief Investment Officer, International Equities — Mondrian Investment Partners Ltd.
The International Equity Portfolio
Elizabeth A. Desmond is a graduate of Wellesley College and the Masters Program in East Asian Studies at Stanford University. After working for the Japanese government for two years, she began her investment career as a Pacific Basin investment manager with Shearson Lehman Global Asset Management. Prior to joining Mondrian in the spring of 1991, she was a Pacific Basin equity analyst and senior portfolio manager at Hill Samuel Investment Advisers Ltd. Desmond is a CFA charterholder, and a member of the CFA Institute and the CFA Society of the U.K.
Chuck M. Devereux
Senior Vice President, Director of Credit Research
Chuck M. Devereux is the head of the firm’s taxable credit research department, responsible for the gaming sector. In addition, he serves as a consultant for the team responsible for portfolio management of some of the firm’s fixed income products. Prior to April 2007, he was a senior vice president and co-head of the firm’s private placements group, which has responsibility for managing a portfolio of approximately $8 billion of privately placed securities. Prior to joining Delaware Investments in 2001, Devereux was employed by Valuemetrics/VM Equity Partners, a financial advisory and investment banking firm, where he participated in financial advisory and capital-raising efforts for privately held, middle-market companies. These efforts included placements of traditional corporate debt and equity as well as mezzanine and venture-capital financings. Prior to Valuemetrics/VM Equity Partners, he was a trust officer in the privately held asset division of the Northern Trust Corporation for three years. Devereux earned an MBA with a concentration in finance from DePaul University and a bachelor’s degree in economics from St. Joseph’s College.
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Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Roger A. Early, CPA, CFA, CFP
Senior Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy
The Core Focus Fixed Income Portfolio
The Core Plus Fixed Income Portfolio
Roger A. Early rejoined Delaware Investments in March 2007 as a member of the firm’s taxable fixed income portfolio management team, with primary responsibility for portfolio construction and strategic asset allocation. During his previous time at the firm, from 1994 to 2001, he was a senior portfolio manager in the same area, and he left Delaware Investments as head of its U.S. investment grade fixed income group. In recent years, Early was a senior portfolio manager at Chartwell Investment Partners and Rittenhouse Financial and served as the chief investment officer for fixed income at Turner Investments. Prior to joining Delaware Investments in 1994, he worked for more than 10 years at Federated Investors where he managed more than $25 billion in mutual fund and institutional portfolios in the short-term and investment grade markets. He left the firm as head of institutional fixed income management. Earlier in his career, he held management positions with the Federal Reserve Bank, PNC Financial, Touche Ross, and Rockwell International. Early earned his bachelor’s degree in economics from The Wharton School of the University of Pennsylvania and an MBA with concentrations in finance and accounting from the University of Pittsburgh. He is a member of the CFA Society of Philadelphia.
Christopher M. Ericksen, CFA
Vice President, Portfolio Manager, Equity Analyst
The Select 20 Portfolio
The Large-Cap Growth Equity Portfolio
Christopher M. Ericksen joined Delaware Investments in April 2005 as a portfolio manager on the firm’s Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. He was most recently a portfolio manager at Transamerica Investment Management, where he also managed institutional separate accounts. Before joining Transamerica in 2004, he was a vice president at Goldman Sachs. During his 10 years there, he worked in investment banking as well as investment management. Ericksen received his bachelor’s degree from Carnegie Mellon University, with majors in industrial management, economics, and political science.
Patrick G. Fortier, CFA
Vice President, Portfolio Manager, Equity Analyst
The Select 20 Portfolio
Patrick G. Fortier joined Delaware Investments in April 2005 as a portfolio manager on the Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. He was most recently a portfolio manager at Transamerica Investment Management. Before joining Transamerica in 2000, he worked for OLDE Equity Research as an equity analyst. Fortier received his bachelor’s degree in finance from the University of Kentucky.
2009 Annual report · Delaware Pooled Trust
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Clive A. Gillmore
Chief Executive Officer and Chief Investment Officer, Global Equities — Mondrian Investment Partners Ltd.
The International Equity Portfolio
The Labor Select International Equity Portfolio
The Emerging Markets Portfolio
In 1990, Clive A. Gillmore joined Mondrian Investment Partners’ predecessor organization as a founding member, having previously worked as a senior portfolio manager for Hill Samuel Investment Advisers Ltd., and a portfolio manager at Legal and General Investment Management. His research responsibilities are focused today on companies operating in the world’s emerging equity markets. He has more than 20 years of experience analyzing equity markets and securities around the world and has managed client portfolios with a wide range of mandates. Gillmore is a graduate of the University of Warwick and has completed the Investment Management Program at the London Business School. Gillmore is CEO of Mondrian. He is a member of Mondrian’s Equity Strategy Committee (where his research specialization lies) and a member of the company’s Management Steering Committee.
Barry S. Gladstein, CFA
Vice President, Portfolio Manager
The Small-Cap Growth Equity Portfolio
Barry S. Gladstein is a portfolio manager in the energy, industrials, and materials sector of the firm’s Emerging Growth Equity team. Prior to joining Delaware Investments in 1995 as assistant controller, he was director of operational planning at CIGNA Corporation from 1991 to 1995 and a senior accountant with Arthur Young. He holds a bachelor’s degree from Binghamton University and an MBA from The Wharton School of the University of Pennsylvania, and he is a member of the CFA Society of Philadelphia.
Paul Grillo, CFA
Senior Vice President, Co-Chief Investment Officer — Total Return Fixed Income Strategy
The Core Focus Fixed Income Portfolio
The Core Plus Fixed Income Portfolio
Paul Grillo is a member of the firm’s taxable fixed income portfolio management team with primary responsibility for portfolio construction and strategic asset allocation. He is also a member of the firm’s asset allocation committee, which is responsible for building and managing multi-asset class portfolios. He joined Delaware Investments in 1992 as a mortgage-backed and asset-backed securities analyst, assuming portfolio management responsibilities in the mid-1990s. Grillo serves as co-lead portfolio manager for the firm’s Diversified Income products and has been influential in the growth and distribution of the firm’s multisector strategies. Prior to joining Delaware Investments, Grillo served as a mortgage strategist and trader at Dreyfus Corporation. He also worked as a mortgage strategist and portfolio manager at Chemical Investment Group and as a financial analyst at Chemical Bank. Grillo holds a bachelor’s degree in business management from North Carolina State University and an MBA with a concentration in finance from Pace University.
2009 Annual report · Delaware Pooled Trust
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Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Gregory M. Heywood, CFA
Vice President, Portfolio Manager, Equity Analyst
The Select 20 Portfolio
Gregory M. Heywood joined Delaware Investments in April 2005 as a portfolio manager and analyst on the firm’s Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. He was most recently a research analyst at Transamerica Investment Management. Before joining Transamerica in 2004, he worked as a senior analyst for Wells Capital Management from 2003 to 2004 and Montgomery Asset Management from 1996 to 2003, where he was responsible for emerging market equity research. From 1993 to 1995, he was an analyst at Globalvest Management and Valuevest Management, where he researched emerging market and developed international market companies. Heywood received a bachelor’s degree in economics and an MBA in finance from the University of California at Berkeley.
Christopher M. Holland
Vice President, Portfolio Manager
The Small-Cap Growth Equity Portfolio
Christopher M. Holland, who joined Delaware Investments in 2001 as an analyst, is currently a portfolio manager in the business and financial services sectors of the firm’s Emerging Growth Equity team. Prior to joining the firm, Holland worked for three years as a municipal fixed income analyst at BlackRock and in private client services at J.P. Morgan Chase for another year. Holland holds a bachelor’s degree in economics from the University of Delaware and an MBA with a concentration in finance from Villanova University.
John Kirk
Deputy Chief Executive Officer — Mondrian Investment Partners Ltd.
The Global Fixed Income Portfolio
The International Fixed Income Portfolio
Before joining Mondrian in 1998, John Kirk was at Royal Bank of Canada in London, where he was responsible for European and Asian Fixed Income. He started his career at Ford Motor Company as a member of its operations research group. Kirk leads Mondrian’s credit research and heads the Global Credit Valuation Committee. Kirk is a math graduate from the University of Wales and has an MA in operations research from Lancaster University.
Nikhil G. Lalvani, CFA
Vice President, Portfolio Manager
The Large-Cap Value Equity Portfolio
Nikhil G. Lalvani is a portfolio manager with the firm’s Large-Cap Value Focus team. At Delaware Investments, Lalvani has served as both a fundamental and quantitative analyst. Prior to joining the firm in 1997 as an account analyst, he was a research associate with Bloomberg. Lalvani holds a bachelor’s degree in finance from The Pennsylvania State University. He is a member of the CFA Institute and the CFA Society of Philadelphia.
Emma R. E. Lewis
Senior Portfolio Manager — Mondrian Investment Partners Ltd.
The Labor Select International Equity Portfolio
Emma R. E. Lewis joined Mondrian in 1995, assuming analytical responsibilities in the Pacific Basin Team. Lewis is currently a senior portfolio manager at Mondrian where she manages international portfolios. Prior to joining Mondrian, she began her investment career at the Dutch bank ABN AMRO and later joined Fuji Investment Management. Lewis is a graduate of Pembroke College, Oxford University, where she completed her master’s degree in philosophy and theology. She holds the ASIP designation and is a member of the CFA Institute and the CFA Society of the U.K.
2009 Annual report · Delaware Pooled Trust
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Anthony A. Lombardi, CFA
Vice President, Senior Portfolio Manager
The Large-Cap Value Equity Portfolio
Anthony A. Lombardi is a senior portfolio manager for the firm’s Large-Cap Value Focus strategy. Prior to joining the firm in 2004 in his current role, Lombardi was a director at Merrill Lynch Investment Managers. He joined Merrill Lynch Investment Managers’ Capital Management Group in 1998 and last served as a portfolio manager for the U.S. Active Large-Cap Value team, managing mutual funds and separate accounts for institutions and private clients. From 1990 to 1997, he worked at Dean Witter Reynolds as a sell-side equity research analyst. He began his career as an investment analyst with Crossland Savings. Lombardi graduated from Hofstra University, receiving a bachelor’s degree in finance and an MBA with a concentration in finance. He is a member of the New York Society of Security Analysts and the CFA Institute.
Kevin P. Loome, CFA
Senior Vice President, Senior Portfolio Manager, Head of High Yield Investments
The High-Yield Bond Portfolio
The Core Plus Fixed Income Portfolio
Kevin P. Loome is head of the High Yield fixed income team, responsible for portfolio construction and strategic asset allocation of all high yield fixed income assets. Prior to joining Delaware Investments in August 2007 in his current position, Loome spent 11 years at T. Rowe Price, starting as an analyst and leaving the firm as a portfolio manager. He began his career with Morgan Stanley as a corporate finance analyst in the New York and London offices. Loome received his bachelor’s degree in commerce from the University of Virginia and earned an MBA from the Tuck School of Business at Dartmouth.
Nigel G. May
Deputy Chief Executive Officer — Mondrian Investment Partners Ltd.
The International Equity Portfolio
Nigel G. May joined Mondrian in 1991. Having led the European team’s research effort since 1995, he now has responsibility for several investment products. May was formerly a senior portfolio manager and analyst with Hill Samuel Investment Advisers Ltd., having joined the Hill Samuel Investment Group in 1986. He is a graduate of Sidney Sussex College, Cambridge University, where he completed his master’s degree in engineering. He holds the ASIP designation and is a member of the CFA Institute and the CFA Society of the U.K.
Christopher A. Moth
Director and Chief Investment Officer, Global Fixed Income & Currency — Mondrian Investment Partners Ltd.
The Global Fixed Income Portfolio
The International Fixed Income Portfolio
Christopher A. Moth joined Mondrian in 1992, after working for the GRE insurance company where he was responsible for quantitative models and projections. He has made key contributions to the development of Mondrian’s fixed income product, and was primarily responsible for the structure of the company’s in-house systems to control and facilitate the investment process. He is an actuarial graduate from The City University in London, and was later awarded the Certificate in Finance & Investment from the London Institute of Actuaries. Moth chairs the Global Fixed Income and Currency Committee meeting.
2009 Annual report · Delaware Pooled Trust
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Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
D. Tysen Nutt Jr.
Senior Vice President, Senior Portfolio Manager, Team Leader — Large-Cap Value Focus Equity
The Large-Cap Value Equity Portfolio
D. Tysen Nutt Jr. joined Delaware Investments in 2004 as senior vice president and senior portfolio manager for the firm’s Large-Cap Value Focus strategy. Before joining the firm, Nutt led the U.S. Active Large-Cap Value team within Merrill Lynch Investment Managers, where he managed mutual funds and separate accounts for institutions and private clients. He departed Merrill Lynch Investment Managers as a managing director. Prior to joining Merrill Lynch Investment Managers in 1994, Nutt was with Van Deventer & Hoch (V&H) where he managed large-cap value portfolios for institutions and private clients. He began his investment career at Dean Witter Reynolds, where he eventually became vice president, investments. Nutt earned his bachelor’s degree from Dartmouth College, and he is a member of the New York Society of Security Analysts and the CFA Institute.
Daniel J. Prislin, CFA
Vice President, Senior Portfolio Manager, Equity Analyst
The Select 20 Portfolio
The Large-Cap Growth Equity Portfolio
Daniel J. Prislin joined Delaware Investments in April 2005 as a senior portfolio manager on the firm’s Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. He was most recently a principal and portfolio manager at Transamerica Investment Management, where he also managed sub-advised funds and institutional separate accounts. Prior to joining Transamerica in 1998, he was a portfolio manager with The Franklin Templeton Group. Prislin received an MBA and bachelor’s degree in business administration from the University of California at Berkeley.
David G. Tilles
Executive Chairman — Mondrian Investment Partners Ltd.
The International Equity Portfolio
The Labor Select International Equity Portfolio
The Emerging Markets Portfolio
The Global Fixed Income Portfolio
The International Fixed Income Portfolio
David G. Tilles was educated at the Sorbonne, Warwick University, and Heidelberg University. Prior to joining Mondrian in 1990 as managing director and chief investment officer of Mondrian Investment Partners Limited, he spent 16 years with Hill Samuel in London, serving in a number of investment capacities. He holds the ASIP designation and is a member of the CFA Institute and the CFA Society of the U.K.
Rudy D. Torrijos III
Vice President, Portfolio Manager
The Small-Cap Growth Equity Portfolio
Rudy D. Torrijos joined Delaware Investments in July 2005 in his current position as a portfolio manager, focusing on the technology sector for the firm’s Emerging Growth Equity team. He spent the prior two years as a technology analyst at Fiduciary Trust, where he was responsible for sector management of technology stocks for small-cap equity products. From 1997 to 2002 he worked for Neuberger Berman Growth Group, first as an analyst and then as fund manager. Torrijos worked as a technology analyst at Hellman Jordan Management for three years, and he began his career as a marketing/strategic financial planning analyst at Unocal in Los Angeles. Torrijos attended Harvard University, where he graduated with a bachelor’s degree in applied mathematics/economics.
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Michael S. Tung, M.D.
Vice President, Portfolio Manager, Equity Analyst
The Small-Cap Growth Equity Portfolio
Michael S. Tung, M.D., handles research and analysis and portfolio management in the healthcare sector for the firm’s Emerging Growth Equity team. Prior to joining Delaware Investments in November 2006 as an equity analyst covering the technology and healthcare sectors for the firm’s Emerging Markets team, he worked for 20 months as a vice president at the Galleon Group, performing fundamental research in the medical technology and biotechnology sectors. From late 2003 to 2005 he was an analyst responsible for investing in healthcare equities for Hambrecht & Quist Capital Management, and he spent most of 2003 as a junior analyst for Durus Capital Management. He began his professional career in the medical field from 2001 to the beginning of 2003, first as a physician at the Lemuel Shattuck Hospital of the Tufts University School of Medicine and then as an anesthesiologist at Beth Israel Deaconess Medical Center at the Harvard Medical School. Dr. Tung received bachelor’s degrees in economics and biology, summa cum laude, from George Washington University, where he spent a year at Oxford University in England as one of only three students awarded the Pembroke College Scholarship. He earned his medical doctorate and an MBA from the Tufts University School of Medicine. Dr. Tung is also a licensed physician in New York State.
Jeffrey S. Van Harte, CFA
Senior Vice President, Chief Investment Officer — Focus Growth Equity
The Select 20 Portfolio
The Large-Cap Growth Equity Portfolio
Jeffrey S. Van Harte is the chief investment officer for the Focus Growth Equity team, which manages large-cap growth, smid-cap growth, all-cap growth, and global growth portfolios. Prior to joining Delaware Investments in April 2005 in his current position, he was a principal and executive vice president at Transamerica Investment Management. Van Harte has been managing portfolios and separate accounts for more than 20 years. Before becoming a portfolio manager, Van Harte was a securities analyst and trader for Transamerica Investment Services, which he joined in 1980. Van Harte received his bachelor’s degree in finance from California State University at Fullerton.
Robert A. Vogel Jr., CFA
Vice President, Senior Portfolio Manager
The Large-Cap Value Equity Portfolio
Robert A. Vogel Jr. joined Delaware Investments in 2004 as a vice president, senior portfolio manager for the firm’s Large-Cap Value Focus strategy. He previously worked at Merrill Lynch Investment Managers for more than seven years, where he rose to the position of director and portfolio manager within the U.S. Active Large-Cap Value team. He began his career in 1992 as a financial consultant at Merrill Lynch Investment Managers. Vogel graduated from Loyola College in Maryland, earning both bachelor’s and master’s degrees in finance. He also earned an MBA with a concentration in finance from The Wharton School of the University of Pennsylvania. Vogel is a member of the New York Society of Security Analysts, the CFA Institute, and the CFA Society of Philadelphia.
Lori P. Wachs, CFA
Vice President, Portfolio Manager
The Small-Cap Growth Equity Portfolio
Lori P. Wachs is a portfolio manager and analyst for the consumer sector in the firm’s Emerging Growth Equity group. She joined Delaware Investments in 1992 as a consumer analyst, after serving in the equity-risk arbitrage department of Goldman Sachs from 1990 to 1992. She holds a bachelor’s degree in economics from The Wharton School of the University of Pennsylvania, where she graduated Phi Beta Kappa and magna cum laude.
2009 Annual report · Delaware Pooled Trust
(continues) 185
Other Portfolio information
(Unaudited)
Delaware Pooled® Trust
Nashira S. Wynn
Vice President, Portfolio Manager
The Large-Cap Value Equity Portfolio
Nashira S. Wynn is a portfolio manager with the firm’s Large-Cap Value Focus team. Prior to joining Delaware Investments in 2004 as a senior equity analyst, she was an equity research analyst for Merrill Lynch Investment Managers, starting there in July 2001. Wynn earned a bachelor’s degree in finance, with a minor in economics, from The College of New Jersey, and she attended England’s Oxford University as a Presidential Scholar.
Babak “Bob” Zenouzi
Senior Vice President, Senior Portfolio Manager
The Global Real Estate Securities Portfolio
The Real Estate Investment Trust Portfolio II
Bob Zenouzi is the lead manager for the domestic and global REIT effort at Delaware Investments, which includes the team, its process, and its institutional and retail products, which he created during his prior time with the firm. He also focuses on opportunities in Japan, Singapore, and Malaysia for the firm’s global REIT product. Additionally, he serves as lead portfolio manager for the firm’s Dividend Income products, which he helped to create in the 1990s. He is also a member of the firm’s asset allocation committee, which is responsible for building and managing multi-asset class portfolios. He rejoined Delaware Investments in May 2006 as senior portfolio manager and head of real estate securities. In his first term with the firm, he spent seven years as an analyst and portfolio manager, leaving in 1999 to work at Chartwell Investment Partners, where from 1999 to 2006 he was a partner and senior portfolio manager on Chartwell’s Small-Cap Value portfolio. He began his career with The Boston Company, where he held several positions in accounting and financial analysis. Zenouzi earned a master’s degree in finance from Boston College and a bachelor’s degree from Babson College. He is a member of the National Association of Real Estate Investment Trusts and the Urban Land Institute.
It is currently anticipated that Lincoln National Corporation will complete its sale of Delaware Management Holdings, Inc. and its subsidiaries (also known by the marketing name of Delaware Investments) to Macquarie Group on or about December 31, 2009. Please see your Portfolio’s prospectus and any supplements thereto for more complete information.
Investments in The Large-Cap Value Equity Portfolio, The Select 20 Portfolio, The Large-Cap Growth Equity Portfolio, The Small-Cap Growth Equity Portfolio, The Focus Smid-Cap Growth Equity Portfolio, The Real Estate Investment Trust Portfolio II, The Core Focus Fixed Income Portfolio, The High-Yield Bond Portfolio, The Core Plus Fixed Income Portfolio, The International Equity Portfolio, The Labor Select International Equity Portfolio, The Emerging Markets Portfolio, The Global Real Estate Securities Portfolio, The Global Fixed Income Portfolio, and The International Fixed Income Portfolio are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including subsidiaries or related companies (the “Macquarie Group”), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Portfolios, the repayment of capital from the Portfolios, or any particular rate of return.
2009 Annual report · Delaware Pooled Trust
186
Board of trustees/directors
and officers addendum
Delaware Investments® Family of Funds
A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.
| | | | Number of | |
| | | | Portfolios in Fund | Other |
| Name, | | | | Complex Overseen | Directorships |
| Address, | Position(s) | Length of | Principal Occupation(s) | by Trustee | Held by |
| and Birth Date | Held with Fund(s) | Time Served | During Past 5 Years | or Officer | Trustee or Officer |
| Interested Trustees | | | | | |
| Patrick P. Coyne1 | Chairman, | Chairman and Trustee | Patrick P. Coyne has served in | 80 | Director — |
| 2005 Market Street | President, | since August 16, 2006 | various executive capacities | | Kaydon Corp. |
| Philadelphia, PA | Chief Executive | | at different times at | | |
| 19103 | Officer, and | President and | Delaware Investments.2 | | |
| Trustee | Chief Executive Officer | | | |
| April 1963 | | since August 1, 2006 | | | |
| Independent Trustees | | | | | |
| Thomas L. Bennett | Trustee | Since | Private Investor — | 80 | Director — |
| 2005 Market Street | | March 2005 | (March 2004–Present) | | Bryn Mawr |
| Philadelphia, PA | | | | | Bank Corp. (BMTC) |
| 19103 | | | Investment Manager — | | (April 2007–Present) |
| | | Morgan Stanley & Co. | | |
| October 1947 | | | (January 1984–March 2004) | | |
| John A. Fry | Trustee | Since | President — | 80 | Director — |
| 2005 Market Street | | January 2001 | Franklin & Marshall College | | Community Health |
| Philadelphia, PA | | | (June 2002–Present) | | Systems |
| 19103 | | | | | |
| | | Executive Vice President — | | |
| May 1960 | | | University of Pennsylvania | | |
| | | (April 1995–June 2002) | | |
| Anthony D. Knerr | Trustee | Since | Founder and Managing Director — | 80 | None |
| 2005 Market Street | | April 1990 | Anthony Knerr & Associates | | |
| Philadelphia, PA | | | (Strategic Consulting) | | |
| 19103 | | | (1990–Present) | | |
| | | | | | |
| December 1938 | | | | | |
| Lucinda S. Landreth | Trustee | Since | Chief Investment Officer — | 80 | None |
| 2005 Market Street | | March 2005 | Assurant, Inc. | | |
| Philadelphia, PA | | | (Insurance) | | |
| 19103 | | | (2002–2004) | | |
| | | | | | |
| June 1947 | | | | | |
| Ann R. Leven | Trustee | Since | Consultant — | 80 | None |
| 2005 Market Street | | October 1989 | ARL Associates | | |
| Philadelphia, PA | | | (Financial Planning) | | |
| 19103 | | | (1983–Present) | | |
| | | | | | |
| November 1940 | | | | | |
2009 Annual report · Delaware Pooled Trust
(continues) 187
| | | | Number of | |
| | | | Portfolios in Fund | Other |
| Name, | | | | Complex Overseen | Directorships |
| Address, | Position(s) | Length of | Principal Occupation(s) | by Trustee | Held by |
| and Birth Date | Held with Fund(s) | Time Served | During Past 5 Years | or Officer | Trustee or Officer |
| Independent Trustees (continued) | | | | |
| Thomas F. Madison | Trustee | Since | President and Chief | 80 | Director and Chair of |
| 2005 Market Street | | May 19973 | Executive Officer — | | Compensation |
| Philadelphia, PA | | | MLM Partners, Inc. | | Committee, |
| 19103 | | | (Small Business Investing | | Governance Committee |
| | | and Consulting) | | Member |
| February 1936 | | | (January 1993–Present) | | — CenterPoint Energy |
| | | | | |
| | | | | Lead Director and Chair |
| | | | | of Audit |
| | | | | and Governance |
| | | | | Committees, |
| | | | | Member of |
| | | | | Compensation |
| | | | | Committee — Digital |
| | | | | River, Inc. |
| | | | | |
| | | | | Director and Chair of |
| | | | | Governance |
| | | | | Committee, Audit |
| | | | | Committee Member — |
| | | | | Rimage Corporation |
| | | | | |
| | | | | Director and Chair of |
| | | | | Compensation |
| | | | | Committee — Spanlink |
| | | | | Communications |
| | | | | |
| | | | | Lead Director and Chair |
| | | | | of Compensation and |
| | | | | Governance |
| | | | | Committees — |
| | | | | Valmont Industries, Inc. |
| Janet L. Yeomans | Trustee | Since | Vice President and Treasurer | 80 | None |
| 2005 Market Street | | April 1999 | (January 2006–Present) | | |
| Philadelphia, PA | | | Vice President — Mergers & Acquisitions | | |
| 19103 | | | (January 2003–January 2006), and | | |
| | | Vice President | | |
| July 1948 | | | (July 1995–January 2003) | | |
| | | 3M Corporation | | |
| J. Richard Zecher | Trustee | Since | Founder — | 80 | Director and Audit |
| 2005 Market Street | | March 2005 | Investor Analytics | | Committee Member — |
| Philadelphia, PA | | | (Risk Management) | | Investor Analytics |
| 19103 | | | (May 1999–Present) | | |
| | | | | | |
| July 1940 | | | Founder — | | |
| | | Sutton Asset Management | | |
| | | (Hedge Fund) | | |
| | | (September 1996–Present) | | |
2009 Annual report · Delaware Pooled Trust
188
| | | | Number of | |
| | | | Portfolios in Fund | Other |
| Name, | | | | Complex Overseen | Directorships |
| Address, | Position(s) | Length of | Principal Occupation(s) | by Trustee | Held by |
| and Birth Date | Held with Fund(s) | Time Served | During Past 5 Years | or Officer | Trustee or Officer |
| Officers | | | | | |
| David F. Connor | Vice President, | Vice President since | David F. Connor has served as | 80 | None4 |
| 2005 Market Street | Deputy General | September 2000 | Vice President and Deputy | | |
| Philadelphia, PA | Counsel, and Secretary | and Secretary | General Counsel of | | |
| 19103 | | since | Delaware Investments | | |
| | October 2005 | since 2000. | | |
| December 1963 | | | | | |
| Daniel V. Geatens | Vice President | Treasurer | Daniel V. Geatens has served | 80 | None4 |
| 2005 Market Street | and Treasurer | since | in various capacities at | | |
| Philadelphia, PA | | October 25, 2007 | different times at | | |
| 19103 | | | Delaware Investments. | | |
| October 1972 | | | | | |
| David P. O’Connor | Senior Vice | Senior Vice President, | David P. O’Connor has served in | 80 | None4 |
| 2005 Market Street | President, | General Counsel, and | various executive and legal | | |
| Philadelphia, PA | General Counsel, | Chief Legal Officer | capacities at different times | | |
| 19103 | and Chief | since | at Delaware Investments. | | |
| Legal Officer | October 2005 | | | |
| February 1966 | | | | | |
| Richard Salus | Senior | Chief Financial | Richard Salus has served in | 80 | None4 |
| 2005 Market Street | Vice President | Officer since | various executive capacities | | |
| Philadelphia, PA | and | November 2006 | at different times at | | |
| 19103 | Chief Financial | | Delaware Investments. | | |
| Officer | | | | |
| October 1963 | | | | | |
| 1 Patrick P. Coyne is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor. |
| 2 Delaware Investments is the marketing name for Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent. |
| 3 In 1997, several funds managed by Voyageur Fund Managers, Inc. (the “Voyageur Funds”) were incorporated into the Delaware Investments Family of Funds. Mr. Madison served as a director of the Voyageur Funds from 1993 until 1997. |
| 4 David F. Connor, Daniel V. Geatens, David P. O’Connor, and Richard Salus serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant. |
| |
| The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918. |
2009 Annual report · Delaware Pooled Trust
189
Fund officers and portfolio managers
| Patrick P. Coyne | Roger A. Early | Nigel G. May |
| Chairman, President, and | Senior Vice President and | Deputy Chief Executive Officer |
| Chief Executive Officer — | Co-Chief Investment Officer — | Mondrian Investment Partners Limited |
| Delaware Investments® Family of Funds | Total Return Fixed Income Strategy | |
| | | Christopher A. Moth |
| Robert Akester | Christopher M. Ericksen | Director and Chief Investment Officer — |
| Senior Portfolio Manager | Vice President, Portfolio Manager, and | Global Fixed Income and Currency |
| Mondrian Investment Partners Limited | Equity Analyst | Mondrian Investment Partners Limited |
| | | |
| Damon J. Andres | Patrick G. Fortier | D. Tysen Nutt Jr. |
| Vice President and Senior Portfolio | Vice President, Portfolio Manager, and | Senior Vice President, Senior Portfolio |
| Manager | Equity Analyst | Manager, and Team Leader — Large-Cap |
| | | Value Focus Equity |
| Kristen E. Bartholdson | Clive A. Gillmore | |
| Vice President and Portfolio Manager | Chief Executive Officer and | Daniel J. Prislin |
| | CIO Global Equities | Vice President, Senior Portfolio Manager, |
| Fiona A. Barwick | Mondrian Investment Partners Limited | and Equity Analyst |
| Deputy Head, International Equities | | |
| Mondrian Investment Partners Limited | Barry S. Gladstein | David G. Tilles |
| | Vice President and Portfolio Manager | Executive Chairman |
| Marshall T. Bassett | | Mondrian Investment Partners Limited |
| Senior Vice President and Chief | Paul Grillo | |
| Investment Officer — Emerging Growth | Senior Vice President and | Rudy D. Torrijos III |
| Equity | Co-Chief Investment Officer — | Vice President and Portfolio Manager |
| | Total Return Fixed Income Strategy | |
| Joanna Bates | | Michael S. Tung, M.D. |
| Senior Portfolio Manager | Gregory M. Heywood | Vice President, Portfolio Manager, and |
| Mondrian Investment Partners Limited | Vice President, Portfolio Manager, and | Equity Analyst |
| | Equity Analyst | |
| Nigel Bliss | | Jeffrey S. Van Harte |
| Senior Portfolio Manager | Christopher M. Holland | Senior Vice President and Chief |
| Mondrian Investment Partners Limited | Vice President and Portfolio Manager | Investment Officer — Focus Growth Equity |
| | | |
| Christopher J. Bonavico | John Kirk | Robert A. Vogel Jr. |
| Vice President, Senior Portfolio Manager, | Deputy Chief Executive Officer | Vice President and Senior Portfolio |
| and Equity Analyst | Mondrian Investment Partners Limited | Manager |
| | | |
| Kenneth F. Broad | Nikhil G. Lalvani | Lori P. Wachs |
| Vice President, Senior Portfolio Manager, | Vice President and Portfolio Manager | Vice President and Portfolio Manager |
| and Equity Analyst | | |
| | Emma R. E. Lewis | Nashira S. Wynn |
| Thomas H. Chow | Senior Portfolio Manager | Vice President and Portfolio Manager |
| Senior Vice President and Senior Portfolio | Mondrian Investment Partners Limited | |
| Manager | | Babak (Bob) Zenouzi |
| | Anthony A. Lombardi | Senior Vice President and Senior Portfolio |
| Elizabeth A. Desmond | Vice President and Senior Portfolio | Manager |
| Director and Chief Investment Officer — | Manager | |
| International Equities | | |
| Mondrian Investment Partners Limited | Kevin P. Loome | |
| | Senior Vice President, Senior Portfolio | |
| Chuck M. Devereux | Manager, and Head of High Yield | |
| Senior Vice President and Director of | Investments | |
| Credit Research | | |
| Custodian |
| The Bank of New York Mellon |
| One Wall Street |
| New York, NY 10286 |
| |
| Independent registered public accounting firm |
| Ernst & Young LLP |
| 2001 Market Street |
| Philadelphia, PA 19103 |
| |
| Investment advisor |
| Delaware Management Company, a series of Delaware Management Business Trust |
| 2005 Market Street |
| Philadelphia, PA 19103 |
| |
| Investment sub-advisor for certain Portfolios |
| Mondrian Investment Partners Limited |
| Fifth Floor |
| 10 Gresham Street |
| London EC2V 7JD |
| United Kingdom |
Each Portfolio files its complete schedule of portfolio holdings with the Securities and Exchange Commission for the first and third quarters of each fiscal year on Form N-Q. Each Portfolio’s Forms N-Q, as well as a description of the policies and procedures that each Portfolio uses to determine how to vote proxies (if any) relating to portfolio securities are available without charge (i) upon request, by calling 800 523-1918; (ii) on the Portfolios’ Web site at www.delawareinvestments.com; and (iii) on the Commission’s Web site at www.sec.gov. Each Portfolio’s Forms N-Q may be reviewed and copied at the Commission’s Public Reference Room in Washington, D.C.; information on the operation of the Public Reference Room may be obtained by calling 800 SEC-0330. Information (if any) regarding how each Portfolio voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Portfolios’ Web site at www.delawareinvestments.com; and (ii) on the Commission’s Web site at www.sec.gov. |
| This report was prepared for investors in the Delaware Pooled® Trust Portfolios. It may be distributed to others only if preceded or accompanied by a current Delaware Pooled Trust prospectus, which contains details about charges, expenses, investment objectives, and operating policies of the Portfolios. All Delaware Pooled Trust Portfolios are offered by prospectus only. The return and principal value of an investment in a Portfolio will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Carefully consider the Portfolios’ investment objectives, risk factors, charges, and expenses before investing. This and other information can be found in the Portfolios’ prospectus, which may be obtained by visiting www.delawareinvestments.com or calling 800 231-8002. Investors should read the prospectus carefully before investing. |
 |  | 2005 Market Street |
| Philadelphia, PA 19103 |
| Telephone 800 231-8002 |
| Fax 215 255-1162 |
| (5247) | | Printed in the USA |
| AR-DPT [10/09] DG3 12/09 | | MF0911113 PO14633 |
| |
| |
 | 
|
Annual report Delaware REIT Fund October 31, 2009 Value equity mutual fund |
This annual report is for the information of Delaware REIT Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware REIT Fund. The figures in the annual report for Delaware REIT Fund represent past results, which are not a guarantee of future results. The return and principal value of an investment in the investment company will fluctuate so that shares, when redeemed, may be worth more or less than their original cost. Current performance may be higher or lower than the performance data quoted. You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware REIT Fund prospectus contains this and other important information about the investment company. Prospectuses for all open-end funds in the Delaware Investments® Family of Funds are available from your financial advisor, online at www.delawareinvestments.com, or by phone at 800 523-1918. Please read the prospectus carefully before you invest or send money. |
You can obtain shareholder reports and prospectuses online instead of in the mail.
Visit www.delawareinvestments.com/edelivery. |
Experience Delaware Investments
Delaware Investments is committed to the pursuit of consistently superior asset management and unparalleled client service. We believe in our investment processes, which seek to deliver consistent results, and in convenient services that help add value for our clients.
If you are interested in learning more about creating an investment plan, contact your financial advisor.
You can learn more about Delaware Investments or obtain a prospectus for Delaware REIT Fund at www.delawareinvestments.com.
Manage your investments online
- 24-hour access to your account information
- Obtain share prices
- Check your account balance and recent transactions
- Request statements or literature
- Make purchases and redemptions
Contact information
Investment manager
Delaware Management Company, a series of Delaware Management Business Trust
National distributor
Delaware Distributors, L.P.
Financial intermediary wholesaler
Lincoln Financial Distributors, L.P.
Shareholder servicing, dividend disbursing, and transfer agent
Delaware Service Company, Inc.
Mailing address
2005 Market Street
Philadelphia, PA 19103-7094
Shareholder assistance by phone
800 523-1918, weekdays from 8 a.m. to 7 p.m. Eastern time
For securities dealers and financial institutions representatives only
800 362-7500
Table of contents
| Portfolio management review | 1 |
| Performance summary | 5 |
| Disclosure of Fund expenses | 8 |
| Sector allocation and top 10 holdings | 10 |
| Statement of net assets | 11 |
| Statement of operations | 15 |
| Statements of changes in net assets | 16 |
| Financial highlights | 18 |
| Notes to financial statements | 28 |
| Report of independent registered public accounting firm | 39 |
| Other Fund information | 40 |
| Board of trustees/directors and officers addendum | 46 |
| About the organization | 52 |
Views expressed herein are current as of Oct. 31, 2009, and are subject to change.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
Mutual fund advisory services provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries. Lincoln Financial Group is the marketing name for Lincoln National Corporation and its affiliates.
© 2009 Delaware Distributors, L.P.
All third-party trademarks cited are the property of their respective owners.
| Portfolio management review | |
| Delaware REIT Fund | Nov. 10, 2009 |
| Performance preview (for the period ended Oct. 31, 2009) | | | | |
| Delaware REIT Fund (Class A shares) | | 1-year return | | -2.97% |
| FTSE NAREIT Equity REITs Index (benchmark) | | 1-year return | | +.06% |
Past performance does not guarantee future results.
For complete, annualized performance for Delaware REIT Fund, please see the table on page 5.
The performance of Class A shares excludes the applicable sales charge and reflects the reinvestment of all distributions. |
For its fiscal year ended Oct. 31, 2009, Delaware REIT Fund (Class A shares) declined by 2.97% at net asset value, and by 8.52% at maximum offer price (both returns assume reinvestment of all distributions). In comparison, the Fund’s benchmark, the FTSE NAREIT Equity REITs Index, was relatively flat with a mild gain of 0.06% during the same period.
Volatile REIT prices, tenuous capital markets
Investors in U.S. real estate securities saw tremendous market volatility during the past year. As measured by the FTSE NAREIT Equity REITs Index, real estate investment trusts (REITs) were down sharply for much of the first half of the fiscal year ended Oct. 31, 2009. Beginning roughly in March 2009, however, conditions shifted and stocks of property companies gained significant ground.
Several months before the start of the fiscal period, many investors became nervous about the possibility of a world-wide economic depression. For several months thereafter, credit markets nearly ceased to function, remaining weak through the rest of the fall and most of the winter months. Businesses, almost irrespective of the strength of their balance sheets, found it difficult to get the investment capital they needed. In this environment, financial markets fell sharply around the world. Generally all but the least volatile fixed income securities lost substantial value. (Data for securities prices: Barclays Capital.)
Strong headwinds for REITs
The lack of available credit was a problem for businesses and individuals alike, but it was an especially acute challenge for REITs. That’s because REITs, particularly those that are heavily leveraged, rely to a greater extent on external capital to continue operating their businesses. With access to financing cut off (or prohibitively expensive), many investors worried that formerly healthy companies would be unable to survive. As a result, REIT prices fell particularly sharply during the downturn and even lagged the broad U.S. equity market, which itself lost significant ground. (Data for REIT prices: NAREIT.)
Once credit market conditions improved, so did REIT performance. Starting in March 2009, thanks to a combination of factors — including continued low interest rates, active government intervention, and the relatively successful “stress tests” of U.S. banks — credit became relatively easier for some REITs to obtain. Accordingly, REIT investors became increasingly comfortable owning companies with higher debt levels and weaker balance sheets. In this environment, the real estate securities market turned in much-improved performance for most of the remainder of the period. In fact, as many investors’ pessimism turned to optimism, many
1
Portfolio management review
Delaware REIT Fund
of the same REITs that had fared the worst during the downturn ended up doing the best when markets turned positive.
Investing opportunistically
As we do across all types of market conditions, we continued to employ our “bottom up” security selection strategy, in which we evaluate potential investments based on our assessment of each company’s growth prospects, relative valuation, and balance-sheet quality (among other factors). Given the highly volatile conditions of the past year, however, our approach was more opportunistic than usual, as we sought to take advantage of shifting conditions in the marketplace.
Early on, the Fund was positioned relatively defensively in light of the weak investment environment. We focused on companies with longer lease terms, such as healthcare REITs, and we added to our holdings in manufactured-home REITs, which have historically tended to provide steady returns (albeit with relatively limited growth potential). Simultaneously, we limited the Fund’s exposure to companies with shorter-duration leases — such as hotel REITs, whose cash flows tend to be more uncertain than in other sectors — and we cut our weighting in mall and office REIT stocks so that we could lock in some recent gains. We also looked to avoid stocks that we believed had significant balance-sheet problems.
This defensive stance was generally beneficial during the downturn, but it can be argued that we maintained this positioning for too long into the spring as credit markets loosened and REIT markets advanced. We conservatively calculated that the recovery would be much shorter than it turned out to be. In actuality, credit conditions continued improving, and by summer 2009 it became evident that a more sustainable improvement had taken place. We began adjusting the Fund accordingly, taking the following measures:
- We added to more-economically sensitive REITs, including office, mall, shopping center, and hotel REITs.
- We reduced our relatively defensive healthcare weighting.
- We increased exposure to more-companies that we felt had sufficient access to capital and whose performance prospects justified the added risk.
During the final months of the fiscal year, we felt it was prudent to once again make the portfolio more defensive. In the short period between July and September 2009 alone, the FTSE NAREIT Equity REITs Index advanced by nearly one-third. In our view, this increase was faster than was warranted, given declining business fundamentals in the commercial real estate industry. What’s more, we saw the advance as unsustainable because many companies were saddled with debt and had limited opportunities for growth. Given these circumstances, we opted to cut our positions in companies we believed faced serious fundamental challenges or troubled balance sheets. We sold certain mall stocks whose prospects we had become less confident about, and we cut our weight in the office sector.
An emphasis on enduring value
We emphasize that all of the moves listed above were made at the margins of the Fund’s investment portfolio, designed to take advantage of what we believed were unique opportunities presented by then-current conditions. Our basic emphasis on large-capitalization REITs with strong balance sheets remains unchanged. As always, we continue favoring REITs that we feel exhibit high-quality
2
property portfolios, a focus on fundamentally solid real estate markets, and capable management teams that are focused on the long term.
Setbacks in lodging and industrials
The most significant negative effects on the Fund’s performance compared to its benchmark index came from holdings within the lodging sector. The group had been one of the real estate market’s worst performers during the downturn, but it bounced back strongly during the rebound. Our intentional lack of exposure in the sector hampered results compared to the benchmark index. Most notably, we did not own hotel REITs Hospitality Properties Trust and DiamondRock Hospitality, two index components that gained much ground and contributed significantly to the performance of our benchmark index. We were also underweight in Host Hotels & Resorts, which further detracted from performance compared to the benchmark index.
A second source of relative underperformance came within the industrials sector, where our group of stocks posted a collective decline of more than 25% for the period. ProLogis, an owner, operator, and developer of industrial properties, was among the Fund’s weakest contributors to overall return for the period. The company’s stock suffered as investors worried about the amount of debt on the company’s balance sheet. The Fund also lost ground against the benchmark within specialty REITs. Our performance was hindered, for example, by the lack of a position in forest-products company Rayonier, a benchmark component that posted strong returns overall. The Fund’s performance was also compromised by our holdings in Corrections Corporation of America (CCA), a REIT that owns and operates private corrections facilities for governments, and which is not included in the index. We sold our complete position in CCA before the end of the period, resulting in negative effects on the Fund’s overall return.
Other notable contributions
On the positive side, our investments in the so-called mixed sector — which consists of companies that own multiple property types or that focus on niches within the real estate market — had positive effects on our results. For instance, we were helped by our position in Digital Realty Trust. This owner/operator of data centers has benefited from the growing number of corporations that choose to cut costs by outsourcing their data-management needs. Liberty Property Trust, an owner/operator of office and industrial properties that benefited from its solid balance sheet, also contributed to the Fund’s overall return. During the broad REIT upswing that ran between 2002 and 2007, Liberty’s share price did not inflate as dramatically as many other companies, and the stock’s comparatively tempered nature helped it weather the recent storm.
Another recent source of gains was the manufactured homes sector, where a position in Equity Lifestyle Properties provided the main boost. This company owns and leases sites that can be used for manufactured homes as well as RVs — a product mix that has provided resilient cash flows. Throughout the market downturn, the relatively stable nature of the manufactured-homes business was also a positive for the company.
The strongest contributors to the Fund’s overall return during the fiscal year included Mack-Cali Realty, an owner/operator of office properties that focuses on the northeastern United States. Despite facing a similar decline in business fundamentals along with the rest of the office
3
Portfolio management review
Delaware REIT Fund
sector, Mack-Cali was supported by its strong balance sheet and success in maintaining its tenant base.
At period end, we anticipate continued challenges in REIT markets. It’s very difficult to say how much (if any) growth we can expect in the year ahead. Nonetheless, we expect our philosophy and investment process to remain unchanged. We continue aiming to provide investors with a high-quality, research-driven way to invest in REITs.
4
| Performance summary | |
| Delaware REIT Fund | Oct. 31, 2009 |
The performance data quoted represent past performance; past performance does not guarantee future results. Investment return and principal value will fluctuate so your shares, when redeemed, may be worth more or less than their original cost. Please obtain the performance data current for the most recent month end by calling 800 523-1918 or visiting our Web site at www.delawareinvestments.com/performance. Current performance may be lower or higher than the performance data quoted.
You should consider the investment objectives, risks, charges, and expenses of the investment company carefully before investing. The Delaware REIT Fund prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor or by calling 800 523-1918 or visiting our Web site at www.delawareinvestments.com. Read the prospectus carefully before you invest or send money.
| Fund performance | | Average annual total returns through Oct. 31, 2009 |
| | 1 year | | 5 years | | 10 years | | Lifetime |
| Class A (Est. Dec. 6, 1995) | | | | | | | | | | | | | | | | | | | | |
| Excluding sales charge | | | -2.97 | % | | | | -1.48 | % | | | | +8.57 | % | | | | +9.74 | % | |
| Including sales charge | | | -8.52 | % | | | | -2.64 | % | | | | +7.93 | % | | | | +9.28 | % | |
| Class B (Est. Nov. 11, 1997) | | | | | | | | | | | | | | | | | | | | |
| Excluding sales charge | | | -3.73 | % | | | | -2.23 | % | | | | +7.91 | % | | | | +5.33 | % | |
| Including sales charge | | | -7.43 | % | | | | -2.40 | % | | | | +7.91 | % | | | | +5.33 | % | |
| Class C (Est. Nov. 11, 1997) | | | | | | | | | | | | | | | | | | | | |
| Excluding sales charge | | | -3.73 | % | | | | -2.23 | % | | | | +7.75 | % | | | | +5.07 | % | |
| Including sales charge | | | -4.66 | % | | | | -2.23 | % | | | | +7.75 | % | | | | +5.07 | % | |
| Class R (Est. June 2, 2003) | | | | | | | | | | | | | | | | | | | | |
| Excluding sales charge | | | -3.21 | % | | | | -1.75 | % | | | | n/a | | | | | +4.48 | % | |
| Including sales charge | | | -3.21 | % | | | | -1.75 | % | | | | n/a | | | | | +4.48 | % | |
| Institutional Class (Est. Nov. 11, 1997) | | | | | | | | | | | | | | | | | | | | |
| Excluding sales charge | | | -2.72 | % | | | | -1.25 | % | | | | +8.83 | % | | | | +6.11 | % | |
| Including sales charge | | | -2.72 | % | | | | -1.25 | % | | | | +8.83 | % | | | | +6.11 | % | |
Returns reflect the reinvestment of all distributions and any applicable sales charges as noted in the following paragraphs.
Performance for Class B and C shares, excluding sales charges, assumes either that contingent deferred sales charges did not apply or that the investment was not redeemed.
Expense limitations were in effect for all classes during the periods shown in the Fund performance chart and in the “Performance of a $10,000 investment” chart. The current expenses for each class are listed on the “Fund expense ratios” chart. (Note that all charts and graphs referred to in the “Performance summary” section of this report are found on pages 5 through 7.) Performance would have been lower had the expense limitation not been in effect.
The Fund offers Class A, B, C, R, and Institutional Class shares.
Class A shares are sold with a maximum front-end sales charge of up to 5.75%, and have an annual distribution and service fee of up to 0.30% of average daily net assets. This fee
5
Performance summary
Delaware REIT Fund
has been contractually limited to 0.25% of average daily net assets from March 1, 2009, through Feb. 28, 2010.
Class B shares may only be purchased through dividend reinvestment and certain permitted exchanges as described in the prospectus. Please see the prospectus for additional information on Class B purchase and sales charges. Class B shares have a contingent deferred sales charge that declines from 4.00% to zero depending on the period of time the shares are held.
Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. They are also subject to an annual distribution and service fee of up to 1.00% of average daily net assets.
Ten-year and lifetime performance figures for Class B shares reflect conversion to Class A shares after approximately eight years.
Class C shares are sold with a contingent deferred sales charge of 1.00% if redeemed during the first 12 months. They are also subject to an annual distribution and service fee of 1.00% of average daily net assets.
Class R shares were first made available June 2, 2003, and are available only for certain retirement plan products. They are sold without a sales charge and have an annual distribution and service fee of up to 0.60% of average daily net assets, which has been limited contractually to 0.50% from March 1, 2009, to Feb. 28, 2010.
Institutional Class shares were first made available Nov. 11, 1997, and are available without sales or asset-based distribution charges only to certain eligible institutional accounts.
The “Fund performance” table and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholder would pay on Fund distributions or redemptions of Fund shares.
Narrowly focused investments may exhibit higher volatility than investments in multiple industry sectors.
REIT investments are subject to many of the risks associated with direct real estate ownership, including changes in economic conditions, credit risk, and interest rate fluctuations.
A REIT fund’s tax status as a regulated investment company could be jeopardized if it holds real estate directly, as a result of defaults, or receives rental income from real estate holdings.
The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the following “Fund expense ratios” table. Delaware Investments has agreed to voluntarily reimburse certain expenses and/or waive certain fees from Sept. 11, 2009, until the waiver is discontinued, in order to prevent total operating expense from exceeding, in an aggregate amount 1.30% of the Funds average daily assets. Please see the most recent prospectus for additional information on these fee waivers and/or reimbursements.
| Fund expense ratios | Class A | | Class B | | Class C | | Class R | | Institutional Class |
| Total annual operating expenses | 1.59% | | 2.29% | | 2.29% | | 1.89% | | 1.29% |
| (without fee waivers) | | | | | | | | | |
| Net expenses | 1.54% | | 2.29% | | 2.29% | | 1.79% | | 1.29% |
| (including fee waivers, if any) | | | | | | | | | |
| Type of waiver | Voluntary | | Voluntary | | Voluntary | | Voluntary | | Voluntary |
| and contractual | | | | | | and contractual | | |
6
Performance of a $10,000 investment
Average annual total returns from Oct. 31, 1999, through Oct. 31, 2009
| For period beginning Oct. 31, 1999, through Oct. 31, 2009 | Starting value | Ending value |
| | FTSE NAREIT Equity REITs Index (benchmark) | $10,000 | $24,322 |
| | Delaware REIT Fund — Class A Shares | $9,425 | $21,446 |
The chart assumes $10,000 invested in the Fund on Oct. 31, 1999, and includes the effect of a 5.75% front-end sales charge and the reinvestment of all distributions. Please note additional details on these fees in the “Performance summary” section of this report, which includes pages 5 through 7.
The chart also assumes $10,000 invested in the FTSE NAREIT Equity REITs Index as of Oct. 31, 1999. The FTSE NAREIT Equity REITs Index measures the performance of all publicly traded equity real estate investment trusts (REITs) traded on U.S. exchanges.
An index is unmanaged and does not reflect the costs of operating a mutual fund, such as the costs of buying, selling, and holding securities. You cannot invest directly in an index. Past performance is not a guarantee of future results.
Performance of other Fund classes will vary due to different charges and expenses.
The “Fund performance” chart and the “Performance of a $10,000 investment” graph do not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares.
| Symbols and CUSIP numbers | |
| | Nasdaq symbols | | CUSIPs | |
| Class A | | | DPREX | | | 246248868 | |
| Class B | | | DPRBX | | | 246248819 | |
| Class C | | | DPRCX | | | 246248793 | |
| Class R | | | DPRRX | | | 246248561 | |
| Institutional Class | | | DPRSX | | | 246248777 | |
7
Disclosure of Fund expenses
For the period May 1, 2009 to October 31, 2009
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period May 1, 2009 to October 31, 2009.
Actual expenses
The first section of the table shown, “Actual Fund Return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second section of the table shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Fund’s expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.
8
Delaware REIT Fund
Expense analysis of an investment of $1,000
| | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 5/1/09 | | 10/31/09 | | Expense Ratio | | 5/1/09 to 10/31/09* |
| Actual Fund return | | | | | | | | | | | | | |
| Class A | $ | 1,000.00 | | | $ | 1,217.60 | | | 1.49% | | $ | 8.33 | |
| Class B | | 1,000.00 | | | | 1,211.70 | | | 2.24% | | | 12.49 | |
| Class C | | 1,000.00 | | | | 1,211.70 | | | 2.24% | | | 12.49 | |
| Class R | | 1,000.00 | | | | 1,216.00 | | | 1.74% | | | 9.72 | |
| Institutional Class | | 1,000.00 | | | | 1,218.50 | | | 1.24% | | | 6.93 | |
| Hypothetical 5% return (5% return before expenses) | | | | | | | |
| Class A | $ | 1,000.00 | | | $ | 1,017.69 | | | 1.49% | | $ | 7.58 | |
| Class B | | 1,000.00 | | | | 1,013.91 | | | 2.24% | | | 11.37 | |
| Class C | | 1,000.00 | | | | 1,013.91 | | | 2.24% | | | 11.37 | |
| Class R | | 1,000.00 | | | | 1,016.43 | | | 1.74% | | | 8.84 | |
| Institutional Class | | 1,000.00 | | | | 1,018.95 | | | 1.24% | | | 6.31 | |
Delaware Management Company (DMC) has voluntarily agreed to waive that portion, if any, of its management fee and reimburse the Fund to the extent necessary to ensure that total annual operating expenses from March 1, 2009 to September 10, 2009 and from September 11, 2009 until such time as the waiver is discontinued, do not exceed 1.21% and 1.30%, respectively, of average daily net assets of the Fund (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, short sale and dividend interest expenses, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations, (collectively, nonroutine expenses)). The Fund’s expense analysis would be as follows if this new limit was in effect for the entire period:
| | Beginning | | Ending | | | | Expenses |
| | Account Value | | Account Value | | Annualized | | Paid During Period |
| | 5/1/09 | | 10/31/09 | | Expense Ratio | | 5/1/09 to 10/31/09* |
| Actual Fund Return | | | | | | | | | | | | | |
| Class A | $ | 1,000.00 | | | $ | 1,217.60 | | | 1.55% | | $ | 8.66 | |
| Class B | | 1,000.00 | | | | 1,211.70 | | | 2.30% | | | 12.82 | |
| Class C | | 1,000.00 | | | | 1,211.70 | | | 2.30% | | | 12.82 | |
| Class R | | 1,000.00 | | | | 1,216.00 | | | 1.80% | | | 10.05 | |
| Institutional Class | | 1,000.00 | | | | 1,218.50 | | | 1.30% | | | 7.27 | |
| Hypothetical 5% Return (5% return before expenses) | | | | | | | |
| Class A | $ | 1,000.00 | | | $ | 1,017.39 | | | 1.55% | | $ | 7.88 | |
| Class B | | 1,000.00 | | | | 1,013.61 | | | 2.30% | | | 11.67 | |
| Class C | | 1,000.00 | | | | 1,013.61 | | | 2.30% | | | 11.67 | |
| Class R | | 1,000.00 | | | | 1,016.13 | | | 1.80% | | | 9.15 | |
| Institutional Class | | 1,000.00 | | | | 1,018.65 | | | 1.30% | | | 6.61 | |
*“Expenses Paid During Period” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 184/365 (to reflect the one-half year period).
9
| Sector allocation and top 10 holdings | |
| Delaware REIT Fund | As of October 31, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one fund being different than another Fund’s sector designations.
| Sector | Percentage of net assets |
| Common Stock | 94.63 | % |
| Diversified REITs | 6.42 | % |
| Health Care REITs | 16.34 | % |
| Hotel REITs | 3.70 | % |
| Industrial REITs | 3.60 | % |
| Mall REITs | 13.32 | % |
| Manufactured Housing REITs | 2.06 | % |
| Multifamily REITs | 13.59 | % |
| Office REITs | 13.39 | % |
| Office/Industrial REITs | 3.35 | % |
| Self-Storage REITs | 4.50 | % |
| Shopping Center REITs | 9.30 | % |
| Single Tenant REITs | 1.52 | % |
| Specialty REITs | 3.54 | % |
| Discount Note | 4.70 | % |
| Securities Lending Collateral | 15.31 | % |
| Total Value of Securities | 114.64 | % |
| Obligation to Return Securities Lending Collateral | (15.65 | %) |
| Receivables and Other Assets Net of Liabilities | 1.01 | % |
| Total Net Assets | 100.00 | % |
Holdings are for informational purposes only and are subject to change at any time. They are not a recommendation to buy, sell, or hold any security.
| Top 10 Holdings | | |
| Simon Property Group | 10.85 | % |
| Vornado Realty Trust | 6.43 | % |
| Equity Residential | 4.64 | % |
| Public Storage | 4.39 | % |
| HCP | 4.32 | % |
| Boston Properties | 4.27 | % |
| Ventas | 3.88 | % |
| Health Care REIT | 3.83 | % |
| Nationwide Health Properties | 3.06 | % |
| Kimco Realty | 2.85 | % |
10
| Statement of net assets | |
| Delaware REIT Fund | October 31, 2009 |
| | | Number of shares | | Value |
| Common Stock – 94.63% | | | | |
| Diversified REITs – 6.42% | | | | |
| * | Vornado Realty Trust | 209,782 | | $ | 12,494,616 |
| | | | | | 12,494,616 |
| | |
| Health Care REITs – 16.34% | | | | |
| * | HCP | 284,000 | | | 8,403,559 |
| * | Health Care REIT | 167,900 | | | 7,449,723 |
| Healthcare Realty Trust | 71,500 | | | 1,489,345 |
| LTC Properties | 40,000 | | | 950,000 |
| * | Nationwide Health Properties | 184,300 | | | 5,943,675 |
| * | Ventas | 187,900 | | | 7,540,427 |
| | | | | | 31,776,729 |
| | |
| Hotel REITs – 3.70% | | | | |
| *† | Gaylord Entertainment | 39,300 | | | 590,679 |
| * | Host Hotels & Resorts | 502,043 | | | 5,075,655 |
| * | LaSalle Hotel Properties | 89,700 | | | 1,539,252 |
| | | | | | 7,205,586 |
| | |
| Industrial REITs – 3.60% | | | | |
| AMB Property | 43,540 | | | 957,009 |
| EastGroup Properties | 55,800 | | | 2,053,998 |
| ProLogis | 352,833 | | | 3,997,598 |
| | | | | | 7,008,605 |
| | |
| Mall REITs – 13.32% | | | | |
| * | CBL & Associates Properties | 200,900 | | | 1,639,344 |
| * | Macerich | 106,309 | | | 3,168,008 |
| * | Simon Property Group | 310,704 | | | 21,093,695 |
| | | | | | 25,901,047 |
| | |
| Manufactured Housing REITs – 2.06% | | | | |
| Equity Lifestyle Properties | 86,300 | | | 4,008,635 |
| | | | | | 4,008,635 |
| | |
| Multifamily REITs – 13.59% | | | | |
| Apartment Investment & Management | 65,100 | | | 803,985 |
| * | AvalonBay Communities | 57,534 | | | 3,957,189 |
| * | Camden Property Trust | 118,700 | | | 4,302,875 |
| * | Equity Residential | 312,200 | | | 9,016,335 |
11
Statement of net assets
Delaware REIT Fund
| | | Number of shares | | Value |
| Common Stock (continued) | | | | |
| Multifamily REITs (continued) | | | | |
| * | Essex Property Trust | 45,087 | | $ | 3,389,641 |
| * | Mid-America Apartment Communities | 18,500 | | | 810,670 |
| * | Post Properties | 92,600 | | | 1,526,974 |
| UDR | 181,660 | | | 2,612,271 |
| | | | | 26,419,940 |
| |
| Office REITs – 13.39% | | | | |
| * | Alexandria Real Estate Equities | 77,900 | | | 4,219,843 |
| * | Boston Properties | 136,800 | | | 8,313,336 |
| Brandywine Realty Trust | 209,400 | | | 2,001,864 |
| * | Corporate Office Properties Trust | 41,100 | | | 1,364,109 |
| * | Douglas Emmett | 162,000 | | | 1,911,600 |
| Government Properties Income Trust | 58,500 | | | 1,361,880 |
| Mack-Cali Realty | 98,400 | | | 3,045,480 |
| SL Green Realty | 98,853 | | | 3,831,542 |
| | | | | 26,049,654 |
| |
| Office/Industrial REITs – 3.35% | | | | |
| * | Digital Realty Trust | 62,400 | | | 2,816,112 |
| * | Duke Realty | 205,500 | | | 2,309,820 |
| Liberty Property Trust | 47,100 | | | 1,383,327 |
| | | | | | 6,509,259 |
| |
| Self-Storage REITs – 4.50% | | | | |
| * | Public Storage | 116,100 | | | 8,544,960 |
| U-Store-it Trust | 34,600 | | | 197,220 |
| | | | | 8,742,180 |
| |
| Shopping Center REITs – 9.30% | | | | |
| Cedar Shopping Centers | 81,000 | | | 491,670 |
| * | Federal Realty Investment Trust | 66,511 | | | 3,926,144 |
| * | Kimco Realty | 438,900 | | | 5,547,696 |
| * | Ramco-Gershenson Properties Trust | 105,700 | | | 934,388 |
| * | Regency Centers | 38,961 | | | 1,307,142 |
| * | Tanger Factory Outlet Centers | 71,100 | | | 2,706,777 |
| * | Weingarten Realty Investors | 171,100 | | | 3,165,350 |
| | | | | 18,079,167 |
12
| | | Number of shares | | Value | |
| Common Stock (continued) | | | | | | |
| Single Tenant REITs – 1.52% | | | | | | |
| * | National Retail Properties | | 152,400 | | $ | 2,953,512 | |
| | | | | | 2,953,512 | |
| |
| Specialty REITs – 3.54% | | | | | | |
| * | Entertainment Properties Trust | | 92,440 | | | 3,144,809 | |
| * | Plum Creek Timber | | 85,700 | | | 2,681,553 | |
| * | Rayonier | | 27,300 | | | 1,053,234 | |
| | | | | | 6,879,596 | |
| Total Common Stock (cost $162,274,982) | | | | | 184,028,526 | |
| |
| | Principal amount | | | | |
| ¹Discount Note – 4.70% | | | | | | |
| Federal Home Loan Bank 0.02% 11/2/09 | $ | 9,139,019 | | | 9,139,014 | |
| Total Discount Note (cost $9,139,014) | | | | | 9,139,014 | |
| |
| Total Value of Securities Before Securities | | | | | | |
| Lending Collateral – 99.33% (cost $171,413,996) | | | | | 193,167,540 | |
| |
| | Number of shares | | | | |
| Securities Lending Collateral** – 15.31% | | | | | | |
| Investment Companies | | | | | | |
| Mellon GSL DBT II Collateral Fund | | 24,407,806 | | | 24,407,806 | |
| BNY Mellon SL DB II Liquidating Fund | | 5,416,425 | | | 5,355,761 | |
| @†Mellon GSL Reinvestment Trust II | | 611,030 | | | 61 | |
| Total Securities Lending Collateral (cost $30,435,261) | | | | 29,763,628 | |
| |
| Total Value of Securities – 114.64% | | | | | | |
| (cost $201,849,257) | | | | | 222,931,168 | © |
| | | | | | | |
| Obligation to Return Securities | | | | | | |
| Lending Collateral** – (15.65%) | | | | | (30,435,261 | ) |
| | | | | | | |
| Receivables and Other Assets | | | | | | |
| Net of Liabilities – 1.01% | | | | | 1,970,472 | |
| | | | | | | |
| Net Assets Applicable to 25,472,673 | | | | | | |
| Shares Outstanding – 100.00% | | | | $ | 194,466,379 | |
13
Statement of net assets
Delaware REIT Fund
| | | | |
| Net Asset Value – Delaware REIT Fund | | | |
| Class A ($64,237,284 / 8,420,182 Shares) | | | $7.63 | |
| Net Asset Value – Delaware REIT Fund | | | |
| Class B ($10,984,965 / 1,441,877 Shares) | | | $7.62 | |
| Net Asset Value – Delaware REIT Fund | | | |
| Class C ($16,313,999 / 2,140,448 Shares) | | | $7.62 | |
| Net Asset Value – Delaware REIT Fund | | | |
| Class R ($3,595,604 / 471,337 Shares) | | | $7.63 | |
| Net Asset Value – Delaware REIT Fund | | | |
| Institutional Class ($99,334,527 / 12,998,829 Shares) | | | $7.64 | |
| |
| Components of Net Assets at October 31, 2009: | | | |
| Shares of beneficial interest (unlimited authorization – no par) | $ | 306,745,879 | |
| Accumulated net realized loss on investments | | (133,361,411 | ) |
| Net unrealized appreciation of investments | | 21,081,911 | |
| Total net assets | | $ | 194,466,379 | |
| * | Fully or partially on loan. |
| † | Non income producing security. |
| ¹ | The rate shown is the effective yield at time of purchase. |
| ** | See Note 8 in “Notes to financial statements.” |
| @ | Illiquid security. At October 31, 2009, the aggregate amount of illiquid securities was $61, which represented 0.00% of the Fund’s net assets. See Note 9 in “Notes to financial statements.” |
| © | Includes $29,599,266 of securities loaned. |
REIT – Real Estate Investment Trust
| Net Asset Value and Offering Price Per Share – | | |
| Delaware REIT Fund | | |
| Net asset value Class A (A) | $ | 7.63 |
| Sales charge (5.75% of offering price) (B) | | 0.47 |
| Offering price | $ | 8.10 |
| (A) | Net asset value per share, as illustrated, is the amount which would be paid upon redemption or repurchase of shares. |
| (B) | See the current prospectus for purchase of $50,000 or more. |
See accompanying notes
14
| Statement of operations | |
| Delaware REIT Fund | Year Ended October 31, 2009 |
| Investment Income: | | | | | | |
| | Dividends | $ | 7,937,483 | | | | |
| Interest | | 10,934 | | | | |
| Securities lending income | | 144,930 | | $ | 8,093,347 | |
| |
| Expenses: | | | | | | |
| Management fees | | 1,248,182 | | | | |
| Dividend disbursing and transfer agent fees and expenses | | 1,016,363 | | | | |
| Distribution expenses – Class A | | 165,471 | | | | |
| Distribution expenses – Class B | | 115,849 | | | | |
| Distribution expenses – Class C | | 154,245 | | | | |
| Distribution expenses – Class R | | 18,382 | | | | |
| Reports and statements to shareholders | | 129,018 | | | | |
| Registration fees | | 99,612 | | | | |
| | Accounting and administration expenses | | 66,570 | | | | |
| Legal fees | | 19,782 | | | | |
| Audit and tax | | 16,689 | | | | |
| Trustees’ fees | | 11,165 | | | | |
| Custodian fees | | 7,234 | | | | |
| Insurance fees | | 4,196 | | | | |
| Pricing fees | | 2,662 | | | | |
| Consulting fees | | 2,249 | | | | |
| Dues and services | | 1,564 | | | | |
| Trustees’ expenses | | 786 | | | 3,080,019 | |
| Less fees waived | | | | | (582,581 | ) |
| Less waived distribution expenses – Class A | | | | | (27,578 | ) |
| Less waived distribution expenses – Class R | | | | | (3,063 | ) |
| Total operating expenses | | | | | 2,466,797 | |
| Net Investment Income | | | | | 5,626,550 | |
| |
| Net Realized and Unrealized Gain (Loss) on Investments: | | | | | | |
| Net realized loss on investments | | | | | (104,064,386 | ) |
| Net change in unrealized appreciation/depreciation of investments | | | | | 94,733,999 | |
| Net Realized and Unrealized Loss on Investments | | | | | (9,330,387 | ) |
| |
| Net Decrease in Net Assets Resulting from Operations | | | | $ | (3,703,837 | ) |
See accompanying notes
15
Statements of changes in net assets
Delaware REIT Fund
| | | Year Ended |
| | 10/31/09 | | 10/31/08 |
| Increase (Decrease) in Net Assets from Operations: | | | | | | | |
| Net investment income | $ | 5,626,550 | | | $ | 5,423,741 | |
| Net realized loss on investments | | (104,064,386 | ) | | | (26,844,463 | ) |
| Net change in unrealized | | | | | | | |
| appreciation/depreciation of investments | | 94,733,999 | | | | (117,125,176 | ) |
| Net decrease in net assets resulting from operations | | (3,703,837 | ) | | | (138,545,898 | ) |
| |
| Dividends and Distributions to shareholders from: | | | | | | | |
| Net investment income: | | | | | | | |
| Class A | | (1,885,057 | ) | | | (3,017,144 | ) |
| Class B | | (321,276 | ) | | | (628,609 | ) |
| Class C | | (420,155 | ) | | | (739,771 | ) |
| Class R | | (98,649 | ) | | | (111,667 | ) |
| Institutional Class | | (2,839,606 | ) | | | (3,589,389 | ) |
| |
| Net realized gain on investments: | | | | | | | |
| Class A | | — | | | | (29,255,383 | ) |
| Class B | | — | | | | (8,911,390 | ) |
| Class C | | — | | | | (9,679,097 | ) |
| Class R | | — | | | | (1,021,236 | ) |
| Institutional Class | | — | | | | (23,707,395 | ) |
| The Real Estate Investment Trust Portfolio Class* | | — | | | | (15 | ) |
| |
| Return of capital | | | | | | | |
| Class A | | (484,398 | ) | | | — | |
| Class B | | (82,949 | ) | | | — | |
| Class C | | (123,136 | ) | | | — | |
| Class R | | (27,115 | ) | | | — | |
| Institutional Class | | (747,800 | ) | | | — | |
| | | (7,030,141 | ) | | | (80,661,096 | ) |
| |
| Capital Share Transactions: | | | | | | | |
| Proceeds from shares sold: | | | | | | | |
| | Class A | | 14,099,246 | | | | 20,295,575 | |
| Class B | | 114,096 | | | | 464,084 | |
| Class C | | 1,282,972 | | | | 2,489,643 | |
| Class R | | 2,052,540 | | | | 3,016,816 | |
| Institutional Class | | 46,849,175 | | | | 102,891,711 | |
16
| | | Year Ended |
| | 10/31/09 | | 10/31/08 |
| Capital Share Transactions (continued): | | | | | | | |
| Net asset value of shares issued upon reinvestment | | | | | | | |
| of dividends and distributions: | | | | | | | |
| Class A | $ | 2,162,188 | | | $ | 30,007,521 | |
| Class B | | 354,139 | | | | 8,465,189 | |
| Class C | | 492,250 | | | | 9,786,133 | |
| Class R | | 125,507 | | | | 1,129,135 | |
| | Institutional Class | | 3,462,045 | | | | 24,562,159 | |
| The Real Estate Investment Trust Portfolio Class* | | — | | | | 11 | |
| | | 70,994,158 | | | | 203,107,977 | |
| |
| Cost of shares repurchased: | | | | | | | |
| Class A | | (19,539,034 | ) | | | (48,230,245 | ) |
| Class B | | (5,212,173 | ) | | | (15,954,108 | ) |
| Class C | | (5,663,181 | ) | | | (13,597,018 | ) |
| Class R | | (1,887,887 | ) | | | (3,159,932 | ) |
| Institutional Class | | (38,287,466 | ) | | | (67,241,814 | ) |
| The Real Estate Investment Trust Portfolio Class* | | — | | | | (27,045,813 | ) |
| | | (70,589,741 | ) | | | (175,228,930 | ) |
| Increase in net assets derived from capital | | | | | | | |
| share transactions | | 404,417 | | | | 27,879,047 | |
| Net Decrease in Net Assets | | (10,329,561 | ) | | | (191,327,947 | ) |
| |
| Net Assets: | | | | | | | |
| Beginning of year | | 204,795,940 | | | | 396,123,887 | |
| End of year (there was no undistributed | | | | | | | |
| net investment income at either year end) | $ | 194,466,379 | | | $ | 204,795,940 | |
*Effective at the close of business on February 21, 2008, all assets of the Fund’s Real Estate Investment Trust Portfolio Class were redeemed.
See accompanying notes
17
Financial highlights
Delaware REIT Fund Class A
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Return of capital |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets |
| Ratio of expenses to average net assets |
| prior to fees waived and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to fees waived and expense paid indirectly |
| Portfolio turnover |
| 1 The average shares outstanding method has been applied for per share information. |
| 2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects waivers by the manager and distributor, as applicable. Performance would have been lower had the waivers not been in effect. |
See accompanying notes
18
| Year Ended |
| 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| $ 8.200 | | | $17.690 | | | $24.180 | | | $21.390 | | | $ 21.140 | |
| | |
| | |
| 0.221 | | | 0.225 | | | 0.149 | | | 0.351 | | | 0.441 | |
| (0.509 | ) | | (5.793 | ) | | 0.372 | | | 5.910 | | | 2.101 | |
| (0.288 | ) | | (5.568 | ) | | 0.521 | | | 6.261 | | | 2.542 | |
| | |
| | |
| (0.224 | ) | | (0.339 | ) | | (0.380 | ) | | (0.460 | ) | | (0.435 | ) |
| — | | | (3.583 | ) | | (6.631 | ) | | (3.011 | ) | | (1.857 | ) |
| (0.058 | ) | | — | | | — | | | — | | | — | |
| (0.282 | ) | | (3.922 | ) | | (7.011 | ) | | (3.471 | ) | | (2.292 | ) |
| | |
| $ 7.630 | | | $ 8.200 | | | $17.690 | | | $24.180 | | | $21.390 | |
| | |
| (2.97% | ) | | (37.85% | ) | | 2.33% | | | 33.45% | | | 12.27% | |
| | |
| | |
| $64,237 | | | $73,445 | | | $153,051 | | | $231,367 | | | $285,579 | |
| 1.48% | | | 1.48% | | | 1.36% | | | 1.34% | | | 1.34% | |
| | |
| 1.88% | | | 1.59% | | | 1.41% | | | 1.39% | | | 1.39% | |
| 3.38% | | | 1.82% | | | 0.79% | | | 1.65% | | | 2.07% | |
| | |
| 2.98% | | | 1.71% | | | 0.74% | | | 1.60% | | | 2.02% | |
| 174% | | | 115% | | | 82% | | | 60% | | | 37% | |
19
Financial highlights
Delaware REIT Fund Class B
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Return of capital |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets |
| Ratio of expenses to average net assets |
| prior to fees waived and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to fees waived and expense paid indirectly |
| Portfolio turnover |
1 The average shares outstanding method has been applied for per share information. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
20
| Year Ended |
| 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| $ 8.190 | | | $17.680 | | | $24.150 | | | $21.360 | | | $ 21.120 | |
| | |
| | |
| 0.173 | | | 0.138 | | | 0.006 | | | 0.191 | | | 0.281 | |
| (0.511 | ) | | (5.793 | ) | | 0.373 | | | 5.911 | | | 2.089 | |
| (0.338 | ) | | (5.655 | ) | | 0.379 | | | 6.102 | | | 2.370 | |
| | |
| | |
| (0.174 | ) | | (0.252 | ) | | (0.218 | ) | | (0.301 | ) | | (0.273 | ) |
| — | | | (3.583 | ) | | (6.631 | ) | | (3.011 | ) | | (1.857 | ) |
| (0.058 | ) | | — | | | — | | | — | | | — | |
| (0.232 | ) | | (3.835 | ) | | (6.849 | ) | | (3.312 | ) | | (2.130 | ) |
| | |
| $ 7.620 | | | $ 8.190 | | | $17.680 | | | $ 24.150 | | | $21.360 | |
| | |
| (3.73% | ) | | (38.28% | ) | | 1.52% | | | 32.50% | | | 11.39% | |
| | |
| | |
| $10,985 | | | $17,831 | | | $48,300 | | | $71,206 | | | $72,917 | |
| 2.23% | | | 2.23% | | | 2.11% | | | 2.09% | | | 2.09% | |
| | |
| 2.58% | | | 2.29% | | | 2.11% | | | 2.09% | | | 2.09% | |
| 2.63% | | | 1.07% | | | 0.04% | | | 0.90% | | | 1.32% | |
| | |
| 2.28% | | | 1.01% | | | 0.04% | | | 0.90% | | | 1.32% | |
| 174% | | | 115% | | | 82% | | | 60% | | | 37% | |
21
Financial highlights
Delaware REIT Fund Class C
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Return of capital |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets |
| Ratio of expenses to average net assets |
| prior to fees waived and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to fees waived and expense paid indirectly |
| Portfolio turnover |
1 The average shares outstanding method has been applied for per share information. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
22
| Year Ended |
| 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| $ 8.190 | | | $17.680 | | | $24.150 | | | $21.370 | | | $ 21.120 | |
| | |
| | |
| 0.173 | | | 0.136 | | | 0.006 | | | 0.191 | | | 0.281 | |
| (0.511 | ) | | (5.791 | ) | | 0.373 | | | 5.901 | | | 2.099 | |
| (0.338 | ) | | (5.655 | ) | | 0.379 | | | 6.092 | | | 2.380 | |
| | |
| | |
| (0.174 | ) | | (0.252 | ) | | (0.218 | ) | | (0.301 | ) | | (0.273 | ) |
| — | | | (3.583 | ) | | (6.631 | ) | | (3.011 | ) | | (1.857 | ) |
| (0.058 | ) | | — | | | — | | | — | | | — | |
| (0.232 | ) | | (3.835 | ) | | (6.849 | ) | | (3.312 | ) | | (2.130 | ) |
| | |
| $ 7.620 | | | $ 8.190 | | | $17.680 | | | $ 24.150 | | | $21.370 | |
| | |
| (3.73% | ) | | (38.33% | ) | | 1.58% | | | 32.43% | | | 11.44% | |
| | |
| | |
| $16,314 | | | $22,695 | | | $50,819 | | | $71,614 | | | $70,860 | |
| 2.23% | | | 2.23% | | | 2.11% | | | 2.09% | | | 2.09% | |
| | |
| 2.58% | | | 2.29% | | | 2.11% | | | 2.09% | | | 2.09% | |
| 2.63% | | | 1.07% | | | 0.04% | | | 0.90% | | | 1.32% | |
| | |
| 2.28% | | | 1.01% | | | 0.04% | | | 0.90% | | | 1.32% | |
| 174% | | | 115% | | | 82% | | | 60% | | | 37% | |
23
Financial highlights
Delaware REIT Fund Class R
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Return of capital |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets |
| Ratio of expenses to average net assets |
| prior to fees waived and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to fees waived and expense paid indirectly |
| Portfolio turnover |
1 The average shares outstanding method has been applied for per share information. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects waivers by the manager and distributor, as applicable. Performance would have been lower had the waivers not been in effect. |
See accompanying notes
24
| Year Ended |
| 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| $ 8.200 | | | $17.690 | | | $24.180 | | | $21.390 | | | $ 21.130 | |
| | |
| | |
| 0.205 | | | 0.191 | | | 0.102 | | | 0.297 | | | 0.373 | |
| (0.509 | ) | | (5.789 | ) | | 0.363 | | | 5.913 | | | 2.097 | |
| (0.304 | ) | | (5.598 | ) | | 0.465 | | | 6.210 | | | 2.470 | |
| | |
| | |
| (0.208 | ) | | (0.309 | ) | | (0.324 | ) | | (0.409 | ) | | (0.353 | ) |
| — | | | (3.583 | ) | | (6.631 | ) | | (3.011 | ) | | (1.857 | ) |
| (0.058 | ) | | — | | | — | | | — | | | — | |
| (0.266 | ) | | (3.892 | ) | | (6.955 | ) | | (3.420 | ) | | (2.210 | ) |
| | |
| $ 7.630 | | | $ 8.200 | | | $17.690 | | | $24.180 | | | $21.390 | |
| | |
| (3.21% | ) | | (38.00% | ) | | 2.03% | | | 33.13% | | | 11.90% | |
| | |
| | |
| $3,596 | | | $3,395 | | | $5,734 | | | $7,107 | | | $4,168 | |
| 1.73% | | | 1.73% | | | 1.61% | | | 1.59% | | | 1.66% | |
| | |
| 2.18% | | | 1.89% | | | 1.71% | | | 1.69% | | | 1.69% | |
| 3.13% | | | 1.57% | | | 0.54% | | | 1.40% | | | 1.75% | |
| | |
| 2.68% | | | 1.41% | | | 0.44% | | | 1.30% | | | 1.72% | |
| 174% | | | 115% | | | 82% | | | 60% | | | 37% | |
25
Financial highlights
Delaware REIT Fund Institutional Class
Selected data for each share of the Fund outstanding throughout each period were as follows:
| Net asset value, beginning of period |
| |
| Income (loss) from investment operations: |
| Net investment income1 |
| Net realized and unrealized gain (loss) on investments |
| Total from investment operations |
| |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| Return of capital |
| Total dividends and distributions |
| |
| Net asset value, end of period |
| |
| Total return2 |
| |
| Ratios and supplemental data: |
| Net assets, end of period (000 omitted) |
| Ratio of expenses to average net assets |
| Ratio of expenses to average net assets |
| prior to fees waived and expense paid indirectly |
| Ratio of net investment income to average net assets |
| Ratio of net investment income to average net assets |
| prior to fees waived and expense paid indirectly |
| Portfolio turnover |
1 The average shares outstanding method has been applied for per share information. |
2 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
26
| Year Ended |
| 10/31/09 | | 10/31/08 | | 10/31/07 | | 10/31/06 | | 10/31/05 | |
| $ 8.220 | | | $17.710 | | | $24.210 | | | $ 21.410 | | | $ 21.150 | |
| | |
| | |
| 0.238 | | | 0.247 | | | 0.196 | | | 0.404 | | | 0.494 | |
| (0.520 | ) | | (5.784 | ) | | 0.366 | | | 5.923 | | | 2.101 | |
| (0.282 | ) | | (5.537 | ) | | 0.562 | | | 6.327 | | | 2.595 | |
| | |
| | |
| (0.240 | ) | | (0.370 | ) | | (0.431 | ) | | (0.516 | ) | | (0.478 | ) |
| — | | | (3.583 | ) | | (6.631 | ) | | (3.011 | ) | | (1.857 | ) |
| (0.058 | ) | | — | | | — | | | — | | | — | |
| (0.298 | ) | | (3.953 | ) | | (7.062 | ) | | (3.527 | ) | | (2.335 | ) |
| | |
| $ 7.640 | | | $ 8.220 | | | $ 17.710 | | | $24.210 | | | $ 21.410 | |
| | |
| (2.72% | ) | | (37.66% | ) | | 2.56% | | | 33.81% | | | 12.54% | |
| | |
| | |
| $99,334 | | | $87,430 | | | $106,145 | | | $32,166 | | | $58,428 | |
| 1.23% | | | 1.23% | | | 1.11% | | | 1.09% | | | 1.09% | |
| | |
| 1.58% | | | 1.29% | | | 1.11% | | | 1.09% | | | 1.09% | |
| 3.63% | | | 2.07% | | | 1.04% | | | 1.90% | | | 2.32% | |
| | |
| 3.28% | | | 2.01% | | | 1.04% | | | 1.90% | | | 2.32% | |
| 174% | | | 115% | | | 82% | | | 60% | | | 37% | |
27
| Notes to financial statements | |
| Delaware REIT Fund | | October 31, 2009 |
The Real Estate Investment Trust Portfolio (Delaware REIT Fund or Fund) is a series of Delaware Pooled® Trust (Trust), which is organized as a Delaware statutory trust. The Trust is an open-end investment company. The Fund is considered non-diversified under the Investment Company Act of 1940, as amended, and offers Class A, Class B, Class C, Class R and Institutional Class shares. Class A shares are sold with a maximum front-end sales charge of up to 5.75%. Class A share purchases of $1,000,000 or more will incur a contingent deferred sales charge (CDSC) of 1% if redeemed during the first year and 0.50% during the second year, provided that Delaware Distributors, L.P. (DDLP) paid a financial advisor a commission on the purchase of those shares. Class B shares may be purchased only through dividend reinvestment and certain permitted exchanges. Prior to June 1, 2007, Class B shares were sold with a CDSC that declined from 4% to zero depending upon the period of time the shares were held. Class B shares will automatically convert to Class A shares on a quarterly basis approximately eight years after purchase. Class C shares are sold with a CDSC of 1%, if redeemed during the first twelve months. Class R and Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. This report contains information relating only to the Delaware REIT Fund. All other Delaware Pooled® Trust portfolios are included in a separate report.
The investment objectives of the Fund are to seek maximum long-term total return, with capital appreciation as a secondary objective. It seeks to achieve its objective by investing primarily in securities of companies principally engaged in the real estate industry.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles (GAAP) and are consistently followed by the Fund.
Security Valuation — Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and ask prices will be used. Investment companies are valued at net asset value per share. Generally, other securities and assets for which market quotations are not readily available are valued at fair value as determined in good faith under the direction of the Fund’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures or suspension of trading in a security. The Fund may use fair value pricing more frequently for securities traded primarily in non-U.S. markets because, among other things, most foreign markets close well before the Fund values its securities at 4:00 p.m. Eastern time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading, or news events may have occurred in the interim. To account for this,
28
the Fund may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing).
Federal Income Taxes — No provision for federal income taxes has been made as the Fund intends to continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years (tax years ended October 31, 2006 – October 31, 2009), and has concluded that no provision for federal income tax is required in the Fund’s financial statements.
Class Accounting — Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the various classes of the Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
Repurchase Agreements — The Fund may invest in a pooled cash account along with members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Fund’s custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings. At October 31, 2009, the Fund held no investments in repurchase agreements.
Use of Estimates — The preparation of financial statements in conformity with U.S. GAAP 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 — Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Investments® Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. 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. Distributions received from investments in
29
Notes to financial statements
Delaware REIT Fund
1. Significant Accounting Policies (continued)
Real Estate Investment Trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer. The financial statements reflect an estimate of the reclassification of the distribution character. The Fund declares and pays dividends from net investment income quarterly and distributions from net realized gain on investments, if any, annually.
Subject to seeking best execution, the Fund may direct certain security trades to brokers who have agreed to rebate a portion of the related brokerage commission to the Fund in cash. In general, best execution refers to many factors, including the price paid or received for a security, the commission charged, the promptness and reliability of execution, the confidentiality and placement accorded the order, and other factors affecting the overall benefit obtained by the Fund on the transaction. There were no commission rebates for the year ended October 31, 2009.
The Fund receives earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the year ended October 31, 2009.
On July 1, 2009, the Financial Accounting Standards Board (FASB) issued the FASB Accounting Standards Codification (Codification). The Codification became the single source of authoritative nongovernmental U.S. GAAP, superseding existing literature of the FASB, American Institute of Certified Public Accountants, Emerging Issues Task Force and other sources. The Codification is effective for interim and annual periods ending after September 15, 2009. The Fund adopted the Codification for the year ended October 31, 2009. There was no impact to financial statements as the Codification requirements are disclosure-only in nature.
Management has evaluated whether any events or transactions occurred subsequent to October 31, 2009 through December 22, 2009, the date of issuance of the Fund’s financial statements, and determined that there were no material events or transactions that would require recognition or disclosure in the Fund’s financial statements.
2. Investment Management, Administration Agreements and Other Transactions with Affiliates
In accordance with the terms of its investment management agreement, the Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.75% on the first $500 million of average daily net assets of the Fund, 0.70% on the next $500 million, 0.65% on the next $1.5 billion and 0.60% on average daily net assets in excess of $2.5 billion.
Effective September 11, 2009, DMC has voluntarily agreed to waive that portion, if any, of its management fee and reimburse the Fund to the extent necessary to ensure that total annual operating expenses (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, short sale and dividend interest expenses, certain insurance costs, and nonroutine expenses or costs, including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, nonroutine expenses)) do not exceed 1.30% of average daily net assets of the Fund until such time as the
30
voluntary expenses cap is discontinued. For purposes of these waivers and reimbursements, nonroutine expenses may also include such additional costs and expenses, as may be agreed upon from time to time by the Fund’s Board and DMC. These fee waivers and expense reimbursements apply only to expenses paid directly by the Fund, and may be discontinued at any time because they are voluntary. From March 1, 2009 to September 10, 2009, DMC had voluntarily agreed to waive that portion, if any, of its management fee and reimburse the Fund to the extent necessary to ensure that total annual operating expenses (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, short sale and dividend interest expenses, certain insurance costs, and nonroutine expenses) did not exceed 1.21% of average daily net assets of the Fund. Prior to March 1, 2009, total annual operating expenses were contractually limited to 1.23% of average daily net assets (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, short sale and dividend interest expenses, certain insurance costs, and nonroutine expenses) of the Fund.
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Fund. For these services, the Fund pays DSC fees based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DSC under the service agreement described above are allocated among all Funds in the Delaware Investments® Family of Funds on a relative net asset value basis. For the year ended October 31, 2009, the Fund was charged $8,321 for these services.
DSC also provides dividend disbursing and transfer agency services. The Fund pays DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services.
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Class A shares, 1.00% of the average daily net assets of the Class B and C shares and 0.60% of the average daily net assets of the Class R shares. DDLP has contracted to limit through February 28, 2010 in order to prevent distribution and service fees of Class A and Class R shares from exceeding 0.25% and 0.50%, respectively, of average daily net assets. Institutional Class shares pay no distribution and service expenses.
At October 31, 2009, the Fund had liabilities payable to affiliates as follows:
| Investment management fee payable to DMC | | $ | 96,052 |
| Dividend disbursing, transfer agent and fund accounting | | | |
| oversight fees and other expenses payable to DSC | | | 99,452 |
| Distribution fees payable to DDLP | | | 39,490 |
| Other expenses payable to DMC and affiliates* | | | 1,919 |
*DMC, as part of its administrative services, pays operating expenses on behalf of the Fund and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.
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Notes to financial statements
Delaware REIT Fund
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
As provided in the investment management agreement, the Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to the Fund by DMC and/or its affiliates’ employees.
For the year ended October 31, 2009, the Fund was charged $14,350 for internal legal and tax services provided by DMC and/or its affiliates’ employees. For the year ended October 31, 2009, DDLP earned $7,366 for commissions on sales of the Fund’s Class A shares. For the year ended October 31, 2009, DDLP received gross CDSC commissions of $—, $8,164 and $1,045 on redemptions of the Fund’s Class A, Class B and Class C shares, respectively, and these commissions were entirely used to offset up-front commissions previously paid by DDLP to broker/dealers on sales of those shares.
Trustees’ fees include expenses accrued by the Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DSC and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Fund.
3. Investments
For the year ended October 31, 2009, the Fund made purchases of $286,826,351 and sales of $282,730,436 of investment securities other than short-term investments.
At October 31, 2009, the cost of investments for federal income tax purposes was $270,768,955. At October 31, 2009, the net unrealized depreciation was $47,837,787, of which $3,886,624 related to unrealized appreciation of investments and $51,724,411 related to unrealized depreciation of investments.
Effective November 1, 2008, the Fund adopted the amended provisions of Accounting Standards Codification 820 (ASC 820), Fair Value Measurements and Disclosures. ASC 820 defines fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. ASC 820 also establishes a framework for measuring fair value, and a three level hierarchy for fair value measurements based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information
32
available under the circumstances. The Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
Level 1 – inputs are quoted prices in active markets
Level 2 – inputs are observable, directly or indirectly
Level 3 – inputs are unobservable and reflect assumptions on the part of the reporting entity
The following table summarizes the valuation of the Fund’s investments by the ASC 820 fair value hierarchy levels as of October 31, 2009:
| | Level 1 | | Level 2 | | Level 3 | | Total |
| Common Stock | | $ | 184,028,526 | | $ | — | | $ | — | | $ | 184,028,526 |
| Short-Term | | | — | | | 9,139,014 | | | — | | | 9,139,014 |
| Securities Lending Collateral | | | 24,407,806 | | | 5,355,761 | | | 61 | | | 29,763,628 |
| Total | | $ | 208,436,332 | | $ | 14,494,775 | | $ | 61 | | $ | 222,931,168 |
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| Security |
| Lending |
| Collateral |
| Balance as of 10/31/08 | $ | 32,996 | |
| Net change in unrealized appreciation/depreciation | | (32,935 | ) |
| Balance as of 10/31/09 | $ | 61 | |
| |
| Net change in unrealized appreciation/depreciation | | | |
| from investments still held as of 10/31/09 | $ | (32,935 | ) |
4. Dividend and Distribution Information
Income and long-term capital gain distributions are determined in accordance with federal income tax regulations, which may differ from U.S. GAAP. Additionally, distributions from net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the years ended October 31, 2009 and 2008 was as follows:
| | Year Ended |
| | 10/31/09 | | 10/31/08 |
| Ordinary income | | $ | 5,564,743 | | $ | 19,443,932 |
| Long-term capital gain | | | — | | | 61,155,357 |
| Return of capital | | | 1,465,398 | | | 61,807 |
| Total | | $ | 7,030,141 | | $ | 80,661,096 |
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Notes to financial statements
Delaware REIT Fund
5. Components of Net Assets on a Tax Basis
As of October 31, 2009, the components of net assets on a tax basis were as follows:
| Shares of beneficial interest | | $ | 306,745,879 | |
| Capital loss carryforwards | | | (64,441,713 | ) |
| Unrealized depreciation of investments | | | (47,837,787 | ) |
| Net assets | | $ | 194,466,379 | |
The undistributed earnings for the Delaware REIT Fund are estimated pending final notification of the tax character of distributions received from investments in REITs.
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales.
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to tax treatment of dividends and distributions. Results of operations and net assets were not affected by these reclassifications. For the year ended October 31, 2009, the Fund recorded the following reclassifications.
| Undistributed net investment income | | $ | (61,807 | ) |
| Paid-in capital | | | 61,807 | |
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at October 31, 2009 will expire as follows; $9,848,927 expires in 2016 and $54,592,786 expires in 2017.
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6. Capital Shares
Transactions in capital shares were as follows:
| | Year Ended |
| | 10/31/09 | | 10/31/08 |
| Shares sold: | | | | | | |
| Class A | | 2,175,080 | | | 1,755,042 | |
| Class B | | 18,567 | | | 43,175 | |
| Class C | | 199,187 | | | 208,988 | |
| Class R | | 330,368 | | | 261,470 | |
| Institutional Class | | 7,661,922 | | | 8,457,890 | |
| |
| Shares issued upon reinvestment of dividends and distributions: | | | | | | |
| Class A | | 360,492 | | | 2,543,376 | |
| Class B | | 60,103 | | | 717,840 | |
| Class C | | 83,165 | | | 829,270 | |
| Class R | | 20,978 | | | 95,724 | |
| Institutional Class | | 572,391 | | | 2,079,763 | |
| The Real Estate Investment Trust Portfolio Class* | | — | | | 1 | |
| | 11,482,253 | | | 16,992,539 | |
| | | | | | | |
| Shares repurchased: | | | | | | |
| Class A | | (3,067,391 | ) | | (3,997,829 | ) |
| Class B | | (813,317 | ) | | (1,317,005 | ) |
| Class C | | (911,408 | ) | | (1,142,927 | ) |
| Class R | | (293,767 | ) | | (267,544 | ) |
| Institutional Class | | (5,874,558 | ) | | (5,890,961 | ) |
| The Real Estate Investment Trust Portfolio Class* | | — | | | (1,811,509 | ) |
| | | (10,960,441 | ) | | (14,427,775 | ) |
| Net increase | | 521,812 | | | 2,564,764 | |
*Effective at the close of business on February 21, 2008, all assets of the Fund’s Real Estate Investment Trust Portfolio Class were redeemed.
For the years ended October 31, 2009 and 2008, 175,717 Class B shares were converted to 175,412 Class A shares valued at $1,210,467 and 147,129 Class B shares were converted to 146,775 Class A shares valued at $1,838,671, respectively. The respective amounts are included in Class B redemptions and Class A subscriptions in the table above and the statements of changes in net assets.
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Notes to financial statements
Delaware REIT Fund
7. Line of Credit
The Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), was a participant in a $225,000,000 revolving line of credit with The Bank of New York Mellon (BNY Mellon) to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants were charged an annual commitment fee, which was allocated across the Participants on the basis of each Participant’s allocation of the entire facility. Participants were permitted to borrow up to a maximum of one third of their net assets under the agreement. The agreement expired on November 18, 2008.
Effective November 18, 2008, the Fund, along with the other Participants, entered into an amendment to the agreement with BNY Mellon for a $35,000,000 revolving line of credit. The agreement, as amended, is to be used as described above and operates in substantially the same manner as the original agreement. The agreement, as amended, expires on November 16, 2010. The Fund had no amounts outstanding as of October 31, 2009, or at any time during the year then ended.
8. Securities Lending
The Fund, along with other funds in the Delaware Investments® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with BNY Mellon. With respect to each loan, if the aggregate market value of securities collateral held plus cash collateral received on any business day is less than the aggregate market value of the securities which are the subject of such loan, the borrower will be notified to provide additional collateral not less than the applicable collateral requirements. Cash collateral received is generally invested in the Mellon GSL DBT II Collateral Fund (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of clients participating in its securities lending programs. The Collective Trust may invest in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top three-tiers by Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc. or repurchase agreements collateralized by such securities. The Collective Trust seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. At October 31, 2009, the Collective Trust held only cash and assets with a maturity of one business day or less (Cash/Overnight Assets). The Fund may incur investment losses as a result of investing securities lending collateral in the Collective Trust. This could occur if an investment in the Collective Trust defaulted or if it were necessary to liquidate assets in the Collective Trust to meet returns on outstanding security loans at a time when the Collective Trust’s net asset value per unit was less than $1.00. Under those circumstances, the Fund may not receive an amount from the Collective Trust that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall. Effective April 20, 2009, BNY Mellon transferred the assets of the Collective Trust other than the Cash/Overnight Assets to the BNY Mellon SL DBT II Liquidating Fund (Liquidating Fund), effectively bifurcating the collateral investment
36
pool. The Fund’s exposure to the Liquidating Fund is expected to decrease as the Liquidating Fund’s assets mature or are sold. In October 2008, BNY Mellon transferred certain distressed securities from the Collective Trust into the Mellon GSL Reinvestment Trust II. The Fund can also accept U.S. government securities and letters of credit (non-cash collateral) in connection with securities loans. In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund, or at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends or interest, as applicable, on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by non-cash collateral, the Fund receives loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Fund, the security lending agent and the borrower. The Fund records security lending income net of allocations to the security lending agent and the borrower.
At October 31, 2009, the value of securities on loan was $29,599,266, for which cash collateral was received and invested in accordance with the Lending Agreement. Such investments are presented on the statement of net assets under the caption “Securities Lending Collateral.”
9. Credit and Market Risk
The Fund concentrates its investments in the real estate industry and is subject to some of the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. The Fund is also affected by interest rate changes, particularly if the real estate investment trusts it holds use floating rate debt to finance their ongoing operations. Its investments may also tend to fluctuate more in value than a portfolio that invests in a broader range of industries.
The Fund may invest up to 15% of its net 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 these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund’s Board has delegated to DMC the day-today functions of determining whether individual securities are liquid for purposes of the Fund’s limitation on investments in illiquid assets. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in illiquid securities. As of October 31, 2009, there were no Rule 144A securities. Illiquid securities have been identified on the statement of net assets.
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Notes to financial statements
Delaware REIT Fund
10. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
11. Sale of Delaware Investments to Macquarie Group
On August 18, 2009, Lincoln National Corporation (parent company of Delaware Investments) and Macquarie Group (Macquarie) entered into an agreement pursuant to which Delaware Investments, including DMC, DDLP and DSC, will be acquired by Macquarie, an Australia-based global provider of banking, financial, advisory, investment and funds management services (Transaction). Upon completion of the Transaction, DMC, DDLP and DSC will be wholly-owned subsidiaries of Macquarie.
The Transaction will result in a change of control of DMC which, in turn, will cause the termination of the investment advisory agreement between DMC and the Fund. As a result, a Special Meeting of Shareholders (Meeting) of the Fund has been scheduled for the purpose of asking shareholders to approve a new investment advisory agreement between DMC and the Fund (New Agreement). If approved by shareholders, the New Agreement will take effect upon the closing of the Transaction, which is currently anticipated to occur by on or about December 31, 2009. Shareholders of the Fund received proxy materials including more detailed information about the Meeting, the Transaction and the proposed New Agreement.
12. Tax Information (Unaudited)
The information set forth below is for the Fund’s fiscal year as required by federal laws. Shareholders, however, must report distributions on a calendar year basis for income tax purposes, which may include distributions for portions of two fiscal years of a fund. Accordingly, the information needed by shareholders for income tax purposes will be sent to them in January of each year. Please consult your tax advisor for proper treatment of this information.
For the fiscal year ended October 31, 2009, the Fund designates distributions paid during the year as follows:
| (A) Ordinary Income Distributions (Tax Basis) | 79.16 | % |
| (B) Return of Capital (Tax Basis) | 20.84 | % |
| Total Distributions (Tax Basis) | 100 | % |
(A) and (B) are based on a percentage of the Fund’s total distributions.
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Report of independent
registered public accounting firm
To the Shareholders and Board of Trustees
Delaware Pooled Trust — The Real Estate Investment Trust Portfolio
We have audited the accompanying statement of net assets of The Real Estate Investment Trust Portfolio (one of the series constituting the Delaware Pooled Trust) (the “Fund”) as of October 31, 2009, and the related statement of operations for the year then ended, the statements of changes in net assets for each of the two years in the period then ended, and the financial highlights for each of the five years in the period then ended. These financial statements and financial highlights are the responsibility of the Fund’s management. Our responsibility is to express an opinion on these financial statements and financial highlights based on our audits.
We conducted our audits in accordance with the standards of the Public Company Accounting Oversight Board (United States). Those standards require that we plan and perform the audit to obtain reasonable assurance about whether the financial statements and financial highlights are free of material misstatement. We were not engaged to perform an audit of the Fund’s internal control over financial reporting. Our audits included consideration of internal control over financial reporting as a basis for designing audit procedures that are appropriate in the circumstances, but not for the purpose of expressing an opinion on the effectiveness of the Fund’s internal control over financial reporting. Accordingly, we express no such opinion. An audit also includes examining, on a test basis, evidence supporting the amounts and disclosures in the financial statements and financial highlights, assessing the accounting principles used and significant estimates made by management, and evaluating the overall financial statement presentation. Our procedures included confirmation of securities owned as of October 31, 2009 by correspondence with the custodian and brokers or by other appropriate auditing procedures when replies from brokers were not received. We believe that our audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to above present fairly, in all material respects, the financial position of The Real Estate Investment Trust Portfolio of Delaware Pooled Trust at October 31, 2009, the results of its operations for the year then ended, the changes in its net assets for each of the two years in the period then ended, and its financial highlights for each of the five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Philadelphia, Pennsylvania
December 22, 2009
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Other Fund information
(Unaudited)
Delaware REIT Fund
Board Consideration of Delaware REIT Fund Investment Advisory Agreement
At a meeting held on May 19-21, 2009 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreement for the Delaware REIT Fund (the “Fund”). In making its decision, the Board considered information furnished specifically in connection with the renewal of the Investment Advisory Agreement with Delaware Management Company (“DMC”), which included materials provided by DMC and its affiliates (“Delaware Investments”) concerning, among other things, the nature, extent and quality of services provided to the Fund, the costs of such services to the Fund, economies of scale and the financial condition and profitability of Delaware Investments. Reference was made to information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. In addition, in connection with the Annual Meeting, reports were provided in February 2009 and included independent historical and comparative reports prepared by Lipper Inc. (“Lipper”), an independent statistical compilation organization. The Lipper reports compared the Fund’s investment performance and expenses with those of other comparable mutual funds. The independent Trustees reviewed and discussed the Lipper reports with counsel to the independent Trustees. The Board requested and received information regarding DMC’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; the investment manager’s profitability; and any constraints or limitations on the availability of securities in certain investment styles which had in the past year inhibited, or which were likely in the future to inhibit, DMC’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of the Fund’s advisory agreement, the independent Trustees received assistance and advice from and met separately with counsel to the independent Trustees. Although the Board gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.
Nature, Extent and Quality of Service. The Board considered the services provided by Delaware Investments to the Fund and its shareholders. In reviewing the nature, extent and quality of services, the Board considered reports furnished to it throughout the year, which covered matters such as the relative performance of the Fund, compliance of portfolio managers with the investment policies, strategies and restrictions for the Fund, compliance by DMC and Delaware Distributors, L.P. (together, “Management”) personnel with the Code of Ethics adopted throughout the Delaware Investments Family of Funds complex and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of the Fund’s investment advisor and the emphasis placed on research in the investment process. The Board gave favorable consideration to DMC’s efforts to control expenditures while maintaining service levels committed to fund matters.
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The Board also considered the transfer agent and shareholder services provided to Fund shareholders by DMC’s affiliate, Delaware Service Company, Inc. (“DSC”), noting DSC’s high level of service. The Board noted that Management finished upgrading investment accounting functions through outsourcing to improve the quality and lower the cost of delivering investment accounting services to the Fund. The Board once again noted the benefits provided to Fund shareholders through each shareholder’s ability to exchange an investment in one Delaware Investments fund for the same class of shares in another Delaware Investments fund without a sales charge, to reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Investments funds and the privilege to combine holdings in other Delaware Investments funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent and quality of the overall services provided by Delaware Investments.
Investment Performance. The Board placed significant emphasis on the investment performance of the Fund in view of its importance to shareholders. Although the Board gave appropriate consideration to performance reports and discussions with portfolio managers at Board meetings throughout the year, the Board gave particular weight to the Lipper reports furnished for the Annual Meeting. The Lipper reports prepared for the Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Lipper (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for the Fund was shown for the past one-, three-, five- and ten-year periods, as applicable, ended December 31, 2008. The Board’s objective is that the Fund’s performance for the periods considered be at or above the median of its Performance Universe. The following paragraph summarizes the performance results for the Fund and the Board’s view of such performance.
The Performance Universe for the Fund consisted of the Fund and all retail and institutional real estate funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one- and three-year periods was in the first quartile of its Performance Universe. The report further showed that the Fund’s total return for the five- and ten-year periods was in the second quartile. The Board was satisfied with performance.
Comparative Expenses. The Board considered expense comparison data for the Delaware Investments Family of Funds. Management provided the Board with information on pricing levels and fee structures for the Fund as of October 31, 2008 and, for comparative funds, information as of their respective fiscal year end occurring on or before August 31, 2008. The Board also focused on the comparative analysis of effective management fees and total expense ratios of the Fund versus effective management fees and expense ratios of a group of similar funds as selected by Lipper (the “Expense Group”).
41
Other Fund information
(Unaudited)
Delaware REIT Fund
Board Consideration of Delaware REIT Fund Investment Advisory Agreement (continued)
In reviewing comparative costs, the Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. The Fund’s total expenses were also compared with those of its Expense Group. The Lipper total expenses, for comparative consistency, were shown by Lipper for Class A shares and comparative total expenses including 12b-1 and non 12b-1 service fees. The Board considered fees paid to Delaware Investments for nonmanagement services. The Board’s objective is to limit the Fund’s total expense ratio to be competitive with that of the Expense Group. The following paragraph summarizes the expense results for the Fund and the Board’s view of such expenses.
The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second lowest expenses of its Expense Group and its total expenses were in the quartile with the second highest expenses of its Expense Group. The Board gave favorable consideration to the Fund’s management fee, but noted that the Fund’s total expenses were not in line with the Board’s objective. In evaluating the total expenses, the Board considered current 12b-1 fee waivers and various initiatives implemented by Management, such as the outsourcing of certain transfer agency and investment accounting services, creating an opportunity for a reduction in expenses. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio and bring it in line with the Board’s objective.
Management Profitability. The Board considered the level of profits realized by Delaware Investments in connection with the operation of the Fund. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of Delaware Investments’ business in providing management and other services to each of the individual funds and the Delaware Investments Family of Funds as a whole. Specific attention was given to the methodology followed in allocating costs for the purpose of determining profitability. Management stated that the level of profits of Delaware Investments, to a certain extent, reflect recent operational cost savings and efficiencies initiated by Delaware Investments. The Board considered Delaware Investments’ efforts to improve services provided to fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of Delaware Investments.
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Economies of Scale. The Trustees considered whether economies of scale are realized by Delaware Investments as the Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the standardized advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case on all assets when the asset levels specified are exceeded. The Board noted that the fee under the Fund’s management contract fell within the standard structure. Although the Fund has not reached a size at which it can take advantage of breakpoints, the Board recognized that the fee was structured so that when the Fund grows, economies of scale may be shared.
Fund management
Babak Zenouzi has primary responsibility for making day-to-day investment decisions for the Fund. When making investment decisions for the Fund, Mr. Zenouzi regularly consults with Damon J. Andres.
Babak “Bob” Zenouzi
Senior Vice President, Senior Portfolio Manager
Bob Zenouzi is the lead manager for the domestic and global REIT effort at Delaware Investments, which includes the team, its process, and its institutional and retail products, which he created during his prior time with the firm. He also focuses on opportunities in Japan, Singapore, and Malaysia for the firm’s global REIT product. Additionally, he serves as lead portfolio manager for the firm’s Dividend Income products, which he helped to create in the 1990s. He is also a member of the firm’s asset allocation committee, which is responsible for building and managing multi-asset class portfolios. He rejoined Delaware Investments in May 2006 as senior portfolio manager and head of real estate securities. In his first term with the firm, he spent seven years as an analyst and portfolio manager, leaving in 1999 to work at Chartwell Investment Partners, where from 1999 to 2006 he was a partner and senior portfolio manager on Chartwell’s Small-Cap Value portfolio. He began his career with The Boston Company, where he held several positions in accounting and financial analysis. Zenouzi earned a master’s degree in finance from Boston College and a bachelor’s degree from Babson College. He is a member of the National Association of Real Estate Investment Trusts and the Urban Land Institute.
Damon J. Andres, CFA
Vice President, Senior Portfolio Manager
Damon J. Andres, who joined Delaware Investments in 1994 as an analyst, currently serves as a portfolio manager for REIT investments and convertibles. He also serves as a portfolio manager for the firm’s Dividend Income products. From 1991 to 1994, he performed investment-consulting services as a consulting associate with Cambridge Associates. Andres earned a bachelor’s degree in business administration with an emphasis in finance and accounting from the University of Richmond.
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Other Fund information
(Unaudited)
Delaware REIT Fund
Board Consideration of Delaware REIT Fund Investment Advisory Agreement (continued)
It is currently anticipated that Lincoln National Corporation will complete its sale of Delaware Management Holdings, Inc. and its subsidiaries (also known by the marketing name of Delaware Investments) to Macquarie Group on or about December 31, 2009. Please see your Fund’s prospectus and any supplements thereto for more complete information.
Investments in Delaware REIT Fund are not and will not be deposits with or liabilities of Macquarie Bank Limited ABN 46 008 583 542 and its holding companies, including subsidiaries or related companies (the “Macquarie Group”), and are subject to investment risk, including possible delays in repayment and loss of income and capital invested. No Macquarie Group company guarantees or will guarantee the performance of the Fund, the repayment of capital from the Fund, or any particular rate of return.
44
Board of trustees/directors and officers addendum
Delaware Investments® Family of Funds
A mutual fund is governed by a Board of Trustees/Directors (“Trustees”), which has oversight responsibility for the management of a fund’s business affairs. Trustees establish procedures and oversee and review the performance of the investment manager, the distributor, and others who perform services for the fund. The independent fund trustees, in particular, are advocates
| Name, Address, | | Position(s) | | Length of |
| and Birth Date | | Held with Fund(s) | | Time Served |
| Interested Trustees | | | | |
| |
| Patrick P. Coyne1 | | Chairman, President, | | Chairman and Trustee |
| 2005 Market Street | | Chief Executive Officer, | | since August 16, 2006 |
| Philadelphia, PA 19103 | | and Trustee | | |
| April 1963 | | | | President and |
| | | | | Chief Executive Officer |
| | | | | since August 1, 2006 |
| | | | | |
| Independent Trustees | | | | |
| |
| Thomas L. Bennett | | Trustee | | Since March 2005 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| October 1947 | | | | |
| |
| |
| |
| John A. Fry | | Trustee | | Since January 2001 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| May 1960 | | | | |
| |
| |
| |
| |
| Anthony D. Knerr | | Trustee | | Since April 1990 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| December 1938 | | | | |
| |
| |
| Lucinda S. Landreth | | Trustee | | Since March 2005 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| June 1947 | | | | |
| | | | | |
1 Patrick P. Coyne is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.
46
for shareholder interests. Each trustee has served in that capacity since he or she was elected to or appointed to the Board of Trustees, and will continue to serve until his or her retirement or the election of a new trustee in his or her place. The following is a list of the Trustees and Officers with certain background and related information.
| Number of Portfolios in |
| Principal Occupation(s) | | Fund Complex Overseen | | Other Directorships |
| During Past 5 Years | | by Trustee or Officer | | Held by Trustee or Officer |
| |
| |
| Patrick P. Coyne has served in | | 80 | | Director |
| various executive capacities | | | | Kaydon Corp. |
| at different times at | | | | |
| Delaware Investments.2 | | | | |
| |
| |
| |
| |
| |
| Private Investor | | 80 | | Director |
| (March 2004–Present) | | | | Bryn Mawr Bank Corp. (BMTC) |
| | | | | (April 2007–Present) |
| Investment Manager | | | | |
| Morgan Stanley & Co. | | | | |
| (January 1984–March 2004) | | | | |
| | | | | |
| President | | 80 | | Director |
| Franklin & Marshall College | | | | Community Health Systems |
| (June 2002–Present) | | | | |
| |
| Executive Vice President | | | | |
| University of Pennsylvania | | | | |
| (April 1995–June 2002) | | | | |
| | | | | |
| Founder and | | 80 | | None |
| Managing Director | | | | |
| Anthony Knerr & Associates | | | | |
| (Strategic Consulting) | | | | |
| (1990–Present) | | | | |
| | | | | |
| Chief Investment Officer | | 80 | | None |
| Assurant, Inc. (Insurance) | | | | |
| (2002–2004) | | | | |
| | | | | |
| | | | | |
2 Delaware Investments is the marketing name for Delaware Management Holdings, Inc. and its subsidiaries, including the Fund’s(s’) investment advisor, principal underwriter, and its transfer agent.
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Board of trustees/directors and officers addendum
Delaware Investments® Family of Funds
| Name, Address, | | Position(s) | | Length of |
| and Birth Date | | Held with Fund(s) | | Time Served |
| Independent Trustees (continued) | | | | |
| |
| Ann R. Leven | | Trustee | | Since October 1989 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| November 1940 | | | | |
| | | | | |
| Thomas F. Madison | | Trustee | | Since May 19973 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| February 1936 | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | | |
| | | | |
| | | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
| | | | |
3 In 1997, several funds managed by Voyageur Fund Managers, Inc. (the “Voyageur Funds”) were incorporated into the Delaware Investments Family of Funds. Mr. Madison served as a director of the Voyageur Funds from 1993 until 1997.
48
| Number of Portfolios in |
| Principal Occupation(s) | | Fund Complex Overseen | | Other Directorships |
| During Past 5 Years | | by Trustee or Officer | | Held by Trustee or Officer |
| |
| |
| Consultant | | 80 | | None |
| ARL Associates | | | | |
| (Financial Planning) | | | | |
| (1983–Present) | | | | |
| | | | | |
| President and | | 80 | | Director and Chair of |
| Chief Executive Officer | | | | Compensation Committee, |
| MLM Partners, Inc. | | | | Governance Committee |
| (Small Business Investing | | | | Member |
| and Consulting) | | | | CenterPoint Energy |
| (January 1993–Present) | | | | |
| | | | Lead Director and Chair of |
| | | | Audit and Governance |
| | | | Committees, Member of |
| | | | Compensation Committee |
| | | | Digital River, Inc. |
| |
| | | | Director and Chair of |
| | | | Governance Committee, |
| | | | Audit Committee |
| | | | Member |
| | | | Rimage Corporation |
| |
| | | | Director and Chair of |
| | | | Compensation Committee |
| | | | Spanlink Communications |
| |
| | | | Lead Director and Member of |
| | | | Compensation and |
| | | | Governance Committees |
| | | | Valmont Industries, Inc. |
| | | | |
49
Board of trustees/directors and officers addendum
Delaware Investments® Family of Funds
| Name, Address, | | Position(s) | | Length of |
| and Birth Date | | Held with Fund(s) | | Time Served |
| Independent Trustees (continued) | | | | |
| |
| Janet L. Yeomans | | Trustee | | Since April 1999 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| July 1948 | | | | |
| |
| |
| |
| |
| J. Richard Zecher | | Trustee | | Since March 2005 |
| 2005 Market Street | | | | |
| Philadelphia, PA 19103 | | | | |
| July 1940 | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| | | | | |
| Officers | | | | |
| |
| David F. Connor | | Vice President, | | Vice President since |
| 2005 Market Street | | Deputy General | | September 2000 |
| Philadelphia, PA 19103 | | Counsel, and Secretary | | and Secretary since |
| December 1963 | | | | October 2005 |
| |
| |
| Daniel V. Geatens | | Vice President | | Treasurer |
| 2005 Market Street | | and Treasurer | | since October 25, 2007 |
| Philadelphia, PA 19103 | | | | |
| October 1972 | | | | |
| |
| David P. O’Connor | | Senior Vice President, | | Senior Vice President, |
| 2005 Market Street | | General Counsel, | | General Counsel, and |
| Philadelphia, PA 19103 | | and Chief Legal Officer | | Chief Legal Officer |
| February 1966 | | | | since October 2005 |
| |
| Richard Salus | | Senior Vice President | | Chief Financial Officer |
| 2005 Market Street | | and Chief Financial Officer | | since November 2006 |
| Philadelphia, PA 19103 | | | | |
| October 1963 | | | | |
| | | | | |
4 David F. Connor, Daniel V. Geatens, David P. O’Connor, and Richard Salus serve in similar capacities for the six portfolios of the Optimum Fund Trust, which have the same investment advisor, principal underwriter, and transfer agent as the registrant.
50
| | Number of Portfolios in | | |
| Principal Occupation(s) | | Fund Complex Overseen | | Other Directorships |
| During Past 5 Years | | by Trustee or Officer | | Held by Trustee or Officer |
| |
| |
| Vice President and Treasurer | | 80 | | None |
| (January 2006–Present) | | | | |
| Vice President — Mergers & Acquisitions | | | | |
| (January 2003–January 2006), and | | | | |
| Vice President | | | | |
| (July 1995–January 2003) | | | | |
| 3M Corporation | | | | |
| |
| Founder | | 80 | | Director and Audit |
| Investor Analytics | | | | Committee Member |
| (Risk Management) | | | | Investor Analytics |
| (May 1999–Present) | | | | |
| |
| Founder | | | | |
| Sutton Asset Management | | | | |
| (Hedge Fund) | | | | |
| (September 1996–Present) | | | | |
| | | | | |
| |
| |
| David F. Connor has served as | | 80 | | None4 |
| Vice President and Deputy | | | | |
| General Counsel of | | | | |
| Delaware Investments | | | | |
| since 2000. | | | | |
| |
| Daniel V. Geatens has served | | 80 | | None4 |
| in various capacities at | | | | |
| different times at | | | | |
| Delaware Investments. | | | | |
| |
| David P. O’Connor has served in | | 80 | | None4 |
| various executive and legal | | | | |
| capacities at different times | | | | |
| at Delaware Investments. | | | | |
| |
| Richard Salus has served in | | 80 | | None4 |
| various executive capacities | | | | |
| at different times at | | | | |
| Delaware Investments. | | | | |
| | | | | |
The Statement of Additional Information for the Fund(s) includes additional information about the Trustees and Officers and is available, without charge, upon request by calling 800 523-1918.
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About the organization
| Board of trustees | | | |
| | | | |
| Patrick P. Coyne | Anthony D. Knerr | Ann R. Leven | Janet L. Yeomans |
Chairman, President, and
Chief Executive Officer
Delaware Investments®
Family of Funds
Philadelphia, PA Thomas L. Bennett |
