UNITED STATES SECURITIES AND EXCHANGE COMMISSION
Washington, D.C. 20549
FORM N-CSR
CERTIFIED SHAREHOLDER REPORT OF REGISTERED MANAGEMENT
INVESTMENT COMPANIES
Investment Company Act file number: 811-06324
Exact name of registrant as specified in charter:
Delaware Group® Global & International Funds
Address of principal executive offices:
2005 Market Street
Philadelphia, PA 19103
Name and address of agent for service:
David F. Connor, Esq.
2005 Market Street
Philadelphia, PA 19103
Registrant’s telephone number, including area code: (800) 523-1918
Date of fiscal year end: November 30
Date of reporting period: November 30, 2008
Item 1. Reports to Stockholders
 |  |
| Annual report | |
Delaware International Value Equity Fund Delaware Emerging Markets Fund Delaware Global Value Fund | |
| November 30, 2008 | |
International equity mutual funds |
Table of contents
| Portfolio management review | 1 |
| Performance summaries | 11 |
| Disclosure of Fund expenses | 20 |
| Country and sector allocations | 23 |
| Statements of net assets | 29 |
| Statements of operations | 46 |
| Statements of changes in net assets | 48 |
| Financial highlights | 54 |
| Notes to financial statements | 80 |
| Report of independent registered public accounting firm | 97 |
| Other Fund information | 98 |
| Board of trustees/directors and officers addendum | 100 |
| About the organization | 108 |
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.
© 2009 Delaware Distributors, L.P.
All third-party trademarks cited are the property of their respective owners.
| Portfolio management review | ||
| Delaware International Value Equity Fund | Dec. 9, 2008 |
The managers of Delaware International Value Equity Fund provided the answers to the questions below as a review of the Fund’s activities for the fiscal year ended Nov. 30, 2008.
How would you describe the global economic and market backdrop of the 12-month reporting period?
The year that ended Nov. 30, 2008, was shaped by opposing trends — demand-led commodity price gains coinciding with eroding consumer sentiment. Until late in the period, global stock prices fell, especially in emerging markets, but in developed markets as well. At the same time, oil and other commodity prices rose sharply, with oil peaking at more than $140 a barrel in July. This led to continued gains from energy and other commodity-related stocks, although momentum turned negative in the period’s final months as shares of those companies fell along with oil prices.
Meanwhile, the global economic environment became increasingly dire as markets around the world responded to the credit crisis unfolding in the United States. As the situation worsened, most economic sectors lost value, especially cyclical sectors such as consumer discretionary stocks and industrials. Earnings in these sectors tend to rise and fall along with changes in economic activity.
In contrast, traditionally defensive sectors such as healthcare and consumer staples fared better relative to the benchmark index, the MSCI EAFE Index, but nevertheless produced negative returns. Specifically, these stocks have tended to be less sensitive to a weakening economy and were therefore favored by investors, who became increasingly nervous amid rising market volatility.
Against this backdrop, global stocks fell throughout the period, with a particularly sharp decline beginning in late September and accelerating in October. Given the turmoil in the global financial system, financial stocks around the world were hit particularly hard and might have fared even worse if not for the massive capital infusions provided by fiscal and monetary authorities around the world.
How did Delaware International Value Equity Fund perform during the 12 months ended Nov. 30, 2008?
Delaware International Value Equity Fund returned -48.60% with all distributions reinvested (Class A shares at net asset value) and -51.57% with the sales charge included (Class A shares at maximum offer price). This performance was below that of its benchmark, the MSCI EAFE Index (net) which returned -47.79% during the same time frame. For complete, annualized performance of Delaware International Value Equity Fund, please see the table on page 11.
What factors contributed to the Fund’s performance during the 12-month period?
Several factors had a positive effect on the Fund’s performance when holdings and sector returns were compared to the benchmark index. For instance, in comparison to the MSCI EAFE Index, we were significantly underexposed to financials stocks. In fact, we increased this underweight as the period progressed, selling some of our positions that we believed were more vulnerable. As financials increasingly encountered difficulty, the reduced exposure to the sector mitigated some of the Fund’s negative performance elsewhere. An overweight in healthcare also helped relative returns, with all of
The views expressed are current as of the date of this report and are subject to change.
Data for this portfolio management review were provided by Bloomberg unless otherwise noted.
1
Portfolio management review
Delaware International Value Equity Fund
our holdings in this particular group outperforming the benchmark.
The Fund saw relative strength from certain holdings in the telecommunication services sector that held up better than peers — especially from a position in Chunghwa Telecom. This communications services provider’s stock performed better than some of its peers due in part to the company’s strong incumbent status in the Taiwanese market as well as its extremely strong financial position — two characteristics typically favored by risk-averse investors.
Our stocks in the information technology sector also fared better as a group than those selected for the index, with our shares in Canadian technology outsourcing company CGI Group outperforming the group. We believe investors favored the company for its solid cash position and steady profitability, helping it fare better than other technology stocks in a declining market.
One of the Fund’s better overall individual performers was Japanese retailer Don Quijote. The company was one of the few holdings in the Fund to post a positive return for the period. Don Quijote benefited from its status as the leading low-cost retailer in the country — a resilient niche in what is largely a deteriorating economy.
What factors hampered the Fund’s performance?
In a market that declined significantly, no industry sectors were spared, so general weakness was widespread. When measured against the benchmark index, our weakness was largely attributable to adverse stock selection. Our holdings in consumer staples, for instance, detracted from the Fund’s results relative to the benchmark. In this group, diversified German retail giant Metro was among the worst individual performers. We believe investors worried that the company’s business could be hurt by a decline in consumer spending.
Despite a helpful underweight in financials, stock selection in the sector was a negative overall. Most notably, we were hurt by a position in diversified financial company ING Groep. Shares of this Netherlands-based company fell sharply in September and even more in October, when the market reacted poorly to the news of a 10-billion euro capital infusion coming from the Dutch government — a move that suggested a weaker-than-expected financial position. Nevertheless, we maintained this holding because we continued to have confidence in the company’s performance potential and competitive strength, especially after the recent injection of government capital.
Our weakest overall performer was Petroleum Geo-Services, a Norwegian company that does seismic mapping for integrated and independent oil producers. As the price of oil plummeted in the summer, we believe the market became concerned that new energy exploration investments would decline and cut into the business of Petroleum Geo-Services. Another individual disappointment was Japan’s Round One, a leading Japanese bowling and amusement facility company hurt by weaker consumer spending. Despite their recent poor performance, we maintained positions in both companies and, because of their dominant market positions, believe in their potential for improved future performance.
What was your recent management approach?
Regardless of the market environment, we always look for the same types of stocks
2
— companies that we think are distinguished by strong competitive and financial positions and currently out of favor with investors. Ideally, we want to own companies with a market position that is secure enough they may outperform their rivals in difficult economic times. Identifying these types of companies with an attractive price and with the potential for long-term outperformance is at the core of our investment process.
Recognizing that investors’ risk tolerance appeared to have declined substantially, our focus was to meticulously re-evaluate the assumptions underlying every stock in the portfolio, and to sell those we no longer felt comfortable holding. Given the difficult credit environment, for example, we focused even more on the financial strength of the companies whose stocks we held in the Fund, culling companies with higher debt loads and therefore the potential for deterioration in their future earnings prospects. With the proceeds of these stock sales, we actively reinvested in market leaders that, in our opinion, had low share prices but continue to provide stable earnings and cash flow streams.
The market environment posed significant challenges for all investors, including value investors, during the fiscal period. At the end of the fiscal year, many stocks were trading at depressed valuations, and we resisted the temptation to buy stocks simply because their prices were relatively low. When evaluating new stocks for the Fund, we plan to buy only from companies we believe are in strong shape financially with potential to benefit from a stock market recovery.
Our long-term approach to investing focuses on the benefits of investing in strong, market-leading companies that, are well positioned, in our opinion, to survive the many challenges ahead. At the end of the period, we found it notable that in three of the four quarters of the recent fiscal year, the market had favored value stocks over their growth counterparts. Although we had no guarantee that value stocks would continue to outperform, the fiscal period performance fit a long-term pattern investors have seen before, with a value investment style outperforming growth after a long bull market period and subsequent decline.
| Fund basics | |||||
| Delaware International Value Equity Fund | As of Nov. 30, 2008 | ||||
| Fund objective: | The Fund seeks long-term growth without undue risk to principal. | ||||
| Total Fund net assets: | $388 million | ||||
| Number of holdings: | 48 | ||||
| Fund start date: | Oct. 31, 1991 | ||||
| Nasdaq symbols | CUSIPs | ||||
| Class A | DEGIX | 245914106 | |||
| Class B | DEIEX | 245914700 | |||
| Class C | DEGCX | 245914858 | |||
| Class R | DIVRX | 245914577 | |||
| Institutional Class | DEQIX | 245914403 | |||
3
| Portfolio management review | ||
| Delaware Emerging Markets Fund | Dec. 9, 2008 |
The managers of Delaware Emerging Markets Fund provided the answers to the questions below as a review of the Fund’s activities for the fiscal year ended Nov. 30, 2008.
How did emerging markets generally fare during the year?
Emerging markets declined during the year, ending a string of generally positive years that began in 2003. The benchmark MSCI Emerging Markets Index fell significantly during the period as a global economic slowdown affected market performance in many emerging nations. After gaining ground during the final months of 2007, the benchmark turned downward in early 2008, beginning a slide that carried into the end of the Fund’s fiscal year.
As we wrote in the portfolio management review last year, volatility can be inherent in emerging markets, and such was the case this year. Regions that performed relatively well during a given quarter were not always immune from downturns in the following quarter.
In general, emerging markets responded to the credit crisis unfolding in developed markets, particularly the United States. In addition, emerging markets were not spared from a speculative boom in real estate and other assets, much of which was driven by an overabundance of credit. For instance, we saw excesses in the real estate markets in Brazil and China.
Generally speaking, global markets became very sensitive to risk, and nervous investors raised cash by selling shares of companies in our investment spectrum. This put noticeable pressure on stock prices across all geographical regions represented within the benchmark — all of them posted declines for the period. Among the weakest nations were Russia, South Korea, and India, all falling more than 60%. China and Brazil, two of the more heavily weighted nations within the index, slipped by more than 55%.
As the period began, India showed positive fundamentals, and we viewed some Indian companies as among the best in their respective industries. Challenges arose by the middle of the period, however, as India then faced headwinds that included accelerating inflation, high oil prices, and political instability. Taken together, these circumstances appeared to have dampened investor sentiment and drove down stock prices.
In Russia, steep declines in commodity and energy prices were among the biggest causes of market setbacks. This was exacerbated by rising political risk in the wake of the conflict between Russia and the country of Georgia.
How did the Fund perform?
Delaware Emerging Markets Fund returned - -53.37% with all distributions reinvested (Class A shares at net asset value) and -56.06% with the sales charge included (Class A shares at maximum offer price). By comparison, the MSCI Emerging Markets Index (net) which serves as the Fund’s performance benchmark, returned -56.56% during the same time frame. For the complete, annualized performance of Delaware Emerging Markets Fund, please see the table on page 14.
The views expressed are current as of the date of this report and are subject to change.
Data for this portfolio management review were provided by Bloomberg unless otherwise noted.
4
What was your management approach during the year?
During the fiscal year, we continued following our practice of identifying companies that we viewed as a) trading below their intrinsic values, b) exhibiting sustainable franchises, and c) having strong financial fundamentals. All along, our process remained focused on maintaining an attractive balance between risk and potential reward.
Our country allocations were determined by our company-selection process. In other words, we did not aim for specific allocations to particular countries. We continued to build the Fund based on rigorous analysis of companies, and we believe this generally resulted in more exposure, relative to the benchmark, to attractive markets and sectors.
What factors resulted in positive contributions to performance during the fiscal year?
Measured against the benchmark, most of our outperformance was based on the effects of individual stocks, with a smaller portion explained by the effects of the Fund’s country allocations.
Our holdings in South Korea (the Republic of Korea) and Brazil were among those with the strongest positive effects on relative performance. One example from South Korea was electronics manufacturer Samsung. The company’s share price fluctuated somewhat briskly during the period, but despite the volatility, we felt that the company’s sum-of-the-parts value remained attractive.
In Brazil, we saw positive contributions to relative return from companies that included Energias do Brasil, a holding company that owns electricity distributors and power plants. Early in our fiscal period, that company’s stock price overreacted when Brazil’s electricity regulators reduced their estimate of the company’s asset base. Regulators use this estimate to determine the rates that power companies can charge. In our view, this perception overshadowed the company’s long-term soundness; nonetheless, we sold our position late in the period.
Some individual Mexican holdings made notable gains, although our Mexican holdings detracted from relative performance as a group. Among our positive contributors, Grupo Televisa delivered above-index performance. As one of the largest media companies in Latin America, the company controls a significant portion of the Mexican entertainment market. We believed that Grupo Televisa’s strong competitive position would allow it to withstand a slowing Mexican economy during the period; we also believed that it has the potential to maintain its foothold in broadcasting as well as cable. Early in the fiscal period, the company signed an agreement with Telemundo (the second-largest Spanish-language television network in the United States), providing Televisa with opportunities for growth in the U.S.
What factors hampered the Fund’s performance during the period?
As groups, our holdings in Argentina, Colombia, Israel, and Mexico were among our significant detractors from performance versus the index. Our holdings declined across all four countries, falling further than the benchmark constituents in those countries. One of our Argentine detractors, Cresud, owns and operates farmland in its home country as well as in Brazil. Despite political strife in the Argentine farming sector that began early in our fiscal period, we believed
5
Portfolio management review
Delaware Emerging Markets Fund
the political situation should be resolved in the long run, and that the company’s farm land would likely hold its value. We also saw value in the company’s interests in Inversiones y Representaciones Sociedad Anonima (IRSA), a Buenos Aires real estate developer that primarily focuses on “high-quality” properties.
Our holdings in Russia performed well against the index, but included one significant detractor: Gazprom, Russia’s largest natural-gas producer. Heightened concerns about the Russian government’s involvement in the economy, as well as the aforementioned increase in political risk due to armed conflict in Georgia, contributed to the downturn in Gazprom’s share price.
What other developments affected the performance of the Fund during the period?
Early in the fiscal period, we kept an underweight in India, a reasonably big component of our benchmark index and one that experienced strong gains in recent years. Our country allocations are not based on a strong adherence to country allocations within the benchmark index, and this is an example of where we stayed true to that practice. For the fiscal period, the underweight in India had a positive effect on the Fund’s performance relative to the index. The same thing happened with our overweight allocations in South Africa and Brazil. As in India, our South African and Brazilian allocations were based purely on the relative value we believed our holdings had. In both cases, the resulting overweight had a positive effect on the Fund’s relative performance.
| Fund basics | |||||
| Delaware Emerging Markets Fund | As of Nov. 30, 2008 | ||||
| Fund objective: | The Fund seeks long-term capital appreciation. | ||||
| Total Fund net assets: | $358 million | ||||
| Number of holdings: | 127 | ||||
| Fund start date: | June 10, 1996 | ||||
| Nasdaq symbols | CUSIPs | ||||
| Class A | DEMAX | 245914841 | |||
| Class B | DEMBX | 245914833 | |||
| Class C | DEMCX | 245914825 | |||
| Institutional Class | DEMIX | 245914817 | |||
6
| Delaware Global Value Fund | Dec. 9, 2008 |
The managers of Delaware Global Value Fund provided the answers to the questions below as a review of the Fund’s activities for the fiscal year ended Nov. 30, 2008.
How would you describe the global economic and market backdrop of the 12-month reporting period?
The year ended Nov. 30, 2008, was shaped by opposing trends — demand-led commodity price gains coinciding with eroding consumer sentiment. Until late in the period, global stock prices fell, especially in emerging markets, but also in developed markets. At the same time, oil and other commodity prices rose sharply, with oil peaking at more than $140 a barrel in July. This led to continued gains from energy and other commodity-related stocks, although their momentum turned negative in the period’s final months as their share prices fell along with oil prices.
Meanwhile, the global economic environment became increasingly dire as markets around the world responded to the credit crisis unfolding in the United States. As the situation worsened, most economic sectors lost value, especially cyclical sectors such as consumer discretionary stocks and industrials. Earnings in these sectors tend to rise and fall along with changes in economic activity.
In contrast, traditionally defensive sectors such as healthcare and consumer staples fared better relative to the benchmark MSCI World Index as a whole, but nevertheless produced negative returns. Specifically, these stocks have tended to be less sensitive to a weakening economy and were therefore favored by investors, who became increasingly nervous amid rising market volatility.
Against this backdrop, global stocks fell throughout the period, with a particularly sharp decline beginning in late September and accelerating in October. Given the turmoil in the global financial system, financial stocks around the world were hit particularly hard and might have fared even worse if not for the massive capital infusions provided by fiscal and monetary authorities around the world.
How did Delaware Global Value Fund perform during the 12 months ended Nov. 30, 2008?
For the fiscal year ended Nov. 30, 2008, Delaware Global Value Fund returned -48.12% at net asset value and -51.10% at maximum offer price. Both returns represent performance for Class A shares with all distributions reinvested. This performance was below that of its benchmark, the MSCI World Index (net), which returned -43.30% during the same time frame. Effective after March 31, 2008, the Fund changed its benchmark to the MSCI World Index from the MSCI ACWI (All Country World Index) Index. The MSCI ACWI Index (net) returned -44.84% for the period. For the complete, annualized performance of Delaware Global Value Fund, please see the table on page 17.
What were the significant changes within the Fund during the fiscal period and how did they affect the Fund?
Early in calendar year 2008, Delaware Global Value Fund made two significant changes. First, the team managing the international aspects of the portfolio took on responsibility for managing the domestic equity portion of the Fund as well. Second, we changed the
The views expressed are current as of the date of this report and are subject to change.
Data for this portfolio management review were provided by Bloomberg unless otherwise noted.
7
Portfolio management review
Delaware Global Value Fund
Fund’s benchmark index from the MSCI ACWI Index to the MSCI World Index. The portfolio managers believe that the new benchmark is a more accurate comparison to the Fund’s investments.
We accomplished the transition of the domestic holdings to the new management team in a short period of time, with a process concentrating on three steps. Initially, we evaluated each stock within the existing holdings in light of its value and our competitive criteria. Given the difficult credit environment, for example, we focused even more on the financial strength of the companies whose stocks we held in the Fund, culling companies with excessive debt loads and therefore the potential for deterioration in their future earnings prospects. Second, we sold the domestic stocks we felt no longer fit the criteria, and we actively reinvested in market leaders that had low share prices but continued to provide stable earnings and cash-flow streams. The third step was to fill out the remaining list with potential U.S. candidates through our standard process of considering the entire universe of securities in which we invest and applying our usual evaluation system.
We assessed the international holdings as well and in some cases substituted what we felt were better alternatives from the domestic stocks list where we saw similar valuation characteristics in a similar industry make-up domiciled in the United States. One example of this approach was the acquisition of a position in Archer-Daniels-Midland (ADM) in the consumer staples sector. The company is one of the largest publicly traded processors and traders of agricultural commodities in the world. The U.S. produced a large percentage of globally traded agricultural commodities, and ADM was in a position to benefit from this. Despite the company’s poor performance in response to flooding in the American Midwest, the company is gaining ground in relative performance in its industry. We believe the company is well positioned to benefit from a better economy, as a value investment.
What factors contributed to the Fund’s performance during the 12-month period?
Although no sectors made a positive contribution to the Fund, several factors had a positive effect on the Fund’s performance when holdings and sector returns were compared to the benchmark index. For instance, in comparison to the MSCI World Index, we were significantly underexposed to financials. In fact, we became more underweight as the period progressed, selling some of our positions that we believed were more vulnerable. As financials encountered increasing difficulties, the reduced exposure to the sector mitigated some of the Fund’s negative performance elsewhere. An overweight in healthcare helped relative returns, with the holdings in this particular group outperforming the index.
The Fund saw relative strength from certain holdings in the telecommunication services sector that held up better than peers — especially from a position in Chunghwa Telecom. This communications services provider’s stock performed better than some of its peers due in part to the company’s strong incumbent status in the Taiwanese market, as well as its extremely strong financial position — two characteristics typically favored by risk-averse investors.
One of the Fund’s better overall individual performers was Japanese retailer Don Quijote. The company was one of the few holdings
8
in the Fund to post a positive return for the period. Don Quijote benefited from its status as the leading low-cost retailer in the country — a resilient niche in what is largely a deteriorating economy.
What factors hampered the Fund’s performance?
In a market that declined significantly, no industry sectors were spared, and general weakness was widespread. Our holdings in consumer staples, for instance, detracted from the Fund’s results relative to the benchmark. In this group, diversified German retail giant Metro was among the worst individual performers, and investors worried that the company’s business could be hurt by a decline in consumer spending.
Despite a helpful underweight in financials, our selection of holdings in the sector was a negative overall. In the U.S., we were hurt by our position in insurance and financial-services company American International Group (AIG). AIG was the sole U.S. financial stock we continued to hold following the company’s February management change and re-evaluation of the Fund’s domestic securities. We subsequently sold the position at a considerable loss.
Our weakest overall performer was Petroleum Geo-Services, a Norwegian company that does seismic mapping for integrated and independent oil producers. As the price of oil plummeted in the summer, the market became concerned, in our opinion, that new energy exploration investments would decline and cut into the business of Petroleum Geo-Services. Another individual disappointment was Japan’s Round One, a leading Japanese bowling and amusement facility company hurt by weaker consumer spending. Despite their recent poor performance, we maintained positions in both companies and, because of their dominant market positions, believe in their potential for improved future performance.
What was your recent management approach?
The primary tenets of the Delaware Global Value Fund investment strategy apply to both the domestic and international segments of the Fund. In both portions of the Fund, we evaluate potential holdings against the measures of global competitiveness. Together, the essential criteria for such an evaluation determine the fundamental soundness of almost any value stock. Two key elements are important. First, the security must be selling at a discount based on its own history as well as the overall global market, based on a value with estimated earnings that do not reflect cyclical factors. Second, the securities may be either domestic or global, as long as we believe they are not in any competitive disadvantage world-wide.
At the end of the fiscal year, approximately 40% of Fund assets were invested in domestic securities, with the remaining holdings domiciled in various countries. France and the United Kingdom were our two largest country allocations after the U.S., at approximately 13% and 11%, respectively.
The market environment posed significant challenges for all investors, including value investors, during the fiscal period. At the end of the fiscal year, many stocks were trading at depressed valuations, and we resisted the temptation to buy stocks simply because their prices were comparatively low. When evaluating new stocks for the Fund, we plan to buy only from companies in financially solid shape with potential to benefit from a stock market recovery.
9
Portfolio management review
Delaware Global Value Fund
Our long-term approach to investing focuses on the benefits of investing in strong, market-leading companies that we believe are well positioned to survive the many challenges ahead.
At the end of the period, we found it notable that in three of the four quarters of the recent fiscal year, the market had favored value stocks over their growth counterparts. Although we had no guarantee that value stocks would continue to outperform, the fiscal period performance fit a pattern investors have seen before, with the value investment style generally benefiting more than the growth investing market after a long bull market period and subsequent decline.
| Fund basics | |||
| Delaware Global Value Fund | As of Nov. 30, 2008 | ||
| Fund objective: | The Fund seeks long-term capital appreciation. | ||
| Total Fund net assets: | $38 million | ||
| Number of holdings: | 70 | ||
| Fund start date: | Dec. 19, 1997 | ||
| Nasdaq symbols | CUSIPs | ||||
| Class A | DABAX | 245914718 | |||
| Class B | DABBX | 245914692 | |||
| Class C | DABCX | 245914684 | |||
| Institutional Class | DABIX | 245914676 |
10
| Performance summaries | |
| Delaware International Value Equity Fund | Nov. 30, 2008 |
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 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 International Value Equity Fund prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor 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 Nov. 30, 2008 | ||||||
| 1 year | 5 years | 10 years | Lifetime | ||||
| Class A (Est. Oct. 31, 1991) | |||||||
| Excluding sales charge | -48.60% | -0.23% | +1.33% | +4.81% | |||
| Including sales charge | -51.57% | -1.39% | +0.73% | +4.45% | |||
| Class B (Est. Sept. 6, 1994) | |||||||
| Excluding sales charge | -48.95% | -0.92% | +0.75% | +2.96% | |||
| Including sales charge | -50.90% | -1.20% | +0.75% | +2.96% | |||
| Class C (Est. Nov. 29, 1995) | |||||||
| Excluding sales charge | -49.01% | -0.92% | +0.63% | +2.90% | |||
| Including sales charge | -49.50% | -0.92% | +0.63% | +2.90% | |||
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” table. (Note that all charts and graphs referred to in the “Performance summaries” section of this report are found on pages 11 through 13.) 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.
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
11
Performance summaries
Delaware International Value Equity Fund
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.
Please see the fee table in the prospectus and your financial professional for a more complete explanation of sales charges.
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 but such fee is subject to a contractual cap of 0.50% of average daily net assets.
The average annual total returns for the 1-year, 5-year, and lifetime (since June 2, 2003) periods ended Nov. 30, 2008, for Delaware International Value Equity Fund Class R shares were -48.70%, -0.45%, and +2.36%, respectively.
The average annual total returns for the 1-year, 5-year, 10-year, and lifetime periods ended Nov. 30, 2008, for Delaware International Value Equity Fund Institutional Class shares were -48.44%, +0.07%, +1.63%, and +5.10%, respectively. Institutional Class shares were first made available Nov. 9, 1992, and are available without sales or asset-based distribution charges only to certain eligible institutional accounts. The Institutional Class lifetime performance includes performance prior to Nov. 9, 1992, which is based on Class A performance and was adjusted to eliminate the sales charges, but not the asset-based distribution charge of Class A shares.
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.
In addition to the normal risks associated with investing, international investments are subject to risks not ordinarily associated with U.S. investments including capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or from economic or political instability in other nations.
The Fund‘s expense ratios, as described in the most recent prospectus, are disclosed in the “Fund expense ratios” table. Management has contracted to reimburse certain expenses and/or waive its management fees from April 1, 2008, through March 31, 2009. Please see the most recent prospectus for additional information on the fee waivers.
| Fund expense ratios | Class A | Class B | Class C | Class R | Institutional Class | ||||||||
| Total annual operating expenses | 1.40 | % | 2.10 | % | 2.10 | % | 1.70 | % | 1.10% | ||||
| (without fee waivers) | |||||||||||||
| Net expense ratio | 1.40 | % | 2.10 | % | 2.10 | % | 1.60 | % | 1.10% | ||||
| (including fee waivers, if any)* | |||||||||||||
* The applicable fee waivers are discussed in the text on pages 11 and 12. | |||||||||||||
12
Performance of a $10,000 Investment
Average annual total returns from Nov. 30, 1998, through Nov. 30, 2008
| For period beginning Nov. 30, 1998, through Nov. 30, 2008 | Starting value | Ending value | ||||||
| Delaware International Value Equity Fund — Class A Shares | $9,425 | $10,759 | ||||||
| MSCI EAFE Index (gross) | $10,000 | $11,024 | ||||||
| MSCI EAFE Index (net) | $10,000 | $10,615 | ||||||
The chart assumes $10,000 invested in the Fund on Nov. 30, 1998, 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 11 through 13.
The chart also assumes $10,000 invested in the MSCI EAFE Index as of Nov. 30, 1998. The MSCI EAFE Index measures equity market performance across developed market countries in Europe, Australasia, and the Far East. Index “gross” return reflects the maximum possible dividend reinvestment. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. 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 chart does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares.
13
| Performance summaries | |
Delaware Emerging Markets Fund | Nov. 30, 2008 |
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 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 Emerging Markets Fund prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor 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 Nov. 30, 2008 | |||||||||
| 1 year | 5 years | 10 years | Lifetime | |||||||
| Class A (Est. June 10, 1996) | ||||||||||
| Excluding sales charge | -53.37% | +8.40% | +10.37 | % | +5.21% | |||||
| Including sales charge | -56.06% | +7.13% | +9.71 | % | +4.72% | |||||
| Class B (Est. June 10, 1996) | ||||||||||
| Excluding sales charge | -53.76% | +7.61% | +9.71 | % | +4.73% | |||||
| Including sales charge | -55.15% | +7.36% | +9.71 | % | +4.73% | |||||
| Class C (Est. June 10, 1996) | ||||||||||
| Excluding sales charge | -53.75% | +7.59% | +9.55 | % | +4.44% | |||||
| Including sales charge | -54.09% | +7.59% | +9.55 | % | +4.44% | |||||
Class R shares had not commenced operations as of Nov. 30, 2008.
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” table. (Note that all charts and graphs referred to in the “Performance summaries” section of this report are found on pages 14 through 16.) Performance would have been lower had the expense limitation not been in effect.
The Fund offers Class A, B, C, 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.
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
14
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.
Please see the fee table in the prospectus and your financial professional for a more complete explanation of sales charges.
The average annual total returns for the 1-year, 5-year, 10-year, and lifetime (since June 10, 1996) periods ended Nov. 30, 2008, for Delaware Emerging Markets Fund Institutional Class shares were -53.30%, +8.66%, +10.65%, and +5.50%, respectively. Institutional Class shares were first made available June 10, 1996, 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.
In addition to the normal risks associated with investing, international investments are subject to risks not ordinarily associated with U.S. investments including capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or from economic or political instability in other nations.
Investing in emerging markets can be riskier than investing in well-established foreign markets.
The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the “Fund expense ratios” table. Management has contracted to reimburse certain expenses and/or waive its management fees from April 1, 2008, through March 31, 2009. Please see the most recent prospectus for additional information on the fee waivers.
| Fund expense ratios | Class A | Class B | Class C | Class R | Institutional Class | ||||||||
| Total annual operating expenses | 2.02 | % | 2.72 | % | 2.72 | % | 2.32 | % | 1.72% | ||||
| (without fee waivers) | |||||||||||||
| Net expense ratio | 1.97 | % | 2.72 | % | 2.72 | % | 2.22 | % | 1.72% | ||||
| (including fee waivers, if any)* | |||||||||||||
* The applicable fee waivers are discussed in the text on pages 14 and 15. | |||||||||||||
15
Performance summaries
Delaware Emerging Markets Fund
Performance of a $10,000 Investment
Average annual total returns from Nov. 30, 1998, through Nov. 30, 2008
| For period beginning Nov. 30, 1998, through Nov. 30, 2008 | Starting value | Ending value | ||||
| Delaware Emerging Markets Fund — Class A Shares | $9,425 | $25,272 | ||||
| MSCI Emerging Markets Index (gross) | $10,000 | $22,257 | ||||
| MSCI Emerging Markets Index (net) | $10,000 | $21,676 | ||||
The chart assumes $10,000 invested in the Fund on Nov. 30, 1998, 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 14 through 16.
The chart also assumes $10,000 invested in the MSCI Emerging Markets Index as of Nov. 30, 1998. The MSCI Emerging Markets Index, sometimes also referred to as the MSCI Emerging Markets Free Index, measures equity market performance across emerging market countries world-wide. Index “gross” return reflects the maximum possible dividend reinvestment. Index “net” return approximates the minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. 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 chart does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares.
16
| Delaware Global Value Fund | Nov. 30, 2008 |
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 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 Global Value Fund prospectus contains this and other important information about the investment company. Please request a prospectus through your financial advisor 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 Nov. 30, 2008 | |||||||||
| 1 year | 5 years | 10 years | Lifetime | |||||||
| Class A (Est. Dec. 19, 1997) | ||||||||||
| Excluding sales charge | -48.12% | +0.71% | +3.70 | % | +3.91% | |||||
| Including sales charge | -51.10% | -0.47% | +3.08 | % | +3.35% | |||||
| Class B (Est. Sept. 28, 2001) | ||||||||||
| Excluding sales charge | -48.51% | -0.06% | n/ | a | +3.67% | |||||
| Including sales charge | -50.47% | -0.36% | n/ | a | +3.67% | |||||
| Class C (Est. Sept. 28, 2001) | ||||||||||
| Excluding sales charge | -48.51% | -0.03% | n/ | a | +3.69% | |||||
| Including sales charge | -49.00% | -0.03% | n/ | a | +3.69% | |||||
Class R shares had not commenced operations as of Nov. 30, 2008.
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 expenses” chart. (Note that all charts and graphs referred to in the “Performance summaries” section of this report are found on pages 17 through 19.) Performance would have been lower had the expense limitation not been in effect.
The Fund offers Class A, B, C, 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.
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
17
Performance summaries
Delaware Global Value Fund
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.
Please see the fee table in the prospectus and your financial professional for a more complete explanation of sales charges.
The average annual total returns for the 1-year, 5-year, 10-year, and lifetime (since Dec. 19, 1997) periods ended Nov. 30, 2008, for Delaware Global Value Fund Institutional Class shares were -48.03%, +0.96%, +3.89%, and +4.09%, respectively. Institutional Class shares were first made available Dec. 19, 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.
In addition to the normal risks associated with investing, international investments are subject to risks not ordinarily associated with U.S. investments including capital loss from unfavorable fluctuation in currency values, differences in generally accepted accounting principles, or from economic or political instability in other nations.
The Fund’s expense ratios, as described in the most recent prospectus, are disclosed in the “Fund expense ratios” table. Management has contracted to reimburse certain expenses and/or waive its management fees from April 1, 2008, through March 31, 2009. Please see the most recent prospectus for additional information on the fee waivers.
| Fund expense ratios | Class A | Class B | Class C | Class R | Institutional Class | |||||||||
| Total annual operating expenses | 1.57 | % | 2.27 | % | 2.27 | % | 1.87 | % | 1.27% | |||||
| (without fee waivers) | ||||||||||||||
| Net expense ratio | 1.45 | % | 2.20 | % | 2.20 | % | 1.70 | % | 1.20% | |||||
| (including fee waivers, if any)* | ||||||||||||||
* The applicable fee waivers are discussed in the text on pages 17 and 18. | ||||||||||||||
18
Performance of a $10,000 Investment
Average annual total returns from Nov. 30, 1998, through Nov. 30, 2008
| For period beginning Nov. 30, 1998, through Nov. 30, 2008 | Starting value | Ending value | ||||||
| Delaware Global Value Fund — Class A Shares | $9,425 | $13,550 | ||||||
| MSCI ACWI Index (gross) | $10,000 | $10,328 | ||||||
| MSCI ACWI Index (net) | $10,000 | $9,668 | ||||||
| MSCI World Index (net) | $10,000 | $9,534 | ||||||
As of April 1, 2008, the MSCI World Index replaced the MSCI ACWI (All Country World Index) Index as the Fund’s benchmark. The investment manager believes the MSCI World Index is a more accurate benchmark of the Fund’s investments. The MSCI ACWI Index may be excluded from this comparison in the future.
The chart assumes $10,000 invested in the Fund on Nov. 30, 1998, 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 17 through 19.
The chart also assumes $10,000 invested in the MSCI World Index and the MSCI ACWI Index as of Nov. 30, 1998. The MSCI World Index is a free float-adjusted market capitalization weighted index designed to measure equity market performance across developed markets world-wide. The MSCI ACWI Index is a free float-adjusted market capitalization index that is designed to measure equity market performance across developed and emerging markets world-wide. Index “gross” return reflects the maximum possible dividend reinvestment. Index “net” return reflects minimum possible dividend reinvestment, after deduction of withholding tax at the highest possible rate. 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 chart does not reflect the deduction of taxes the shareholders would pay on Fund distributions or redemptions of Fund shares.
19
Disclosure of Fund expenses
For the period June 1, 2008 to November 30, 2008
As a shareholder of a 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. These following examples are intended to help you understand your ongoing costs (in dollars) of investing in a Fund 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 June 1, 2008 to November 30, 2008.
Actual expenses
The first section of the tables 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 tables shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Funds’ actual expense ratio(s) and an assumed rate of return of 5% per year before expenses, which is not the Funds’ 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 tables 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 each 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.
20
The Fund’s expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
“Expenses Paid During Period” are equal to the Funds’ annualized expense ratio, multiplied by the average account value over the period, multiplied by 183/366 (to reflect the one-half year period).
Delaware International Value Equity Fund
Expense analysis of an investment of $1,000
| Beginning | Ending | Expenses | |||||||||
| Account Value | Account Value | Annualized | Paid During Period | ||||||||
| 6/1/08 | 11/30/08 | Expense Ratio | 6/1/08 to 11/30/08 | ||||||||
| Actual Fund Return | |||||||||||
| Class A | $ | 1,000.00 | $ | 555.80 | 1.40% | $ | 5.45 | ||||
| Class B | 1,000.00 | 553.80 | 2.10% | 8.16 | |||||||
| Class C | 1,000.00 | 554.30 | 2.10% | 8.16 | |||||||
| Class R | 1,000.00 | 555.30 | 1.60% | 6.22 | |||||||
| Institutional Class | 1,000.00 | 556.50 | 1.10% | 4.28 | |||||||
| Hypothetical 5% return (5% return before expenses) | |||||||||||
| Class A | $ | 1,000.00 | $ | 1,018.00 | 1.40% | $ | 7.06 | ||||
| Class B | 1,000.00 | 1,014.50 | 2.10% | 10.58 | |||||||
| Class C | 1,000.00 | 1,014.50 | 2.10% | 10.58 | |||||||
| Class R | 1,000.00 | 1,017.00 | 1.60% | 8.07 | |||||||
| Institutional Class | 1,000.00 | 1,019.50 | 1.10% | 5.55 | |||||||
Delaware Emerging Markets Fund
Expense analysis of an investment of $1,000
| Beginning | Ending | Expenses | |||||||||
| Account Value | Account Value | Annualized | Paid During Period | ||||||||
| 6/1/08 | 11/30/08 | Expense Ratio | 6/1/08 to 11/30/08 | ||||||||
| Actual Fund Return | |||||||||||
| Class A | $ | 1,000.00 | $ | 459.30 | 1.87% | $ | 6.82 | ||||
| Class B | 1,000.00 | 457.60 | 2.62% | 9.55 | |||||||
| Class C | 1,000.00 | 457.50 | 2.62% | 9.55 | |||||||
| Institutional Class | 1,000.00 | 459.60 | 1.62% | 5.91 | |||||||
| Hypothetical 5% return (5% return before expenses) | |||||||||||
| Class A | $ | 1,000.00 | $ | 1,015.65 | 1.87% | $ | 9.42 | ||||
| Class B | 1,000.00 | 1,011.90 | 2.62% | 13.18 | |||||||
| Class C | 1,000.00 | 1,011.90 | 2.62% | 13.18 | |||||||
| Institutional Class | 1,000.00 | 1,016.90 | 1.62% | 8.17 | |||||||
21
Disclosure of Fund expenses
Delaware Global Value Fund
Expense analysis of an investment of $1,000
| Beginning | Ending | Expenses | |||||||||
| Account Value | Account Value | Annualized | Paid During Period | ||||||||
| 6/1/08 | 11/30/08 | Expense Ratio | 6/1/08 to 11/30/08 | ||||||||
| Actual Fund Return | |||||||||||
| Class A | $ | 1,000.00 | $ | 554.80 | 1.45% | $ | 5.64 | ||||
| Class B | 1,000.00 | 552.80 | 2.20% | 8.54 | |||||||
| Class C | 1,000.00 | 552.70 | 2.20% | 8.54 | |||||||
| Institutional Class | 1,000.00 | 555.60 | 1.20% | 4.67 | |||||||
| Hypothetical 5% return (5% return before expenses) | |||||||||||
| Class A | $ | 1,000.00 | $ | 1,017.75 | 1.45% | $ | 7.31 | ||||
| Class B | 1,000.00 | 1,014.00 | 2.20% | 11.08 | |||||||
| Class C | 1,000.00 | 1,014.00 | 2.20% | 11.08 | |||||||
| Institutional Class | 1,000.00 | 1,019.00 | 1.20% | 6.06 | |||||||
22
| Country and sector allocations | |
| Delaware International Value Equity | As of November 30, 2008 |
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.
| Composition of Portfolio | Percentage of net assets | |
| Common Stock by Country | 98.95 | % |
| Australia | 6.02 | % |
| Canada | 3.54 | % |
| Denmark | 2.48 | % |
| Finland | 2.48 | % |
| France | 20.68 | % |
| Germany | 8.28 | % |
| Hong Kong | 0.90 | % |
| Italy | 2.22 | % |
| Japan | 15.14 | % |
| Netherlands | 2.94 | % |
| Norway | 0.67 | % |
| Republic of Korea | 2.14 | % |
| Singapore | 1.38 | % |
| Sweden | 3.93 | % |
| Switzerland | 2.87 | % |
| Taiwan | 3.15 | % |
| United Kingdom | 20.13 | % |
| Rights | 0.22 | % |
| Repurchase Agreement | 1.98 | % |
| Securities Lending Collateral | 24.48 | % |
| Total Value of Securities | 125.63 | % |
| Obligation to Return Securities Lending Collateral | (25.52 | %) |
| Liabilities Net of Receivables and Other Assets | (0.11 | %) |
| Total Net Assets | 100.00 | % |
23
Country and sector allocations
| Common Stock and Rights by Sector | Percentage of net assets | |
| Consumer Discretionary | 14.25 | % |
| Consumer Staples | 8.78 | % |
| Energy | 8.86 | % |
| Financials | 8.75 | % |
| Health Care | 12.15 | % |
| Industrials | 15.22 | % |
| Information Technology | 12.48 | % |
| Materials | 3.03 | % |
| Telecommunication Services | 11.74 | % |
| Utilities | 3.91 | % |
| Total | 99.17 | % |
24
| Delaware Emerging Markets Fund | As of November 30, 2008 |
Sector designations may differ from 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.
| Composition of Portfolio | Percentage of net assets | |
| Common Stock by Country | 93.38 | % |
| Argentina | 2.18 | % |
| Australia | 0.08 | % |
| Brazil | 14.13 | % |
| China | 11.50 | % |
| Colombia | 0.49 | % |
| France | 0.52 | % |
| Hungary | 0.40 | % |
| India | 1.40 | % |
| Indonesia | 1.29 | % |
| Israel | 0.64 | % |
| Kazakhstan | 1.51 | % |
| Malaysia | 4.07 | % |
| Mexico | 3.61 | % |
| Pakistan | 0.42 | % |
| Peru | 0.87 | % |
| Philippines | 0.91 | % |
| Poland | 1.24 | % |
| Republic of Korea | 13.11 | % |
| Russia | 7.11 | % |
| South Africa | 9.22 | % |
| Taiwan | 9.15 | % |
| Thailand | 2.85 | % |
| Turkey | 5.03 | % |
| United Kingdom | 1.12 | % |
| United States | 0.53 | % |
| Preferred Stock by Country | 6.91 | % |
| Brazil | 4.45 | % |
| Republic of Korea | 2.10 | % |
| Russia | 0.36 | % |
25
Country and sector allocations
| Composition of Portfolio | Percentage of net assets | |
| Participation Notes | 0.93 | % |
| Securities Lending Collateral | 10.18 | % |
| Total Value of Securities | 111.40 | % |
| Obligation to Return Securities Lending Collateral | (10.57 | %) |
| Liabilities Net of Receivables and Other Assets | (0.83 | %) |
| Total Net Assets | 100.00 | % |
| Common, Preferred Stock and Participation Notes by Sector | ||
| Consumer Discretionary | 5.02 | % |
| Consumer Staples | 6.40 | % |
| Energy | 23.09 | % |
| Financials | 8.94 | % |
| Industrials | 8.74 | % |
| Information Technology | 8.97 | % |
| Materials | 14.79 | % |
| Telecommunication Services | 14.30 | % |
| Utilities | 10.97 | % |
| Total | 101.22 | % |
26
| Delaware Global Value Fund | As of November 30, 2008 |
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.
| Composition of Portfolio | Percentage of net assets | |
| Common Stock by Country | 99.65 | % |
| Australia | 3.22 | % |
| Canada | 2.31 | % |
| Denmark | 1.59 | % |
| Finland | 1.43 | % |
| France | 13.34 | % |
| Germany | 5.52 | % |
| Italy | 2.05 | % |
| Japan | 8.90 | % |
| Netherlands | 1.85 | % |
| Norway | 0.65 | % |
| Republic of Korea | 1.26 | % |
| Singapore | 0.73 | % |
| Sweden | 2.31 | % |
| Switzerland | 1.58 | % |
| Taiwan | 2.11 | % |
| United Kingdom | 10.98 | % |
| United States | 39.82 | % |
| Rights | 0.14 | % |
| Repurchase Agreement | 0.83 | % |
| Securities Lending Collateral | 19.84 | % |
| Total Value of Securities | 120.46 | % |
| Obligation to Return Securities Lending Collateral | (20.74 | %) |
| Receivables and Other Assets Net of Liabilities | 0.28 | % |
| Total Net Assets | 100.00 | % |
27
Country and sector allocations
| Common Stock and Rights by Sector | Percentage of net assets | |
| Consumer Discretionary | 12.89 | % |
| Consumer Staples | 9.46 | % |
| Energy | 9.88 | % |
| Financials | 6.23 | % |
| Health Care | 11.28 | % |
| Industrials | 15.88 | % |
| Information Technology | 16.23 | % |
| Materials | 6.68 | % |
| Telecommunication Services | 9.25 | % |
| Utilities | 2.01 | % |
| Total | 99.79 | % |
28
| Statements of net assets | |
| Delaware International Value Equity Fund | November 30, 2008 |
| Number of shares | Value (U.S. $) | ||||
| Common Stock – 98.95%D | |||||
| Australia – 6.02% | |||||
| * | Coca-Cola Amatil | 2,378,522 | $ | 13,466,853 | |
| Telstra | 3,732,085 | 9,917,915 | |||
| 23,384,768 | |||||
| Canada – 3.54% | |||||
| † | CGI Group Class A | 1,736,780 | 13,731,208 | ||
| 13,731,208 | |||||
| Denmark – 2.48% | |||||
| Novo Nordisk Class B | 188,276 | 9,630,979 | |||
| 9,630,979 | |||||
| Finland – 2.48% | |||||
| Nokia | 682,759 | 9,616,561 | |||
| 9,616,561 | |||||
| France – 20.68% | |||||
| * | AXA | 377,963 | 7,176,477 | ||
| * | Cie de Saint-Gobain | 161,961 | 6,465,106 | ||
| France Telecom | 511,279 | 13,129,855 | |||
| * | Lafarge | 88,047 | 4,831,360 | ||
| * | Lagardere | 166,296 | 6,065,786 | ||
| * | PPR | 39,260 | 1,862,352 | ||
| * | Publicis Groupe | 228,569 | 5,300,770 | ||
| Sanofi-Aventis | 147,412 | 8,134,736 | |||
| * | Teleperformance | 357,843 | 8,535,106 | ||
| * | Total | 265,561 | 13,845,168 | ||
| * | Vallourec | 46,484 | 4,926,933 | ||
| 80,273,649 | |||||
| Germany – 8.28% | |||||
| Bayerische Motoren Werke | 243,670 | 6,090,430 | |||
| Deutsche Post | 888,959 | 12,684,566 | |||
| Linde | 95,770 | 6,939,145 | |||
| Metro | 209,383 | 6,408,838 | |||
| 32,122,979 | |||||
| Hong Kong – 0.90% | |||||
| * | Techtronic Industries | 11,399,500 | 3,485,838 | ||
| 3,485,838 | |||||
| Italy – 2.22% | |||||
| Parmalat | 5,343,670 | 8,619,145 | |||
| 8,619,145 | |||||
29
Statements of net assets
Delaware International Value Equity Fund
| Number of shares | Value (U.S. $) | ||||
| Common Stock (continued) | |||||
| Japan – 15.14% | |||||
| * | Asahi Glass | 1,016,900 | $ | 5,705,922 | |
| Canon | 287,339 | 8,497,591 | |||
| * | Don Quijote | 567,800 | 12,214,902 | ||
| Mitsubishi UFJ Financial Group | 1,744,832 | 9,516,432 | |||
| * | NGK Spark Plug | 708,000 | 5,929,336 | ||
| Ono Pharmaceutical | 176,900 | 7,796,375 | |||
| * | Round One | 7,751 | 3,655,404 | ||
| Toyota Motor | 173,000 | 5,433,131 | |||
| 58,749,093 | |||||
| Netherlands – 2.94% | |||||
| ING Groep CVA | 479,473 | 4,019,101 | |||
| Koninklijke Philips Electronics | 456,707 | 7,401,320 | |||
| 11,420,421 | |||||
| Norway – 0.67% | |||||
| *† | Petroleum Geo-Services | 583,261 | 2,605,068 | ||
| 2,605,068 | |||||
| Republic of Korea – 2.14% | |||||
| Samsung Electronics | 25,107 | 8,306,391 | |||
| 8,306,391 | |||||
| Singapore – 1.38% | |||||
| Singapore Airlines | 780,142 | 5,361,624 | |||
| 5,361,624 | |||||
| Sweden – 3.93% | |||||
| * | Ericsson LM Class B | 1,167,100 | 8,305,376 | ||
| Nordea Bank | 966,731 | 6,939,218 | |||
| 15,244,594 | |||||
| Switzerland – 2.87% | |||||
| Novartis | 239,971 | 11,170,638 | |||
| 11,170,638 | |||||
| Taiwan – 3.15% | |||||
| * | Chunghwa Telecom ADR | 781,599 | 12,224,212 | ||
| 12,224,212 | |||||
| United Kingdom – 20.13% | |||||
| AstraZeneca | 277,154 | 10,432,221 | |||
| BP | 2,208,822 | 17,935,088 | |||
| Greggs | 113,436 | 5,601,587 | |||
| National Grid | 1,456,623 | 15,182,635 | |||
| * | Standard Chartered | 417,992 | 5,438,759 | ||
| Tomkins | 4,731,145 | 7,982,015 | |||
30
| Number of shares | Value (U.S. $) | |||||
| Common Stock (continued) | ||||||
| United Kingdom (continued) | ||||||
| * | Vodafone Group | 5,258,152 | $ | 10,301,055 | ||
| † | WPP Group | 947,121 | 5,260,692 | |||
| 78,134,052 | ||||||
| Total Common Stock (cost $623,347,795) | 384,081,220 | |||||
| Rights – 0.22% | ||||||
| United Kingdom – 0.22% | ||||||
| Standard Chartered | 137,800 | 862,528 | ||||
| Total Rights (cost $0) | 862,528 | |||||
| Principal | ||||||
| amount (U.S. $) | ||||||
| Repurchase Agreement** – 1.98% | ||||||
| BNP Paribas 0.20%, dated 11/28/08, to be repurchased | ||||||
| on 12/1/08, repurchase price $7,671,128 | ||||||
| (collateralized by U.S. Government obligations, | ||||||
| 6/4/09; market value $7,925,444) | $7,671,000 | 7,671,000 | ||||
| Total Repurchase Agreement (cost $7,671,000) | 7,671,000 | |||||
| Total Value of Securities Before Securities Lending | ||||||
| Collateral – 101.15% (cost $631,018,795) | 392,614,748 | |||||
| Number of shares | ||||||
| Securities Lending Collateral*** – 24.48% | ||||||
| Investment Companies | ||||||
| Mellon GSL DBT II Collateral Fund | 97,521,189 | 94,927,125 | ||||
| =Mellon GSL DBT II Liquidation Trust | 1,554,050 | 127,432 | ||||
| Total Securities Lending Collateral | ||||||
| (cost $99,075,239) | 95,054,557 | |||||
| Total Value of Securities – 125.63% | ||||||
| (cost $730,094,034) | 487,669,305 | © | ||||
| Obligation to Return Securities Lending | ||||||
| Collateral*** – (25.52%) | (99,075,239 | ) | ||||
| Liabilities Net of Receivables and | ||||||
| Other Assets – (0.11%) | (424,213 | ) | ||||
| Net Assets Applicable to 47,849,855 | ||||||
| Shares Outstanding – 100.00% | $ | 388,169,853 | ||||
31
Statements of net assets
Delaware International Value Equity Fund
| Net Asset Value – Delaware International Value Equity Fund | |||||
| Class A ($178,071,310 / 21,932,030 Shares) | $8.12 | ||||
| Net Asset Value – Delaware International Value Equity Fund | |||||
| Class B ($11,227,180 / 1,407,290 Shares) | $7.98 | ||||
| Net Asset Value – Delaware International Value Equity Fund | |||||
| Class C ($51,420,206 / 6,456,054 Shares) | $7.96 | ||||
| Net Asset Value – Delaware International Value Equity Fund | |||||
| Class R ($1,259,471 / 155,943 Shares) | $8.08 | ||||
| Net Asset Value – Delaware International Value Equity Fund | |||||
| Institutional Class ($146,191,686 / 17,898,538 Shares) | $8.17 | ||||
| Components of Net Assets at November 30, 2008: | |||||
| Shares of beneficial interest (unlimited authorization – no par) | $ | 714,512,389 | |||
| Undistributed net investment income | 14,205,784 | ||||
| Accumulated net realized loss on investments | (98,193,415 | ) | |||
| Net unrealized depreciation of investments and foreign currencies | (242,354,905 | ) | |||
| Total net assets | $ | 388,169,853 | |||
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 24 in “Country and sector allocations.” |
| † | Non income producing security. |
| = | Security is being fair valued in accordance with the Fund’s fair valuation policy. At November 30, 2008, the aggregate amount of fair valued securities was $127,432, which represented 0.30% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
| * | Fully or partially on loan. |
| ** | See Note 1 in “Notes to financial statements.” |
| *** | See Note 9 in “Notes to financial statements.” |
| © | Includes $93,363,469 of securities loaned. |
Summary of Abbreviations:
ADR — American Depositary Receipts
CVA — Dutch Certificate
32
| Net Asset Value and Offering Price Per Share – | |||
| Delaware International Value Equity Fund | |||
| Net asset value Class A (A) | $ | 8.12 | |
| Sales charge (5.75% of offering price) (B) | 0.50 | ||
| Offering price | $ | 8.62 | |
| (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 purchases of $50,000 or more. |
See accompanying notes
33
| Statements of net assets | |
| Delaware Emerging Markets Fund | November 30, 2008 |
| Number of shares | Value (U.S. $) | ||||
| Common Stock – 93.38%D | |||||
| Argentina – 2.18% | |||||
| * | Cresud ADR | 896,200 | $ | 5,699,832 | |
| #† | Grupo Clarin Class B GDR 144A | 353,200 | 717,137 | ||
| *† | Grupo Financiero Galicia ADR | 29,313 | 55,695 | ||
| * | IRSA Inversiones y Representaciones GDR | 358,400 | 1,340,416 | ||
| 7,813,080 | |||||
| Australia – 0.08% | |||||
| *† | Alara Resources | 200,832 | 3,944 | ||
| *† | Strike Resources | 1,398,730 | 270,084 | ||
| 274,028 | |||||
| Brazil – 14.13% | |||||
| AES Tiete | 597,480 | 3,449,818 | |||
| Centrais Eletricas Brasileiras | 1,947,871 | 22,536,092 | |||
| * | Cia Siderurgica Nacional ADR | 126,800 | 1,460,736 | ||
| Cia Vale do Rio Doce ADR | 250,000 | 2,985,000 | |||
| * | Gol Linhas Aereas Inteligentes ADR | 125,100 | 490,392 | ||
| † | Lupatech | 22,400 | 179,904 | ||
| Petroleo Brasileiro ADR | 841,600 | 14,963,648 | |||
| *† | Tim Participacoes ADR | 155,000 | 2,666,000 | ||
| † | Triunfo Participacoes e Investimentos | 109,600 | 57,097 | ||
| * | Votorantim Celulose e Papel ADR | 334,058 | 1,857,362 | ||
| 50,646,049 | |||||
| China – 11.50%o | |||||
| † | 51job ADR | 118,300 | 832,832 | ||
| China Shenhua Energy | 1,036,000 | 1,938,210 | |||
| * | China Shipping Development | 578,000 | 477,288 | ||
| * | China Telecom | 10,708,581 | 4,075,933 | ||
| * | China Unicom | 6,734,979 | 8,307,441 | ||
| * | China Unicom ADR | 475,945 | 5,877,921 | ||
| CNPC Hong Kong | 6,783,100 | 2,126,707 | |||
| First Pacific | 4,204,000 | 1,648,957 | |||
| *† | Focus Media Holding ADR | 59,100 | 441,477 | ||
| Fountain Set Holdings | 3,878,800 | 123,113 | |||
| PetroChina | 4,242,000 | 3,497,394 | |||
| PetroChina ADR | 89,200 | 7,366,136 | |||
| Sinotrans | 7,561,000 | 1,024,334 | |||
| *† | Spreadtrum Communications ADR | 213,900 | 156,147 | ||
| † | Tom Group | 47,824,000 | 1,758,587 | ||
| Travelsky Technology | 4,849,400 | 1,557,975 | |||
| 41,210,452 | |||||
34
| Number of shares | Value (U.S. $) | ||||
| Common Stock (continued) | |||||
| Colombia – 0.49% | |||||
| # | Almacenes Exito GDR 144A | 496,600 | $ | 1,741,874 | |
| 1,741,874 | |||||
| France – 0.52% | |||||
| Vallourec | 17,646 | 1,870,335 | |||
| 1,870,335 | |||||
| Hungary – 0.40% | |||||
| * | OTP Bank | 99,702 | 1,446,198 | ||
| 1,446,198 | |||||
| India – 1.40% | |||||
| † | Indiabulls Real Estate GDR | 102,022 | 181,599 | ||
| *# | Reliance Industries GDR 144A | 100,612 | 4,628,152 | ||
| † | Sify Technologies ADR | 179,300 | 207,988 | ||
| 5,017,739 | |||||
| Indonesia – 1.29% | |||||
| Gudang Garam | 7,494,224 | 2,695,425 | |||
| Tambang Batubara Bukit Asam | 3,349,335 | 1,921,862 | |||
| 4,617,287 | |||||
| Israel – 0.64% | |||||
| Israel Chemicals | 391,980 | 2,281,734 | |||
| 2,281,734 | |||||
| Kazakstan – 1.51% | |||||
| KazMunaiGas Exploration Production GDR | 402,441 | 5,396,734 | |||
| 5,396,734 | |||||
| Malaysia – 4.07% | |||||
| Eastern & Oriental | 3,251,700 | 466,644 | |||
| Hong Leong Bank | 3,780,883 | 5,217,171 | |||
| KLCC Property Holdings | 3,244,600 | 2,453,485 | |||
| Media Prima | 2,218,400 | 581,614 | |||
| Oriental Holdings | 2,064,900 | 2,826,523 | |||
| Tanjong | 610,990 | 2,107,734 | |||
| † | UEM Land Holdings | 6,004,250 | 944,507 | ||
| 14,597,678 | |||||
| Mexico – 3.61% | |||||
| America Movil Series L ADR | 75,400 | 2,262,000 | |||
| † | Bolsa Mexicana de Valores | 823,088 | 486,047 | ||
| * | Cemex ADR | 359,073 | 2,495,557 | ||
| Fomento Economico Mexicano ADR | 43,500 | 1,196,685 | |||
35
Statements of net assets
Delaware Emerging Markets Fund
| Number of shares | Value (U.S. $) | ||||
| Common Stock (continued) | |||||
| Mexico (continued) | |||||
| Grupo Mexico Series B | 3,324,018 | $ | 2,066,978 | ||
| Grupo Televisa ADR | 296,900 | 4,411,934 | |||
| 12,919,201 | |||||
| Pakistan – 0.42% | |||||
| Oil & Gas Development GDR | 126,418 | 1,513,489 | |||
| 1,513,489 | |||||
| Peru – 0.87% | |||||
| Cia de Minas Buenaventura ADR | 173,891 | 3,130,038 | |||
| 3,130,038 | |||||
| Philippines – 0.91% | |||||
| * | Philippine Long Distance Telephone ADR | 67,800 | 3,251,010 | ||
| 3,251,010 | |||||
| Poland – 1.24% | |||||
| Polski Koncern Naftowy Orlen | 508,409 | 4,452,919 | |||
| 4,452,919 | |||||
| Republic of Korea – 13.11% | |||||
| CJ | 80,144 | 1,647,628 | |||
| Hyundai Elevator | 40,821 | 1,417,213 | |||
| *† | KB Financial Group ADR | 100,800 | 2,055,312 | ||
| Korea Electric Power | 220,420 | 4,178,857 | |||
| Korea Electric Power ADR | 749,400 | 6,969,420 | |||
| KT | 213,064 | 4,837,124 | |||
| KT ADR | 10,400 | 117,936 | |||
| *† | LG Display ADR | 214,900 | 1,515,045 | ||
| Lotte Confectionery | 4,632 | 3,862,655 | |||
| Samsung Electronics | 37,449 | 12,389,613 | |||
| SK Communications | 171,609 | 543,218 | |||
| † | SK Energy | 63,751 | 2,951,054 | ||
| SK Holdings | 16,519 | 967,082 | |||
| SK Telecom | 21,731 | 3,217,513 | |||
| SK Telecom ADR | 19,300 | 312,853 | |||
| 46,982,523 | |||||
| Russia – 7.11% | |||||
| *† | Chelyabinsk Zink Plant GDR | 143,300 | 214,950 | ||
| † | CTC Media | 27,500 | 116,875 | ||
| =† | Fifth Power Generation GDR | 21,159 | 47,339 | ||
| * | Gazprom ADR | 567,932 | 9,666,203 | ||
| LUKOIL ADR | 101,920 | 3,261,440 | |||
36
| Number of shares | Value (U.S. $) | ||||
| Common Stock (continued) | |||||
| Russia (continued) | |||||
| * | LUKOIL ADR (London International Exchange) | 119,000 | $ | 3,784,200 | |
| Mobile TeleSystems ADR | 99,900 | 2,961,036 | |||
| Sberbank | 2,376,855 | 1,960,905 | |||
| Surgutneftegaz ADR | 471,754 | 3,014,508 | |||
| =† | TGK-5 GDR | 8,772 | 8,045 | ||
| Vimpelcom ADR | 45,700 | 434,150 | |||
| 25,469,651 | |||||
| South Africa – 9.22% | |||||
| ArcelorMittal Steel South Africa | 63,687 | 538,818 | |||
| Gold Fields ADR | 431,300 | 3,545,286 | |||
| Impala Platinum Holdings | 196,836 | 2,401,147 | |||
| JD Group | 723,137 | 2,155,539 | |||
| Pretoria Portland Cement | 1 | 3 | |||
| Sasol | 252,777 | 7,144,898 | |||
| Sasol ADR | 74,500 | 2,127,720 | |||
| Standard Bank Group | 707,810 | 6,028,743 | |||
| Sun International | 306,533 | 2,514,083 | |||
| Telkom | 493,044 | 4,947,416 | |||
| Tongaat Hulett | 328,651 | 1,632,747 | |||
| 33,036,400 | |||||
| Taiwan – 9.15% | |||||
| Cathay Financial Holding | 1,749,284 | 1,812,594 | |||
| Evergreen Marine | 15,768,000 | 7,719,430 | |||
| Formosa Chemicals & Fibre | 4,270,420 | 5,976,921 | |||
| President Chain Store | 1,898,884 | 4,448,504 | |||
| Taiwan Semiconductor Manufacturing | 3,977,248 | 4,873,756 | |||
| United Microelectronics | 13,595,356 | 3,307,475 | |||
| Walsin Lihwa | 24,255,000 | 4,647,752 | |||
| 32,786,432 | |||||
| Thailand – 2.85% | |||||
| Bangkok Bank–Foreign | 1,383,176 | 2,570,090 | |||
| PTT Exploration & Production–Foreign | 1,131,800 | 2,979,259 | |||
| Siam Cement NVDR | 1,843,843 | 4,671,899 | |||
| 10,221,248 | |||||
| Turkey – 5.03% | |||||
| Alarko Gayrimenkul Yatirim Ortakligi | 50,400 | 260,823 | |||
| Alarko Holding | 1,903,508 | 2,128,252 | |||
| Turk Sise ve Cam Fabrikalari | 3,561,828 | 2,457,689 | |||
37
Statements of net assets
Delaware Emerging Markets Fund
| Number of shares | Value (U.S. $) | ||||
| Common Stock (continued) | |||||
| Turkey (continued) | |||||
| Turkcell Iletisim Hizmet | 715,275 | $ | 4,044,328 | ||
| Turkcell Iletisim Hizmet ADR | 233,900 | 3,223,142 | |||
| Turkiye Is Bankasi Class C | 1,242,859 | 3,192,112 | |||
| Yazicilar Holding Class A | 832,584 | 2,712,866 | |||
| 18,019,212 | |||||
| United Kingdom – 1.12% | |||||
| * | Anglo American | 132,917 | 3,139,459 | ||
| ^ | Griffin Mining | 3,056,187 | 835,816 | ||
| † | Mwana Africa | 781,129 | 40,559 | ||
| 4,015,834 | |||||
| United States – 0.53% | |||||
| Freeport-McMoRan Copper & Gold | 59,300 | 1,422,607 | |||
| o† | HLS Systems International | 188,400 | 461,580 | ||
| 1,884,187 | |||||
| Total Common Stock (cost $609,390,639) | 334,595,332 | ||||
| Preferred Stock – 6.91%D | |||||
| Brazil – 4.45% | |||||
| Banco do Estado do Rio Grande do Sul | |||||
| Class B 11.56% | 678,900 | 1,738,918 | |||
| Braskem Class A 10.99% | 541,994 | 1,489,428 | |||
| * | Cia Vale do Rio Doce Class A 1.10% | 1,124,386 | 12,178,875 | ||
| Jereissati Participacoes 7.30% | 2,895,405 | 527,934 | |||
| 15,935,155 | |||||
| Republic of Korea – 2.10% | |||||
| Hyundai Motor 7.14% | 41,547 | 403,029 | |||
| Samsung Electronics 2.74% | 31,362 | 7,120,014 | |||
| 7,523,043 | |||||
| Russia – 0.36% | |||||
| Transneft 3.18% | 5,298 | 1,284,765 | |||
| 1,284,765 | |||||
| Total Preferred Stock (cost $37,992,727) | 24,742,963 | ||||
38
| Number of shares | Value (U.S. $) | ||||||
| Participation Notes – 0.93%D | |||||||
| India – 0.93% | |||||||
| =@# | Lehman Indian Oil CW12 144A | 172,132 | $ | 951,996 | |||
| =@# | Lehman Oil & Natural Gas CW12 144A | 254,590 | 2,375,437 | ||||
| Total Participation Notes (cost $8,559,056) | 3,327,433 | ||||||
| Total Value of Securities Before Securities Lending | |||||||
| Collateral – 101.22% (cost $655,942,422) | 362,665,728 | ||||||
| Securities Lending Collateral** – 10.18% | |||||||
| Investment Companies | |||||||
| Mellon GSL DBT II Collateral Fund | 37,472,977 | 36,476,196 | |||||
| =Mellon GSL DBT II Liquidation Trust | 396,304 | 32,497 | |||||
| Total Securities Lending Collateral | |||||||
| (cost $37,869,281) | 36,508,693 | ||||||
| Total Value of Securities – 111.40% | |||||||
| (cost $693,811,703) | 399,174,421 | © | |||||
| Obligation to Return Securities Lending | |||||||
| Collateral** – (10.57%) | (37,869,281 | ) | |||||
| Liabilities Net of Receivables and | |||||||
| Other Assets – (0.83%) | (2,970,670 | ) | |||||
| Net Assets Applicable to 45,606,015 | |||||||
| Shares Outstanding – 100.00% | $ | 358,334,470 | |||||
| Net Asset Value – Delaware Emerging Markets Fund | |||||||
| Class A ($213,581,407 / 26,915,173 Shares) | $7.94 | ||||||
| Net Asset Value – Delaware Emerging Markets Fund | |||||||
| Class B ($14,620,216 / 1,912,473 Shares) | $7.64 | ||||||
| Net Asset Value – Delaware Emerging Markets Fund | |||||||
| Class C ($84,435,861 / 11,067,097 Shares) | $7.63 | ||||||
| Net Asset Value – Delaware Emerging Markets Fund | |||||||
| Institutional Class ($45,696,986 / 5,711,272 Shares) | $8.00 | ||||||
| Components of Net Assets at November 30, 2008: | |||||||
| Shares of beneficial interest (unlimited authorization – no par) | $ | 618,365,253 | |||||
| Undistributed net investment income | 514,269 | ||||||
| Accumulated net realized gain on investments | 34,145,960 | ||||||
| Net unrealized depreciation of investments and foreign currencies | (294,691,012 | ) | |||||
| Total net assets | $ | 358,334,470 | |||||
39
Statements of net assets
Delaware Emerging Markets Fund
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 26 in “Country and sector allocations.” |
| * | Fully or partially on loan. |
| † | Non income producing security. |
| = | Security is being fair valued in accordance with the Fund’s fair valuation policy. At November 30, 2008, the aggregate amount of fair valued securities was $3,415,314, which represented 0.95% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
| o | Securities listed and traded on the Hong Kong Stock Exchange. |
| # | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At November 30, 2008, the aggregate amount of Rule 144A securities was $10,414,596, which represented 2.91% of the Fund’s net assets. See Note 10 in “Notes to financial statements.” |
| ^ | Holding is a Bermuda Company whose shares are listed and traded on the London Stock Exchange. |
| ** | See Note 9 in “Notes to financial statements.” |
| © | Includes $35,523,528 of securities loaned. |
| @ | Illiquid security. At November 30, 2008, the aggregate amount of illiquid securities was $3,327,433, which represented 0.93% of the Fund’s net assets. See Note 10 in “Notes to financial statements.” |
Summary of Abbreviations:
ADR — American Depositary Receipts
GDR — Global Depositary Receipts
NVDR — Non-Voting Depositary Receipts
| Net Asset Value and Offering Price Per Share – | |||
| Delaware Emerging Markets Fund | |||
| Net asset value Class A (A) | $ | 7.94 | |
| Sales charge (5.75% of offering price) (B) | 0.48 | ||
| Offering Price | $ | 8.42 |
| (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 purchases of $50,000 or more. |
See accompanying notes
40
| Delaware Global Value Fund | November 30, 2008 |
| Number of shares | Value (U.S. $) | ||||
| Common Stock – 99.65%D | |||||
| Australia – 3.22% | |||||
| Coca-Cola Amatil | 100,067 | $ | 566,565 | ||
| Telstra | 253,467 | 673,582 | |||
| 1,240,147 | |||||
| Canada – 2.31% | |||||
| † | CGI Group Class A | 112,290 | 887,779 | ||
| 887,779 | |||||
| Denmark – 1.59% | |||||
| * | Novo Nordisk Class B | 11,914 | 609,443 | ||
| 609,443 | |||||
| Finland – 1.43% | |||||
| Nokia | 39,115 | 550,929 | |||
| 550,929 | |||||
| France – 13.34% | |||||
| * | AXA | 24,836 | 471,567 | ||
| Cie de Saint-Gobain | 11,335 | 452,467 | |||
| France Telecom | 26,574 | 682,431 | |||
| * | Lafarge | 8,256 | 453,027 | ||
| Lagardere | 5,084 | 185,443 | |||
| * | PPR | 3,855 | 182,867 | ||
| Publicis Groupe | 14,197 | 329,244 | |||
| Sanofi-Aventis | 9,852 | 543,670 | |||
| * | Teleperformance | 24,344 | 580,642 | ||
| * | Total | 16,819 | 876,869 | ||
| Vallourec | 3,540 | 375,212 | |||
| 5,133,439 | |||||
| Germany – 5.52% | |||||
| Bayerische Motoren Werke | 14,622 | 365,471 | |||
| Deutsche Post | 50,832 | 725,322 | |||
| Linde | 8,080 | 585,447 | |||
| Metro | 14,590 | 446,574 | |||
| 2,122,814 | |||||
| Italy – 2.05% | |||||
| Parmalat | 488,493 | 787,921 | |||
| 787,921 | |||||
| Japan – 8.90% | |||||
| Asahi Glass | 69,500 | 389,971 | |||
| Canon | 11,300 | 334,179 | |||
| * | Don Quijote | 25,000 | 537,817 | ||
| Mitsubishi UFJ Financial Group | 140,654 | 767,137 | |||
41
Statements of net assets
Delaware Global Value Fund
| Number of shares | Value (U.S. $) | ||||
| Common Stock (continued) | |||||
| Japan (continued) | |||||
| * | NGK Spark Plug | 35,000 | $ | 293,117 | |
| Ono Pharmaceutical | 12,200 | 537,681 | |||
| Round One | 546 | 257,496 | |||
| Toyota Motor | 9,850 | 309,343 | |||
| 3,426,741 | |||||
| Netherlands – 1.85% | |||||
| ING Groep CVA | 33,538 | 281,127 | |||
| Koninklijke Philips Electronics | 26,463 | 428,855 | |||
| 709,982 | |||||
| Norway – 0.65% | |||||
| † | Petroleum Geo-Services | 56,216 | 251,082 | ||
| 251,082 | |||||
| Republic of Korea – 1.26% | |||||
| Samsung Electronics | 1,468 | 485,673 | |||
| 485,673 | |||||
| Singapore – 0.73% | |||||
| Singapore Airlines | 41,067 | 282,238 | |||
| 282,238 | |||||
| Sweden – 2.31% | |||||
| * | Ericsson LM Class B | 57,200 | 407,050 | ||
| Nordea Bank FDR | 67,692 | 482,304 | |||
| 889,354 | |||||
| Switzerland – 1.58% | |||||
| Novartis | 13,089 | 609,292 | |||
| 609,292 | |||||
| Taiwan – 2.11% | |||||
| Chunghwa Telecom ADR | 51,882 | 811,440 | |||
| 811,440 | |||||
| United Kingdom – 10.98% | |||||
| AstraZeneca | 13,139 | 494,559 | |||
| BP | 106,924 | 868,197 | |||
| * | Greggs | 8,102 | 400,085 | ||
| National Grid | 74,055 | 771,888 | |||
| Standard Chartered | 26,257 | 341,646 | |||
| Tomkins | 303,608 | 512,224 | |||
| * | Vodafone Group | 274,693 | 538,141 | ||
| † | WPP Group | 53,465 | 296,966 | ||
| 4,223,706 | |||||
42
| Number of shares | Value (U.S. $) | ||||||
| Common Stock (continued) | |||||||
| United States – 39.82% | |||||||
| * | Abercrombie & Fitch Class A | 22,200 | $ | 429,126 | |||
| Archer-Daniels-Midland | 31,400 | 859,732 | |||||
| Ball | 24,300 | 885,735 | |||||
| † | Benchmark Electronics | 71,400 | 905,352 | ||||
| BJ Services | 47,000 | 563,530 | |||||
| * | Black & Decker | 16,800 | 712,992 | ||||
| Carnival | 21,800 | 457,800 | |||||
| * | Caterpillar | 19,700 | 807,503 | ||||
| * | CenturyTel | 32,200 | 855,232 | ||||
| Chevron | 15,700 | 1,240,458 | |||||
| *† | Convergys | 44,100 | 277,389 | ||||
| Cooper Industries Class A | 30,600 | 738,684 | |||||
| FedEx | 11,600 | 819,540 | |||||
| Imation | 33,400 | 443,552 | |||||
| Intel | 39,600 | 546,480 | |||||
| International Business Machines | 4,700 | 383,520 | |||||
| Lowe’s | 29,100 | 601,206 | |||||
| Microsoft | 27,000 | 545,940 | |||||
| * | Mylan | 54,300 | 510,963 | ||||
| Nucor | 18,100 | 645,808 | |||||
| Pfizer | 63,100 | 1,036,733 | |||||
| Walgreen | 23,500 | 581,390 | |||||
| Xerox | 68,300 | 477,417 | |||||
| 15,326,082 | |||||||
| Total Common Stock (cost $62,304,728) | 38,348,062 | ||||||
| Rights – 0.14% | |||||||
| United Kingdom – 0.14% | |||||||
| Standard Chartered | 8,656 | 54,181 | |||||
| Total Rights (cost $0) | 54,181 | ||||||
43
Statements of net assets
Delaware Global Value Fund
| Principal | |||||||
| amount (U.S. $) | Value (U.S. $) | ||||||
| Repurchase Agreement** – 0.83% | |||||||
| BNP Paribas 0.20%, dated 11/28/08, to be repurchased | |||||||
| on 12/1/08, repurchase price $320,005 (collateralized | |||||||
| by U.S. Government obligations, 6/4/09; market value | |||||||
| $330,614) | $ | 320,000 | $ | 320,000 | |||
| Total Repurchase Agreement (cost $320,000) | 320,000 | ||||||
| Total Value of Securities Before Securities Lending | |||||||
| Collateral – 100.62% (cost $62,624,728) | 38,722,243 | ||||||
| Number of shares | |||||||
| Securities Lending Collateral*** – 19.84% | |||||||
| Investment Companies | |||||||
| Mellon GSL DBT II Collateral Fund | 7,831,006 | 7,622,701 | |||||
| =Mellon GSL DBT II Liquidation Trust | 149,675 | 12,273 | |||||
| Total Securities Lending Collateral (cost $7,980,681) | 7,634,974 | ||||||
| Total Value of Securities – 120.46% | |||||||
| (cost $70,605,409) | 46,357,217 | © | |||||
| Obligation to Return Securities | |||||||
| Lending Collateral*** – (20.74%) | (7,980,681 | ) | |||||
| Receivables and Other Assets Net | |||||||
| of Liabilities – 0.28% | 108,314 | ||||||
| Net Assets Applicable to 6,697,816 | |||||||
| Shares Outstanding – 100.00% | $ | 38,484,850 | |||||
| Net Asset Value – Delaware Global Value Fund | |||||||
| Class A ($22,034,187 / 3,808,153 Shares) | $5.79 | ||||||
| Net Asset Value – Delaware Global Value Fund | |||||||
| Class B ($4,102,498 / 722,322 Shares) | $5.68 | ||||||
| Net Asset Value – Delaware Global Value Fund | |||||||
| Class C ($11,260,402 / 1,980,266 Shares) | $5.69 | ||||||
| Net Asset Value – Delaware Global Value Fund | |||||||
| Institutional Class ($1,087,763 / 187,075 Shares) | $5.81 | ||||||
44
| Components of Net Assets at November 30, 2008: | |||
| Shares of beneficial interest (unlimited authorization – no par) | $ | 79,724,003 | |
| Undistributed net investment income | 885,652 | ||
| Accumulated net realized loss on investments | (17,880,943 | ) | |
| Net unrealized depreciation of investments and foreign currencies | (24,243,862 | ) | |
| Total net assets | $ | 38,484,850 | |
| D | Securities have been classified by country of origin. Classification by type of business has been presented on page 28 in “Country and sector allocations.” |
| † | Non income producing security. |
| = | Security is being fair valued in accordance with the Fund’s fair valuation policy. At November 30, 2008, the aggregate amount of fair valued securities was $12,273, which represented 0.03% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
| * | Fully or partially on loan. |
| ** | See Note 1 in “Notes to financial statements.” |
| *** | See Note 9 in “Notes to financial statements.” |
| © | Includes $7,660,400 of securities loaned. |
Summary of Abbreviations:
ADR — American Depositary Receipts
CVA — Dutch Certificate
FDR — Foreign Depositary Receipts
| Net Asset Value and Offering Price Per Share – | ||
| Delaware Global Value Fund | ||
| Net asset value Class A (A) | $5.79 | |
| Sales charge (5.75% of offering price) (B) | 0.35 | |
| Offering price | $6.14 |
| (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 purchases of $50,000 or more. |
See accompanying notes
45
| Statements of operations | |
| Delaware International Funds | Year Ended November 30, 2008 |
| Delaware | Delaware | Delaware | |||||||||
| International | Emerging | Global | |||||||||
| Value Equity | Markets | Value | |||||||||
| Fund | Fund | Fund | |||||||||
| Investment Income: | |||||||||||
| Dividends | $ | 28,555,472 | $ | 23,980,612 | $ | 2,668,583 | |||||
| Interest | 302,015 | 19,683 | 26,767 | ||||||||
| Securities lending income | 1,474,680 | 707,271 | 128,364 | ||||||||
| Foreign tax withheld | (2,356,811 | ) | (2,058,014 | ) | (178,754 | ) | |||||
| 27,975,356 | 22,649,552 | 2,644,960 | |||||||||
| Expenses: | |||||||||||
| Management fees | 6,474,141 | 10,061,603 | 682,612 | ||||||||
| Distribution expenses – Class A | 1,034,672 | 1,530,574 | 134,784 | ||||||||
| Distribution expenses – Class B | 231,863 | 333,116 | 79,954 | ||||||||
| Distribution expenses – Class C | 1,025,188 | 1,878,343 | 255,055 | ||||||||
| Distribution expenses – Class R | 13,476 | — | — | ||||||||
| Dividend disbursing and transfer agent | |||||||||||
| fees and expenses | 1,647,642 | 1,669,163 | 261,041 | ||||||||
| Accounting and administration expenses | 311,586 | 327,400 | 32,123 | ||||||||
| Custodian fees | 274,256 | 385,668 | 66,831 | ||||||||
| Reports and statements to shareholders | 149,944 | 145,343 | 23,397 | ||||||||
| Legal fees | 110,235 | 113,149 | 13,697 | ||||||||
| Registration fees | 104,258 | 82,983 | 59,383 | ||||||||
| Audit and tax fees | 58,720 | 65,478 | 15,659 | ||||||||
| Trustees' fees | 47,653 | 49,569 | 4,940 | ||||||||
| Insurance fees | 22,301 | 23,273 | 1,988 | ||||||||
| Consulting fees | 11,213 | 13,678 | 1,168 | ||||||||
| Pricing fees | 7,461 | 11,965 | 6,775 | ||||||||
| Taxes (other than taxes on income) | 6,834 | — | — | ||||||||
| Dues and services | 6,037 | 6,492 | 2,647 | ||||||||
| Trustees' expenses | 3,747 | 3,521 | 350 | ||||||||
| 11,541,227 | 16,701,318 | 1,642,404 | |||||||||
| Less fees waived | (628,398 | ) | — | (205,412 | ) | ||||||
| Less waived distribution expenses – Class A | — | (255,096 | ) | (22,614 | ) | ||||||
| Less waived distribution expenses – Class R | (2,246 | ) | — | — | |||||||
| Less expense paid indirectly | (4,791 | ) | (17,185 | ) | (103 | ) | |||||
| Total operating expenses | 10,905,792 | 16,429,037 | 1,414,275 | ||||||||
| Net Investment Income | 17,069,564 | 6,220,515 | 1,230,685 | ||||||||
46
| Delaware | Delaware | Delaware | |||||||||
| International | Emerging | Global | |||||||||
| Value Equity | Markets | Value | |||||||||
| Fund | Fund | Fund | |||||||||
| Net Realized and Unrealized | |||||||||||
| Gain (Loss) on Investments and | |||||||||||
| Foreign Currencies: | |||||||||||
| Net realized gain (loss) on: | |||||||||||
| Investments | $ | (95,907,836 | ) | $ | 60,452,890 | $ | (17,832,376 | ) | |||
| Redemptions in-kind* | (1,957,046 | ) | (371,988 | ) | — | ||||||
| Foreign currencies | (2,754,298 | ) | (2,115,829 | ) | (332,093 | ) | |||||
| Net realized gain (loss) | (100,619,180 | ) | 57,965,073 | (18,164,469 | ) | ||||||
| Net change in unrealized appreciation/ | |||||||||||
| depreciation of investments | |||||||||||
| and foreign currencies | (346,654,297 | ) | (550,842,194 | ) | (26,952,252 | ) | |||||
| Net Realized and Unrealized Loss on | |||||||||||
| Investments and Foreign Currencies | (447,273,477 | ) | (492,877,121 | ) | (45,116,721 | ) | |||||
| Net Decrease in Net Assets Resulting | |||||||||||
| from Operations | $ | (430,203,913 | ) | $ | (486,656,606 | ) | $ | (43,886,036 | ) | ||
*See Note 12 in “Notes to financial Statements.”
See accompanying notes
47
Statements of changes in net assets
Delaware International Value Equity Fund
| Year Ended | |||||||
| 11/30/08 | 11/30/07 | ||||||
| Increase (Decrease) in Net Assets from Operations: | |||||||
| Net investment income | $ | 17,069,564 | $ | 13,133,648 | |||
| Net realized gain (loss) on investments | |||||||
| and foreign currencies | (100,619,180 | ) | 45,474,942 | ||||
| Net change in unrealized appreciation/depreciation | |||||||
| of investments and foreign currencies | (346,654,297 | ) | 53,076,401 | ||||
| Net increase (decrease) in net assets resulting | |||||||
| from operations | (430,203,913 | ) | 111,684,991 | ||||
| Dividends and Distributions to Shareholders from: | |||||||
| Net investment income: | |||||||
| Class A | (5,733,859 | ) | (5,103,903 | ) | |||
| Class B | (186,281 | ) | (149,145 | ) | |||
| Class C | (799,282 | ) | (555,490 | ) | |||
| Class R | (31,370 | ) | (40,730 | ) | |||
| Institutional Class | (6,021,409 | ) | (4,921,442 | ) | |||
| Net realized gain on investments: | |||||||
| Class A | (20,209,040 | ) | (23,319,560 | ) | |||
| Class B | (1,455,826 | ) | (1,943,772 | ) | |||
| Class C | (6,246,566 | ) | (7,239,582 | ) | |||
| Class R | (131,133 | ) | (228,030 | ) | |||
| Institutional Class | (17,044,855 | ) | (17,545,051 | ) | |||
| (57,859,621 | ) | (61,046,705 | ) | ||||
| Capital Share Transactions: | |||||||
| Proceeds from shares sold: | |||||||
| Class A | 54,669,434 | 98,316,948 | |||||
| Class B | 472,785 | 3,398,913 | |||||
| Class C | 7,600,984 | 20,677,266 | |||||
| Class R | 970,751 | 1,836,653 | |||||
| Institutional Class | 71,947,147 | 109,126,111 | |||||
48
| Year Ended | |||||||
| 11/30/08 | 11/30/07 | ||||||
| Capital Share Transactions (continued): | |||||||
| Net asset value of shares issued upon reinvestment | |||||||
| of dividends and distributions: | |||||||
| Class A | $ | 24,490,131 | $ | 26,910,819 | |||
| Class B | 1,553,479 | 1,981,350 | |||||
| Class C | 6,784,142 | 7,548,657 | |||||
| Class R | 162,502 | 267,756 | |||||
| Institutional Class | 23,006,594 | 22,416,670 | |||||
| 191,657,949 | 292,481,143 | ||||||
| Cost of shares repurchased: | |||||||
| Class A | (151,646,856 | ) | (148,665,478 | ) | |||
| Class B | (10,536,262 | ) | (12,561,813 | ) | |||
| Class C | (41,786,464 | ) | (35,375,604 | ) | |||
| Class R | (1,553,490 | ) | (3,849,570 | ) | |||
| Institutional Class | (163,150,080 | ) | (106,274,894 | ) | |||
| (368,673,152 | ) | (306,727,359 | ) | ||||
| Decrease in net assets derived from | |||||||
| capital share transactions | (177,015,203 | ) | (14,246,216 | ) | |||
| Net Increase (Decrease) in Net Assets | (665,078,737 | ) | 36,392,070 | ||||
| Net Assets: | |||||||
| Beginning of year | 1,053,248,590 | 1,016,856,520 | |||||
| End of year | $ | 388,169,853 | $ | 1,053,248,590 | |||
| Undistributed net investment income | $ | 14,205,784 | $ | 12,714,199 | |||
See accompanying notes
49
Statements of changes in net assets
Delaware Emerging Markets Fund
| Year Ended | |||||||
| 11/30/08 | 11/30/07 | ||||||
| Increase (Decrease) in Net Assets from Operations: | |||||||
| Net investment income | $ | 6,220,515 | $ | 7,218,234 | |||
| Net realized gain on investments | |||||||
| and foreign currencies | 57,965,073 | 256,086,972 | |||||
| Net change in unrealized appreciation/depreciation | |||||||
| of investments and foreign currencies | (550,842,194 | ) | 76,796,009 | ||||
| Net increase (decrease) in net assets resulting | |||||||
| from operations | (486,656,606 | ) | 340,101,215 | ||||
| Dividends and Distributions to Shareholders from: | |||||||
| Net investment income: | |||||||
| Class A | (6,928,794 | ) | (12,778,230 | ) | |||
| Class B | (186,103 | ) | (685,797 | ) | |||
| Class C | (1,007,368 | ) | (3,334,594 | ) | |||
| Institutional Class | (1,311,904 | ) | (2,528,275 | ) | |||
| Net realized gain on investments: | |||||||
| Class A | (162,293,675 | ) | (129,443,721 | ) | |||
| Class B | (10,968,084 | ) | (9,486,556 | ) | |||
| Class C | (59,369,696 | ) | (46,127,095 | ) | |||
| Institutional Class | (25,408,291 | ) | (23,458,492 | ) | |||
| (267,473,915 | ) | (227,842,760 | ) | ||||
| Capital Share Transactions: | |||||||
| Proceeds from shares sold: | |||||||
| Class A | 132,602,172 | 151,753,478 | |||||
| Class B | 1,673,924 | 3,658,695 | |||||
| Class C | 29,518,228 | 37,435,719 | |||||
| Institutional Class | 32,335,792 | 49,423,224 | |||||
50
| Year Ended | |||||||
| 11/30/08 | 11/30/07 | ||||||
| Capital Share Transactions (continued): | |||||||
| Net asset value of shares issued upon reinvestment | |||||||
| of dividends and distributions: | |||||||
| Class A | $ | 150,625,631 | $ | 124,618,298 | |||
| Class B | 10,122,855 | 9,163,578 | |||||
| Class C | 55,804,659 | 44,943,351 | |||||
| Institutional Class | 25,764,773 | 23,080,588 | |||||
| 438,448,034 | 444,076,931 | ||||||
| Cost of shares repurchased: | |||||||
| Class A | (278,598,809 | ) | (206,267,292 | ) | |||
| Class B | (12,287,151 | ) | (9,856,414 | ) | |||
| Class C | (64,222,452 | ) | (53,401,076 | ) | |||
| Institutional Class | (38,321,112 | ) | (86,875,728 | ) | |||
| (393,429,524 | ) | (356,400,510 | ) | ||||
| Increase in net assets derived from | |||||||
| capital share transactions | 45,018,510 | 87,676,421 | |||||
| Net Increase (Decrease) in Net Assets | (709,112,011 | ) | 199,934,876 | ||||
| Net Assets: | |||||||
| Beginning of year | 1,067,446,481 | 867,511,605 | |||||
| End of year | $ | 358,334,470 | $ | 1,067,446,481 | |||
| Undistributed net investment income | $ | 514,269 | $ | 5,834,954 | |||
See accompanying notes
51
Statements of changes in net assets
Delaware Global Value Fund
| Year Ended | |||||||
| 11/30/08 | 11/30/07 | ||||||
| Increase (Decrease) in Net Assets from Operations: | |||||||
| Net investment income | $ | 1,230,685 | $ | 1,037,551 | |||
| Net realized gain (loss) on investments | |||||||
| and foreign currencies | (18,164,469 | ) | 5,350,451 | ||||
| Net change in unrealized appreciation/depreciation | |||||||
| of investments and foreign currencies | (26,952,252 | ) | (1,827,620 | ) | |||
| Net increase (decrease) in net assets resulting | |||||||
| from operations | (43,886,036 | ) | 4,560,382 | ||||
| Dividends and Distributions to Shareholders from: | |||||||
| Net investment income: | |||||||
| Class A | (768,522 | ) | (193,758 | ) | |||
| Class B | (45,880 | ) | — | ||||
| Class C | (163,328 | ) | — | ||||
| Institutional Class | (34,770 | ) | (40,243 | ) | |||
| Net realized gain on investments: | |||||||
| Class A | (3,007,262 | ) | (6,317,684 | ) | |||
| Class B | (495,500 | ) | (1,254,470 | ) | |||
| Class C | (1,763,938 | ) | (3,073,525 | ) | |||
| Institutional Class | (111,761 | ) | (892,825 | ) | |||
| (6,390,961 | ) | (11,772,505 | ) | ||||
| Capital Share Transactions: | |||||||
| Proceeds from shares sold: | |||||||
| Class A | 9,813,016 | 53,951,952 | |||||
| Class B | 979,766 | 5,676,981 | |||||
| Class C | 3,506,026 | 32,018,658 | |||||
| Institutional Class | 847,401 | 3,309,568 | |||||
52
| Year Ended | |||||||
| 11/30/08 | 11/30/07 | ||||||
| Capital Share Transactions (continued): | |||||||
| Net asset value of shares issued upon reinvestment | |||||||
| of dividends and distributions: | |||||||
| Class A | $ | 3,353,184 | $ | 5,708,852 | |||
| Class B | 465,056 | 1,047,071 | |||||
| Class C | 1,771,570 | 2,822,629 | |||||
| Institutional Class | 133,664 | 577,097 | |||||
| 20,869,683 | 105,112,808 | ||||||
| Cost of shares repurchased: | |||||||
| Class A | (28,821,804 | ) | (26,419,804 | ) | |||
| Class B | (3,120,086 | ) | (2,465,987 | ) | |||
| Class C | (17,832,203 | ) | (10,735,392 | ) | |||
| Institutional Class | (1,111,337 | ) | (6,109,535 | ) | |||
| (50,885,430 | ) | (45,730,718 | ) | ||||
| Increase (decrease) in net assets derived from | |||||||
| capital share transactions | (30,015,747 | ) | 59,382,090 | ||||
| Net Increase (Decrease) in Net Assets | (80,292,744 | ) | 52,169,967 | ||||
| Net Assets: | |||||||
| Beginning of year | 118,777,594 | 66,607,627 | |||||
| End of year | $ | 38,484,850 | $ | 118,777,594 | |||
| Undistributed net investment income | $ | 885,652 | $ | 1,003,690 | |||
See accompanying notes
53
Financial highlights
Delaware International Value Equity 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 expenses 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
54
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $16.750 | $16.010 | $18.130 | $16.340 | $13.350 | |||||||||||
| 0.288 | 0.205 | 0.339 | 0.388 | 0.261 | |||||||||||
| (7.995 | ) | 1.504 | 3.220 | 1.610 | 2.891 | ||||||||||
| (7.707 | ) | 1.709 | 3.559 | 1.998 | 3.152 | ||||||||||
| (0.204 | ) | (0.174 | ) | (0.412 | ) | (0.063 | ) | (0.162 | ) | ||||||
| (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||
| (0.923 | ) | (0.969 | ) | (5.679 | ) | (0.208 | ) | (0.162 | ) | ||||||
| $8.120 | $16.750 | $16.010 | $18.130 | $16.340 | |||||||||||
| (48.60% | ) | 11.24% | 23.57% | 12.35% | 23.83% | ||||||||||
| $178,072 | $472,533 | $472,803 | $468,217 | $308,751 | |||||||||||
| 1.40% | 1.40% | 1.41% | 1.48% | 1.70% | |||||||||||
| 1.49% | 1.40% | 1.43% | 1.48% | 1.70% | |||||||||||
| 2.19% | 1.25% | 2.05% | 2.24% | 1.78% | |||||||||||
| 2.10% | 1.25% | 2.03% | 2.24% | 1.78% | |||||||||||
| 32% | 26% | 127% | 14% | 7% | |||||||||||
55
Financial highlights
Delaware International Value Equity 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 expenses 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
56
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $16.470 | $15.750 | $17.910 | $16.200 | $13.250 | |||||||||||
| 0.197 | 0.092 | 0.226 | 0.269 | 0.160 | |||||||||||
| (7.876 | ) | 1.484 | 3.173 | 1.586 | 2.873 | ||||||||||
| (7.679 | ) | 1.576 | 3.399 | 1.855 | 3.033 | ||||||||||
| (0.092 | ) | (0.061 | ) | (0.292 | ) | — | (0.083 | ) | |||||||
| (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||
| (0.811 | ) | (0.856 | ) | (5.559 | ) | (0.145 | ) | (0.083 | ) | ||||||
| $7.980 | $16.470 | $15.750 | $17.910 | $16.200 | |||||||||||
| (48.95% | ) | 10.48% | 22.70% | 11.53% | 23.00% | ||||||||||
| $11,227 | $34,520 | $39,834 | $38,284 | $38,962 | |||||||||||
| 2.10% | 2.10% | 2.11% | 2.18% | 2.40% | |||||||||||
| 2.19% | 2.10% | 2.13% | 2.18% | 2.40% | |||||||||||
| 1.49% | 0.55% | 1.35% | 1.54% | 1.08% | |||||||||||
| 1.40% | 0.55% | 1.33% | 1.54% | 1.08% | |||||||||||
| 32% | 26% | 127% | 14% | 7% | |||||||||||
57
Financial highlights
Delaware International Value Equity 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 expenses 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
58
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $16.450 | $15.730 | $17.890 | $16.180 | $13.240 | |||||||||||
| 0.197 | 0.092 | 0.226 | 0.269 | 0.160 | |||||||||||
| (7.876 | ) | 1.484 | 3.173 | 1.586 | 2.863 | ||||||||||
| (7.679 | ) | 1.576 | 3.399 | 1.855 | 3.023 | ||||||||||
| (0.092 | ) | (0.061 | ) | (0.292 | ) | — | (0.083 | ) | |||||||
| (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||
| (0.811 | ) | (0.856 | ) | (5.559 | ) | (0.145 | ) | (0.083 | ) | ||||||
| $7.960 | $16.450 | $15.730 | $17.890 | $16.180 | |||||||||||
| (49.01% | ) | 10.50% | 22.73% | 11.55% | 22.94% | ||||||||||
| $51,420 | $144,106 | $144,298 | $124,931 | $70,169 | |||||||||||
| 2.10% | 2.10% | 2.11% | 2.18% | 2.40% | |||||||||||
| 2.19% | 2.10% | 2.13% | 2.18% | 2.40% | |||||||||||
| 1.49% | 0.55% | 1.35% | 1.54% | 1.08% | |||||||||||
| 1.40% | 0.55% | 1.33% | 1.54% | 1.08% | |||||||||||
| 32% | 26% | 127% | 14% | 7% | |||||||||||
59
Financial highlights
Delaware International Value Equity 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 expenses 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
60
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $16.670 | $15.930 | $18.050 | $16.270 | $13.350 | |||||||||||
| 0.261 | 0.173 | 0.308 | 0.343 | 0.217 | |||||||||||
| (7.960 | ) | 1.504 | 3.207 | 1.600 | 2.879 | ||||||||||
| (7.699 | ) | 1.677 | 3.515 | 1.943 | 3.096 | ||||||||||
| (0.172 | ) | (0.142 | ) | (0.368 | ) | (0.018 | ) | (0.176 | ) | ||||||
| (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||
| (0.891 | ) | (0.937 | ) | (5.635 | ) | (0.163 | ) | (0.176 | ) | ||||||
| $8.080 | $16.670 | $15.930 | $18.050 | $16.270 | |||||||||||
| (48.70% | ) | 11.07% | 23.33% | 12.04% | 23.43% | ||||||||||
| $1,259 | $3,076 | $4,575 | $3,097 | $1,547 | |||||||||||
| 1.60% | 1.60% | 1.61% | 1.74% | 2.00% | |||||||||||
| 1.79% | 1.70% | 1.73% | 1.78% | 2.00% | |||||||||||
| 1.99% | 1.05% | 1.85% | 1.98% | 1.48% | |||||||||||
| 1.80% | 0.95% | 1.73% | 1.94% | 1.48% | |||||||||||
| 32% | 26% | 127% | 14% | 7% | |||||||||||
61
Financial highlights
Delaware International Value Equity 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 expenses 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
62
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $16.850 | $16.100 | $18.210 | $16.410 | $13.400 | |||||||||||
| 0.327 | 0.255 | 0.389 | 0.439 | 0.305 | |||||||||||
| (8.034 | ) | 1.513 | 3.233 | 1.614 | 2.902 | ||||||||||
| (7.707 | ) | 1.768 | 3.622 | 2.053 | 3.207 | ||||||||||
| (0.254 | ) | (0.223 | ) | (0.465 | ) | (0.108 | ) | (0.197 | ) | ||||||
| (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||
| (0.973 | ) | (1.018 | ) | (5.732 | ) | (0.253 | ) | (0.197 | ) | ||||||
| $8.170 | $16.850 | $16.100 | $18.210 | $16.410 | |||||||||||
| (48.44% | ) | 11.59% | 23.93% | 12.67% | 24.21% | ||||||||||
| $146,192 | $399,014 | $355,347 | $276,499 | $178,048 | |||||||||||
| 1.10% | 1.10% | 1.11% | 1.18% | 1.40% | |||||||||||
| 1.19% | 1.10% | 1.13% | 1.18% | 1.40% | |||||||||||
| 2.49% | 1.55% | 2.35% | 2.54% | 2.08% | |||||||||||
| 2.40% | 1.55% | 2.33% | 2.54% | 2.08% | |||||||||||
| 32% | 26% | 127% | 14% | 7% | |||||||||||
63
Financial highlights
Delaware Emerging Markets 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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
64
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $22.760 | $21.280 | $17.950 | $14.550 | $10.890 | |||||||||||
| 0.137 | 0.184 | 0.419 | 0.309 | 0.225 | |||||||||||
| (9.242 | ) | 7.117 | 4.080 | 3.567 | 3.637 | ||||||||||
| (9.105 | ) | 7.301 | 4.499 | 3.876 | 3.862 | ||||||||||
| (0.234 | ) | (0.523 | ) | (0.269 | ) | (0.092 | ) | (0.202 | ) | ||||||
| (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | |||||||
| (5.715 | ) | (5.821 | ) | (1.169 | ) | (0.476 | ) | (0.202 | ) | ||||||
| $7.940 | $22.760 | $21.280 | $17.950 | $14.550 | |||||||||||
| (53.37% | ) | 46.11% | 26.52% | 27.42% | 36.01% | ||||||||||
| $213,581 | $673,309 | $533,042 | $724,417 | $209,870 | |||||||||||
| 1.83% | 1.97% | 1.94% | 1.97% | 1.91% | |||||||||||
| 1.88% | 2.02% | 1.99% | 2.02% | 2.12% | |||||||||||
| 0.94% | 0.97% | 2.23% | 1.90% | 1.81% | |||||||||||
| 0.89% | 0.92% | 2.18% | 1.85% | 1.60% | |||||||||||
| 37% | 108% | 46% | 25% | 34% | |||||||||||
65
Financial highlights
Delaware Emerging Markets 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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
66
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $22.120 | $20.830 | $17.600 | $14.290 | $10.710 | |||||||||||
| 0.030 | 0.045 | 0.280 | 0.191 | 0.135 | |||||||||||
| (8.936 | ) | 6.926 | 3.998 | 3.503 | 3.583 | ||||||||||
| (8.906 | ) | 6.971 | 4.278 | 3.694 | 3.718 | ||||||||||
| (0.093 | ) | (0.383 | ) | (0.148 | ) | — | (0.138 | ) | |||||||
| (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | |||||||
| (5.574 | ) | (5.681 | ) | (1.048 | ) | (0.384 | ) | (0.138 | ) | ||||||
| $7.640 | $22.120 | $20.830 | $17.600 | $14.290 | |||||||||||
| (53.76% | ) | 44.97% | 25.59% | 26.47% | 35.08% | ||||||||||
| $14,620 | $45,978 | $37,944 | $36,399 | $16,027 | |||||||||||
| 2.58% | 2.72% | 2.69% | 2.72% | 2.66% | |||||||||||
| 2.58% | 2.72% | 2.69% | 2.72% | 2.82% | |||||||||||
| 0.19% | 0.22% | 1.48% | 1.15% | 1.06% | |||||||||||
| 0.19% | 0.22% | 1.48% | 1.15% | 0.90% | |||||||||||
| 37% | 108% | 46% | 25% | 34% | |||||||||||
67
Financial highlights
Delaware Emerging Markets 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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
68
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $22.090 | $20.800 | $17.580 | $14.270 | $10.700 | |||||||||||
| 0.031 | 0.045 | 0.280 | 0.191 | 0.135 | |||||||||||
| (8.917 | ) | 6.926 | 3.988 | 3.503 | 3.573 | ||||||||||
| (8.886 | ) | 6.971 | 4.268 | 3.694 | 3.708 | ||||||||||
| (0.093 | ) | (0.383 | ) | (0.148 | ) | — | (0.138 | ) | |||||||
| (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | |||||||
| (5.574 | ) | (5.681 | ) | (1.048 | ) | (0.384 | ) | (0.138 | ) | ||||||
| $7.630 | $22.090 | $20.800 | $17.580 | $14.270 | |||||||||||
| (53.75% | ) | 45.03% | 25.56% | 26.51% | 35.02% | ||||||||||
| $84,436 | $237,832 | $183,562 | $211,896 | $50,564 | |||||||||||
| 2.58% | 2.72% | 2.69% | 2.72% | 2.66% | |||||||||||
| 2.58% | 2.72% | 2.69% | 2.72% | 2.82% | |||||||||||
| 0.19% | 0.22% | 1.48% | 1.15% | 1.06% | |||||||||||
| 0.19% | 0.22% | 1.48% | 1.15% | 0.90% | |||||||||||
| 37% | 108% | 46% | 25% | 34% | |||||||||||
69
Financial highlights
Delaware Emerging Markets 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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
70
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $22.910 | $21.390 | $18.030 | $14.610 | $10.920 | |||||||||||
| 0.175 | 0.232 | 0.466 | 0.349 | 0.256 | |||||||||||
| (9.321 | ) | 7.157 | 4.104 | 3.579 | 3.659 | ||||||||||
| (9.146 | ) | 7.389 | 4.570 | 3.928 | 3.915 | ||||||||||
| (0.283 | ) | (0.571 | ) | (0.310 | ) | (0.124 | ) | (0.225 | ) | ||||||
| (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | |||||||
| (5.764 | ) | (5.869 | ) | (1.210 | ) | (0.508 | ) | (0.225 | ) | ||||||
| $8.000 | $22.910 | $21.390 | $18.030 | $14.610 | |||||||||||
| (53.30% | ) | 46.49% | 26.87% | 27.73% | 36.34% | ||||||||||
| $45,697 | $110,327 | $112,964 | $255,608 | $63,732 | |||||||||||
| 1.58% | 1.72% | 1.69% | 1.72% | 1.66% | |||||||||||
| 1.58% | 1.72% | 1.69% | 1.72% | 1.82% | |||||||||||
| 1.19% | 1.22% | 2.48% | 2.15% | 2.06% | |||||||||||
| 1.19% | 1.22% | 2.48% | 2.15% | 1.90% | |||||||||||
| 37% | 108% | 46% | 25% | 34% | |||||||||||
71
Financial highlights
Delaware Global Value 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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. Performance would have been lower had the waivers not been in effect. |
See accompanying notes
72
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $11.850 | $13.260 | $11.660 | $10.810 | $8.700 | |||||||||||
| 0.172 | 0.145 | 0.111 | 0.120 | 0.156 | |||||||||||
| (5.554 | ) | 0.663 | 3.084 | 1.231 | 2.059 | ||||||||||
| (5.382 | ) | 0.808 | 3.195 | 1.351 | 2.215 | ||||||||||
| (0.138 | ) | (0.066 | ) | (0.238 | ) | (0.016 | ) | (0.105 | ) | ||||||
| (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||
| (0.678 | ) | (2.218 | ) | (1.595 | ) | (0.501 | ) | (0.105 | ) | ||||||
| $5.790 | $11.850 | $13.260 | $11.660 | $10.810 | |||||||||||
| (48.12% | ) | 6.96% | 30.83% | 12.97% | 25.74% | ||||||||||
| $22,034 | $66,024 | $36,416 | $20,613 | $16,597 | |||||||||||
| 1.45% | 1.45% | 1.59% | 1.89% | 1.50% | |||||||||||
| 1.76% | 1.57% | 1.88% | 2.13% | 2.21% | |||||||||||
| 1.84% | 1.22% | 0.93% | 1.06% | 1.64% | |||||||||||
| 1.53% | 1.10% | 0.64% | 0.82% | 0.93% | |||||||||||
| 78% | 31% | 124% | 51% | 36% | |||||||||||
73
Financial highlights
Delaware Global Value 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 (loss) 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. |
| Performance would have been lower had the waiver not been in effect. |
See accompanying notes
74
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $11.640 | $13.070 | $11.510 | $10.740 | $8.660 | |||||||||||
| 0.104 | 0.057 | 0.022 | 0.037 | 0.085 | |||||||||||
| (5.474 | ) | 0.665 | 3.050 | 1.218 | 2.042 | ||||||||||
| (5.370 | ) | 0.722 | 3.072 | 1.255 | 2.127 | ||||||||||
| (0.050 | ) | — | (0.155 | ) | — | (0.047 | ) | ||||||||
| (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||
| (0.590 | ) | (2.152 | ) | (1.512 | ) | (0.485 | ) | (0.047 | ) | ||||||
| $5.680 | $11.640 | $13.070 | $11.510 | $10.740 | |||||||||||
| (48.51% | ) | 6.08% | 29.95% | 12.11% | 24.68% | ||||||||||
| $4,103 | $10,893 | $7,453 | $3,483 | $6,673 | |||||||||||
| 2.20% | 2.20% | 2.34% | 2.64% | 2.25% | |||||||||||
| 2.46% | 2.27% | 2.58% | 2.83% | 2.91% | |||||||||||
| 1.09% | 0.47% | 0.18% | 0.31% | 0.89% | |||||||||||
| 0.83% | 0.40% | (0.06% | ) | 0.12% | 0.23% | ||||||||||
| 78% | 31% | 124% | 51% | 36% | |||||||||||
75
Financial highlights
Delaware Global Value 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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 (loss) 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. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
76
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $11.650 | $13.090 | $11.520 | $10.750 | $ 8.660 | |||||||||||
| 0.102 | 0.057 | 0.022 | 0.037 | 0.084 | |||||||||||
| (5.472 | ) | 0.655 | 3.060 | 1.218 | 2.053 | ||||||||||
| (5.370 | ) | 0.712 | 3.082 | 1.255 | 2.137 | ||||||||||
| (0.050 | ) | — | (0.155 | ) | — | (0.047 | ) | ||||||||
| (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||
| (0.590 | ) | (2.152 | ) | (1.512 | ) | (0.485 | ) | (0.047 | ) | ||||||
| $5.690 | $11.650 | $13.090 | $11.520 | $10.750 | |||||||||||
| (48.51% | ) | 6.17% | 29.92% | 12.10% | 24.80% | ||||||||||
| $11,260 | $39,463 | $17,545 | $6,380 | $4,355 | |||||||||||
| 2.20% | 2.20% | 2.34% | 2.64% | 2.25% | |||||||||||
| 2.46% | 2.27% | 2.58% | 2.83% | 2.91% | |||||||||||
| 1.09% | 0.47% | 0.18% | 0.31% | 0.89% | |||||||||||
| 0.83% | 0.40% | (0.06% | ) | 0.12% | 0.23% | ||||||||||
| 78% | 31% | 124% | 51% | 36% | |||||||||||
77
Financial highlights
Delaware Global Value 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 and foreign currencies |
| Total from investment operations |
| Less dividends and distributions from: |
| Net investment income |
| Net realized gain on investments |
| 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. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
78
| Year Ended | |||||||||||||||
| 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||
| $11.910 | $13.310 | $11.700 | $10.840 | $ 8.730 | |||||||||||
| 0.195 | 0.176 | 0.141 | 0.148 | 0.180 | |||||||||||
| (5.587 | ) | 0.673 | 3.092 | 1.237 | 2.053 | ||||||||||
| (5.392 | ) | 0.849 | 3.233 | 1.385 | 2.233 | ||||||||||
| (0.168 | ) | (0.097 | ) | (0.266 | ) | (0.040 | ) | (0.123 | ) | ||||||
| (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||
| (0.708 | ) | (2.249 | ) | (1.623 | ) | (0.525 | ) | (0.123 | ) | ||||||
| $5.810 | $11.910 | $13.310 | $11.700 | $10.840 | |||||||||||
| (48.03% | ) | 7.12% | 31.24% | 13.28% | 25.91% | ||||||||||
| $1,088 | $2,398 | $5,193 | $4,576 | $667 | |||||||||||
| 1.20% | 1.20% | 1.34% | 1.64% | 1.25% | |||||||||||
| 1.46% | 1.27% | 1.58% | 1.83% | 1.91% | |||||||||||
| 2.09% | 1.47% | 1.18% | 1.31% | 1.89% | |||||||||||
| 1.83% | 1.40% | 0.94% | 1.12% | 1.23% | |||||||||||
| 78% | 31% | 124% | 51% | 36% | |||||||||||
79
| Notes to financial statements | ||
| Delaware International Funds | November 30, 2008 |
Delaware Group® Global & International Funds (Trust) is organized as a Delaware statutory trust and offers three series: Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund (each, a Fund or collectively, Funds). The Trust is an open-end investment company. Each Fund is considered 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 only be purchased 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 12 months. Class R and Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. As of November 30, 2008, Delaware Emerging Markets Fund and Delaware Global Value Fund have not commenced operations of the Class R shares.
The investment objective of Delaware International Value Equity Fund is to seek long-term growth without undue risk to principal.
The investment objective of Delaware Emerging Markets Fund and Delaware Global Value Fund is to seek long-term capital appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with U.S. generally accepted accounting principles and are consistently followed by the Funds.
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. Short-term debt securities having less than 60 days to maturity are valued at amortized cost, which approximates market value. Investment companies are valued at net asset value per share. Foreign 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. 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 each Fund’s Board
80
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 Funds 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 Funds value their 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 new events, may have occurred in the interim. To account for this, the Funds may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (“international fair value pricing”).
Federal Income Taxes — Each 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. Accordingly, no provisions for federal income taxes have been made in the financial statements.
Effective May 30, 2008, the Funds adopted FASB Interpretation No. 48 “Accounting for Uncertainty in Income Taxes” (FIN 48). FIN 48 provides guidance for how uncertain tax positions should be recognized, measured, presented, and disclosed in the financial statements. FIN 48 requires the evaluation of tax positions taken or expected to be taken in the course of preparing the Funds’ 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. The adoption of FIN 48 did not result in the recording of any tax benefit or expense in the current period.
Class Accounting — Investment income, common expenses and realized and unrealized gain (loss) on investments are allocated to the various classes of each 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 — Each Fund 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 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.
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
81
Notes to financial statements
Delaware International Funds
1. Significant Accounting Policies (continued)
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 Funds do not isolate that portion of realized gains and losses on investments which are due to changes in the foreign exchange rates from that which are due to changes in market prices. The Funds 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. generally accepted accounting principles requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Other — Expenses directly attributable to the Funds are charged directly to the Funds. 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 the 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. Taxable non-cash dividends are recorded as dividend income. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Funds are aware of such dividends, net of all non-rebatable tax withholdings. Withholding taxes on foreign dividends have been recorded in accordance with each Fund’s understanding of the applicable country’s tax rules and rates. Each Fund declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, annually.
The Funds receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. The expense paid under this arrangement is included in custodian fees on the statements of operations with the corresponding expense offset shown as “expense paid indirectly.”
82
| 2. Investment Management, Administration Agreements and Other Transactions with Affiliates |
In accordance with the terms of its respective investment management agreement, each Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee based on each Fund’s average daily net assets as follows:
| Delaware International | Delaware Emerging | Delaware Global | |||
| Value Equity Fund | Markets Fund | Value Fund | |||
| On the first $500 million | 0.85% | 1.25% | 0.85% | ||
| On the next $500 million | 0.80% | 1.20% | 0.80% | ||
| On the next $1.5 billion | 0.75% | 1.15% | 0.75% | ||
| In excess of $2.5 billion | 0.70% | 1.10% | 0.70% |
Effective April 1, 2008, DMC has voluntarily agreed to waive that portion, if any, of its management fee and reimburse the Delaware International Value Equity 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, certain insurance costs, and non-routine expenses or costs including, but not limited to, those relating to reorganizations, litigation, conducting shareholder meetings, and liquidations (collectively, “non-routine expenses”)) do not exceed 1.10% of average daily net assets of the Fund until such time as the waiver is discontinued. This waiver and expense limitation may be discontinued at any time because it is voluntary. DMC has contractually agreed to waive that portion, if any, of its management fees and reimburse the Delaware Global Value Fund to the extent necessary to ensure that total annual operating expenses (excluding any non-routine expenses) do not exceed 1.20% of average daily net assets of the Fund through March 31, 2009. For purposes of this waiver and reimbursement, non-routine expenses may also include such additional costs and expenses, as may be agreed upon from time to time by each Fund’s Board and DMC. These expense waivers and reimbursements apply only to expenses paid directly by the Funds. Prior to April 1, 2008, DMC had contractually agreed to waive that portion, if any, of its management fee and reimburse the Funds to the extent necessary to ensure that total annual operating expenses (excluding any non-routine expense), do not exceed the following specified percentages as shown below.
83
Notes to financial statements
Delaware International Funds
| 2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued) | |
| Delaware International | Delaware Emerging | Delaware Global | ||||
| Value Equity Fund | Markets Fund | Value Fund | ||||
| The operating expense | ||||||
| limitation as a percentage | ||||||
| of average daily net assets | ||||||
| (per annum) | 1.10% | 1.72% | 1.20% | |||
| Expiration date | 3/31/08 | 3/31/08 | 3/31/08 |
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Funds. For these services, the Funds 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 November 30, 2008, each Fund was charged for these services as follows:
| Delaware International | Delaware Emerging | Delaware Global | |||
| Value Equity Fund | Markets Fund | Value Fund | |||
| $38,948 | $40,925 | $4,015 |
DSC also provides dividend disbursing and transfer agency services. The Funds 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, each 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. Institutional Class shares pay no distribution and service expenses. DDLP has contracted to limit the Class A Shares’ and Class R Shares’ 12b-1 fees through March 31, 2009 for the Delaware Emerging Markets Fund and Delaware Global Value Fund to no more than 0.25% and 0.50%, respectively, of average daily net assets of each Fund. DDLP has contracted to waive the Class R Shares 12b-1 fees for the Delaware International Value Equity Fund through March 31, 2009 to no more than 0.50% of average daily net assets.
84
At November 30, 2008, the Funds had liabilities payable to affiliates as follows:
| Delaware International | Delaware Emerging | Delaware Global | ||||||
| Value Equity Fund | Markets Fund | Value Fund | ||||||
| Investment management fee | ||||||||
| payable to DMC | $174,509 | $375,616 | $5,961 | |||||
| Dividend disbursing, transfer | ||||||||
| agent, and fund accounting | ||||||||
| oversight fees and other | ||||||||
| expenses payable to DSC | 156,988 | 120,684 | 19,091 | |||||
| Distribution fees payable to DDLP | 98,210 | 127,590 | 17,081 | |||||
| Other expenses payable to DMC | ||||||||
| and affiliates* | 11,386 | 11,052 | 1,165 | |||||
* DMC, as part of its administrative services, pays operating expenses on behalf of the Funds 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.
As provided in the investment management agreement, the Funds bear the cost of certain legal and tax services, including internal legal and tax services provided to the Funds by DMC and/ or its affiliates’ employees. For the year ended November 30, 2008, the Funds were charged for internal legal and tax services provided by DMC and/or its affiliates’ employees as follows:
| Delaware International | Delaware Emerging | Delaware Global | |||
| Value Equity Fund | Markets Fund | Value Fund | |||
| $52,992 | $55,622 | $5,429 |
For the year ended November 30, 2008, DDLP earned commissions on sales of Class A shares for each Fund as follows:
| Delaware International | Delaware Emerging | Delaware Global | |||
| Value Equity Fund | Markets Fund | Value Fund | |||
| $20,593 | $71,491 | $19,352 |
For the year ended November 30, 2008, DDLP received gross CDSC commissions on redemption of each Fund’s Class A, Class B and Class C shares, and these commissions were entirely used to offset up-front commissions previously paid by DDLP to broker-dealers on sales of those shares. The amounts received were as follows:
| Delaware International | Delaware Emerging | Delaware Global | ||||||
| Value Equity Fund | Markets Fund | Value Fund | ||||||
| Class A | $ 5,586 | $ 3,750 | $ 3,411 | |||||
| Class B | 43,662 | 46,311 | 22,543 | |||||
| Class C | 8,655 | 20,774 | 10,594 | |||||
Trustees’ fees include expenses accrued by the Funds 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 Funds.
85
Notes to financial statements
Delaware International Funds
3. Investments
For year ended November 30, 2008, the Funds made purchases and sales of investment securities other than short-term investments as follows:
| Delaware International | Delaware Emerging | Delaware Global | ||||
| Value Equity Fund | Markets Fund | Value Fund | ||||
| Purchases | $247,010,916 | $301,656,533 | $62,762,427 | |||
| Sales | 448,428,773 | 521,435,376 | 96,686,305 | |||
At November 30, 2008, the cost of investments and unrealized appreciation (depreciation) for federal income tax purposes for each Fund were as follows:
| Delaware International | Delaware Emerging | Delaware Global | ||||||||||
| Value Equity Fund | Markets Fund | Value Fund | ||||||||||
| Cost of investments | $ | 734,605,604 | $ | 695,721,221 | $ | 71,825,140 | ||||||
| Aggregate unrealized | ||||||||||||
| appreciation | $ | 5,760,840 | $ | 13,789,394 | $ | 324,839 | ||||||
| Aggregate unrealized | ||||||||||||
| depreciation | (252,697,139 | ) | (310,336,194 | ) | (25,792,762 | ) | ||||||
| Net unrealized depreciation | $ | (246,936,299 | ) | $ | (296,546,800 | ) | $ | (25,467,923 | ) | |||
Effective December 1, 2007, the Funds adopted Financial Accounting Standards No. 157, Fair Value Measurements (FAS 157). FAS 157 defines fair value as the price that the Funds would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date. FAS 157 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. The Funds’ 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
86
The following table summarizes the valuation of each Fund’s investments by the above FAS 157 fair value hierarchy levels as of November 30, 2008:
| Delaware International | Delaware Emerging | Delaware Global | |||||||||||
| Value Equity Fund | Markets Fund | Value Fund | |||||||||||
| Securities | |||||||||||||
| Level 1 | $ | 392,614,748 | $ | 355,310,411 | $ | 38,722,243 | |||||||
| Level 2 | 94,927,125 | 40,448,696 | 7,622,701 | ||||||||||
| Level 3 | 127,432 | 3,415,314 | 12,273 | ||||||||||
| Total | $ | 487,669,305 | $ | 399,174,421 | $ | 46,357,217 | |||||||
The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
| Delaware International | Delaware Emerging | Delaware Global | ||||||||||||||
| Value Equity Fund | Markets Fund | Value Fund | ||||||||||||||
| Securities | ||||||||||||||||
| Balance as of 11/30/07 | $ | 7,792,516 | $ | 22,201,507 | $ | 546,204 | ||||||||||
| Net realized gain (loss) | 184,944 | 2,367,896 | 34,711 | |||||||||||||
| Net change in unrealized | ||||||||||||||||
| appreciation (depreciation) | (1,161,344 | ) | (9,197,298 | ) | (65,021 | ) | ||||||||||
| Net purchases, sales | ||||||||||||||||
| and settlements | (4,781,574 | ) | (12,353,095 | ) | (438,506 | ) | ||||||||||
| Net transfers in and/or out of Level 3 | (1,907,110 | ) | 396,304 | (65,115 | ) | |||||||||||
| Balance as of 11/30/08 | $ | 127,432 | $ | 3,415,314 | $ | 12,273 | ||||||||||
| Net change in unrealized | ||||||||||||||||
| appreciation/depreciation | ||||||||||||||||
| on investments still held | ||||||||||||||||
| as of 11/30/08 | $ | (1,426,618 | ) | $ | (7,046,250 | ) | $ | (137,402 | ) | |||||||
87
Notes to financial statements
Delaware International Funds
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. generally accepted accounting principles. Additionally, distributions from net gains on foreign currency transactions and net short-term gains on sale 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 November 30, 2008 and 2007 was as follows:
| Ordinary | Long-Term | ||||||||
| Income | Capital Gain | Total | |||||||
| Year ended November 30, 2008: | |||||||||
| Delaware International | |||||||||
| Value Equity Fund | $ | 26,770,568 | $ | 31,089,053 | $ | 57,859,621 | |||
| Delaware Emerging Markets Fund | 137,065,213 | 130,408,702 | 267,473,915 | ||||||
| Delaware Global Value Fund | 2,618,032 | 3,772,929 | 6,390,961 | ||||||
| Year ended November 30, 2007: | |||||||||
| Delaware International | |||||||||
| Value Equity Fund | $ | 10,770,710 | $ | 50,275,995 | $ | 61,046,705 | |||
| Delaware Emerging Markets Fund | 56,283,558 | 171,559,202 | 227,842,760 | ||||||
| Delaware Global Value Fund | 3,049,206 | 8,723,299 | 11,772,505 | ||||||
5. Components of Net Assets on a Tax Basis
As of November 30, 2008, the components of net assets on a tax basis were as follows:
| Delaware International | Delaware Emerging | Delaware Global | ||||||||||
| Value Equity Fund | Markets Fund | Value Fund | ||||||||||
| Shares of beneficial interest | $ | 714,512,389 | $ | 618,365,253 | $ | 79,724,003 | ||||||
| Undistributed ordinary | ||||||||||||
| income | 14,205,784 | 5,579,129 | 885,652 | |||||||||
| Undistributed long-term | ||||||||||||
| capital gains | — | 30,990,618 | — | |||||||||
| Capital loss carryforwards | (93,681,845 | ) | — | (16,661,212 | ) | |||||||
| Unrealized depreciation of | ||||||||||||
| investments and foreign | ||||||||||||
| currencies | (246,866,475 | ) | (296,600,530 | ) | (25,463,593 | ) | ||||||
| Net assets | $ | 388,169,853 | $ | 358,334,470 | $ | 38,484,850 | ||||||
88
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, gain (loss) on foreign currency transactions and loss on redemptions in-kind. Results of operations and net assets were not affected by these reclassifications. For the year ended November 30, 2008, the Funds recorded the following reclassifications:
| Delaware International | Delaware Emerging | Delaware Global | ||||||||||||||||
| Value Equity Fund | Markets Fund | Value Fund | ||||||||||||||||
| Undistributed net investment income | $ | (2,805,778 | ) | $ | (2,107,031 | ) | $ | (336,223 | ) | |||||||||
| Accumulated net realized gain (loss) | 4,762,824 | (22,520,981 | ) | 336,223 | ||||||||||||||
| Paid-in capital | (1,957,046 | ) | 24,628,012 | — | ||||||||||||||
For federal income tax purposes, capital loss carryforwards may be carried forward and applied against future capital gains. Capital loss carryforwards remaining at November 30, 2008 for Delaware International Value Equity and Delaware Global Value Fund was $93,681,845 and $16,661,212, respectively, and expires in 2016.
89
Notes to financial statements
Delaware International Funds
6. Capital Shares
Transactions in capital shares were as follows:
| Delaware International | Delaware Emerging | |||||||||||
| Value Equity Fund | Markets Fund | |||||||||||
| Year Ended | Year Ended | |||||||||||
| 11/30/08 | 11/30/07 | 11/30/08 | 11/30/07 | |||||||||
| Shares sold: | ||||||||||||
| Class A | 4,081,000 | 5,988,142 | 8,851,089 | 7,783,618 | ||||||||
| Class B | 34,786 | 211,804 | 109,987 | 203,341 | ||||||||
| Class C | 585,093 | 1,280,135 | 1,979,325 | 1,989,829 | ||||||||
| Class R | 75,442 | 111,514 | — | — | ||||||||
| Institutional Class | 5,418,047 | 6,595,213 | 2,163,823 | 2,465,651 | ||||||||
| Shares issued upon reinvestment | ||||||||||||
| of dividends and distributions: | ||||||||||||
| Class A | 1,606,965 | 1,738,427 | 8,849,919 | 7,837,860 | ||||||||
| Class B | 103,084 | 129,331 | 613,135 | 588,792 | ||||||||
| Class C | 451,073 | 493,699 | 3,386,206 | 2,891,988 | ||||||||
| Class R | 10,705 | 17,351 | — | — | ||||||||
| Institutional Class | 1,505,667 | 1,444,287 | 1,504,952 | 1,445,826 | ||||||||
| 13,871,862 | 18,009,903 | 27,458,436 | 25,206,905 | |||||||||
| Shares repurchased: | ||||||||||||
| Class A | (11,959,599 | ) | (9,052,777 | ) | (20,366,726 | ) | (11,084,485 | ) | ||||
| Class B | (826,244 | ) | (774,332 | ) | (888,869 | ) | (535,755 | ) | ||||
| Class C | (3,341,698 | ) | (2,185,982 | ) | (5,064,594 | ) | (2,938,680 | ) | ||||
| Class R | (114,760 | ) | (231,445 | ) | — | — | ||||||
| Institutional Class | (12,701,921 | ) | (6,431,820 | ) | (2,773,642 | ) | (4,376,201 | ) | ||||
| (28,944,222 | ) | (18,676,356 | ) | (29,093,831 | ) | (18,935,121 | ) | |||||
| Net increase (decrease) | (15,072,360 | ) | (666,453 | ) | (1,635,395 | ) | 6,271,784 | |||||
90
| Delaware Global | ||||||
| Value Fund | ||||||
| Year Ended | ||||||
| 11/30/08 | 11/30/07 | |||||
| Shares sold: | ||||||
| Class A | 1,010,773 | 4,528,567 | ||||
| Class B | 101,606 | 482,447 | ||||
| Class C | 367,542 | 2,705,905 | ||||
| Institutional Class | 92,645 | 275,635 | ||||
| Shares issued upon reinvestment | ||||||
| of dividends and distributions: | ||||||
| Class A | 308,197 | 501,657 | ||||
| Class B | 43,261 | 92,990 | ||||
| Class C | 164,644 | 250,455 | ||||
| Institutional Class | 12,263 | 50,578 | ||||
| 2,100,931 | 8,888,234 | |||||
| Shares repurchased: | ||||||
| Class A | (3,081,696 | ) | (2,206,684 | ) | ||
| Class B | (358,507 | ) | (209,557 | ) | ||
| Class C | (1,938,648 | ) | (910,459 | ) | ||
| Institutional Class | (119,135 | ) | (515,120 | ) | ||
| (5,497,986 | ) | (3,841,820 | ) | |||
| Net increase (decrease) | (3,397,055 | ) | 5,046,414 | |||
91
Notes to financial statements
Delaware International Funds
6. Capital Shares (continued)
For the year ended November 30, 2008 and the year ended November 30, 2007, the following shares were converted from Class B to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the tables on page 91 and the statements of changes in net assets.
| Year Ended | Year Ended | ||||||||||||
| 11/30/08 | 11/30/07 | ||||||||||||
| Class B | Class A | Class B | Class A | ||||||||||
| Shares | Shares | Value | Shares | Shares | Value | ||||||||
| Delaware International | |||||||||||||
| Value Equity Fund | 198,385 | 195,458 | $ | 2,702,641 | 244,462 | 241,022 | $ | 3,974,761 | |||||
| Delaware Emerging | |||||||||||||
| Markets Fund | 155,263 | 150,394 | 2,613,941 | 92,822 | 90,585 | 1,742,088 | |||||||
| Delaware Global | |||||||||||||
| Value Fund | 79,339 | 78,121 | 755,853 | 40,055 | 39,490 | 483,355 | |||||||
7. Line of Credit
Each 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, 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 as of November 18, 2008, the Funds 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 17, 2009.
The Funds had no amounts outstanding at any time during the year then ended November 30, 2008.
8. Foreign Currency Exchange Contracts
The Funds may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Funds may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Funds may also use these contracts to hedge the U.S. dollar value of securities it already owns that are denominated in foreign currencies. The change in 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.
92
The use of foreign 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 Funds could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. There were no foreign currency contracts outstanding at November 30, 2008.
9. Securities Lending
The Funds, 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 (the “Collective Trust”) established by BNY Mellon for the purpose of investment on behalf of clients participating in its securities lending programs. The Collective Trust invests 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. The Funds 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. During the year ended November 30, 2008, BNY Mellon transferred certain distressed securities from the Collective Trust into the Mellon GSL DBT II Liquidation Trust. The Funds 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 Funds, or at the discretion of the lending agent, replace the loaned securities. The Funds 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 Funds 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 Funds 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 Funds, the security lending agent and the borrower. The Funds record security lending income net of allocations to the security lending agent and the borrower.
93
Notes to financial statements
Delaware International Funds
9. Securities Lending (continued)
At November 30, 2008, the value of securities on loan was:
| Delaware International | Delaware Emerging | Delaware Global | |||||||||
| Value Equity Fund | Markets Fund | Value Fund | |||||||||
| Value | $ | 93,363,469 | $ | 35,523,528 | $ | 7,660,400 | |||||
The Funds received collateral, comprised of cash and securities as shown below: | |||||||||||
| Delaware International | Delaware Emerging | Delaware Global | |||||||||
| Value Equity Fund | Markets Fund | Value Fund | |||||||||
| Cash | $ | 99,075,239 | $ | 37,869,281 | $ | 7,980,681 | |||||
| Securities | 1,289,182 | — | 198,018 | ||||||||
Investments purchased with cash collateral are presented on the statements of net assets under the caption “Securities Lending Collateral.”
10. Credit and Market Risk
Some countries in which the Funds may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is 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 Funds may be inhibited. In addition, a significant proportion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Funds.
Each 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 each 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 Funds’ Board has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Funds’ 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 Funds’ limitation on investments in illiquid assets. Rule 144A and illiquid securities have been identified on the statements of net assets.
94
11. Contractual Obligations
The Funds enter into contracts in the normal course of business that contain a variety of indemnifications. The Funds’ maximum exposure under these arrangements is unknown. However, the Funds have not had prior claims or losses pursuant to these contracts. Management has reviewed the Funds’ existing contracts and expects the risk of loss to be remote.
12. In-Kind Redemptions
During the year ended November 30, 2008, Delaware International Value Fund and Delaware Emerging Markets Fund satisfied a withdrawal request with a transfer of securities and cash totaling $13,424,890 and $3,105,365, respectively, resulting in a realized loss of $1,957,046 and $371,988, respectively.
13. Tax Information (Unaudited)
The information set forth below is for each 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 November 30, 2008, each Fund designates distributions paid during the year as follows:
| (A) | (B) | ||||||||||
| Long-Term | Ordinary | Total | |||||||||
| Capital Gains | Income* | Distributions | (C) | ||||||||
| (Tax Basis) | (Tax Basis) | (Tax Basis) | Dividends1 | ||||||||
| Delaware International Value | |||||||||||
| Equity Fund | 53.73 | % | 46.27 | % | 100.00 | % | 0.70 | % | |||
| Delaware Emerging Markets Fund | 51.94 | % | 48.06 | % | 100.00 | % | 0.10 | % | |||
| Delaware Global Value Fund | 59.04 | % | 40.96 | % | 100.00 | % | 43.74 | % | |||
(A) and (B) are based on a percentage of each Fund’s total distributions.
(C) is based on a percentage of each Fund’s ordinary income distributions.
1 Qualifying dividends represent dividends, which qualify for the corporate dividends received deduction.
95
Notes to financial statements
Delaware International Funds
13. Tax Information (Unaudited) (continued)
For the fiscal year ended November 30, 2008 certain dividends paid by the Funds 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 Funds intend to designate up to a maximum amount to be taxed at a maximum rate of 15%. Complete information will be computed and reported in conjunction with your 2008 Form 1099-DIV. The amounts paid for the year ended November 30, 2008 were as follows:
| Delaware International | Delaware Emerging | Delaware Global | |||||||||
| Value Equity Fund | Markets Fund | Value Fund | |||||||||
| $ | 16,646,541 | $ | 10,681,052 | $ | 1,678,866 | ||||||
Delaware International Value Equity Fund, Delaware Emerging Markets Fund, and Delaware Global Value Fund intend to pass through foreign tax credits in the maximum amount of $1,288,999, $993,353, and $92,571 respectively. The gross foreign source income earned during the fiscal year 2008 by the Delaware International Value Equity Fund, Delaware Emerging Markets Fund, and Delaware Global Value Fund was $ 26,200,082, $ 23,689,877, and $1,954,518. Complete information will be computed and reported in conjunction with your 2008 Form 1099-DIV.
For the fiscal year ended November 30, 2008, certain ordinary income paid by the Funds, determined to be Qualified Ordinary 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 November 30 2008, the Funds have designated a maximum Qualified Ordinary Income and Qualified Short-Term Capital Gains distributions as follows:
| Delaware International | Delaware Emerging | Delaware Global | |||||||||
| Value Equity Fund | Markets Fund | Value Fund | |||||||||
| Qualified ordinary income | $ | 122,069 | $ | 4,143 | $ | 2,526 | |||||
| Qualified short-term capital gain | — | 8,502,206 | — | ||||||||
96
Report of independent
registered public accounting firm
To the Shareholders and Board of Trustees
Delaware Group® Global & International Funds
We have audited the accompanying statement of net assets of Delaware Group Global & International Funds (comprising the Delaware International Value Equity Fund, Delaware Emerging Markets Fund, and Delaware Global Value Fund) (the “Funds”) as of November 30, 2008, and the related statements 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 Funds’ 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 Funds’ 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 Funds’ 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 November 30, 2008 by correspondence with the custodian and brokers or by other appropriate auditing procedures where 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 each of the respective funds constituting the Delaware Group Global & International Funds at November 30, 2008, 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 five years in the period then ended, in conformity with U.S. generally accepted accounting principles.
Philadelphia, Pennsylvania
January 16, 2009
97
Other Fund information
(Unaudited)
Delaware International Funds
Fund management
Liu-Er Chen, CFA
Senior Vice President, Chief Investment Officer – Emerging Markets and Healthcare
Liu-Er Chen heads the firm’s global Emerging Markets team, and he is also the portfolio manager for the Delaware Healthcare Fund, which launched in October 2007. Prior to joining Delaware Investments in September 2006, he spent nearly 11 years at Evergreen Investment Management Company, where he most recently served as managing director and senior portfolio manager. He co-managed the Evergreen Emerging Markets Growth Fund from 1999 to 2001, and became the Fund’s sole manager in 2001. He also served as the sole manager of the Evergreen Health Care Fund since its inception in 1999. Chen began his career at Evergreen in 1995 as an analyst covering Asian and global healthcare stocks, before being promoted to portfolio manager in 1998. Prior to his career in asset management, Chen worked for three years in sales, marketing, and business development for major American and European pharmaceutical and medical device companies. He is licensed to practice medicine in China and has experience in medical research at both the Chinese Academy of Sciences and Cornell Medical School. He holds an MBA with a concentration in management from Columbia Business School.
Edward A. “Ned” Gray, CFA
Senior Vice President, Senior Portfolio Manager
Ned Gray joined Delaware Investments in June 2005 to develop the firm’s International Value Equity team, from Arborway Capital, which he co-founded in January 2005. He previously worked in the investment management business at Thomas Weisel Asset Management, and ValueQuest, which was acquired by TWAM in 2002. At ValueQuest, which he joined in 1987, Gray served as a senior investment professional with responsibilities for portfolio management, security analysis, quantitative research, performance analysis, global research, back office/investment information systems integration, trading, and client and consultant relations. Prior to ValueQuest, he was a research analyst at the Center for Competitive Analysis. Gray received his bachelor’s degree in history from Reed College and a master of arts in law and diplomacy, in international economics, business and law from Tufts University’s Fletcher School of Law and Diplomacy.
Todd A. Bassion, CFA
Vice President, Portfolio Manager
Todd A. Bassion joined Delaware Investments in June 2005 as a senior analyst on the firm’s International Value Equity team. He takes a lead role in generating and researching new companies for the portfolios as well as providing input on ongoing portfolio management. Bassion previously worked at Arborway Capital, where he was a key part of the team that started at ValueQuest/TA and moved to Thomas Weisel Asset Management with its acquisition of ValueQuest/TA in 2002. Bassion, who joined ValueQuest/TA in 2000, served as a research associate there. Bassion earned a bachelor’s degree in economics from Colorado College.
98
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 | ||||
1 Patrick P. Coyne is considered to be an “Interested Trustee” because he is an executive officer of the Fund’s(s’) investment advisor.
100
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 | 85 | Director | ||
| various executive capacities | Kaydon Corp. | |||
| at different times at | ||||
| Delaware Investments.2 | Board of Governors Member | |||
| Investment Company | ||||
| Institute (ICI) | ||||
| (2007–Present) | ||||
| Member of Investment Committee | ||||
| Cradle of Liberty Council, BSA | ||||
| (November 2007–Present) | ||||
| Finance Committee Member | ||||
| St. John Vianney | ||||
| Roman Catholic Church | ||||
| (2007–Present) | ||||
| Private Investor | 85 | Director | ||
| (March 2004–Present) | Bryn Mawr Bank Corp. (BMTC) | |||
| (April 2007–Present) | ||||
| Investment Manager | ||||
| Morgan Stanley & Co. | Chairman of | |||
| (January 1984–March 2004) | Investment Committee | |||
| Pennsylvania Academy of | ||||
| Fine Arts (2007–Present) | ||||
| Trustee (2004–Present) | ||||
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.
101
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) | ||||
| Thomas L. Bennett | ||||
| (continued) | ||||
| 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 | ||||
| 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.
102
| 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 | ||
| Investment Committee and | ||||
| Governance Committee | ||||
| Member | ||||
| Pennsylvania Horticultural | ||||
| Society | ||||
| (February 2006–Present) | ||||
| President | 85 | Director | ||
| Franklin & Marshall College | Community Health Systems | |||
| (June 2002–Present) | ||||
| Executive Vice President | ||||
| University of Pennsylvania | ||||
| (April 1995–June 2002) | ||||
| Founder and | 85 | None | ||
| Managing Director | ||||
| Anthony Knerr & Associates | ||||
| (Strategic Consulting) | ||||
| (1990–Present) | ||||
| Chief Investment Officer | 85 | None | ||
| Assurant, Inc. (Insurance) | ||||
| (2002–2004) | ||||
| Consultant | 85 | Director and Audit | ||
| ARL Associates | Committee Chair | |||
| (Financial Planning) | Systemax, Inc. | |||
| (1983–Present) | ||||
| President and | 85 | 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) | ||||
103
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) | ||||
| Thomas F. Madison | ||||
| (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 | ||||
104
| 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 | ||
| 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 | ||||
| the Compensation Committee | ||||
| Spanlink Communications | ||||
| Lead Director and Chair of | ||||
| Compensation and | ||||
| Governance Committees | ||||
| Valmont Industries, Inc. | ||||
| Vice President and Treasurer | 85 | None | ||
| (January 2006–Present) | ||||
| Vice President — Mergers & Acquisitions | ||||
| (January 2003–January 2006), and | ||||
| Vice President | ||||
| (July 1995–January 2003) | ||||
| 3M Corporation | ||||
| Founder | 85 | Director and Audit | ||
| Investor Analytics | Committee Member | |||
| (Risk Management) | Investor Analytics | |||
| (May 1999–Present) | ||||
| Founder | ||||
| Sutton Asset Management | ||||
| (Hedge Fund) | ||||
| (September 1996–Present) | ||||
105
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 | ||
| 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.
106
| 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 | ||
| David F. Connor has served as | 85 | None4 | ||
| Vice President and Deputy | ||||
| General Counsel of | ||||
| Delaware Investments | ||||
| since 2000. | ||||
| Daniel V. Geatens has served | 85 | None4 | ||
| in various capacities at | ||||
| different times at | ||||
| Delaware Investments. | ||||
| David P. O’Connor has served in | 85 | None4 | ||
| various executive and legal | ||||
| capacities at different times | ||||
| at Delaware Investments. | ||||
| Richard Salus has served in | 85 | 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.
107
About the organization
This annual report is for the information of Delaware International Value Equity Fund, Delaware Emerging Markets Fund, and Delaware Global Value Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware International Value Equity Fund, Delaware Emerging Markets Fund, and Delaware Global Value Fund and the Delaware Investments® Fund profiles for the most recently completed calendar quarter. These documents are available at www.delawareinvestments.com. The prospectus sets forth details about charges, expenses, investment objectives, and operating policies of the investment company. You should read the prospectus carefully before you invest. The figures in this report represent past results that 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.
| Board of trustees | |
| Patrick P. Coyne | Ann R. Leven |
| Chairman, President, and | Consultant |
| Chief Executive Officer | ARL Associates |
| Delaware Investments Family of Funds | New York, NY |
| Philadelphia, PA | |
| Thomas F. Madison | |
| Thomas L. Bennett | President and Chief Executive Officer |
| Private Investor | MLM Partners, Inc. |
| Rosemont, PA | Minneapolis, MN |
| John A. Fry | Janet L. Yeomans |
| President | Vice President and Treasurer |
| Franklin & Marshall College | 3M Corporation |
| Lancaster, PA | St. Paul, MN |
| Anthony D. Knerr | J. Richard Zecher |
| Founder and Managing Director | Founder |
| Anthony Knerr & Associates | Investor Analytics |
| New York, NY | Scottsdale, AZ |
| Lucinda S. Landreth | |
| Former Chief Investment Officer | |
| Assurant, Inc. | |
| Philadelphia, PA | |
108
| Affiliated officers | Contact information |
| David F. Connor | Investment manager |
| Vice President, Deputy General Counsel, and | Delaware Management Company, a series of |
| Secretary | Delaware Management Business Trust |
| Delaware Investments® Family of Funds | Philadelphia, PA |
| Philadelphia, PA | |
| National distributor | |
| Daniel V. Geatens | Delaware Distributors, L.P. |
| Vice President and Treasurer | Philadelphia, PA |
| Delaware Investments Family of Funds | |
| Philadelphia, PA | Shareholder servicing, dividend disbursing, |
| and transfer agent | |
| David P. O’Connor | Delaware Service Company, Inc. |
| Senior Vice President, General Counsel, | 2005 Market Street |
| and Chief Legal Officer | Philadelphia, PA 19103-7094 |
| Delaware Investments Family of Funds | |
| Philadelphia, PA | For shareholders |
| 800 523-1918 | |
| Richard Salus | |
| Senior Vice President and | For securities dealers and financial |
| Chief Financial Officer | institutions representatives only |
| Delaware Investments Family of Funds | 800 362-7500 |
| Philadelphia, PA | |
| Web site | |
| www.delawareinvestments.com |
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
Each Fund 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 Fund’s Forms N-Q, as well as a description of the policies and procedures that each Fund 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; and (ii) on the Commission’s Web site at www.sec.gov. In addition, a description of the policies and procedures that each Fund uses to determine how to vote proxies (if any) relating to portfolio securities and each Fund’s Schedule of Investments are available without charge on each Fund’s Web site at www.delawareinvestments.com. Each Fund’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 Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through each Fund’s Web site at www.delawareinvestments.com; and (ii) on the Commission’s Web site at www.sec.gov.
109
Item 2. Code of Ethics
The registrant has adopted a code of ethics that applies to the registrant’s principal executive officer, principal financial officer, principal accounting officer or controller, or persons performing similar functions, regardless of whether these individuals are employed by the registrant or a third party. A copy of the registrant’s Code of Business Ethics has been posted on the Delaware Investments Internet Web site at www.delawareinvestments.com. Any amendments to the Code of Business Ethics, and information on any waiver from its provisions granted by the registrant, will also be posted on this Web site within five business days of such amendment or waiver and will remain on the Web site for at least 12 months.
Item 3. Audit Committee Financial Expert
The registrant’s Board of Trustees/Directors has determined that each member of the registrant’s Audit Committee is an audit committee financial expert, as defined below. For purposes of this item, an “audit committee financial expert” is a person who has the following attributes:
a. An understanding of generally accepted accounting principles and financial statements;
b. The ability to assess the general application of such principles in connection with the accounting for estimates, accruals, and reserves;
c. Experience preparing, auditing, analyzing, or evaluating financial statements that present a breadth and level of complexity of accounting issues that are generally comparable to the breadth and complexity of issues that can reasonably be expected to be raised by the registrant’s financial statements, or experience actively supervising one or more persons engaged in such activities;
d. An understanding of internal controls and procedures for financial reporting; and
e. An understanding of audit committee functions.
An “audit committee financial expert” shall have acquired such attributes through:
a. Education and experience as a principal financial officer, principal accounting officer, controller, public accountant, or auditor or experience in one or more positions that involve the performance of similar functions;
b. Experience actively supervising a principal financial officer, principal accounting officer, controller, public accountant, auditor, or person performing similar functions;
c. Experience overseeing or assessing the performance of companies or public accountants with respect to the preparation, auditing, or evaluation of financial statements; or
d. Other relevant experience.
The registrant’s Board of Trustees/Directors has also determined that each member of the registrant’s Audit Committee is independent. In order to be “independent” for purposes of this item, the Audit Committee member may not: (i) other than in his or her capacity as a member of the Board of Trustees/Directors or any committee thereof, accept directly or indirectly any consulting, advisory or other compensatory fee from the issuer; or (ii) be an “interested person” of the registrant as defined in Section 2(a)(19) of the Investment Company Act of 1940.
The names of the audit committee financial experts on the registrant’s Audit Committee are set forth below:
Thomas L. Bennett1
Thomas F. Madison
Janet L. Yeomans1
J. Richard Zecher
Item 4. Principal Accountant Fees and Services
(a) Audit fees.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $94,100 for the fiscal year ended November 30, 2008.
_______________________
1 The instructions to Form N-CSR require disclosure on the relevant experience of persons who qualify as audit committee financial experts based on “other relevant experience.” The Board of Trustees/Directors has determined that Mr. Bennett qualifies as an audit committee financial expert by virtue of his education, Chartered Financial Analyst designation, and his experience as a credit analyst, portfolio manager and the manager of other credit analysts and portfolio managers. The Board of Trustees/Directors has determined that Ms. Yeomans qualifies as an audit committee financial expert by virtue of her education and experience as the Treasurer of a large global corporation.
The aggregate fees billed for services provided to the registrant by its independent auditors for the audit of the registrant’s annual financial statements and for services normally provided by the independent auditors in connection with statutory and regulatory filings or engagements were $96,400 for the fiscal year ended November 30, 2008.
(b) Audit-related fees.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended November 30, 2008.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $19,074 for the registrant’s fiscal year ended November 30, 2008. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: issuance of report concerning transfer agent's system of internal accounting control pursuant to Rule 17Ad-13 of the Securities Exchange Act.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the registrant’s financial statements and not reported under paragraph (a) of this Item were $0 for the fiscal year ended November 30, 2007.
The aggregate fees billed by the registrant’s independent auditors for services relating to the performance of the audit of the financial statements of the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $19,074 for the registrant’s fiscal year ended November 30, 2007. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These audit-related services were as follows: issuance of report concerning transfer agent's system of internal accounting control pursuant to Rule 17Ad-13 of the Securities Exchange Act.
(c) Tax fees.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $44,490 for the fiscal year ended November 30, 2008. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations, and tax compliance services related to investments in foreign securities.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s investment adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2008.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant were $47,485 for the fiscal year ended November 30, 2007. The percentage of these fees relating to services approved by the registrant’s Audit Committee pursuant to the de minimis exception from the pre-approval requirement in Rule 2-01(c)(7)(i)(C) of Regulation S-X was 0%. These tax-related services were as follows: review of income tax returns and review of annual excise distribution calculations, and tax compliance services related to investments in foreign securities.
The aggregate fees billed by the registrant’s independent auditors for tax-related services provided to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2007.
(d) All other fees.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended November 30, 2008.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2008.
The aggregate fees billed for all services provided by the independent auditors to the registrant other than those set forth in paragraphs (a), (b) and (c) of this Item were $0 for the fiscal year ended November 30, 2007.
The aggregate fees billed for all services other than those set forth in paragraphs (b) and (c) of this Item provided by the registrant’s independent auditors to the registrant’s adviser and other service providers under common control with the adviser and that relate directly to the operations or financial reporting of the registrant were $0 for the registrant’s fiscal year ended November 30, 2007.
(e) The registrant’s Audit Committee has established pre-approval policies and procedures as permitted by Rule 2-01(c)(7)(i)(B) of Regulation S-X (the “Pre-Approval Policy”) with respect to services provided by the registrant’s independent auditors. Pursuant to the Pre-Approval Policy, the Audit Committee has pre-approved the services set forth in the table below with respect to the registrant up to the specified fee limits. Certain fee limits are based on aggregate fees to the registrant and other registrants within the Delaware Investments Family of Funds.
| Service | Range of Fees |
| Audit Services | |
| Statutory audits or financial audits for new Funds | up to $25,000 per Fund |
| Services associated with SEC registration statements (e.g., Form N-1A, Form N-14, etc.), periodic reports and other documents filed with the SEC or other documents issued in connection with securities offerings (e.g., comfort letters for closed-end Fund offerings, consents), and assistance in responding to SEC comment letters | up to $10,000 per Fund |
| Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and/or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit-related services” rather than “audit services”) | up to $25,000 in the aggregate |
| Audit-Related Services | |
| Consultations by Fund management as to the accounting or disclosure treatment of transactions or events and /or the actual or potential impact of final or proposed rules, standards or interpretations by the SEC, FASB, or other regulatory or standard-setting bodies (Note: Under SEC rules, some consultations may be considered “audit services” rather than “audit-related services”) | up to $25,000 in the aggregate |
| Tax Services | |
| U.S. federal, state and local and international tax planning and advice (e.g., consulting on statutory, regulatory or administrative developments, evaluation of Funds’ tax compliance function, etc.) | up to $25,000 in the aggregate |
| U.S. federal, state and local tax compliance (e.g., excise distribution reviews, etc.) | up to $5,000 per Fund |
| Review of federal, state, local and international income, franchise and other tax returns | up to $5,000 per Fund |
Under the Pre-Approval Policy, the Audit Committee has also pre-approved the services set forth in the table below with respect to the registrant’s investment adviser and other entities controlling, controlled by or under common control with the investment adviser that provide ongoing services to the registrant (the “Control Affiliates”) up to the specified fee limit. This fee limit is based on aggregate fees to the investment adviser and its Control Affiliates.
| Service | Range of Fees |
| Non-Audit Services | |
| Services associated with periodic reports and other documents filed with the SEC and assistance in responding to SEC comment letters | up to $10,000 in the aggregate |
The Pre-Approval Policy requires the registrant’s independent auditors to report to the Audit Committee at each of its regular meetings regarding all services initiated since the last such report was rendered, including those services authorized by the Pre-Approval Policy.
(f) Not applicable.
(g) The aggregate non-audit fees billed by the registrant’s independent auditors for services rendered to the registrant and to its investment adviser and other service providers under common control with the adviser were $298,492 and $301,847 for the registrant’s fiscal years ended November 30, 2008 and November 30, 2007, respectively.
(h) In connection with its selection of the independent auditors, the registrant’s Audit Committee has considered the independent auditors’ provision of non-audit services to the registrant’s investment adviser and other service providers under common control with the adviser that were not required to be pre-approved pursuant to Rule 2-01(c)(7)(ii) of Regulation S-X. The Audit Committee has determined that the independent auditors’ provision of these services is compatible with maintaining the auditors’ independence.
Item 5. Audit Committee of Listed Registrants
Not applicable.
Item 6. Investments
(a) Included as part of report to shareholders filed under Item 1 of this Form N-CSR.
(b) Divestment of securities in accordance with Section 13(c) of the Investment Company Act of 1940.
Not applicable.
Item 7. Disclosure of Proxy Voting Policies and Procedures for Closed-End Management Investment Companies
Not applicable.
Item 8. Portfolio Managers of Closed-End Management Investment Companies
Not applicable.
Item 9. Purchases of Equity Securities by Closed-End Management Investment Company and Affiliated Purchasers
Not applicable.
Item 10. Submission of Matters to a Vote of Security Holders
Not applicable.
Item 11. Controls and Procedures
The registrant’s principal executive officer and principal financial officer have evaluated the registrant’s disclosure controls and procedures within 90 days of the filing of this report and have concluded that they are effective in providing reasonable assurance that the information required to be disclosed by the registrant in its reports or statements filed under the Securities Exchange Act of 1934 is recorded, processed, summarized and reported within the time periods specified in the rules and forms of the Securities and Exchange Commission.
There were no significant changes in the registrant’s internal control over financial reporting that occurred during the second fiscal quarter of the period covered by the report to stockholders included herein (i.e., the registrant’s fourth fiscal quarter) that have materially affected, or are reasonably likely to materially affect, the registrant’s internal control over financial reporting.
Item 12. Exhibits
| (a) | (1) Code of Ethics | |
Not applicable. | ||
(2) Certifications of Principal Executive Officer and Principal Financial Officer pursuant to Rule 30a-2 under the Investment Company Act of 1940 are attached hereto as Exhibit 99.CERT. | ||
(3) Written solicitations to purchase securities pursuant to Rule 23c-1 under the Securities Exchange Act of 1934. | ||
Not applicable. | ||
| (b) | Certifications pursuant to Section 906 of the Sarbanes-Oxley Act of 2002 are furnished herewith as Exhibit 99.906CERT. |
SIGNATURES
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, the registrant has duly caused this report to be signed on its behalf, by the undersigned, thereunto duly authorized.
Name of Registrant: Delaware Group® Global & International Funds
| PATRICK P. COYNE | |
| By: | Patrick P. Coyne |
| Title: | Chief Executive Officer |
| Date: | January 30, 2009 |
Pursuant to the requirements of the Securities Exchange Act of 1934 and the Investment Company Act of 1940, this report has been signed below by the following persons on behalf of the registrant and in the capacities and on the dates indicated.
| PATRICK P. COYNE | |
| By: | Patrick P. Coyne |
| Title: | Chief Executive Officer |
| Date: | January 30, 2009 |
| RICHARD SALUS | |
| By: | Richard Salus |
| Title: | Chief Financial Officer |
| Date: | January 30, 2009 |