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: May 31, 2009
Item 1. Reports to Stockholders
Semiannual report | |
Delaware International Value Equity Fund Delaware Emerging Markets Fund Delaware Global Value Fund | |
May 31, 2009 |
International equity mutual funds |
Table of contents
Disclosure of Fund expenses | 1 | |
Country and sector allocations | 4 | |
Statements of net assets | 10 | |
Statements of operations | 28 | |
Statements of changes in net assets | 30 | |
Financial highlights | 36 | |
Notes to financial statements | 62 | |
Other Fund information | 77 | |
About the organization | 82 |
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.
Disclosure of Fund expenses
For the period December 1, 2008 to May 31, 2009
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 December 1, 2008 to May 31, 2009.
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 ratios 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 Funds 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. The Funds’ expenses shown in the tables reflect fee waivers in effect. The expenses shown in each table assume reinvestment of all dividends and distributions.
1
Disclosure of Fund expenses
Delaware International Value Equity Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||
12/1/08 | 5/31/09 | Expense Ratio | 12/1/08 to 5/31/09* | ||||||||||||||
Actual Fund return | |||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,191.10 | 1.45 | % | $ | 7.92 | |||||||||
Class B | 1,000.00 | 1,187.10 | 2.15 | % | 11.72 | ||||||||||||
Class C | 1,000.00 | 1,186.00 | 2.15 | % | 11.72 | ||||||||||||
Class R | 1,000.00 | 1,191.00 | 1.65 | % | 9.01 | ||||||||||||
Institutional Class | 1,000.00 | 1,192.70 | 1.15 | % | 6.29 | ||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,017.70 | 1.45 | % | $ | 7.29 | |||||||||
Class B | 1,000.00 | 1,014.21 | 2.15 | % | 10.80 | ||||||||||||
Class C | 1,000.00 | 1,014.21 | 2.15 | % | 10.80 | ||||||||||||
Class R | 1,000.00 | 1,016.70 | 1.65 | % | 8.30 | ||||||||||||
Institutional Class | 1,000.00 | 1,019.20 | 1.15 | % | 5.79 |
Delaware Emerging Markets Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||
12/1/08 | 5/31/09 | Expense Ratio | 12/1/08 to 5/31/09* | ||||||||||||||
Actual Fund return | |||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,436.80 | 2.01 | % | $ | 12.21 | |||||||||
Class B | 1,000.00 | 1,431.70 | 2.76 | % | 16.73 | ||||||||||||
Class C | 1,000.00 | 1,432.90 | 2.76 | % | 16.74 | ||||||||||||
Institutional Class | 1,000.00 | 1,439.50 | 1.76 | % | 10.70 | ||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,014.91 | 2.01 | % | $ | 10.10 | |||||||||
Class B | 1,000.00 | 1,011.17 | 2.76 | % | 13.84 | ||||||||||||
Class C | 1,000.00 | 1,011.17 | 2.76 | % | 13.84 | ||||||||||||
Institutional Class | 1,000.00 | 1,016.16 | 1.76 | % | 8.85 |
2
Delaware Global Value Fund
Expense analysis of an investment of $1,000
Beginning | Ending | Expenses | |||||||||||||||
Account Value | Account Value | Annualized | Paid During Period | ||||||||||||||
12/1/08 | 5/31/09 | Expense Ratio | 12/1/08 to 5/31/09* | ||||||||||||||
Actual Fund return | |||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,144.10 | 1.51 | % | $ | 8.07 | |||||||||
Class B | 1,000.00 | 1,141.20 | 2.26 | % | 12.06 | ||||||||||||
Class C | 1,000.00 | 1,139.20 | 2.26 | % | 12.05 | ||||||||||||
Institutional Class | 1,000.00 | 1,144.20 | 1.26 | % | 6.74 | ||||||||||||
Hypothetical 5% return (5% return before expenses) | |||||||||||||||||
Class A | $ | 1,000.00 | $ | 1,017.40 | 1.51 | % | $ | 7.59 | |||||||||
Class B | 1,000.00 | 1,013.66 | 2.26 | % | 11.35 | ||||||||||||
Class C | 1,000.00 | 1,013.66 | 2.26 | % | 11.35 | ||||||||||||
Institutional Class | 1,000.00 | 1,018.65 | 1.26 | % | 6.34 |
*“Expenses Paid During Period” are equal to the Funds’ annualized expense ratio, multiplied by the average account value over the period, multiplied by 182/365 (to reflect the one-half year period).
3
Country and sector allocations | |
Delaware International Value Equity Fund | As of May 31, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one Fund being different than another Fund’s sector designations.
Composition of Portfolio | Percentage of net assets | ||
Common Stock by Country | 98.99 | % | |
Australia | 5.37 | % | |
Canada | 6.17 | % | |
Denmark | 2.27 | % | |
Finland | 2.42 | % | |
France | 22.56 | % | |
Germany | 8.90 | % | |
Hong Kong | 1.91 | % | |
Italy | 5.08 | % | |
Japan | 12.16 | % | |
Netherlands | 2.00 | % | |
Republic of Korea | 1.90 | % | |
Singapore | 1.56 | % | |
Sweden | 1.80 | % | |
Switzerland | 3.94 | % | |
Taiwan | 2.81 | % | |
United Kingdom | 18.14 | % | |
Discount Note | 1.48 | % | |
Securities Lending Collateral | 13.74 | % | |
Total Value of Securities | 114.21 | % | |
Obligation to Return Securities Lending Collateral | (14.45 | %) | |
Receivables and Other Assets Net of Liabilities | 0.24 | % | |
Total Net Assets | 100.00 | % |
4
Common Stock by Sector | Percentage of net assets | ||
Consumer Discretionary | 14.60 | % | |
Consumer Staples | 10.23 | % | |
Energy | 9.48 | % | |
Financials | 8.45 | % | |
Health Care | 9.93 | % | |
Industrials | 16.80 | % | |
Information Technology | 9.77 | % | |
Materials | 7.04 | % | |
Telecommunication Services | 9.42 | % | |
Utilities | 3.27 | % | |
Total | 98.99 | % |
5
Country and sector allocations | |
Delaware Emerging Markets Fund | As of May 31, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications which may result in the sector designations for one Fund being different than another Fund’s sector designations.
Composition of Portfolio | Percentage of net assets | ||
Common Stock by Country | 95.00 | % | |
Argentina | 2.28 | % | |
Australia | 0.36 | % | |
Brazil | 13.69 | % | |
China | 12.99 | % | |
France | 0.45 | % | |
Hungary | 0.36 | % | |
India | 2.87 | % | |
Indonesia | 2.22 | % | |
Israel | 1.48 | % | |
Kazakhstan | 0.06 | % | |
Luxembourg | 0.57 | % | |
Malaysia | 2.73 | % | |
Mexico | 4.42 | % | |
Pakistan | 0.25 | % | |
Peru | 0.88 | % | |
Philippines | 0.65 | % | |
Poland | 0.77 | % | |
Republic of Korea | 12.83 | % | |
Russia | 8.75 | % | |
South Africa | 9.80 | % | |
Taiwan | 8.02 | % | |
Thailand | 2.86 | % | |
Turkey | 4.15 | % | |
United Kingdom | 1.56 | % | |
Preferred Stock by Country | 6.51 | % | |
Brazil | 3.79 | % | |
Republic of Korea | 2.10 | % | |
Russia | 0.62 | % |
6
Composition of Portfolio | Percentage of net assets | ||
Participation Notes | 0.10 | % | |
Securities Lending Collateral | 3.70 | % | |
Total Value of Securities | 105.31 | % | |
Obligation to Return Securities Lending Collateral | (3.86 | %) | |
Liabilities Net of Receivables and Other Assets | (1.45 | %) | |
Total Net Assets | 100.00 | % | |
Common Stock, Preferred Stock and Participation Notes by Sector | Percentage of net assets | ||
Consumer Discretionary | 5.26 | % | |
Consumer Staples | 6.74 | % | |
Energy | 22.30 | % | |
Financials | 10.84 | % | |
Industrials | 6.80 | % | |
Information Technology | 8.39 | % | |
Materials | 16.09 | % | |
Telecommunication Services | 17.19 | % | |
Utilities | 8.00 | % | |
Total | 101.61 | % |
7
Country and sector allocations | |
Delaware Global Value Fund | As of May 31, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications which may result in the sector designations for one Fund being different than another Fund’s sector designations.
Composition of Portfolio | Percentage of net assets | ||
Common Stock by Country | 98.77 | % | |
Australia | 2.90 | % | |
Canada | 4.53 | % | |
Denmark | 1.37 | % | |
Finland | 1.33 | % | |
France | 14.54 | % | |
Germany | 5.45 | % | |
Italy | 4.20 | % | |
Japan | 9.65 | % | |
Netherlands | 1.10 | % | |
Republic of Korea | 1.45 | % | |
Singapore | 1.56 | % | |
Sweden | 2.01 | % | |
Switzerland | 2.98 | % | |
Taiwan | 1.99 | % | |
United Kingdom | 10.11 | % | |
United States | 33.60 | % | |
Discount Note | 2.05 | % | |
Securities Lending Collateral | 15.44 | % | |
Total Value of Securities | 116.26 | % | |
Obligation to Return Securities Lending Collateral | (16.21 | %) | |
Liabilities Net of Receivables and Other Assets | (0.05 | %) | |
Total Net Assets | 100.00 | % |
8
Common Stock by Sector | Percentage of net assets | |
Consumer Discretionary | 14.43 | % |
Consumer Staples | 10.10 | % |
Energy | 9.21 | % |
Financials | 6.24 | % |
Health Care | 9.61 | % |
Industrials | 19.24 | % |
Information Technology | 13.13 | % |
Materials | 7.36 | % |
Telecommunication Services | 7.86 | % |
Utilities | 1.59 | % |
Total | 98.77 | % |
9
Statements of net assets | |
Delaware International Value Equity Fund | May 31, 2009 (Unaudited) |
Number of shares | Value (U.S. $) | ||||
Common Stock – 98.99%D | |||||
Australia – 5.37% | |||||
± | Coca-Cola Amatil | 1,740,498 | $ | 11,818,729 | |
± | Telstra | 3,181,155 | 7,974,701 | ||
19,793,430 | |||||
Canada – 6.17% | |||||
†* | Agrium | 183,100 | 9,012,182 | ||
† | CGI Group Class A | 1,480,398 | 13,763,261 | ||
22,775,443 | |||||
Denmark – 2.27% | |||||
± | Novo Nordisk Class B | 160,483 | 8,367,886 | ||
8,367,886 | |||||
Finland – 2.42% | |||||
± | Nokia | 581,970 | 8,932,507 | ||
8,932,507 | |||||
France – 22.56% | |||||
±* | AXA | 322,169 | 6,040,052 | ||
±* | Cie de Saint-Gobain | 138,052 | 5,033,567 | ||
±* | France Telecom | 327,224 | 7,980,919 | ||
±* | Lafarge | 148,060 | 10,153,878 | ||
±* | PPR | 64,317 | 5,434,160 | ||
±* | Publicis Groupe | 194,828 | 6,356,562 | ||
± | Sanofi-Aventis | 125,651 | 8,020,711 | ||
±* | Teleperformance | 305,018 | 9,038,831 | ||
±* | Total | 226,359 | 13,060,785 | ||
±* | Vallourec | 47,470 | 5,999,395 | ||
± | Vivendi | 230,754 | 6,107,363 | ||
83,226,223 | |||||
Germany – 8.90% | |||||
±* | Bayerische Motoren Werke | 207,699 | 7,496,463 | ||
± | Deutsche Post | 757,731 | 10,480,747 | ||
± | Linde | 81,633 | 6,805,658 | ||
±* | Metro | 149,002 | 8,064,953 | ||
32,847,821 | |||||
Hong Kong – 1.91% | |||||
±* | Techtronic Industries | 9,356,500 | 7,036,091 | ||
7,036,091 | |||||
Italy – 5.08% | |||||
±* | Finmeccanica | 524,025 | 7,413,895 | ||
± | Parmalat | 4,554,840 | 11,308,409 | ||
18,722,304 |
10
Number of shares | Value (U.S. $) | ||||
Common Stock (continued) | |||||
Japan – 12.16% | |||||
±* | Asahi Glass | 614,900 | $ | 4,517,655 | |
± | Canon | 191,039 | 6,337,828 | ||
±* | Don Quijote | 312,700 | 5,505,554 | ||
± | Mitsubishi UFJ Financial Group | 1,768,257 | 11,219,788 | ||
± | Ono Pharmaceutical | 116,400 | 5,212,090 | ||
± | Round One | 528,322 | 4,887,754 | ||
± | Toyota Motor | 179,900 | 7,173,262 | ||
44,853,931 | |||||
Netherlands – 2.00% | |||||
± | Koninklijke Philips Electronics | 389,288 | 7,360,719 | ||
7,360,719 | |||||
Republic of Korea – 1.90% | |||||
± | Samsung Electronics | 15,704 | 7,004,741 | ||
7,004,741 | |||||
Singapore – 1.56% | |||||
± | Singapore Airlines | 664,873 | 5,766,476 | ||
5,766,476 | |||||
Sweden – 1.80% | |||||
± | Nordea Bank | 824,022 | 6,623,627 | ||
6,623,627 | |||||
Switzerland – 3.94% | |||||
± | Novartis | 204,546 | 8,185,148 | ||
† | Transocean | 79,700 | 6,334,556 | ||
14,519,704 | |||||
Taiwan – 2.81% | |||||
Chunghwa Telecom ADR | 545,141 | 10,363,130 | |||
10,363,130 | |||||
United Kingdom – 18.14% | |||||
± | AstraZeneca | 164,256 | 6,852,597 | ||
± | BP | 1,882,757 | 15,567,363 | ||
±@ | Greggs | 1,006,930 | 6,519,006 | ||
± | National Grid | 1,241,597 | 12,042,047 | ||
± | Standard Chartered | 356,289 | 7,295,492 | ||
± | Tomkins | 2,750,421 | 6,354,800 | ||
± | Vodafone Group | 4,481,946 | 8,433,778 | ||
± | WPP Group | 515,535 | 3,855,859 | ||
66,920,942 | |||||
Total Common Stock (cost $459,008,134) | 365,114,975 |
11
Statements of net assets
Delaware International Value Equity Fund
Principal | |||||||
amount (U.S. $) | Value (U.S. $) | ||||||
¹Discount Note – 1.48% | |||||||
Federal Home Loan Bank 0.07% 6/1/09 | $5,471,035 | $ | 5,471,035 | ||||
Total Discount Note (cost $5,471,035) | 5,471,035 | ||||||
Total Value of Securities Before Securities Lending | |||||||
Collateral – 100.47% (cost $464,479,169) | 370,586,010 | ||||||
Number of shares | |||||||
Securities Lending Collateral** – 13.74% | |||||||
Investment Companies | |||||||
Mellon GSL DBT II Collateral Fund | 16,017,006 | 16,017,006 | |||||
BNY Mellon SL DBT II Liquidating Fund | 35,710,502 | 34,654,134 | |||||
†Mellon GSL Reinvestment Trust II | 1,554,050 | 155 | |||||
Total Securities Lending Collateral | |||||||
(cost $53,281,558) | 50,671,295 | ||||||
Total Value of Securities – 114.21% | |||||||
(cost $517,760,727) | 421,257,305 | © | |||||
Obligation to Return Securities | |||||||
Lending Collateral** – (14.45%) | (53,281,558 | ) | |||||
Receivables and Other Assets | |||||||
Net of Liabilities – 0.24% | 885,786 | ||||||
Net Assets Applicable to 39,363,671 | |||||||
Shares Outstanding – 100.00% | $ | 368,861,533 | |||||
Net Asset Value – Delaware International Value Equity Fund | |||||||
Class A ($171,501,943 / 18,285,163 Shares) | $9.38 | ||||||
Net Asset Value – Delaware International Value Equity Fund | |||||||
Class B ($10,579,861 / 1,140,601 Shares) | $9.28 | ||||||
Net Asset Value – Delaware International Value Equity Fund | |||||||
Class C ($50,306,350 / 5,431,969 Shares) | $9.26 | ||||||
Net Asset Value – Delaware International Value Equity Fund | |||||||
Class R ($1,544,939 / 165,133 Shares) | $9.36 | ||||||
Net Asset Value – Delaware International Value Equity Fund | |||||||
Institutional Class ($134,928,440 / 14,340,805 Shares) | $9.41 |
12
Components of Net Assets at May 31, 2009: | |||
Shares of beneficial interest (unlimited authorization – no par) | $ | 648,784,173 | |
Undistributed net investment income | 5,467,044 | ||
Accumulated net realized loss on investments | (188,954,463 | ) | |
Net unrealized depreciation of investments and foreign currencies | (96,435,221 | ) | |
Total net assets | $ | 368,861,533 |
D | Securities have been classified by country of origin. Classification by type of business has been presented on page 5 in “Country and sector allocations.” |
† | Non income producing security. |
* | Fully or partially on loan. |
** | See Note 9 in “Notes to financial statements.” |
© | Includes $50,743,054 of securities loaned. |
¹ | The rate shown is the effective yield at the time of purchase. |
@ | Illiquid security. At May 31, 2009, the aggregate amount of illiquid securities was $6,519,006, which represented 1.77% of the Fund’s net assets. See Note 10 in “Notes to financial statements.” |
± | Security is being valued based on international fair value pricing. At May 31, 2009, the aggregate amount of international fair value priced securities was $325,641,846, which represented 88.28% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
Summary of abbreviations:
ADR — American Depositary Receipt
HKD — Hong Kong Dollar
USD — United States Dollar
Net Asset Value and Offering Price Per Share – | ||
Delaware International Value Equity Fund | ||
Net asset value Class A (A) | $ | 9.38 |
Sales charge (5.75% of offering price) (B) | 0.57 | |
Offering price | $ | 9.95 |
(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. |
13
Statements of net assets
Delaware International Value Equity Fund
The following foreign currency exchange contracts were outstanding at May 31, 2009: |
Foreign Currency Exchange Contracts1
Unrealized | |||||||||||||
Contracts to Deliver | In Exchange For | Settlement Date | Depreciation | ||||||||||
HKD | (3,731,828 | ) | USD | 481,278 | 6/1/09 | $ | (127 | ) | |||||
HKD | (770,260 | ) | USD | 99,356 | 6/2/09 | (8 | ) | ||||||
$ | (135 | ) |
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional values presented above represent the Fund’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Fund’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
14
Delaware Emerging Markets Fund | May 31, 2009 (Unaudited) |
Number of shares | Value (U.S. $) | ||||
Common Stock – 95.00%D | |||||
Argentina – 2.28% | |||||
*@ | Cresud ADR | 896,200 | $ | 8,585,596 | |
†# | Grupo Clarin Class B GDR 144A | 353,200 | 980,519 | ||
†*@ | IRSA Inversiones y Representaciones GDR | 358,400 | 1,612,800 | ||
11,178,915 | |||||
Australia – 0.36% | |||||
†@ | Alara Resources | 200,832 | 11,259 | ||
Alumina ADR | 292,200 | 1,273,992 | |||
±† | Strike Resources | 1,398,730 | 475,754 | ||
1,761,005 | |||||
Brazil – 13.69% | |||||
AES Tiete | 597,480 | 5,042,923 | |||
Banco Bradesco ADR | 200,400 | 3,060,108 | |||
†* | Braskem ADR | 99,300 | 723,897 | ||
Centrais Eletricas Brasileiras | 1,579,671 | 21,284,495 | |||
* | Gol Linhas Aereas Inteligentes ADR | 125,100 | 549,189 | ||
Itau Unibanco Holding | 300,000 | 4,815,000 | |||
Petroleo Brasileiro ADR | 635,000 | 22,205,950 | |||
Redecard | 155,100 | 2,239,654 | |||
* | Tim Participacoes ADR | 155,000 | 3,045,750 | ||
† | Triunfo Participacoes e Investmentos | 109,600 | 115,354 | ||
†* | Votorantim Celulose e Papel ADR | 344,758 | 4,092,277 | ||
67,174,597 | |||||
China – 12.99%¨ | |||||
† | 51job ADR | 118,300 | 1,025,661 | ||
China Mobile ADR | 189,900 | 9,344,978 | |||
* | China Petroleum & Chemical ADR | 45,000 | 3,690,000 | ||
± | China Telecom | 8,633,078 | 4,114,447 | ||
± | China Unicom | 6,734,979 | 8,290,162 | ||
* | China Unicom ADR | 455,200 | 5,621,720 | ||
± | First Pacific | 4,204,000 | 2,094,473 | ||
† | Focus Media Holding ADR | 600,300 | 5,162,580 | ||
± | Fountain Set Holdings | 3,878,800 | 349,415 | ||
±† | Foxconn International Holdings | 1,931,000 | 1,394,016 | ||
† | HLS Systems International | 188,400 | 1,081,416 | ||
± | Johnson Electric Holdings | 278,500 | 76,973 | ||
± | PetroChina | 4,242,000 | 4,927,302 | ||
* | PetroChina ADR | 50,000 | 5,814,500 | ||
† | Sina | 108,926 | 3,061,910 | ||
± | Sinotrans | 7,561,000 | 1,980,078 |
15
Statements of net assets
Delaware Emerging Markets Fund
Number of shares | Value (U.S. $) | ||||
Common Stock (continued) | |||||
China (continued) | |||||
*† | Spreadtrum Communications ADR | 213,900 | $ | 389,298 | |
±† | Tom Group | 47,824,000 | 2,776,835 | ||
± | Travelsky Technology | 4,849,400 | 2,549,465 | ||
63,745,229 | |||||
France – 0.45% | |||||
*± | Vallourec | 17,646 | 2,230,152 | ||
2,230,152 | |||||
Hungary – 0.36% | |||||
*± | OTP Bank | 99,702 | 1,770,719 | ||
1,770,719 | |||||
India – 2.87% | |||||
±@ | Indiabulls Real Estate GDR | 102,022 | 508,069 | ||
± | Reliance Communications | 537,130 | 3,509,592 | ||
†*# | Reliance Industries 144A GDR | 100,612 | 9,743,065 | ||
*† | Sify Technologies ADR | 179,300 | 335,291 | ||
14,096,017 | |||||
Indonesia – 2.22% | |||||
± | Gudang Garam | 7,494,224 | 8,278,764 | ||
± | Tambang Batubara Bukit Asam | 2,379,335 | 2,624,211 | ||
10,902,975 | |||||
Israel – 1.48% | |||||
±† | Bank Hapoalim | 420,000 | 1,113,315 | ||
± | Bank Leumi Le - Israel | 600,000 | 1,689,341 | ||
± | Israel Chemicals | 391,980 | 4,472,394 | ||
7,275,050 | |||||
Kazakhstan – 0.06% | |||||
KazMunaiGas Exploration Production GDR | 12,918 | 284,067 | |||
284,067 | |||||
Luxembourg – 0.57% | |||||
Tenaris ADR | 91,900 | 2,809,383 | |||
2,809,383 | |||||
Malaysia – 2.73% | |||||
†± | Eastern & Oriental | 3,251,700 | 717,337 | ||
± | Hong Leong Bank | 2,097,983 | 3,287,008 | ||
± | KLCC Property Holdings | 3,244,600 | 2,910,544 | ||
± | Media Prima | 2,218,400 | 737,326 | ||
±@ | Oriental Holdings | 2,064,900 | 2,876,996 | ||
±† | UEM Land Holdings | 6,004,250 | 2,862,776 | ||
13,391,987 |
16
Number of shares | Value (U.S. $) | ||||
Common Stock (continued) | |||||
Mexico – 4.42% | |||||
America Movil Series L ADR | 170,000 | $ | 6,516,100 | ||
†* | Cemex ADR | 483,468 | 4,718,647 | ||
Fomento Economico Mexicano ADR | 125,000 | 4,086,250 | |||
Grupo Mexico Series B | 2,890,524 | 2,724,629 | |||
Grupo Televisa ADR | 205,200 | 3,648,456 | |||
21,694,082 | |||||
Pakistan – 0.25% | |||||
@ | Oil & Gas Development GDR | 126,418 | 1,218,948 | ||
1,218,948 | |||||
Peru – 0.88% | |||||
* | Cia de Minas Buenaventura ADR | 153,100 | 4,337,323 | ||
4,337,323 | |||||
Philippines – 0.65% | |||||
Philippine Long Distance Telephone ADR | 67,800 | 3,213,720 | |||
3,213,720 | |||||
Poland – 0.77% | |||||
± | Polski Koncern Naftowy Orlen | 411,252 | 3,756,625 | ||
3,756,625 | |||||
Republic of Korea – 12.83% | |||||
± | CJ | 80,144 | 3,070,802 | ||
± | Hyundai Elevator | 40,821 | 2,018,585 | ||
KB Financial Group ADR | 194,300 | 6,209,828 | |||
± | Korea Electric Power | 220,420 | 5,002,956 | ||
Korea Electric Power ADR | 689,300 | 7,913,165 | |||
± | KT | 213,064 | 5,765,674 | ||
* | LG Display ADR | 214,900 | 2,533,671 | ||
± | Lotte Chilsung Beverage | 9 | 5,762 | ||
± | Lotte Confectionery | 4,610 | 3,669,488 | ||
POSCO ADR | 40,000 | 3,355,600 | |||
± | Samsung Electronics | 21,558 | 9,615,908 | ||
±† | SK Communications | 171,609 | 1,594,125 | ||
± | SK Energy | 63,751 | 5,421,082 | ||
± | SK Holdings | 16,519 | 1,433,496 | ||
± | SK Telecom | 21,731 | 3,036,857 | ||
SK Telecom ADR | 148,100 | 2,329,613 | |||
62,976,612 |
17
Statements of net assets
Delaware Emerging Markets Fund
Number of shares | Value (U.S. $) | ||||
Common Stock (continued) | |||||
Russia – 8.75% | |||||
†@ | Chelyabinsk Zinc Plant GDR | 143,300 | $ | 336,755 | |
†@= | Fifth Power Generation GDR | 21,159 | 39,011 | ||
Gazprom ADR | 671,095 | 15,462,029 | |||
LUKOIL ADR | 90,000 | 4,770,000 | |||
LUKOIL ADR (London International Exchange) | 101,920 | 5,376,280 | |||
MMC Norilsk Nickel ADR | 159,893 | 1,806,791 | |||
Mobile TeleSystems ADR | 99,900 | 4,144,851 | |||
Sberbank | 4,397,787 | 6,222,869 | |||
± | Surgutneftegaz ADR | 400,000 | 3,407,920 | ||
†= | TGK-5 GDR | 8,772 | 8,314 | ||
VTB Bank GDR | 467,782 | 1,365,923 | |||
42,940,743 | |||||
South Africa – 9.80% | |||||
± | ArcelorMittal Steel South Africa | 226,105 | 2,716,542 | ||
Gold Fields ADR | 431,300 | 5,857,054 | |||
± | Impala Platinum Holdings | 196,836 | 4,808,036 | ||
± | JD Group | 723,137 | 3,429,794 | ||
± | Sasol | 252,777 | 9,582,846 | ||
± | Standard Bank Group | 610,460 | 6,359,639 | ||
± | Sun International | 290,543 | 2,756,304 | ||
*= | Telkom | 153,106 | 1,693,480 | ||
± | Tongaat Hulett | 328,651 | 3,147,340 | ||
±† | Vodacom Group | 1,189,062 | 7,771,647 | ||
48,122,682 | |||||
Taiwan – 8.02% | |||||
Chunghwa Telecom ADR | 460,400 | 8,752,204 | |||
± | Evergreen Marine | 10,573,000 | 6,218,132 | ||
± | Formosa Chemicals & Fibre | 2,919,420 | 4,872,393 | ||
± | President Chain Store | 1,238,884 | 3,210,045 | ||
± | Taiwan Semiconductor Manufacturing | 3,477,248 | 6,424,831 | ||
± | United Microelectronics | 13,595,356 | 5,516,962 | ||
± | Walsin Lihwa | 13,056,756 | 4,353,381 | ||
39,347,948 | |||||
Thailand – 2.86% | |||||
± | Bangkok Bank-Foreign | 1,015,349 | 2,688,573 | ||
PTT Exploration & Production -Foreign | 1,131,800 | 4,277,151 | |||
± | Siam Cement NVDR | 1,843,843 | 7,048,337 | ||
14,014,061 |
18
Number of shares | Value (U.S. $) | ||||
Common Stock (continued) | |||||
Turkey – 4.15% | |||||
± | Alarko Gayrimenkul Yatirim Ortakligi | 50,400 | $ | 520,331 | |
± | Alarko Holding | 1,903,508 | 3,202,324 | ||
±† | Turk Sise ve Cam Fabrikalari | 3,561,828 | 3,036,155 | ||
± | Turkcell Iletisim Hizmet | 715,275 | 3,815,598 | ||
Turkcell Iletisim Hizmet ADR | 183,900 | 2,447,709 | |||
± | Turkiye Is Bankasi Class C | 1,092,859 | 3,758,222 | ||
± | Yazicilar Holding Class A | 832,584 | 3,599,659 | ||
20,379,998 | |||||
United Kingdom – 1.56% | |||||
± | Anglo American | 132,917 | 3,844,004 | ||
Anglo American ADR | 118,000 | 1,693,300 | |||
^±@ | Griffin Mining | 3,056,187 | 2,040,113 | ||
±† | Mwana Africa | 781,129 | 72,993 | ||
7,650,410 | |||||
Total Common Stock (cost $582,441,052) | 466,273,248 | ||||
Preferred Stock – 6.51%D | |||||
Brazil – 3.79% | |||||
† | Braskem Class A | 541,994 | 1,975,898 | ||
@ | Jereissati Participacoes 5.56% | 2,895,405 | 942,194 | ||
Vale Class A 3.21% | 950,000 | 15,683,996 | |||
18,602,088 | |||||
Republic of Korea – 2.10% | |||||
± | Hyundai Motor 3.09% | 41,547 | 1,049,266 | ||
± | Samsung Electronics 1.55% | 31,362 | 9,238,423 | ||
10,287,689 | |||||
Russia – 0.62% | |||||
@ | AK Transneft 1.42% | 5,498 | 3,037,645 | ||
3,037,645 | |||||
Total Preferred Stock (cost $32,808,935) | 31,927,422 |
19
Statements of net assets
Delaware Emerging Markets Fund
Number of shares | Value (U.S. $) | ||||||
Participation Notes – 0.10%D | |||||||
India – 0.10% | |||||||
†#@= | Lehman Indian Oil CW 12 LEPO 144A | 172,132 | $ | 134,041 | |||
†#= | Lehman Oil & Natural Gas CW 12 LEPO 144A | 254,590 | 380,966 | ||||
Total Participation Notes (cost $8,559,056) | 515,007 | ||||||
Total Value of Securities Before Securities | |||||||
Lending Collateral – 101.61% (cost $623,809,043) | 498,715,677 | ||||||
Securities Lending Collateral** – 3.70% | |||||||
Investment Companies | |||||||
Mellon GSL DBT II Collateral Fund | 6,634,545 | 6,634,545 | |||||
BNY Mellon SL DBT II Liquidating Fund | 11,894,903 | 11,543,035 | |||||
†Mellon GSL Reinvestment Trust II | 396,304 | 40 | |||||
Total Securities Lending Collateral | |||||||
(cost $18,925,752) | 18,177,620 | ||||||
Total Value of Securities – 105.31% | |||||||
(cost $642,734,795) | 516,893,297 | © | |||||
Obligation to Return Securities | |||||||
Lending Collateral** – (3.86%) | (18,925,752 | ) | |||||
Liabilities Net of Receivables and | |||||||
Other Assets – (1.45%) | (7,158,047 | ) | |||||
Net Assets Applicable to 48,095,585 | |||||||
Shares Outstanding – 100.00% | $ | 490,809,498 | |||||
Net Asset Value – Delaware Emerging Markets Fund | |||||||
Class A ($280,057,042 / 27,147,874 Shares) | $10.32 | ||||||
Net Asset Value – Delaware Emerging Markets Fund | |||||||
Class B ($17,298,678 / 1,750,206 Shares) | $ 9.88 | ||||||
Net Asset Value – Delaware Emerging Markets Fund | |||||||
Class C ($109,851,577 / 11,139,906 Shares) | $ 9.86 | ||||||
Net Asset Value – Delaware Emerging Markets Fund | |||||||
Institutional Class ($83,602,201 / 8,057,599 Shares) | $10.38 |
20
Components of Net Assets at May 31, 2009: | |||
Shares of beneficial interest (unlimited authorization – no par) | $ | 639,578,286 | |
Undistributed net investment income | 1,582,064 | ||
Accumulated net realized loss on investments | (24,557,804 | ) | |
Net unrealized depreciation of investments and foreign currencies | (125,793,048 | ) | |
Total net assets | $ | 490,809,498 |
D | Securities have been classified by country of origin. Classification by type of business has been presented on page 7 in “Country and sector allocations.” |
† | Non income producing security. |
= | Security is being fair valued in accordance with the Fund’s fair valuation policy. At May 31, 2009, the aggregate amount of fair valued securities was $2,255,812, which represented 0.46% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
± | Security is being valued based on international fair value pricing. At May 31, 2009, the aggregate amount of international fair value priced securities was $231,498,634, which represented 47.17% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
# | Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At May 31, 2009, the aggregate amount of Rule 144A securities was $11,238,591, which represented 2.29% of the Fund’s net assets. See Note 10 in “Notes to financial statements.” |
@ | Illiquid security. At May 31, 2009, the aggregate amount of illiquid securities was $21,343,427, which represented 4.35% 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. |
* | Securities listed and traded on the Hong Kong Stock Exchange. |
© | Includes $17,977,992 of securities loaned. |
* | Fully or partially on loan. |
** | See Note 9 in “Notes to financial statements.” |
21
Statements of net assets
Delaware Emerging Markets Fund
Summary of abbreviations: |
Net Asset Value and Offering Price Per Share – | ||
Delaware Emerging Markets Fund | ||
Net asset value Class A (A) | $ | 10.32 |
Sales charge (5.75% of offering price) (B) | 0.63 | |
Offering Price | $ | 10.95 |
(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. |
The following foreign currency exchange contracts were outstanding at May 31, 2009:
Foreign Currency Exchange Contracts1
Unrealized | ||||||||||||
Appreciation | ||||||||||||
Contracts to Receive | In Exchange For | Settlement Date | (Depreciation) | |||||||||
KRW | 6,338,960 | USD | (5,061 | ) | 6/1/09 | $ | (22 | ) | ||||
ZAR | 9,918,324 | USD | (1,204,557 | ) | 6/2/09 | 41,108 | ||||||
ZAR | 8,334,384 | USD | (1,032,966 | ) | 6/3/09 | 13,563 | ||||||
ZAR | 4,505,637 | USD | (570,819 | ) | 6/4/09 | (5,168 | ) | |||||
$ | 49,481 |
The use of foreign currency exchange contracts involves elements of market risk and risks in excess of the amount recognized in the financial statements. The notional values presented above represent the Fund’s total exposure in such contracts, whereas only the net unrealized appreciation (depreciation) is reflected in the Fund’s net assets.
1See Note 8 in “Notes to financial statements.”
See accompanying notes
22
Delaware Global Value Fund | May 31, 2009 (Unaudited) |
Number of shares | Value (U.S. $) | ||||
Common Stock – 98.77%D | |||||
Australia – 2.90% | |||||
± | Coca-Cola Amatil | 81,119 | $ | 550,833 | |
± | Telstra | 205,471 | 515,086 | ||
1,065,919 | |||||
Canada – 4.53% | |||||
*† | Agrium | 16,600 | 817,052 | ||
† | CGI Group Class A | 91,027 | 846,278 | ||
1,663,330 | |||||
Denmark – 1.37% | |||||
± | Novo Nordisk Class B | 9,659 | 503,638 | ||
503,638 | |||||
Finland – 1.33% | |||||
± | Nokia | 31,708 | 486,678 | ||
486,678 | |||||
France – 14.54% | |||||
±* | AXA | 20,132 | 377,436 | ||
±* | Cie de Saint-Gobain | 9,188 | 335,007 | ||
±* | France Telecom | 17,182 | 419,065 | ||
±* | Lafarge | 11,279 | 773,508 | ||
±* | PPR | 4,355 | 367,955 | ||
±* | Publicis Groupe | 11,508 | 375,466 | ||
± | Sanofi-Aventis | 7,988 | 509,900 | ||
± | Teleperformance | 19,735 | 584,822 | ||
±* | Total | 13,635 | 786,732 | ||
±* | Vallourec | 3,214 | 406,195 | ||
±* | Vivendi | 15,148 | 400,922 | ||
5,337,008 | |||||
Germany – 5.45% | |||||
±* | Bayerische Motoren Werke | 11,853 | 427,809 | ||
± | Deutsche Post | 41,207 | 569,966 | ||
± | Linde | 6,551 | 546,150 | ||
±* | Metro | 8,415 | 455,474 | ||
1,999,399 | |||||
Italy – 4.20% | |||||
±* | Finmeccanica | 39,497 | 558,803 | ||
± | Parmalat | 395,993 | 983,141 | ||
1,541,944 |
23
Statements of net assets
Delaware Global Value Fund
Number of shares | Value (U.S. $) | ||||
Common Stock (continued) | |||||
Japan – 9.65% | |||||
±* | Asahi Glass | 95,500 | $ | 701,636 | |
± | Canon | 9,200 | 305,215 | ||
±* | Don Quijote | 38,400 | 676,090 | ||
± | Mitsubishi UFJ Financial Group | 116,554 | 739,548 | ||
± | Ono Pharmaceutical | 6,400 | 286,575 | ||
± | Round One | 35,129 | 324,995 | ||
± | Toyota Motor | 12,750 | 508,389 | ||
3,542,448 | |||||
Netherlands – 1.10% | |||||
± | Koninklijke Philips Electronics | 21,453 | 405,637 | ||
405,637 | |||||
Republic of Korea – 1.45% | |||||
± | Samsung Electronics | 1,191 | 531,243 | ||
531,243 | |||||
Singapore – 1.56% | |||||
± | Singapore Airlines | 66,067 | 573,002 | ||
573,002 | |||||
Sweden – 2.01% | |||||
± | Nordea Bank FDR | 92,359 | 738,656 | ||
738,656 | |||||
Switzerland – 2.98% | |||||
± | Novartis | 10,609 | 424,532 | ||
† | Transocean | 8,400 | 667,632 | ||
1,092,164 | |||||
Taiwan – 1.99% | |||||
Chunghwa Telecom ADR | 38,431 | 730,578 | |||
730,578 | |||||
United Kingdom – 10.11% | |||||
± | AstraZeneca | 10,651 | 444,349 | ||
± | BP | 86,677 | 716,679 | ||
±@ | Greggs | 67,030 | 433,962 | ||
± | National Grid | 60,032 | 582,241 | ||
± | Standard Chartered | 21,283 | 435,798 | ||
± | Tomkins | 180,549 | 417,155 | ||
± | Vodafone Group | 222,677 | 419,016 | ||
± | WPP Group | 34,984 | 261,657 | ||
3,710,857 |
24
Number of shares | Value (U.S. $) | |||||
Common Stock (continued) | ||||||
United States – 33.60% | ||||||
* | Abercrombie & Fitch Class A | 18,100 | $ | 544,991 | ||
Archer-Daniels-Midland | 25,500 | 701,760 | ||||
Ball | 14,200 | 565,160 | ||||
† | Benchmark Electronics | 57,800 | 705,160 | |||
BJ Services | 38,200 | 597,448 | ||||
Black & Decker | 17,100 | 548,397 | ||||
Carnival | 16,300 | 414,672 | ||||
Caterpillar | 15,900 | 563,814 | ||||
* | CenturyTel | 26,000 | 802,100 | |||
Chevron | 9,200 | 613,364 | ||||
† | Convergys | 35,700 | 330,225 | |||
Cooper Industries Class A | 24,900 | 817,217 | ||||
FedEx | 9,500 | 526,585 | ||||
* | Imation | 27,100 | 261,786 | |||
Intel | 32,100 | 504,612 | ||||
International Business Machines | 3,700 | 393,236 | ||||
Lockheed Martin | 7,200 | 602,568 | ||||
Lowe’s | 23,500 | 446,735 | ||||
Microsoft | 21,900 | 457,491 | ||||
*† | Mylan | 43,900 | 579,919 | |||
Pfizer | 51,200 | 777,728 | ||||
Walgreen | 19,500 | 580,905 | ||||
12,335,873 | ||||||
Total Common Stock (cost $46,739,333) | 36,258,374 | |||||
Principal | ||||||
amount (U.S. $) | ||||||
¹Discount Note – 2.05% | ||||||
Federal Home Loan Bank 0.07% 6/1/09 | $ | 751,005 | 751,005 | |||
Total Discount Note (cost $751,005) | 751,005 | |||||
Total Value of Securities Before Securities | ||||||
Lending Collateral – 100.82% (cost $47,490,338) | 37,009,379 |
25
Statements of net assets
Delaware Global Value Fund
Number of shares | Value (U.S. $) | ||||||
Securities Lending Collateral** – 15.44% | |||||||
Investment Companies | |||||||
Mellon GSL DBT II Collateral Fund | 1,317,046 | $ | 1,317,046 | ||||
BNY Mellon SL DBT II Liquidating Fund | 4,484,116 | 4,351,469 | |||||
†Mellon GSL Reinvestment Trust II | 149,675 | 15 | |||||
Total Securities Lending Collateral | |||||||
(cost $5,950,837) | 5,668,530 | ||||||
Total Value of Securities – 116.26% | |||||||
(cost $53,441,175) | 42,677,909 | © | |||||
Obligation to Return Securities | |||||||
Lending Collateral** – (16.21%) | (5,950,837 | ) | |||||
Liabilities Net of Receivables and | |||||||
Other Assets – (0.05%) | (18,364 | ) | |||||
Net Assets Applicable to 5,691,411 | |||||||
Shares Outstanding – 100.00% | $ | 36,708,708 | |||||
Net Asset Value – Delaware Global Value Fund | |||||||
Class A ($21,213,203 / 3,276,089 Shares) | $6.48 | ||||||
Net Asset Value – Delaware Global Value Fund | |||||||
Class B ($3,822,241 / 596,416 Shares) | $6.41 | ||||||
Net Asset Value – Delaware Global Value Fund | |||||||
Class C ($10,366,195 / 1,617,537 Shares) | $6.41 | ||||||
Net Asset Value – Delaware Global Value Fund | |||||||
Institutional Class ($1,307,069 / 201,369 Shares) | $6.49 | ||||||
Components of Net Assets at May 31, 2009: | |||||||
Shares of beneficial interest (unlimited authorization – no par) | $ | 74,075,193 | |||||
Undistributed net investment income | 359,040 | ||||||
Accumulated net realized loss on investments | (26,965,771 | ) | |||||
Net unrealized depreciation of investments and foreign currencies | (10,759,754 | ) | |||||
Total net assets | $ | 36,708,708 |
26
D | Securities have been classified by country of origin. Classification by type of business has been presented on page 9 in “Country and sector allocations.” |
¹ | The rate shown is the effective yield at the time of purchase. |
† | Non income producing security. |
* | Fully or partially on loan. |
** | See Note 9 in “Notes to financial statements.” |
± | Security is being valued based on international fair value pricing. At May 31, 2009, the aggregate amount of international fair value priced securities was $20,860,961, which represented 56.83% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
@ | Illiquid security. At May 31, 2009, the aggregate amount of illiquid securities was $433,962, which represented 1.18% of the Fund’s net assets. See Note 10 in “Notes to financial statements.” |
© | Includes $5,694,858 of securities loaned. |
Summary of abbreviations:
ADR — American Depositary Receipt
FDR — Foreign Depositary Receipt
Net Asset Value and Offering Price Per Share – | ||
Delaware Global Value Fund | ||
Net asset value Class A (A) | $ | 6.48 |
Sales charge (5.75% of offering price) (B) | 0.40 | |
Offering price | $ | 6.88 |
(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
27
Statements of operations | |
Delaware International Funds | Six Months Ended May 31, 2009 (Unaudited) |
Delaware | Delaware | Delaware | |||||||||
International | Emerging | Global | |||||||||
Value Equity | Markets | Value | |||||||||
Fund | Fund | Fund | |||||||||
Investment Income: | |||||||||||
Dividends | $ | 8,771,874 | $ | 6,376,749 | $ | 715,856 | |||||
Interest | 3,268 | 10,409 | 500 | ||||||||
Securities lending income | 691,144 | 171,913 | 43,928 | ||||||||
Foreign tax withheld | (910,267 | ) | (332,144 | ) | (61,722 | ) | |||||
8,556,019 | 6,226,927 | 698,562 | |||||||||
Expenses: | |||||||||||
Management fees | 1,488,134 | 2,306,538 | 148,051 | ||||||||
Distribution expenses – Class A | 241,080 | 322,347 | 30,154 | ||||||||
Distribution expenses – Class B | 50,789 | 70,196 | 18,063 | ||||||||
Distribution expenses – Class C | 234,927 | 416,871 | 49,858 | ||||||||
Distribution expenses – Class R | 3,878 | — | — | ||||||||
Dividend disbursing and transfer agent | |||||||||||
fees and expenses | 863,598 | 629,995 | 108,514 | ||||||||
Accounting and administration expenses | 70,030 | 73,809 | 6,967 | ||||||||
Reports and statements to shareholders | 69,689 | 66,509 | 5,346 | ||||||||
Custodian fees | 50,454 | 56,854 | 18,611 | ||||||||
Registration fees | 42,605 | 35,105 | 33,090 | ||||||||
Legal fees | 31,321 | 39,848 | 3,280 | ||||||||
Audit and tax fees | 28,293 | 34,888 | 7,949 | ||||||||
Trustees’ fees | 12,691 | 13,193 | 1,261 | ||||||||
Insurance fees | 5,485 | 5,406 | 538 | ||||||||
Consulting fees | 3,101 | 3,292 | 305 | ||||||||
Pricing fees | 2,998 | 4,064 | 2,795 | ||||||||
Dues and services | 2,443 | 1,567 | 72 | ||||||||
Trustees’ expenses | 1,083 | 1,029 | 125 | ||||||||
3,202,599 | 4,081,511 | 434,979 | |||||||||
Less fees waived | (662,681 | ) | (30,361 | ) | (116,570 | ) | |||||
Less waived distribution expenses – Class A | — | (53,724 | ) | (5,026 | ) | ||||||
Less waived distribution expenses – Class R | (646 | ) | — | — | |||||||
Total operating expenses | 2,539,272 | 3,997,426 | 313,383 | ||||||||
Net Investment Income | 6,016,747 | 2,229,501 | 385,179 |
28
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 loss on: | |||||||||||
Investments | $ | (90,761,048 | ) | $ | (22,648,286 | ) | $ | (9,084,828 | ) | ||
Foreign currencies | (531,080 | ) | (459,641 | ) | (18,920 | ) | |||||
Net realized loss | (91,292,128 | ) | (23,107,927 | ) | (9,103,748 | ) | |||||
Net change in unrealized appreciation/ | |||||||||||
depreciation of investments | |||||||||||
and foreign currencies | 145,919,684 | 168,897,964 | 13,484,108 | ||||||||
Net Realized and Unrealized Gain on | |||||||||||
Investments and Foreign Currencies | 54,627,556 | 145,790,037 | 4,380,360 | ||||||||
Net Increase in Net Assets Resulting | |||||||||||
from Operations | $ | 60,644,303 | $ | 148,019,538 | $ | 4,765,539 |
See accompanying notes
29
Statements of changes in net assets
Delaware International Value Equity Fund
Six Months | Year | ||||||
Ended | Ended | ||||||
5/31/09 | 11/30/08 | ||||||
(Unaudited) | |||||||
Increase (Decrease) in Net Assets from Operations: | |||||||
Net investment income | $ | 6,016,747 | $ | 17,069,564 | |||
Net realized loss on investments | |||||||
and foreign currencies | (91,292,128 | ) | (100,619,180 | ) | |||
Net change in unrealized appreciation/depreciation | |||||||
of investments and foreign currencies | 145,919,684 | (346,654,297 | ) | ||||
Net increase (decrease) in net assets resulting | |||||||
from operations | 60,644,303 | (430,203,913 | ) | ||||
Dividends and Distributions to Shareholders from: | |||||||
Net investment income: | |||||||
Class A | (6,520,802 | ) | (5,733,859 | ) | |||
Class B | (300,650 | ) | (186,281 | ) | |||
Class C | (1,386,689 | ) | (799,282 | ) | |||
Class R | (43,071 | ) | (31,370 | ) | |||
Institutional Class | (5,973,195 | ) | (6,021,409 | ) | |||
Net realized gain on investments: | |||||||
Class A | — | (20,209,040 | ) | ||||
Class B | — | (1,455,826 | ) | ||||
Class C | — | (6,246,566 | ) | ||||
Class R | — | (131,133 | ) | ||||
Institutional Class | — | (17,044,855 | ) | ||||
(14,224,407 | ) | (57,859,621 | ) | ||||
Capital Share Transactions: | |||||||
Proceeds from shares sold: | |||||||
Class A | 13,761,847 | 54,669,434 | |||||
Class B | 135,473 | 472,785 | |||||
Class C | 2,114,171 | 7,600,984 | |||||
Class R | 205,071 | 970,751 | |||||
Institutional Class | 5,801,533 | 71,947,147 |
30
Six Months | Year | ||||||
Ended | Ended | ||||||
5/31/09 | 11/30/08 | ||||||
(Unaudited) | |||||||
Capital Share Transactions (continued): | |||||||
Net asset value of shares issued upon reinvestment | |||||||
of dividends and distributions: | |||||||
Class A | $ | 6,086,060 | $ | 24,490,131 | |||
Class B | 284,879 | 1,553,479 | |||||
Class C | 1,323,778 | 6,784,142 | |||||
Class R | 43,071 | 162,502 | |||||
Institutional Class | 5,951,192 | 23,006,594 | |||||
35,707,075 | 191,657,949 | ||||||
Cost of shares repurchased: | |||||||
Class A | (47,957,056 | ) | (151,646,856 | ) | |||
Class B | (2,470,405 | ) | (10,536,262 | ) | |||
Class C | (11,185,932 | ) | (41,786,464 | ) | |||
Class R | (170,964 | ) | (1,553,490 | ) | |||
Institutional Class | (39,650,934 | ) | (163,150,080 | ) | |||
(101,435,291 | ) | (368,673,152 | ) | ||||
Decrease in net assets derived from | |||||||
capital share transactions | (65,728,216 | ) | (177,015,203 | ) | |||
Net Decrease in Net Assets | (19,308,320 | ) | (665,078,737 | ) | |||
Net Assets: | |||||||
Beginning of period | 388,169,853 | 1,053,248,590 | |||||
End of period | $ | 368,861,533 | $ | 388,169,853 | |||
Undistributed net investment income | $ | 5,467,044 | $ | 14,205,784 |
See accompanying notes
31
Statements of changes in net assets
Delaware Emerging Markets Fund
Six Months | Year | ||||||
Ended | Ended | ||||||
5/31/09 | 11/30/08 | ||||||
(Unaudited) | |||||||
Increase (Decrease) in Net Assets from Operations: | |||||||
Net investment income | $ | 2,229,501 | $ | 6,220,515 | |||
Net realized gain (loss) on investments | |||||||
and foreign currencies | (23,107,927 | ) | 57,965,073 | ||||
Net change in unrealized appreciation/depreciation | |||||||
of investments and foreign currencies | 168,897,964 | (550,842,194 | ) | ||||
Net increase (decrease) in net assets resulting | |||||||
from operations | 148,019,538 | (486,656,606 | ) | ||||
Dividends and Distributions to Shareholders from: | |||||||
Net investment income: | |||||||
Class A | (415,316 | ) | (6,928,794 | ) | |||
Class B | — | (186,103 | ) | ||||
Class C | — | (1,007,368 | ) | ||||
Institutional Class | (284,008 | ) | (1,311,904 | ) | |||
Net realized gain on investments: | |||||||
Class A | (21,325,001 | ) | (162,293,675 | ) | |||
Class B | (1,504,913 | ) | (10,968,084 | ) | |||
Class C | (8,645,202 | ) | (59,369,696 | ) | |||
Institutional Class | (4,583,103 | ) | (25,408,291 | ) | |||
(36,757,543 | ) | (267,473,915 | ) | ||||
Capital Share Transactions: | |||||||
Proceeds from shares sold: | |||||||
Class A | 41,011,317 | 132,602,172 | |||||
Class B | 139,951 | 1,673,924 | |||||
Class C | 10,873,513 | 29,518,228 | |||||
Institutional Class | 21,446,490 | 32,335,792 |
32
Six Months | Year | ||||||
Ended | Ended | ||||||
5/31/09 | 11/30/08 | ||||||
(Unaudited) | |||||||
Capital Share Transactions (continued): | |||||||
Net asset value of shares issued upon reinvestment | |||||||
of dividends and distributions: | |||||||
Class A | $ | 20,094,689 | $ | 150,625,631 | |||
Class B | 1,361,700 | 10,122,855 | |||||
Class C | 8,062,549 | 55,804,659 | |||||
Institutional Class | 4,749,439 | 25,764,773 | |||||
107,739,648 | 438,448,034 | ||||||
Cost of shares repurchased: | |||||||
Class A | (57,376,795 | ) | (278,598,809 | ) | |||
Class B | (2,681,114 | ) | (12,287,151 | ) | |||
Class C | (17,467,725 | ) | (64,222,452 | ) | |||
Institutional Class | (9,000,981 | ) | (38,321,112 | ) | |||
(86,526,615 | ) | (393,429,524 | ) | ||||
Increase in net assets derived from | |||||||
capital share transactions | 21,213,033 | 45,018,510 | |||||
Net Increase (Decrease) in Net Assets | 132,475,028 | (709,112,011 | ) | ||||
Net Assets: | |||||||
Beginning of period | 358,334,470 | 1,067,446,481 | |||||
End of period | $ | 490,809,498 | $ | 358,334,470 | |||
Undistributed net investment income | $ | 1,582,064 | $ | 514,269 |
See accompanying notes
33
Statements of changes in net assets
Delaware Global Value Fund
Six Months | Year | ||||||
Ended | Ended | ||||||
5/31/09 | 11/30/08 | ||||||
(Unaudited) | |||||||
Increase (Decrease) in Net Assets from Operations: | |||||||
Net investment income | $ | 385,179 | $ | 1,230,685 | |||
Net realized loss on investments | |||||||
and foreign currencies | (9,103,748 | ) | (18,164,469 | ) | |||
Net change in unrealized appreciation/depreciation | |||||||
of investments and foreign currencies | 13,484,108 | (26,952,252 | ) | ||||
Net increase (decrease) in net assets resulting | |||||||
from operations | 4,765,539 | (43,886,036 | ) | ||||
Dividends and Distributions to Shareholders from: | |||||||
Net investment income: | |||||||
Class A | (609,676 | ) | (768,522 | ) | |||
Class B | (65,574 | ) | (45,880 | ) | |||
Class C | (183,443 | ) | (163,328 | ) | |||
Institutional Class | (34,178 | ) | (34,770 | ) | |||
Net realized gain on investments: | |||||||
Class A | — | (3,007,262 | ) | ||||
Class B | — | (495,500 | ) | ||||
Class C | — | (1,763,938 | ) | ||||
Institutional Class | — | (111,761 | ) | ||||
(892,871 | ) | (6,390,961 | ) | ||||
Capital Share Transactions: | |||||||
Proceeds from shares sold: | |||||||
Class A | 1,772,852 | 9,813,016 | |||||
Class B | 24,626 | 979,766 | |||||
Class C | 552,703 | 3,506,026 | |||||
Institutional Class | 127,096 | 847,401 |
34
Six Months | Year | ||||||
Ended | Ended | ||||||
5/31/09 | 11/30/08 | ||||||
(Unaudited) | |||||||
Capital Share Transactions (continued): | |||||||
Net asset value of shares issued upon reinvestment | |||||||
of dividends and distributions: | |||||||
Class A | $ | 548,127 | $ | 3,353,184 | |||
Class B | 55,280 | 465,056 | |||||
Class C | 163,582 | 1,771,570 | |||||
Institutional Class | 33,393 | 133,664 | |||||
3,277,659 | 20,869,683 | ||||||
Cost of shares repurchased: | |||||||
Class A | (5,320,968 | ) | (28,821,804 | ) | |||
Class B | (777,809 | ) | (3,120,086 | ) | |||
Class C | (2,739,447 | ) | (17,832,203 | ) | |||
Institutional Class | (88,245 | ) | (1,111,337 | ) | |||
(8,926,469 | ) | (50,885,430 | ) | ||||
Decrease in net assets derived from | |||||||
capital share transactions | (5,648,810 | ) | (30,015,747 | ) | |||
Net Decrease in Net Assets | (1,776,142 | ) | (80,292,744 | ) | |||
Net Assets: | |||||||
Beginning of period | 38,484,850 | 118,777,594 | |||||
End of period | $ | 36,708,708 | $ | 38,484,850 | |||
Undistributed net investment income | $ | 359,040 | $ | 885,652 |
See accompanying notes
35
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
36
Six Months Ended | Year Ended | ||||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | ||||||||||||||
(Unaudited) | |||||||||||||||||||
$8.120 | $16.750 | $16.010 | $18.130 | $16.340 | $13.350 | ||||||||||||||
0.138 | 0.288 | 0.205 | 0.339 | 0.388 | 0.261 | ||||||||||||||
1.429 | (7.995 | ) | 1.504 | 3.220 | 1.610 | 2.891 | |||||||||||||
1.567 | (7.707 | ) | 1.709 | 3.559 | 1.998 | 3.152 | |||||||||||||
(0.307 | ) | (0.204 | ) | (0.174 | ) | (0.412 | ) | (0.063 | ) | (0.162 | ) | ||||||||
— | (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | ||||||||||
(0.307 | ) | (0.923 | ) | (0.969 | ) | (5.679 | ) | (0.208 | ) | (0.162 | ) | ||||||||
$9.380 | $8.120 | $16.750 | $16.010 | $18.130 | $16.340 | ||||||||||||||
19.11% | (48.60% | ) | 11.24% | 23.57% | 12.35% | 23.83% | |||||||||||||
$171,502 | $178,072 | $472,533 | $472,803 | $468,217 | $308,751 | ||||||||||||||
1.45% | 1.40% | 1.40% | 1.41% | 1.48% | 1.70% | ||||||||||||||
1.83% | 1.49% | 1.40% | 1.43% | 1.48% | 1.70% | ||||||||||||||
3.43% | 2.19% | 1.25% | 2.05% | 2.24% | 1.78% | ||||||||||||||
3.05% | 2.10% | 1.25% | 2.03% | 2.24% | 1.78% | ||||||||||||||
22% | 32% | 26% | 127% | 14% | 7% |
37
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
38
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$7.980 | $16.470 | $15.750 | $17.910 | $16.200 | $13.250 | |||||||||||||
0.110 | 0.197 | 0.092 | 0.226 | 0.269 | 0.160 | |||||||||||||
1.411 | (7.876 | ) | 1.484 | 3.173 | 1.586 | 2.873 | ||||||||||||
1.521 | (7.679 | ) | 1.576 | 3.399 | 1.855 | 3.033 | ||||||||||||
(0.221 | ) | (0.092 | ) | (0.061 | ) | (0.292 | ) | — | (0.083 | ) | ||||||||
— | (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||||
(0.221 | ) | (0.811 | ) | (0.856 | ) | (5.559 | ) | (0.145 | ) | (0.083 | ) | |||||||
$9.280 | $7.980 | $16.470 | $15.750 | $17.910 | $16.200 | |||||||||||||
18.71% | (48.95% | ) | 10.48% | 22.70% | 11.53% | 23.00% | ||||||||||||
$10,580 | $11,227 | $34,520 | $39,834 | $38,284 | $38,962 | |||||||||||||
2.15% | 2.10% | 2.10% | 2.11% | 2.18% | 2.40% | |||||||||||||
2.53% | 2.19% | 2.10% | 2.13% | 2.18% | 2.40% | |||||||||||||
2.73% | 1.49% | 0.55% | 1.35% | 1.54% | 1.08% | |||||||||||||
2.35% | 1.40% | 0.55% | 1.33% | 1.54% | 1.08% | |||||||||||||
22% | 32% | 26% | 127% | 14% | 7% |
39
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
40
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$7.960 | $16.450 | $15.730 | $17.890 | $16.180 | $13.240 | |||||||||||||
0.110 | 0.197 | 0.092 | 0.226 | 0.269 | 0.160 | |||||||||||||
1.411 | (7.876 | ) | 1.484 | 3.173 | 1.586 | 2.863 | ||||||||||||
1.521 | (7.679 | ) | 1.576 | 3.399 | 1.855 | 3.023 | ||||||||||||
(0.221 | ) | (0.092 | ) | (0.061 | ) | (0.292 | ) | — | (0.083 | ) | ||||||||
— | (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||||
(0.221 | ) | (0.811 | ) | (0.856 | ) | (5.559 | ) | (0.145 | ) | (0.083 | ) | |||||||
$9.260 | $7.960 | $16.450 | $15.730 | $17.890 | $16.180 | |||||||||||||
18.60% | (49.01% | ) | 10.50% | 22.73% | 11.55% | 22.94% | ||||||||||||
$50,306 | $51,420 | $144,106 | $144,298 | $124,931 | $70,169 | |||||||||||||
2.15% | 2.10% | 2.10% | 2.11% | 2.18% | 2.40% | |||||||||||||
2.53% | 2.19% | 2.10% | 2.13% | 2.18% | 2.40% | |||||||||||||
2.73% | 1.49% | 0.55% | 1.35% | 1.54% | 1.08% | |||||||||||||
2.35% | 1.40% | 0.55% | 1.33% | 1.54% | 1.08% | |||||||||||||
22% | 32% | 26% | 127% | 14% | 7% |
41
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of 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
42
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$8.080 | $16.670 | $15.930 | $18.050 | $16.270 | $13.350 | |||||||||||||
0.130 | 0.261 | 0.173 | 0.308 | 0.343 | 0.217 | |||||||||||||
1.432 | (7.960 | ) | 1.504 | 3.207 | 1.600 | 2.879 | ||||||||||||
1.562 | (7.699 | ) | 1.677 | 3.515 | 1.943 | 3.096 | ||||||||||||
(0.282 | ) | (0.172 | ) | (0.142 | ) | (0.368 | ) | (0.018 | ) | (0.176 | ) | |||||||
— | (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||||
(0.282 | ) | (0.891 | ) | (0.937 | ) | (5.635 | ) | (0.163 | ) | (0.176 | ) | |||||||
$9.360 | $8.080 | $16.670 | $15.930 | $18.050 | $16.270 | |||||||||||||
19.10% | (48.70% | ) | 11.07% | 23.33% | 12.04% | 23.43% | ||||||||||||
$1,545 | $1,259 | $3,076 | $4,575 | $3,097 | $1,547 | |||||||||||||
1.65% | 1.60% | 1.60% | 1.61% | 1.74% | 2.00% | |||||||||||||
2.13% | 1.79% | 1.70% | 1.73% | 1.78% | 2.00% | |||||||||||||
3.23% | 1.99% | 1.05% | 1.85% | 1.98% | 1.48% | |||||||||||||
2.75% | 1.80% | 0.95% | 1.73% | 1.94% | 1.48% | |||||||||||||
22% | 32% | 26% | 127% | 14% | 7% |
43
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
44
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$8.170 | $16.850 | $16.100 | $18.210 | $16.410 | $13.400 | |||||||||||||
0.150 | 0.327 | 0.255 | 0.389 | 0.439 | 0.305 | |||||||||||||
1.434 | (8.034 | ) | 1.513 | 3.233 | 1.614 | 2.902 | ||||||||||||
1.584 | (7.707 | ) | 1.768 | 3.622 | 2.053 | 3.207 | ||||||||||||
(0.344 | ) | (0.254 | ) | (0.223 | ) | (0.465 | ) | (0.108 | ) | (0.197 | ) | |||||||
— | (0.719 | ) | (0.795 | ) | (5.267 | ) | (0.145 | ) | — | |||||||||
(0.344 | ) | (0.973 | ) | (1.018 | ) | (5.732 | ) | (0.253 | ) | (0.197 | ) | |||||||
$9.410 | $8.170 | $16.850 | $16.100 | $18.210 | $16.410 | |||||||||||||
19.27% | (48.44% | ) | 11.59% | 23.93% | 12.67% | 24.21% | ||||||||||||
$134,929 | $146,192 | $399,014 | $355,347 | $276,499 | $178,048 | |||||||||||||
1.15% | 1.10% | 1.10% | 1.11% | 1.18% | 1.40% | |||||||||||||
1.53% | 1.19% | 1.10% | 1.13% | 1.18% | 1.40% | |||||||||||||
3.73% | 2.49% | 1.55% | 2.35% | 2.54% | 2.08% | |||||||||||||
3.35% | 2.40% | 1.55% | 2.33% | 2.54% | 2.08% | |||||||||||||
22% | 32% | 26% | 127% | 14% | 7% |
45
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
46
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$7.940 | $22.760 | $21.280 | $17.950 | $14.550 | $10.890 | |||||||||||||
0.054 | 0.137 | 0.184 | 0.419 | 0.309 | 0.225 | |||||||||||||
3.165 | (9.242 | ) | 7.117 | 4.080 | 3.567 | 3.637 | ||||||||||||
3.219 | (9.105 | ) | 7.301 | 4.499 | 3.876 | 3.862 | ||||||||||||
(0.016 | ) | (0.234 | ) | (0.523 | ) | (0.269 | ) | (0.092 | ) | (0.202 | ) | |||||||
(0.823 | ) | (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | ||||||||
(0.839 | ) | (5.715 | ) | (5.821 | ) | (1.169 | ) | (0.476 | ) | (0.202 | ) | |||||||
$10.320 | $7.940 | $22.760 | $21.280 | $17.950 | $14.550 | |||||||||||||
43.68% | (53.37% | ) | 46.11% | 26.52% | 27.42% | 36.01% | ||||||||||||
$280,057 | $213,581 | $673,309 | $533,042 | $724,417 | $209,870 | |||||||||||||
2.01% | 1.83% | 1.97% | 1.94% | 1.97% | 1.91% | |||||||||||||
2.07% | 1.88% | 2.02% | 1.99% | 2.02% | 2.12% | |||||||||||||
1.36% | 0.94% | 0.97% | 2.23% | 1.90% | 1.81% | |||||||||||||
1.30% | 0.89% | 0.92% | 2.18% | 1.85% | 1.60% | |||||||||||||
54% | 37% | 108% | 46% | 25% | 34% |
47
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
48
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$ 7.640 | $22.120 | $20.830 | $17.600 | $14.290 | $10.710 | |||||||||||||
0.026 | 0.030 | 0.045 | 0.280 | 0.191 | 0.135 | |||||||||||||
3.037 | (8.936 | ) | 6.926 | 3.998 | 3.503 | 3.583 | ||||||||||||
3.063 | (8.906 | ) | 6.971 | 4.278 | 3.694 | 3.718 | ||||||||||||
— | (0.093 | ) | (0.383 | ) | (0.148 | ) | — | (0.138 | ) | |||||||||
(0.823 | ) | (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | ||||||||
(0.823 | ) | (5.574 | ) | (5.681 | ) | (1.048 | ) | (0.384 | ) | (0.138 | ) | |||||||
$ 9.880 | $ 7.640 | $22.120 | $20.830 | $17.600 | $14.290 | |||||||||||||
43.17% | (53.76% | ) | 44.97% | 25.59% | 26.47% | 35.08% | ||||||||||||
$17,299 | $14,620 | $45,978 | $37,944 | $36,399 | $16,027 | |||||||||||||
2.76% | 2.58% | 2.72% | 2.69% | 2.72% | 2.66% | |||||||||||||
2.77% | 2.58% | 2.72% | 2.69% | 2.72% | 2.82% | |||||||||||||
0.61% | 0.19% | 0.22% | 1.48% | 1.15% | 1.06% | |||||||||||||
0.60% | 0.19% | 0.22% | 1.48% | 1.15% | 0.90% | |||||||||||||
54% | 37% | 108% | 46% | 25% | 34% |
49
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
50
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$7.630 | $22.090 | $20.800 | $17.580 | $14.270 | $10.700 | |||||||||||||
0.026 | 0.031 | 0.045 | 0.280 | 0.191 | 0.135 | |||||||||||||
3.027 | (8.917 | ) | 6.926 | 3.988 | 3.503 | 3.573 | ||||||||||||
3.053 | (8.886 | ) | 6.971 | 4.268 | 3.694 | 3.708 | ||||||||||||
— | (0.093 | ) | (0.383 | ) | (0.148 | ) | — | (0.138 | ) | |||||||||
(0.823 | ) | (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | ||||||||
(0.823 | ) | (5.574 | ) | (5.681 | ) | (1.048 | ) | (0.384 | ) | (0.138 | ) | |||||||
$9.860 | $7.630 | $22.090 | $20.800 | $17.580 | $14.270 | |||||||||||||
43.29% | (53.75% | ) | 45.03% | 25.56% | 26.51% | 35.02% | ||||||||||||
$109,851 | $84,436 | $237,832 | $183,562 | $211,896 | $50,564 | |||||||||||||
2.76% | 2.58% | 2.72% | 2.69% | 2.72% | 2.66% | |||||||||||||
2.77% | 2.58% | 2.72% | 2.69% | 2.72% | 2.82% | |||||||||||||
0.61% | 0.19% | 0.22% | 1.48% | 1.15% | 1.06% | |||||||||||||
0.60% | 0.19% | 0.22% | 1.48% | 1.15% | 0.90% | |||||||||||||
54% | 37% | 108% | 46% | 25% | 34% |
51
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager, as applicable. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
52
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$8.000 | $22.910 | $21.390 | $18.030 | $14.610 | $10.920 | |||||||||||||
0.063 | 0.175 | 0.232 | 0.466 | 0.349 | 0.256 | |||||||||||||
3.191 | (9.321 | ) | 7.157 | 4.104 | 3.579 | 3.659 | ||||||||||||
3.254 | (9.146 | ) | 7.389 | 4.570 | 3.928 | 3.915 | ||||||||||||
(0.051 | ) | (0.283 | ) | (0.571 | ) | (0.310 | ) | (0.124 | ) | (0.225 | ) | |||||||
(0.823 | ) | (5.481 | ) | (5.298 | ) | (0.900 | ) | (0.384 | ) | — | ||||||||
(0.874 | ) | (5.764 | ) | (5.869 | ) | (1.210 | ) | (0.508 | ) | (0.225 | ) | |||||||
$10.380 | $8.000 | $22.910 | $21.390 | $18.030 | $14.610 | |||||||||||||
43.95% | (53.30% | ) | 46.49% | 26.87% | 27.73% | 36.34% | ||||||||||||
$83,602 | $45,697 | $110,327 | $112,964 | $255,608 | $63,732 | |||||||||||||
1.76% | 1.58% | 1.72% | 1.69% | 1.72% | 1.66% | |||||||||||||
1.77% | 1.58% | 1.72% | 1.69% | 1.72% | 1.82% | |||||||||||||
1.61% | 1.19% | 1.22% | 2.48% | 2.15% | 2.06% | |||||||||||||
1.60% | 1.19% | 1.22% | 2.48% | 2.15% | 1.90% | |||||||||||||
54% | 37% | 108% | 46% | 25% | 34% |
53
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
54
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$5.790 | $11.850 | $13.260 | $11.660 | $10.810 | $8.700 | |||||||||||||
0.071 | 0.172 | 0.145 | 0.111 | 0.120 | 0.156 | |||||||||||||
0.780 | (5.554 | ) | 0.663 | 3.084 | 1.231 | 2.059 | ||||||||||||
0.851 | (5.382 | ) | 0.808 | 3.195 | 1.351 | 2.215 | ||||||||||||
(0.161 | ) | (0.138 | ) | (0.066 | ) | (0.238 | ) | (0.016 | ) | (0.105 | ) | |||||||
— | (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||||
(0.161 | ) | (0.678 | ) | (2.218 | ) | (1.595 | ) | (0.501 | ) | (0.105 | ) | |||||||
$6.480 | $5.790 | $11.850 | $13.260 | $11.660 | $10.810 | |||||||||||||
14.41% | (48.12% | ) | 6.96% | 30.83% | 12.97% | 25.74% | ||||||||||||
$21,213 | $22,034 | $66,024 | $36,416 | $20,613 | $16,597 | |||||||||||||
1.51% | 1.45% | 1.45% | 1.59% | 1.89% | 1.50% | |||||||||||||
2.23% | 1.76% | 1.57% | 1.88% | 2.13% | 2.21% | |||||||||||||
2.50% | 1.84% | 1.22% | 0.93% | 1.06% | 1.64% | |||||||||||||
1.78% | 1.53% | 1.10% | 0.64% | 0.82% | 0.93% | |||||||||||||
28% | 78% | 31% | 124% | 51% | 36% |
55
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
56
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$5.680 | $11.640 | $13.070 | $11.510 | $10.740 | $8.660 | |||||||||||||
0.050 | 0.104 | 0.057 | 0.022 | 0.037 | 0.085 | |||||||||||||
0.776 | (5.474 | ) | 0.665 | 3.050 | 1.218 | 2.042 | ||||||||||||
0.826 | (5.370 | ) | 0.722 | 3.072 | 1.255 | 2.127 | ||||||||||||
(0.096 | ) | (0.050 | ) | — | (0.155 | ) | — | (0.047 | ) | |||||||||
— | (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||||
(0.096 | ) | (0.590 | ) | (2.152 | ) | (1.512 | ) | (0.485 | ) | (0.047 | ) | |||||||
$6.410 | $5.680 | $11.640 | $13.070 | $11.510 | $10.740 | |||||||||||||
14.12% | (48.51% | ) | 6.08% | 29.95% | 12.11% | 24.68% | ||||||||||||
$3,823 | $4,103 | $10,893 | $7,453 | $3,483 | $6,673 | |||||||||||||
2.26% | 2.20% | 2.20% | 2.34% | 2.64% | 2.25% | |||||||||||||
2.93% | 2.46% | 2.27% | 2.58% | 2.83% | 2.91% | |||||||||||||
1.75% | 1.09% | 0.47% | 0.18% | 0.31% | 0.89% | |||||||||||||
1.08% | 0.83% | 0.40% | (0.06% | ) | 0.12% | 0.23% | ||||||||||||
28% | 78% | 31% | 124% | 51% | 36% |
57
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value 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
58
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$5.690 | $11.650 | $13.090 | $11.520 | $10.750 | $8.660 | |||||||||||||
0.050 | 0.102 | 0.057 | 0.022 | 0.037 | 0.084 | |||||||||||||
0.766 | (5.472 | ) | 0.655 | 3.060 | 1.218 | 2.053 | ||||||||||||
0.816 | (5.370 | ) | 0.712 | 3.082 | 1.255 | 2.137 | ||||||||||||
(0.096 | ) | (0.050 | ) | — | (0.155 | ) | — | (0.047 | ) | |||||||||
— | (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||||
(0.096 | ) | (0.590 | ) | (2.152 | ) | (1.512 | ) | (0.485 | ) | (0.047 | ) | |||||||
$6.410 | $5.690 | $11.650 | $13.090 | $11.520 | $10.750 | |||||||||||||
13.92% | (48.51% | ) | 6.17% | 29.92% | 12.10% | 24.80% | ||||||||||||
$10,366 | $11,260 | $39,463 | $17,545 | $6,380 | $4,355 | |||||||||||||
2.26% | 2.20% | 2.20% | 2.34% | 2.64% | 2.25% | |||||||||||||
2.93% | 2.46% | 2.27% | 2.58% | 2.83% | 2.91% | |||||||||||||
1.75% | 1.09% | 0.47% | 0.18% | 0.31% | 0.89% | |||||||||||||
1.08% | 0.83% | 0.40% | (0.06% | ) | 0.12% | 0.23% | ||||||||||||
28% | 78% | 31% | 124% | 51% | 36% |
59
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 income2 |
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 return3 |
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 Ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value. Total investment return reflects a waiver by the manager. Performance would have been lower had the waiver not been in effect. |
See accompanying notes
60
Six Months Ended | Year Ended | |||||||||||||||||
5/31/091 | 11/30/08 | 11/30/07 | 11/30/06 | 11/30/05 | 11/30/04 | |||||||||||||
(Unaudited) | ||||||||||||||||||
$5.810 | $11.910 | $13.310 | $11.700 | $10.840 | $8.730 | |||||||||||||
0.078 | 0.195 | 0.176 | 0.141 | 0.148 | 0.180 | |||||||||||||
0.785 | (5.587 | ) | 0.673 | 3.092 | 1.237 | 2.053 | ||||||||||||
0.863 | (5.392 | ) | 0.849 | 3.233 | 1.385 | 2.233 | ||||||||||||
(0.183 | ) | (0.168 | ) | (0.097 | ) | (0.266 | ) | (0.040 | ) | (0.123 | ) | |||||||
— | (0.540 | ) | (2.152 | ) | (1.357 | ) | (0.485 | ) | — | |||||||||
(0.183 | ) | (0.708 | ) | (2.249 | ) | (1.623 | ) | (0.525 | ) | (0.123 | ) | |||||||
$6.490 | $5.810 | $11.910 | $13.310 | $11.700 | $10.840 | |||||||||||||
14.42% | (48.03% | ) | 7.12% | 31.24% | 13.28% | 25.91% | ||||||||||||
$1,307 | $1,088 | $2,398 | $5,193 | $4,576 | $667 | |||||||||||||
1.26% | 1.20% | 1.20% | 1.34% | 1.64% | 1.25% | |||||||||||||
1.93% | 1.46% | 1.27% | 1.58% | 1.83% | 1.91% | |||||||||||||
2.75% | 2.09% | 1.47% | 1.18% | 1.31% | 1.89% | |||||||||||||
2.08% | 1.83% | 1.40% | 0.94% | 1.12% | 1.23% | |||||||||||||
28% | 78% | 31% | 124% | 51% | 36% |
61
Notes to financial statements | |
Delaware International Funds | May 31, 2009 (Unaudited) |
Delaware Group® Global & International Funds (Trust) is organized as a Delaware statutory trust and offers four series: Delaware International Value Equity Fund, Delaware Emerging Markets Fund, Delaware Global Value Fund and Delaware Focus Global Growth Fund. These financial statements and the related notes pertain to Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund (each, a Fund or collectively as the 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 twelve months. Class R and Institutional Class shares are not subject to a sales charge and are offered for sale exclusively to certain eligible investors. As of May 31, 2009, 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. 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 of Trustees (Board). In determining whether market quotations are readily available or fair
62
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 news 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 — No provision for federal income taxes has been made as 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. The Funds evaluate 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 Funds did not record 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 the Funds 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. At May 31, 2009, the Funds held no investments in repurchase agreements.
Foreign Currency Transactions — Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies is translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The 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.
63
Notes to financial statements
Delaware International Funds
1. Significant Accounting Policies (continued)
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 may receive earnings credits from their custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits for the six months ended May 31, 2009.
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 | % |
64
DMC has voluntarily agreed to waive that portion, if any, of its management fee and reimburse 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) in order to prevent total annual fund operating expenses from exceeding, in an aggregate amount, 1.24%, 1.61%, and 1.39% of the average daily net assets of the Delaware International Value Equity Fund, Delaware Emerging Markets Fund, and Delaware Global Value Fund, respectively, from April 1, 2009 until such time as the voluntary expense caps are discontinued. These fee waivers and expense reimbursements apply only to expenses paid directly by the Funds, and may be discontinued at any time because they are voluntary. Prior to April 1, 2009, DMC had voluntarily agreed to waive that portion, if any, of its management fees and reimburse 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”)) did not exceed 1.10% of average net assets of the Fund, and had 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) did not exceed 1.20% of average daily net assets of the Fund.
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 six months ended May 31, 2009, each Fund was charged for these services as follows:
Delaware International | Delaware Emerging | Delaware Global | |||
Value Equity Fund | Markets Fund | Value Fund | |||
$8,754 | $9,226 | $871 |
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.
65
Notes to financial statements
Delaware International Funds
2. Investment Management, Administration Agreements and Other Transactions with Affiliates (continued)
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 waive Delaware International Value Equity Fund’s Class R shares’ 12b-1 fee through March 31, 2010 to no more than 0.50% of average net assets of the Fund. For Delaware Emerging Markets Fund and Delaware Global Value Fund, DDLP has contracted to limit the Class A shares’ and Class R shares’ 12b-1 fees through March 31, 2010 to no more than 0.25% and 0.50%, respectively, of average daily net assets of each Fund.
At May 31, 2009, 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 | $230,881 | $477,988 | $16,529 | ||||||
Dividend disbursing, transfer | |||||||||
agent, and fund accounting | |||||||||
oversight fees and other | |||||||||
expenses payable to DSC | 144,461 | 102,797 | 16,152 | ||||||
Distribution fees payable to DDLP | 93,070 | 155,424 | 16,198 | ||||||
Other expenses payable to DMC | |||||||||
and affiliates* | 12,867 | 15,579 | 1,309 |
*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 six months ended May 31, 2009, 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 | |||
$18,305 | $20,100 | $1,822 |
For the six months ended May 31, 2009, 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 | |||
$5,328 | $17,206 | $2,824 |
66
For the six months ended May 31, 2009, DDLP received gross CDSC commissions on redemption of each Fund’s Class A, Class B and Class C shares, respectively, and these commissions were entirely used to offset up-front commissions previously paid by DDLP to broker-dealers on sales of those shares. The amounts received were as follows:
Delaware International | Delaware Emerging | Delaware Global | |||||||||
Value Equity Fund | Markets Fund | Value Fund | |||||||||
Class A | $ | 7 | $ | 2,052 | $ | 1 | |||||
Class B | 9,469 | 11,369 | 4,925 | ||||||||
Class C | 1,149 | 4,945 | 536 |
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.
3. Investments
For six months ended May 31, 2009, 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 | $ | 39,368,911 | $ | 94,588,837 | $ | 4,849,856 | |||||
Sales | 112,609,015 | 103,011,999 | 11,330,487 |
At May 31, 2009, the cost of investments for federal income tax purposes has been estimated since the final tax characteristics cannot be determined until fiscal year end. At May 31, 2009, the cost of investments and unrealized appreciation (depreciation) for each Fund was as follows:
Delaware International | Delaware Emerging | Delaware Global | ||||||||||||
Value Equity Fund | Markets Fund | Value Fund | ||||||||||||
Cost of investments | $ | 524,363,741 | $ | 644,408,851 | $ | 54,670,675 | ||||||||
Aggregate unrealized | ||||||||||||||
appreciation | $ | 13,057,578 | $ | 53,688,725 | $ | 978,832 | ||||||||
Aggregate unrealized | ||||||||||||||
depreciation | (116,164,014 | ) | (181,204,279 | ) | (12,971,598 | ) | ||||||||
Net unrealized depreciation | $ | (103,106,436 | ) | $ | (127,515,554 | ) | $ | (11,992,766 | ) |
The Funds apply 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 under current market conditions. 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
67
Notes to financial statements
Delaware International Funds
3. Investments (continued) reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. Each Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
Level 1 – inputs are quoted prices in active markets
Level 2 – inputs are observable, directly or indirectly
Level 3 – inputs are unobservable and reflect assumptions on the part of the reporting entity
The following table summarizes the valuation of each Fund’s investments by the FAS 157 fair value hierarchy levels as of May 31, 2009:
Delaware International | Delaware Emerging | Delaware Global | ||||||||||||
Value Equity Fund | Markets Fund | Value Fund | ||||||||||||
Securities | ||||||||||||||
Level 1 | $ | 55,490,135 | $ | 269,396,309 | $ | 16,714,460 | ||||||||
Level 2 | 365,767,015 | 245,241,136 | 25,963,434 | |||||||||||
Level 3 | 155 | 2,255,852 | 15 | |||||||||||
Total | $ | 421,257,305 | $ | 516,893,297 | $ | 42,677,909 | ||||||||
Derivatives | ||||||||||||||
Level 1 | $ | — | $ | — | $ | — | ||||||||
Level 2 | (135 | ) | 49,481 | — | ||||||||||
Level 3 | — | — | — | |||||||||||
Total | $ | (135 | ) | $ | 49,481 | $ | — |
As a result of utilizing international fair value pricing at May 31, 2009, the majority of the portfolios were categorized as Level 2 in the FAS 157 hierarchy.
68
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 | |||||||||
Balance as of 11/30/08 | $ 127,432 | $ 3,415,314 | $ 12,273 | ||||||||
Net realized gain (loss) | — | (3,820,636 | ) | — | |||||||
Net change in unrealized | |||||||||||
appreciation (depreciation) | (127,277 | ) | (4,492,676 | ) | (12,258 | ) | |||||
Net purchases, sales | |||||||||||
and settlements | — | (3,583,161 | ) | — | |||||||
Net transfers in and/or out of Level 3 | — | 10,737,011 | — | ||||||||
Balance as of 5/31/09 | $ 155 | $ 2,255,852 | $ 15 | ||||||||
Net change in unrealized | |||||||||||
appreciation/depreciation | |||||||||||
from investments still held | |||||||||||
as of 5/31/09 | $(127,277 | ) | $(4,492,676 | ) | $(12,258 | ) |
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 six months ended May 31, 2009 and year ended November 30, 2008 was as follows:
Delaware International | Delaware Emerging | Delaware Global | |||||||||
Value Equity Fund | Markets Fund | Value Fund | |||||||||
Six Months Ended May 31, 2009*: | |||||||||||
Ordinary income | $14,224,407 | $ 699,324 | $ 892,871 | ||||||||
Long-term capital gain | — | 36,058,219 | — | ||||||||
Total | $14,224,407 | $ 36,757,543 | $ 892,871 | ||||||||
Year Ended November 30, 2008: | |||||||||||
Ordinary income | $26,770,568 | $137,065,213 | $2,618,032 | ||||||||
Long-term capital gain | 31,089,053 | 130,408,702 | 3,772,929 | ||||||||
Total | $57,859,621 | $267,473,915 | $6,390,961 |
*Tax information for the period ended May 31, 2009 is an estimate and the tax character of dividends and distributions may be redesignated at the fiscal year end.
69
Notes to financial statements
Delaware International Funds
5. Components of Net Assets on a Tax Basis
The components of net assets are estimated since final tax characteristics cannot be determined until fiscal year end. As of May 31, 2009, the estimated 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 | $ 648,784,173 | $ 639,578,286 | $ 74,075,193 | ||||||||
Undistributed ordinary income | 5,467,044 | 1,763,838 | 359,040 | ||||||||
Realized losses | |||||||||||
12/1/08 – 5/31/09 | (88,669,604 | ) | (23,016,019 | ) | (9,075,059 | ) | |||||
Capital loss carryforwards | |||||||||||
as of 11/30/08 | (93,681,845 | ) | — | (16,661,212 | ) | ||||||
Unrealized depreciation of | |||||||||||
investments and foreign | |||||||||||
currencies | (103,038,235 | ) | (127,516,607 | ) | (11,989,254 | ) | |||||
Net assets | $ 368,861,533 | $ 490,809,498 | $ 36,708,708 |
The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, mark-to-market of forward currency contracts and tax treatment of unrealized gain on investments in passive foreign investment companies (PFICs).
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 PFICs. Results of operations and net assets were not affected by these reclassifications. For the six months ended May 31, 2009, the Funds recorded an estimate of these differences since the final tax characteristics cannot be determined until fiscal year end.
Delaware International | Delaware Emerging | Delaware Global | |||||||||
Value Equity Fund | Markets Fund | Value Fund | |||||||||
Undistributed net investment | |||||||||||
income | $ | (531,080 | ) | $ | (462,382 | ) | $ | (18,920 | ) | ||
Accumulated net realized loss | 531,080 | 462,382 | 18,920 |
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, will expire as follows:
Delaware International | Delaware Global | ||||
Year of Expiration | Value Equity Fund | Value Fund | |||
2016 | $93,681,845 | $16,661,212 |
For the six months ended May 31, 2009, each Fund had capital losses which may increase the capital loss carryforwards as follows:
Delaware International | Delaware Emerging | Delaware Global | |||
Value Equity Fund | Markets Fund | Value Fund | |||
$88,669,604 | $23,016,019 | $9,075,059 |
70
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 | ||||||||||
Six Months | Year | Six Months | Year | ||||||||
Ended | Ended | Ended | Ended | ||||||||
5/31/09 | 11/30/08 | 5/31/09 | 11/30/08 | ||||||||
Shares sold: | |||||||||||
Class A | 1,731,067 | 4,081,000 | 5,006,474 | 8,851,089 | |||||||
Class B | 15,349 | 34,786 | 17,043 | 109,987 | |||||||
Class C | 258,479 | 585,093 | 1,355,482 | 1,979,325 | |||||||
Class R | 25,717 | 75,442 | — | — | |||||||
Institutional Class | 700,891 | 5,418,047 | 2,916,867 | 2,163,823 | |||||||
Shares issued upon reinvestment of dividends and distributions: | |||||||||||
Class A | 741,883 | 1,606,965 | 2,668,499 | 8,849,919 | |||||||
Class B | 35,041 | 103,084 | 188,080 | 613,135 | |||||||
Class C | 163,027 | 451,073 | 1,116,696 | 3,386,206 | |||||||
Class R | 5,392 | 10,705 | — | — | |||||||
Institutional Class | 724,871 | 1,505,667 | 627,402 | 1,504,952 | |||||||
4,401,717 | 13,871,862 | 13,896,543 | 27,458,436 | ||||||||
Shares repurchased: | |||||||||||
Class A | (6,119,817 | ) | (11,959,599 | ) | (7,442,272 | ) | (20,366,726 | ) | |||
Class B | (317,079 | ) | (826,244 | ) | (367,390 | ) | (888,869 | ) | |||
Class C | (1,445,591 | ) | (3,341,698 | ) | (2,399,369 | ) | (5,064,594 | ) | |||
Class R | (21,919 | ) | (114,760 | ) | — | — | |||||
Institutional Class | (4,983,495 | ) | (12,701,921 | ) | (1,197,942 | ) | (2,773,642 | ) | |||
(12,887,901 | ) | (28,944,222 | ) | (11,406,973 | ) | (29,093,831 | ) | ||||
Net increase (decrease) | (8,486,184 | ) | (15,072,360 | ) | 2,489,570 | (1,635,395 | ) |
72
Delaware Global | |||||
Value Fund | |||||
Six Months | Year | ||||
Ended | Ended | ||||
5/31/09 | 11/30/08 | ||||
Shares sold: | |||||
Class A | 312,259 | 1,010,773 | |||
Class B | 4,277 | 101,606 | |||
Class C | 97,979 | 367,542 | |||
Class R | — | — | |||
Institutional Class | 23,395 | 92,645 | |||
Shares issued upon reinvestment of dividends and distributions: | |||||
Class A | 94,018 | 308,197 | |||
Class B | 9,567 | 43,261 | |||
Class C | 28,301 | 164,644 | |||
Class R | — | — | |||
Institutional Class | 5,727 | 12,263 | |||
575,523 | 2,100,931 | ||||
Shares repurchased: | |||||
Class A | (938,341 | ) | (3,081,696 | ) | |
Class B | (139,750 | ) | (358,507 | ) | |
Class C | (489,009 | ) | (1,938,648 | ) | |
Class R | — | — | |||
Institutional Class | (14,828 | ) | (119,135 | ) | |
(1,581,928 | ) | (5,497,986 | ) | ||
Net decrease | (1,006,405 | ) | (3,397,055 | ) |
73
Notes to financial statements
Delaware International Funds
6. Capital Shares (continued)
For the six months ended May 31, 2009 and year ended November 30, 2008, the following shares and values were converted from Class B shares to Class A shares. The respective amounts are included in Class B redemptions and Class A subscriptions in the table on previous page and the statements of changes in net assets.
Six Months Ended | Year Ended | ||||||||||
5/31/09 | 11/30/08 | ||||||||||
Class B | Class A | Class B | Class A | ||||||||
Shares | Shares | Value | Shares | Shares | Value | ||||||
Delaware International | |||||||||||
Value Equity Fund | 65,415 | 64,563 | $520,194 | 198,385 | 195,458 | $2,702,641 | |||||
Delaware Emerging | |||||||||||
Markets Fund | 58,481 | 56,198 | 447,705 | 155,263 | 150,394 | 2,613,941 | |||||
Delaware Global | |||||||||||
Value Fund | 35,961 | 35,387 | 206,700 | 79,339 | 78,121 | 755,853 |
7. Line of Credit
Each Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), participates in a $35,000,000 revolving line of credit with The Bank of New York Mellon (BNY Mellon) to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant’s allocation of the entire facility. The Participants may borrow up to a maximum of one third of their net assets under the agreement. The agreement expires on November 17, 2009. The Funds had no amounts outstanding as of May 31, 2009 or at any time during the period then ended.
8. Foreign Currency Exchange Contracts
The Funds may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. Each Fund may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. Each Fund 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.
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.
74
Each Fund’s maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between each Fund and the counterparty and by the posting of collateral by the counterparty to the Funds to cover the funds’ exposure to the counterparty.
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 (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of clients participating in its securities lending programs. The Collective Trust may invest in fixed income securities, with a weighted average maturity not to exceed 90 days, rated in one of the top three tiers by Standard & Poor’s Ratings Group or Moody’s Investors Service, Inc. or repurchase agreements collateralized by such securities. The Collective Trust seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. At May 31, 2009, the Collective Trust held only cash and assets with a maturity of one business day or less (Cash/Overnight Assets). 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 Funds may not receive an amount from the Collective Trust that is equal in amount to the collateral the Funds would be required to return to the borrower of the securities and the Funds would be required to make up for this shortfall. Effective April 20, 2009, BNY Mellon transferred the assets of the Collective Trust other than the Cash/Overnight Assets to the BNY Mellon SL DBT II Liquidating Fund (Liquidating Fund), effectively bifurcating the collateral investment pool. The Funds’ exposure to the Liquidating Fund is expected to decrease as the Liquidating Fund’s assets mature or are sold. In October 2008, BNY Mellon transferred certain distressed securities from the Collective Trust into the Mellon GSL Reinvestment Trust II. The 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
75
Notes to financial statements
Delaware International Funds
9. Securities Lending (continued)
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.
At May 31, 2009, the value of securities on loan for which cash collateral was received and invested in accordance with the Lending Agreement was as follows:
Delaware International | Delaware Emerging | Delaware Global | |||
Value Equity Fund | Markets Fund | Value Fund | |||
$50,743,054 | $17,977,992 | $5,694,858 |
Such investments 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.
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.
76
Other Fund information
(Unaudited)
Delaware International Funds
Board Consideration of Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund Investment Advisory Agreement
At a meeting held on May 19-21, 2009 (the “Annual Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the renewal of the Investment Advisory Agreements for Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund (each a “Fund” and collectively the “Funds”). In making its decision, the Board considered information furnished specifically in connection with the renewal of the Investment Advisory Agreements with Delaware Management Company (“DMC”), which included materials provided by DMC and its affiliates (“Delaware Investments”) concerning, among other things, the nature, extent and quality of services provided to the Funds, the costs of such services to the Funds, economies of scale and the financial condition and profitability of Delaware Investments. Reference was made to information furnished at regular quarterly Board meetings, including reports detailing Fund performance, investment strategies and expenses, as well as information prepared specifically in connection with the renewal of the investment advisory and sub-advisory contracts. In addition, in connection with the Annual Meeting, reports were provided in February 2009 and included independent historical and comparative reports prepared by Lipper Inc. (“Lipper”), an independent statistical compilation organization. The Lipper reports compared each Fund’s investment performance and expenses with those of other comparable mutual funds. The independent Trustees reviewed and discussed the Lipper reports with counsel to the independent Trustees. The Board requested and received information regarding Management’s policy with respect to advisory fee levels and its breakpoint philosophy; the structure of portfolio manager compensation; the investment manager’s profitability; and any constraints or limitations on the availability of securities in certain investment styles which had in the past year inhibited, or which were likely in the future to inhibit, DMC’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of each Fund’s advisory agreement, the independent Trustees received assistance and advice from and met separately with counsel to the independent Trustees. Although the Trustees gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board during its contract renewal considerations.
Nature, Extent and Quality of Service. The Board considered the services provided by Delaware Investments to the Funds and their shareholders. In reviewing the nature, extent and quality of services, the Board considered reports furnished to it throughout the year which covered matters such as the relative performance of the Funds, compliance of portfolio managers with the investment policies, strategies and restrictions for the Funds, compliance by Management personnel with the Code of Ethics adopted throughout the Delaware Investments® Family of Funds complex and adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of the Funds’ investment advisor and the emphasis placed on research in the investment process. The Board gave favorable consideration to DMC’s efforts to control expenditures while maintaining service levels committed to fund matters.
77
Other Fund information
(Unaudited)
Delaware International Funds
Board Consideration of Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund Investment Advisory Agreement (continued)
The Board also considered the transfer agent and shareholder services provided to Fund shareholders by DMC’s affiliate, Delaware Service Company, Inc. (“DSC”), noting DSC’s high level of service. The Board noted that Management finished upgrading investment accounting functions through outsourcing to improve the quality and lower the cost of delivering investment accounting services to the Funds. The Board once again noted the benefits provided to Fund shareholders through each shareholder’s ability to exchange an investment in one Delaware Investments fund for the same class of shares in another Delaware Investments fund without a sales charge, to reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Investments funds and the privilege to combine holdings in other Delaware Investments funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent and quality of the overall services provided by Delaware Investments.
Investment Performance. The Board placed significant emphasis on the investment performance of the Funds in view of its importance to shareholders. Although the Board gave appropriate consideration to performance reports and discussions with portfolio managers at Board meetings throughout the year, the Board gave particular weight to the Lipper reports furnished for the Annual Meeting. The Lipper reports prepared for each Fund showed the investment performance of its Class A shares in comparison to a group of similar funds as selected by Lipper (the “Performance Universe”). A fund with the best performance ranked first, and a fund with the poorest performance ranked last. The highest/best performing 25% of funds in the Performance Universe make up the first quartile; the next 25%, the second quartile; the next 25%, the third quartile; and the poorest/worst performing 25% of funds in the Performance Universe make up the fourth quartile. Comparative annualized performance for each Fund was shown for the past one-, three-, five- and ten-year periods ended December 31, 2008. The Board’s objective is that each Fund’s performance for the periods considered be at or above the median of its Performance Universe. The following paragraphs summarize the performance results for each Fund and the Board’s view of such performance.
Delaware International Value Equity Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional international multi-cap value funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-year period was in the second quartile of its Performance Universe. The report further showed that the Fund’s total return for the three- and ten-year periods was in the third quartile and the Fund’s total return for the five-year period was in the fourth quartile. The Board determined that the Fund’s performance results were mixed. In evaluating the Fund’s performance, the Board noted team changes implemented in March 2008 and the Fund’s significantly improved relative performance for the most recent one-year period. The Board recognized Management’s efforts to increase portfolio management depth and was satisfied that Management was taking effective action.
78
Delaware Emerging Markets Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional emerging markets funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, three-, five- and ten-year periods was in the first quartile of its Performance Universe. Observing that one-year performance had improved from the second quartile in 2007 to the first quartile in 2008, the Board was satisfied with performance.
Delaware Global Value Fund – The Performance Universe for the Fund consisted of the Fund and all retail and institutional global multi-cap value funds as selected by Lipper. The Lipper report comparison showed that the Fund’s total return for the one-, three- and five-year periods was in the fourth quartile of its Performance Universe. The Fund’s total return for the ten-year period was in the second quartile. Although the Fund’s performance results were not in line with the Board’s objective, the Board observed that the Lipper Performance Universe included only four funds. Also, in evaluating the Fund’s performance, the Board considered personnel and strategy changes implemented in March 2008.
Comparative Expenses. The Board considered expense comparison data for the Delaware Investments® Family of Funds. Management provided the Board with information on pricing levels and fee structures for each Fund as of October 31, 2008 and, for comparative funds, information as of their respective fiscal year end occurring on or before August 31, 2008. The Board also focused on the comparative analysis of effective management fees and total expense ratios of each Fund versus effective management fees and expense ratios of a group of similar funds as selected by Lipper (the “Expense Group”). In reviewing comparative costs, each Fund’s contractual management fee and the actual management fee incurred by the Fund were compared with the contractual management fees (assuming all funds in the Expense Group were similar in size to the Fund) and actual management fees (as reported by each fund) within the Expense Group, taking into account any applicable breakpoints and fee waivers. Each Fund’s total expenses were also compared with those of its Expense Group. The Lipper total expenses, for comparative consistency, were shown by Lipper for Class A shares and comparative total expenses including 12b-1 and non 12b-1 service fees. The Board considered fees paid to Delaware Investments for non management services. The Board’s objective is to limit each Fund’s total expense ratio to be competitive with that of the Expense Group. The following paragraphs summarize the expense results for each Fund and the Board’s view of such expenses.
Delaware International Value Equity Fund – The expense comparisons for the Fund showed that its actual management fee and total expenses were in the quartile with the lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Lipper report.
79
Other Fund information
(Unaudited)
Delaware International Funds
Board Consideration of Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund Investment Advisory Agreement (continued)
Delaware Emerging Markets Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the second highest expenses of its Expense Group and its total expenses were in the quartile with the highest expenses of its Expense Group. The Fund’s total expenses were not in line with the Board’s objective. In evaluating total expenses, the Board considered 12b-1 fee waivers in place through March 2010 and various initiatives implemented by Management, such as the outsourcing of certain transfer agency and investment accounting services. The Board was satisfied with Management’s efforts to improve the Fund’s total expense ratio by these initiatives and bring it in line with the Board’s objective.
Delaware Global Value Fund – The expense comparisons for the Fund showed that its actual management fee was in the quartile with the lowest expenses of its Expense Group and its total expenses were in the quartile with the second lowest expenses of its Expense Group. The Board was satisfied with the management fee and total expenses of the Fund in comparison to those of its Expense Group as shown in the Lipper report.
Management Profitability. The Board considered the level of profits realized by Delaware Investments in connection with the operation of the Funds. In this respect, the Board reviewed the Investment Management Profitability Analysis that addressed the overall profitability of Delaware Investments’ business in providing management and other services to each of the individual funds and the Delaware Investments® Family of Funds as a whole. Specific attention was given to the methodology followed in allocating costs for the purpose of determining profitability. Management stated that the level of profits of Delaware Investments, to a certain extent, reflect recent operational cost savings and efficiencies initiated by Delaware Investments. The Board considered Delaware Investments’ efforts to improve services provided to fund shareholders and to meet additional regulatory and compliance requirements resulting from recent industry-wide Securities and Exchange Commission initiatives. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of Delaware Investments.
80
Economies of Scale. The Trustees considered whether economies of scale are realized by Delaware Investments as each Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees reviewed the standardized advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints. Breakpoints in the advisory fee occur when the advisory fee rate is reduced on assets in excess of specified levels. Breakpoints result in a lower advisory fee than would otherwise be the case on all assets when the asset levels specified are exceeded. The Board noted that the fee under each Fund’s management contract fell within the standard structure. Although the Funds have not reached a size at which they can take advantage of breakpoints, the Board recognized that the fees were structured so that when the Funds grow, economies of scale may be shared.
81
About the organization
This semiannual 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 profile 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 Thomas L. Bennett John A. Fry Anthony D. Knerr Lucinda S. Landreth | Ann R. Leven Thomas F. Madison Janet L. Yeomans J. Richard Zecher |
82
Affiliated officers | Contact information |
David F. Connor Daniel V. Geatens David P. O’Connor Richard Salus | Investment manager National distributor Shareholder servicing, dividend disbursing, For shareholders For securities dealers and financial Web site |
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.
83
Semiannual report | |
Delaware Focus Global Growth Fund | |
May 31, 2009 |
International equity mutual fund |
Table of contents
Disclosure of Fund expenses | 1 |
Country and sector allocations | 3 |
Statement of net assets | 4 |
Statement of operations | 8 |
Statement of changes in net assets | 9 |
Financial highlights | 10 |
Notes to financial statements | 12 |
Other Fund information | 20 |
About the organization | 22 |
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.
Disclosure of Fund expenses
For the period December 1, 2008* to May 31, 2009
As a shareholder of the Fund, you incur two types of costs: (1) transaction costs, including sales charges (loads) on purchase payments, reinvested dividends, or other distributions; redemption fees; and exchange fees; and (2) ongoing costs, including management fees; distribution and/or service (12b-1) fees; and other Fund expenses. This example is intended to help you understand your ongoing costs (in dollars) of investing in the Fund and to compare these costs with the ongoing costs of investing in other mutual funds.
The example is based on an investment of $1,000 invested at the beginning of the period and held for the entire period December 1, 2008* to May 31, 2009.
Actual expenses
The first section of the table shown, “Actual Fund Return,” provides information about actual account values and actual expenses. You may use the information in this section of the table, together with the amount you invested, to estimate the expenses that you paid over the period. Simply divide your account value by $1,000 (for example, an $8,600 account value divided by $1,000 = 8.6), then multiply the result by the number in the first section under the heading entitled “Expenses Paid During Period” to estimate the expenses you paid on your account during this period.
Hypothetical example for comparison purposes
The second section of the table shown, “Hypothetical 5% Return,” provides information about hypothetical account values and hypothetical expenses based on the Fund’s actual expense ratio and an assumed rate of return of 5% per year before expenses, which is not the Fund’s actual return. The hypothetical account values and expenses may not be used to estimate the actual ending account balance or expenses you paid for the period. You may use this information to compare the ongoing costs of investing in the Fund and other funds. To do so, compare this 5% hypothetical example with the 5% hypothetical examples that appear in the shareholder reports of the other funds.
Please note that the expenses shown in the table are meant to highlight your ongoing costs only and do not reflect any transactional costs, such as sales charges (loads), redemption fees, or exchange fees. Therefore, the second section of the table is useful in comparing ongoing costs only, and will not help you determine the relative total costs of owning different funds. In addition, if these transactional costs were included, your costs would have been higher. The Fund’s expenses shown in the table reflect fee waivers in effect. The expenses shown in the table assume reinvestment of all dividends and distributions.
*The Fund commenced operations on December 29, 2008.
1
Disclosure of Fund expenses
Delaware Focus Global Growth Fund
Expense analysis of an investment of $1,000
Expenses | ||||||||||||
Beginning | Ending | Paid During | ||||||||||
Account | Account | Annualized | Period | |||||||||
Value | Value | Expense | 12/1/08 to | |||||||||
12/29/08* | 5/31/09** | Ratio | 5/31/09*** | |||||||||
Actual Fund return | ||||||||||||
Class A | $ | 1,000.00 | $ | 1,242.40 | 1.20% | $ | 5.68 | |||||
Institutional Class | 1,000.00 | 1,242.40 | 1.20% | 5.68 | ||||||||
Hypothetical 5% return (5% return before expenses) | ||||||||||||
Class A | $ | 1,000.00 | $ | 1,018.95 | 1.20% | $ | 6.04 | |||||
Institutional Class | 1,000.00 | 1,018.95 | 1.20% | 6.04 |
*The Fund commenced operations on December 29, 2008.
**The ending account value for “Actual Fund Return” uses the performance since inception and is not annualized.
***The expenses paid during the period for “Actual Fund Return” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by 154/365 (to reflect the actual since inception). The expenses paid during period for the “Hypothetical 5% Return” are equal to the Fund’s annualized expense ratio, multiplied by the average account value over the period, multiplied by the 182/365 (to reflect the one-half year period).
2
Country and sector allocations | ||
Delaware Focus Global Growth Fund | As of May 31, 2009 |
Sector designations may be different than the sector designations presented in other Fund materials. The sector designations may represent the investment manager’s internal sector classifications, which may result in the sector designations for one Fund being different than another Fund’s sector designations.
Composition of Portfolio | Percentage of net assets | |
Common Stock by Country | 96.77 | % |
Argentina | 1.00 | % |
Australia | 3.14 | % |
Brazil | 5.49 | % |
Canada | 2.33 | % |
Denmark | 3.08 | % |
France | 2.79 | % |
Germany | 2.59 | % |
India | 2.95 | % |
Japan | 1.77 | % |
Mexico | 2.57 | % |
Netherlands | 2.86 | % |
Norway | 3.08 | % |
Switzerland | 11.46 | % |
Taiwan | 2.44 | % |
United Kingdom | 2.81 | % |
United States | 46.41 | % |
Discount Note | 3.66 | % |
Total Value of Securities | 100.43 | % |
Liabilities Net of Receivables and Other Assets | (0.43 | %) |
Total Net Assets | 100.00 | % |
Common Stock by Sector | ||
Consumer Discretionary | 17.28 | % |
Energy | 2.86 | % |
Financials | 21.58 | % |
Health Care | 10.94 | % |
Industrials | 4.75 | % |
Information Technology | 30.78 | % |
Materials | 6.35 | % |
Telecommunication Services | 2.23 | % |
Total | 96.77 | % |
3
Statement of net assets | |
Delaware Focus Global Growth Fund | May 31, 2009 (Unaudited) |
Number of shares | Value (U.S.$) | ||||
Common Stock – 96.77%D | |||||
Argentina – 1.00% | |||||
† | Mercadolibre | 2,100 | $ | 45,444 | |
45,444 | |||||
Australia – 3.14% | |||||
BHP Billiton ADR | 2,550 | 143,412 | |||
143,412 | |||||
Brazil – 5.49% | |||||
BM&F Bovespa | 19,500 | 111,839 | |||
Redecard | 9,600 | 138,625 | |||
250,464 | |||||
Canada – 2.33% | |||||
† | Research in Motion | 1,350 | 106,164 | ||
106,164 | |||||
Denmark – 3.08% | |||||
± | Novo Nordisk Class B | 2,700 | 140,783 | ||
140,783 | |||||
France – 2.79% | |||||
± | Accor | 2,850 | 127,208 | ||
127,208 | |||||
Germany – 2.59% | |||||
± | Deutsche Boerse | 1,350 | 118,041 | ||
118,041 | |||||
India – 2.95% | |||||
Infosys Technologies ADR | 3,900 | 134,862 | |||
134,862 | |||||
Japan – 1.77% | |||||
± | Nintendo | 300 | 80,954 | ||
80,954 | |||||
Mexico – 2.57% | |||||
Grupo Televisa ADR | 6,600 | 117,348 | |||
117,348 | |||||
Netherlands – 2.86% | |||||
Core Laboratories | 1,380 | 130,410 | |||
130,410 | |||||
Norway – 3.08% | |||||
± | Tandberg | 8,400 | 140,341 | ||
140,341 |
4
Number of shares | Value (U.S.$) | ||||
Common Stock (continued) | |||||
Switzerland – 11.46% | |||||
± | Julius Baer Holding | 3,300 | $ | 140,025 | |
± | Kuehne & Nagel International | 1,575 | 123,409 | ||
± | Roche Holding | 825 | 112,963 | ||
Syngenta ADR | 3,000 | 146,399 | |||
522,796 | |||||
Taiwan – 2.44% | |||||
Taiwan Semiconductor Manufacturing ADR | 10,200 | 111,588 | |||
111,588 | |||||
United Kingdom – 2.81% | |||||
± | Thomson Reuters | 4,650 | 128,061 | ||
128,061 | |||||
United States – 46.41% | |||||
Allergan | 2,850 | 125,771 | |||
† | Apple | 750 | 101,858 | ||
Bank of New York Mellon | 4,350 | 120,843 | |||
† | Crown Castle International | 4,200 | 101,892 | ||
Expeditors International Washington | 2,850 | 93,509 | |||
† | Google Class A | 270 | 112,652 | ||
† | IntercontinentalExchange | 1,050 | 113,180 | ||
† | Intuit | 5,400 | 146,987 | ||
Mastercard Class A | 675 | 119,023 | |||
† | NetFlix | 1,500 | 59,130 | ||
NIKE Class B | 2,400 | 136,920 | |||
optionsXpress Holdings | 7,200 | 123,048 | |||
† | priceline.com | 1,050 | 115,616 | ||
QUALCOMM | 3,000 | 130,770 | |||
Staples | 5,100 | 104,295 | |||
† | Teradata | 6,900 | 149,039 | ||
UnitedHealth Group | 4,500 | 119,700 | |||
† | VeriSign | 6,150 | 143,971 | ||
2,118,204 | |||||
Total Common Stock (cost $3,607,110) | 4,416,080 |
5
Statement of net assets
Delaware Focus Global Growth Fund
Principal amount (U.S.$) | Value (U.S.$) | |||||
¹Discount Note – 3.66% | ||||||
Federal Home Loan Bank 0.07% 6/1/09 | $167,001 | $ | 167,001 | |||
Total Discount Note (cost $167,001) | 167,001 | |||||
Total Value of Securities – 100.43% | ||||||
(cost $3,774,111) | 4,583,081 | |||||
Liabilities Net of Receivables and Other Assets – (0.43%) | (19,432 | ) | ||||
Net Assets Applicable to 432,079 Shares Outstanding – 100.00% | $ | 4,563,649 | ||||
Net Asset Value – Delaware Focus Global Growth Fund | ||||||
Class A ($2,078,479 / 196,782 Shares) | $10.56 | |||||
Net Asset Value – Delaware Focus Global Growth Fund | ||||||
Institutional Class ($2,485,170 / 235,297 Shares) | $10.56 | |||||
Components of Net Assets at May 31, 2009: | ||||||
Shares of beneficial interest | ||||||
(unlimited authorization - no par) | $ | 3,689,343 | ||||
Undistributed net investment income | 17,709 | |||||
Accumulated net realized gain on investments | 47,175 | |||||
Net unrealized appreciation of investments and | ||||||
foreign currencies | 809,422 | |||||
Total net assets | $ | 4,563,649 |
D | Securities have been classified by country of origin. Classification by type of business has been presented on page 3 in “Country and sector allocations.” |
† | Non income producing security. |
± | Security is being valued based on international fair value pricing. At May 31, 2009, the aggregate amount of international fair value priced securities was $1,111,785, which represented 24.36% of the Fund’s net assets. See Note 1 in “Notes to financial statements.” |
¹ | The rate shown is the effective yield at the time of purchase. |
6
ADR – American Depositary Receipts |
Net Asset Value and Offering Price Per Share – | ||
Delaware Focus Global Growth Fund | ||
Net asset value Class A (A) | $ | 10.56 |
Sales charge (5.75% of offering price) (B) | 0.64 | |
Offering price | $ | 11.20 |
(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
7
Statement of operations | |
Delaware Focus Global Growth Fund | December 29, 2008* to May 31, 2009 (Unaudited) |
Investment Income: | |||||||
Dividends | $ | 45,140 | |||||
Interest | 201 | ||||||
Foreign tax withheld | (3,515 | ) | $ | 41,826 | |||
Expenses: | |||||||
Legal fees | 15,541 | ||||||
Management fees | 13,425 | ||||||
Audit and tax | 5,536 | ||||||
Custodian fees | 3,845 | ||||||
Pricing fees | 2,595 | ||||||
Distribution expenses-Class A | 2,118 | ||||||
Registration fees | 1,321 | ||||||
Accounting and administration expenses | 632 | ||||||
Reports and statements to shareholders | 553 | ||||||
Dividend disbursing and transfer agent fees and expenses | 140 | ||||||
Trustees’ fees | 121 | ||||||
Insurance fees | 39 | ||||||
Consulting fees | 19 | ||||||
Trustees’ expenses | 10 | ||||||
Dues and services | 1 | 45,896 | |||||
Less fees waived | (24,936 | ) | |||||
Less waived distribution expenses-Class A | (2,118 | ) | |||||
Total operating expenses | 18,842 | ||||||
Net Investment Income | 22,984 | ||||||
Net Realized and Unrealized Gain (Loss) on Investments | |||||||
and Foreign Currencies: | |||||||
Net realized gain (loss) on: | |||||||
Investments | 47,175 | ||||||
Foreign currencies | (5,275 | ) | |||||
Net realized gain | 41,900 | ||||||
Unrealized appreciation/depreciation of investments and foreign currencies | 809,422 | ||||||
Net Realized and Unrealized Gain on Investments | |||||||
and Foreign Currencies: | 851,322 | ||||||
Net Increase in Net Assets Resulting from Operations | $ | 874,306 |
*Commencement of operations.
See accompanying notes
8
Statement of changes in net assets
Delaware Focus Global Growth Fund
12/29/08* | |||
to | |||
5/31/09 | |||
(Unaudited) | |||
Increase in Net Assets from Operations: | |||
Net investment income | $ | 22,984 | |
Net realized gain on investments and foreign currencies | 41,900 | ||
Unrealized appreciation/depreciation of investments | |||
and foreign currencies | 809,422 | ||
Net increase in net assets resulting from operations | 874,306 | ||
Capital Share Transactions: | |||
Proceeds from shares sold: | |||
Class A | 1,689,318 | ||
Institutional Class | 2,000,025 | ||
3,689,343 | |||
Increase in net assets derived from capital share transactions | 3,689,343 | ||
Net Increase in Net Assets | 4,563,649 | ||
Net Assets: | |||
Beginning of period | – | ||
End of period (including undistributed net investment income of $17,709) | $ | 4,563,649 |
*Commencement of operations.
See accompanying notes
9
Financial highlights
Delaware Focus Global Growth Fund
Selected data for each share of the Fund outstanding throughout each period were as follows:
Class A | Institutional Class | |||||||
12/29/081 | 12/29/081 | |||||||
to | to | |||||||
5/31/09 | 5/31/09 | |||||||
(Unaudited) | (Unaudited) | |||||||
Net asset value, beginning of period | $ | 8.500 | $ | 8.500 | ||||
Income from investment operations: | ||||||||
Net investment income2 | 0.054 | 0.054 | ||||||
Net realized and unrealized gain on investments | ||||||||
and foreign currencies | 2.006 | 2.006 | ||||||
Total from investment operations | 2.060 | 2.0600 | ||||||
Net asset value, end of period | $ | 10.560 | $ | 10.560 | ||||
Total return3 | 24.24% | 24.24% | ||||||
Ratios and supplemental data: | ||||||||
Net assets, end of period (000 omitted) | $ | 2,079 | $ | 2,485 | ||||
Ratio of expenses to average net assets | 1.20% | 1.20% | ||||||
Ratio of expenses to average net assets | ||||||||
prior to fees waived and expense paid indirectly | 3.08% | 2.78% | ||||||
Ratio of net investment income to average net assets | 1.44% | 1.44% | ||||||
Ratio of net investment loss to average net assets | ||||||||
prior to fees waived and expense paid indirectly | (0.44% | ) | (0.14% | ) | ||||
Portfolio turnover | 36% | 36% |
1 Date of commencement of operations; ratios and portfolio turnover have been annualized and total return has not been annualized. |
2 The average shares outstanding method has been applied for per share information. |
3 Total investment return is based on the change in net asset value of a share during the period and assumes reinvestment of dividends and distributions at net asset value and does not reflect the impact of a sales charge. Total investment return reflects a voluntary waiver by the manager and a voluntary waiver by the distributor, as applicable. Performance would have been lower had the voluntary waivers not been in effect. |
See accompanying notes
10
Notes to financial statements | ||
Delaware Focus Global Growth Fund | May 31, 2009 (Unaudited) |
Delaware Group® Global & International Funds (Trust) is organized as a Delaware statutory trust and offers four series: Delaware Focus Global Growth Fund, Delaware International Value Equity Fund, Delaware Emerging Markets Fund and Delaware Global Value Fund. These financial statements and the related notes pertain to Delaware Focus Global Growth Fund (Fund). The Trust is an open-end investment company. The Fund is considered diversified under the Investment Company Act of 1940, as amended, and offers Class A, 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 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 May 31, 2009, Class C and Class R shares had not commenced operations.
The investment objective of the 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 Fund.
Security Valuation – Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the New York Stock Exchange (NYSE) on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and ask prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price on the valuation date. 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 the Fund’s Board of Trustees (Board). In determining whether market quotations are readily available or fair valuation will be used, various factors will be taken into consideration, such as market closures, or suspension of trading in a security. The Fund may use fair value pricing more frequently for securities traded primarily in non-U.S. markets because, among other things, most foreign markets close well before the Fund values its securities at 4:00 p.m. Eastern time. The earlier close of these foreign markets gives rise to the possibility that significant events, including broad market moves, government actions or pronouncements, aftermarket trading, or news events may have occurred in the interim. To account for this, the Fund may frequently value foreign securities using fair value prices based on third-party vendor modeling tools (international fair value pricing).
Federal Income Taxes – No provision for federal income taxes has been made as the Fund intends to 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.
12
The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. The Fund did not record 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 the Fund on the basis of daily net assets of each class. Distribution expenses relating to a specific class are charged directly to that class.
Repurchase Agreements – The Fund may invest in a pooled cash account along with members of the Delaware Investments® Family of Funds pursuant to an exemptive order issued by the Securities and Exchange Commission. The aggregate daily balance of the pooled cash account is invested in repurchase agreements secured by obligations of the U.S. government. The respective collateral is held by the Fund’s custodian bank until the maturity of the respective repurchase agreements. Each repurchase agreement is at least 102% collateralized. However, in the event of default or bankruptcy by the counterparty to the agreement, realization of the collateral may be subject to legal proceedings. At May 31, 2009, the Fund held no investments in repurchase agreements.
Foreign Currency Transactions – Transactions denominated in foreign currencies are recorded at the prevailing exchange rates on the valuation date. The value of all assets and liabilities denominated in foreign currencies is translated into U.S. dollars at the exchange rate of such currencies against the U.S. dollar daily. Transaction gains or losses resulting from changes in exchange rates during the reporting period or upon settlement of the foreign currency transaction are reported in operations for the current period. The Fund does not isolate that portion of realized gains and losses on investments which are due to changes in foreign exchange rates from that which are due to changes in market prices. The Fund reports 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 may affect the reported amounts of assets and liabilities at the date of the financial statements and the reported amounts of revenues and expenses during the reporting period. Actual results could differ from those estimates.
Other – Expenses directly attributable to the Fund are charged directly to the Fund. Other expenses common to various funds within the Delaware Investments Family of Funds are generally allocated amongst such funds on the basis of average net assets. Management fees and some other expenses are paid monthly. Security transactions are recorded on the date the securities are purchased or sold (trade date) for financial reporting purposes. Costs used in calculating realized gains and losses on the sale of investment securities are those of the specific securities sold. Dividend income is recorded on the ex-dividend date and interest income is recorded on the accrual basis. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Fund is aware of
13
Notes to financial statements
Delaware Focus Global Growth Fund
such dividends, net of all non-rebatable tax withholdings. Withholding taxes on foreign dividends have been recorded in accordance with the Fund’s understanding of the applicable country’s tax rules and rates. The Fund declares and pays dividends from net investment income and distributions from net realized gain on investments, if any, annually.
The Fund may receive earnings credits from its custodian when positive cash balances are maintained, which are used to offset custody fees. There were no earnings credits during the period December 29, 2008 through May 31, 2009.
2. | Investment Management, Administration Agreements and Other Transactions with Affiliates |
In accordance with the terms of its investment management agreement, the Fund pays Delaware Management Company (DMC), a series of Delaware Management Business Trust and the investment manager, an annual fee which is calculated daily at the rate of 0.85% on the first $500 million of average daily net assets of the Fund, 0.80% on the next $500 million, 0.75% on the next $1.5 billion, and 0.70% on average daily net assets in excess of $2.5 billion.
DMC has voluntarily agreed to waive that portion, if any, of its management fee and reimburse the Fund to the extent necessary to ensure that total annual operating expenses (excluding any 12b-1 plan expenses, taxes, interest, inverse floater program expenses, brokerage fees, 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 1.20% of average daily net assets of the Fund. 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 the Fund’s Board and DMC. This expense waiver may be discontinued at any time because it is voluntary, and applies only to expenses paid directly by the Fund.
Delaware Service Company, Inc. (DSC), an affiliate of DMC, provides fund accounting and financial administration oversight services to the Fund. For these services, the Fund pays DSC fees based on the aggregate daily net assets of the Delaware Investments® Family of Funds at the following annual rate: 0.0050% of the first $30 billion; 0.0045% of the next $10 billion; 0.0040% of the next $10 billion; and 0.0025% of aggregate average daily net assets in excess of $50 billion. The fees payable to DSC under the service agreement described above are allocated among all Funds in the Delaware Investments® Family of Funds on a relative net asset value basis. For the period December 29, 2008 through May 31, 2009, the Fund was charged $79 for these services.
DSC also provides dividend disbursing and transfer agency services. The Fund pays DSC a monthly fee based on the number of shareholder accounts for dividend disbursing and transfer agent services.
Pursuant to a distribution agreement and distribution plan, the Fund pays DDLP, the distributor and an affiliate of DMC, an annual distribution and service fee not to exceed 0.30% of the average daily net assets of the Class A shares, 1.00% of the average daily net assets of the Class C shares and 0.60% of the average daily net assets of Class R shares. Institutional Class shares pay no distribution and
14
service expenses. DDLP has voluntarily agreed to waive all such distribution and service fees at this time. This expense waiver may be discontinued at any time because it is voluntary, and applies only to expenses paid directly by the Fund.
At May 31, 2009, the Fund had receivable due from or liabilities payable to affiliates as follows:
Dividend disbursing, transfer agent and fund accounting | ||||
oversight fees and other expenses payable to DSC | $ | (42 | ) | |
Other expenses payable to DMC and affiliates* | (91 | ) | ||
Receivable from DMC under expense limitation agreement | 3,770 |
*DMC, as part of its administrative services, pays operating expenses on behalf of the Fund and is reimbursed on a periodic basis. Such expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, registration fees and trustees’ fees.
As provided in the investment management agreement, the Fund bears the cost of certain legal and tax services, including internal legal and tax services provided to the Fund by DMC and/or its affiliates’ employees. For the period December 29, 2008 through May 31, 2009, the Fund was charged $181 for internal legal and tax services provided by DMC and/or its affiliates’ employees.
Trustees’ fees include expenses accrued by the Fund for each Trustee’s retainer and meeting fees. Certain officers of DMC, DSC and DDLP are officers and/or Trustees of the Trust. These officers and Trustees are paid no compensation by the Fund.
3. Investments
For the period December 29, 2008 through May 31, 2009, the Fund made purchases of $4,087,736 and sales of $527,801 of investment securities other than short-term investments.
At May 31, 2009, the cost of investments for federal income tax purposes has been estimated since final tax characteristics cannot be determined until fiscal year end. At May 31, 2009, the cost of investments was $3,774,111. At May 31, 2009, net unrealized appreciation was $808,970, of which $855,342 related to unrealized appreciation of investments and $46,372 related to unrealized depreciation of investments.
Effective December 29, 2008, the Fund adopted Financial Accounting Standard No. 157, Fair Value Measurements (FAS 157). FAS 157 defines fair value as the price that the Fund would receive to sell an asset or pay to transfer a liability in an orderly transaction between market participants at the measurement date under current market conditions. 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 that 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
15
Notes to financial statements
Delaware Focus Global Growth Fund
information available under the circumstances. The Fund’s investment in its entirety is assigned a level based upon the observability of the inputs which are significant to the overall valuation. The three-tier hierarchy of inputs is summarized below.
Level 1 – Inputs are quoted prices in active markets
Level 2 – Inputs are observable, directly or indirectly
Level 3 – Inputs are unobservable and reflect assumptions on the part of the reporting entity
The following table summarizes the valuation of the Fund investments by the FAS 157 fair value hierarchy levels as of May 31, 2009:
Securities | |||
Level 1 | $ | 3,304,295 | |
Level 2 | 1,278,786 | ||
Level 3 | - | ||
Total | $ | 4,583,081 |
There were no Level 3 securities at the beginning or end of the period.
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 transaction and net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. There were no dividends and distributions paid during the period December 29, 2008 through May 31, 2009.
5. Components of Net Assets on a Tax Basis
The components of net assets are estimated since final tax characteristics cannot be determined until fiscal year end. As of May 31, 2009, the estimated components of net assets on a tax basis were as follows:
Shares of beneficial interest | $ | 3,689,343 | |
Undistributed ordinary income | 64,884 | ||
Unrealized appreciation of investments | |||
and foreign currencies | 809,422 | ||
Net assets | $ | 4,563,649 |
For financial reporting purposes, capital accounts are adjusted to reflect the tax character of permanent book/tax differences. Reclassifications are primarily due to gain (loss) on foreign currency transactions. Results of operations and net assets were not affected by these reclassifications. For the period December 29, 2008 through May 31, 2009, the Fund recorded the following reclassifications:
Undistributed net investment income | $ | (5,275 | ) | |
Accumulated net realized gain | 5,275 |
16
6. Capital Shares
Transactions in capital shares were as follows:
12/29/08+ to 5/31/09 | ||||
Shares sold: | ||||
Class A | 196,782 | |||
Institutional Class | 235,297 | |||
Net increase | 432,079 |
+Commencement of operations.
7. Line of Credit
The Fund, along with certain other funds in the Delaware Investments® Family of Funds (Participants), participates in a $35,000,000 revolving line of credit with The Bank of New York Mellon (BNY Mellon) to be used for temporary or emergency purposes as an additional source of liquidity to fund redemptions of investor shares. Under the agreement, the Participants are charged an annual commitment fee, which is allocated across the Participants on the basis of each Participant’s allocation of the entire facility. Participants may borrow up to a maximum of one third of their net assets under the agreement. The agreement expires on November 17, 2009. The Fund had no amounts outstanding as of May 31, 2009, or at any time during the period then ended.
8. Foreign Currency Exchange Contracts
The Fund may enter into foreign currency exchange contracts as a way of managing foreign exchange rate risk. The Fund may enter into these contracts to fix the U.S. dollar value of a security that it has agreed to buy or sell for the period between the date the trade was entered into and the date the security is delivered and paid for. The Fund 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.
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 Fund 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 exchange contracts outstanding at May 31, 2009. The Fund’s maximum risk of loss from counterparty credit risk is the value of its currency exchanged with the counterparty. The risk is generally mitigated by having a netting arrangement between the Fund and the counterparty and by the posting of collateral by the counterparty to the Fund to cover the fund’s exposure to the counterparty.
17
9. Credit and Market Risk
Some countries in which the Fund may invest require governmental approval for the repatriation of investment income, capital or the proceeds of sales of securities by foreign investors. In addition, if there is deterioration in a country’s balance of payments or for other reasons, a country may impose temporary restrictions on foreign capital remittances abroad.
The securities exchanges of certain foreign markets are substantially smaller, less liquid, and more volatile than the major securities markets in the United States. Consequently, acquisition and disposition of securities by the Fund may be inhibited. In addition, a significant portion of the aggregate market value of equity securities listed on the major securities exchanges in emerging markets are held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Fund.
The Fund may invest up to 15% of its net assets in illiquid securities, which may include securities with contractual restrictions on resale, securities exempt from registration under Rule 144A of the Securities Act of 1933, as amended, and other securities which may not be readily marketable. The relative illiquidity of these securities may impair the Fund from disposing of them in a timely manner and at a fair price when it is necessary or desirable to do so. While maintaining oversight, the Fund’s Board has delegated to DMC the day-to-day functions of determining whether individual securities are liquid for purposes of the Fund’s limitation on investments in illiquid assets. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 15% limit on investments in illiquid securities. As of May 31, 2009, there were no Rule 144A securities and no securities have been determined to be illiquid under the Fund’s Liquidity Procedures.
10. Contractual Obligations
The Fund enters into contracts in the normal course of business that contain a variety of indemnifications. The Fund’s maximum exposure under these arrangements is unknown. However, the Fund has not had prior claims or losses pursuant to these contracts. Management has reviewed the Fund’s existing contracts and expects the risk of loss to be remote.
18
Other Fund information
(Unaudited)
Delaware Focus Global Growth Fund
Board Consideration of Delaware Focus Global Growth Investment Advisory Agreement
At a meeting held on November 18-20, 2008 (the “Meeting”), the Board of Trustees (the “Board”), including a majority of disinterested or independent Trustees, approved the Investment Advisory Agreement for Delaware Focus Global Growth Fund (the “Fund”). In making its decision, the Board considered information furnished at regular quarterly Board meetings, including reports detailing performance, investment strategies and expenses, as well as information prepared specifically in connection with the approval of the investment advisory contract. Information furnished specifically in connection with the approval of the Investment Advisory Agreement with Delaware Management Company (“DMC”) included materials provided by DMC and its affiliates (“Delaware Investments”) concerning, among other things, the nature, extent and quality of services provided to the Fund, the costs of such services to the Fund, economies of scale and the financial condition and profitability of Delaware Investments. In addition, in connection with the Meeting, the Board separately received and reviewed independent historical and comparative reports prepared by Lipper Inc. (“Lipper”), an independent statistical compilation organization. The Lipper reports compared Delaware Investments fund investment performance and expenses with those of other comparable mutual funds. The independent Trustees reviewed the Lipper reports with counsel to the independent Trustees. The Board requested and received certain information regarding Management’s policy with respect to advisory fee levels and its philosophy with respect to breakpoints; the structure of portfolio manager compensation; the investment manager’s profitability; and any constraints or limitations on the availability of securities in certain investment styles which might inhibit DMC’s ability to invest fully in accordance with Fund policies.
In considering information relating to the approval of the Fund’s advisory agreement, the independent Trustees received assistance and advice from and met separately with independent counsel. Although the Trustees gave attention to all information furnished, the following discussion identifies, under separate headings, the primary factors taken into account by the Board in its contract renewal considerations.
Nature, Extent And Quality Of Service. Consideration was given to the services to be provided by Delaware Investments to the Fund and its shareholders. In reviewing the nature, extent and quality of such services, the Board emphasized that reports will be furnished to it throughout the year at regular Board Meetings covering matters such as compliance of portfolio managers with the investment policies, strategies and restrictions, the compliance of management personnel with the Code of Ethics adopted throughout the Delaware Investments® Family of Funds complex and the adherence to fair value pricing procedures as established by the Board. The Board was pleased with the current staffing of the Fund’s investment advisor and the emphasis placed on research in the investment process. Favorable consideration was given to DMC’s efforts to maintain and, in some instances, increase financial and human resources committed to fund matters. In particular, the Board noted the investment by DMC in a new computerized platform which is expected to be completed in 2009. The Board also considered the transfer agent and shareholder services to be provided to Fund shareholders by Delaware Investments’ affiliate, Delaware Service Company, Inc. (“DSC”), noting DSC’s commitment to maintain a high level of service as well as Delaware Investments’ expenditures
20
to improve the delivery of shareholder services. The Board once again noted the benefits provided to Fund shareholders for being part of the Delaware Investments® Family of Funds, including each shareholder’s ability to exchange an investment in one Delaware Investments fund for the same class of shares of another Delaware Investments fund without a sales charge, to reinvest Fund dividends into additional shares of the Fund or into additional shares of other Delaware Investments funds and the privilege to combine holdings in other Delaware Investments funds to obtain a reduced sales charge. The Board was satisfied with the nature, extent and quality of the overall services to be provided by Delaware Investments.
Investment Performance. The Board considered the investment performance of DMC with respect to other similar products.
Comparative Expenses. The Board considered management fee and total expense comparison data for the proposed Fund and other comparable funds presented in the Board materials. Management provided the Board with information on pricing levels and fee structures for the Fund. The Board focused on the comparative analysis of the effective management fees and total expense ratios of the Fund versus the effective management fees and expense ratios of a group of similar funds (the “Expense Group”). The Board noted its objective to limit the Fund’s total expense ratio to be competitive with that of the Expense Group. The Board was satisfied with the proposed management fees and total expenses of the Fund in comparison to other similar global multi-cap growth funds.
Management Profitability. The Board considered the level of profits to be realized by Delaware Investments in connection with the operation of the Fund. In this respect, the Board reviewed the pro forma expense statement for the Fund included in the Board material which reflected varying projected levels of expense reimbursement at varying asset levels. The Board also considered the extent to which Delaware Investments might derive ancillary benefits from fund operations, including the potential for procuring additional business as a result of the prestige and visibility associated with its role as service provider to the Delaware Investments Family of Funds and the benefits from allocation of fund brokerage to improve trading efficiencies. The Board found that the management fees were reasonable in light of the services rendered and the level of profitability of Delaware Investments.
Economies Of Scale. The Trustees considered whether economies of scale are realized by Delaware Investments as the Fund’s assets increase and the extent to which any economies of scale are reflected in the level of management fees charged. The Trustees considered the standardized advisory fee pricing and structure, approved by the Board and shareholders, which includes breakpoints. The Board noted that the fee under the Fund’s proposed management contract fell within the standard structure for international equity funds. In light of the start-up nature of the Fund, the Board recognized that the fee was structured so that when the Fund grows, economies of scale may be shared.
21
About the organization
This semiannual report is for the information of Delaware Focus Global Growth Fund shareholders, but it may be used with prospective investors when preceded or accompanied by a current prospectus for Delaware Focus Global Growth Fund, which is 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. For most recent performance, please call 800 523-1918.
Board of trustees | |
Patrick P. Coyne Thomas L. Bennett John A. Fry Anthony D. Knerr Lucinda S. Landreth | Ann R. Leven Thomas F. Madison Janet L. Yeomans J. Richard Zecher |
22
Affiliated officers | Contact information |
David F. Connor Daniel V. Geatens David P. O’Connor Richard Salus | Investment manager National distributor Shareholder servicing, dividend disbursing, For shareholders For securities dealers and financial Web site |
Delaware Investments is the marketing name of Delaware Management Holdings, Inc. and its subsidiaries.
The 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. The Fund’s Forms N-Q, as well as a description of the policies and procedures that the 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 the Fund uses to determine how to vote proxies (if any) relating to portfolio securities and the Fund’s Schedule of Investments are available without charge on the Fund’s Web site at www.delawareinvestments.com. The 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 the Fund voted proxies relating to portfolio securities during the most recently disclosed 12-month period ended June 30 is available without charge (i) through the Fund’s Web site at www.delawareinvestments.com; and (ii) on the Commission’s Web site at www.sec.gov.
23
Item 2. Code of Ethics
Not applicable.
Item 3. Audit Committee Financial Expert
Not applicable.
Item 4. Principal Accountant Fees and Services
Not applicable.
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 Companies 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 second 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: | July 29, 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: | July 29, 2009 |
RICHARD SALUS | |
By: | Richard Salus |
Title: | Chief Financial Officer |
Date: | July 29, 2009 |