deenhanglobdiv_ncsr.htm
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: 811-22050
 
Exact name of registrant as specified in charter:
Delaware Enhanced Global Dividend and Income Fund
 
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, 2011
 

 

Item 1. Reports to Stockholders

   
   
   
   
Semiannual Report
Delaware
Enhanced Global
Dividend and Income
Fund
 
 
  May 31, 2011
   
 
   
 
 
 
 
 
 
 
The figures in the semiannual report for Delaware Enhanced Global Dividend and Income Fund represent past results, which are not a guarantee of future results. A rise or fall in interest rates can have a significant impact on bond prices. Funds that invest in bonds can lose their value as interest rates rise.
 
 
 
 
  Closed-end fund
   

 
 
 
 

 

Table of contents
 
      Security type/sector/country allocations 1
     
  Statement of net assets 3
     
  Statement of operations 19
     
  Statements of changes in net assets 20
     
  Statement of cash flows 21
     
  Financial highlights 22
     
  Notes to financial statements 23
     
  Other Fund information 31
     
  About the organization 35





Unless otherwise noted, views expressed herein are current as of May 31, 2011, and subject to change.
 
Funds are not FDIC insured and are not guaranteed. It is possible to lose the principal amount invested.
 
Mutual fund advisory services are provided by Delaware Management Company, a series of Delaware Management Business Trust, which is a registered investment advisor. Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.
 
© 2011 Delaware Management Holdings, Inc.
 
All third-party trademarks cited are the property of their respective owners.
 

 

Security type/sector/country allocations
 
Delaware Enhanced Global Dividend and Income Fund
As of May 31, 2011
 
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.
 
  Percentage
Security type/sector of Net Assets
Common Stock 54.27 %
Consumer Discretionary 5.39 %
Consumer Staples 5.75 %
Diversified REITs 0.62 %
Energy 4.30 %
Financials 6.42 %
Healthcare 6.55 %
Healthcare REITs 0.12 %
Hotel REITs 0.13 %
Industrial REITs 0.99 %
Industrials 7.93 %
Information Technology 4.45 %
Mall REITs 0.46 %
Manufactured Housing REIT 0.08 %
Materials 2.89 %
Mixed REIT 0.29 %
Mortgage REITs 0.09 %
Multifamily REITs 0.22 %
Office REITs 0.59 %
Real Estate Management & Development 0.35 %
Self-Storage REIT 0.04 %
Shopping Center REITs 0.83 %
Single Tenant REIT 0.14 %
Telecommunications 3.75 %
Utilities 1.89 %
Convertible Preferred Stock 2.59 %
Agency Collateralized Mortgage Obligations 0.24 %
Agency Mortgage-Backed Securities 1.54 %
Commercial Mortgage-Backed Securities 1.16 %
Convertible Bonds 10.37 %
Aerospace & Defense 0.29 %
Auto Parts & Equipment 0.32 %
Banking, Finance & Insurance 0.48 %
Basic Materials 0.55 %
Cable, Media & Publishing 0.15 %
Computers & Technology 2.11 %
Energy 0.41 %
Healthcare & Pharmaceuticals 1.78 %
Leisure, Lodging & Entertainment 0.75 %
Machinery 0.11 %
Real Estate 0.94 %
Telecommunications 2.48 %
Corporate Bonds 33.65 %
Banking 1.09 %
Basic Industry 3.21 %
Brokerage 0.34 %
Capital Goods 2.95 %
Consumer Cyclical 3.67 %
Consumer Non-Cyclical 2.91 %
Energy 5.32 %
Finance & Investments 1.68 %
Media 2.50 %
Real Estate 0.42 %
Services Cyclical 2.43 %
Services Non-Cyclical 1.06 %
Technology 1.43 %
Telecommunications 3.90 %
Utilities 0.74 %
Non-Agency Asset-Backed Securities 0.15 %
Non-Agency Collateralized Mortgage Obligations 0.19 %
Senior Secured Loans 0.79 %
Sovereign Bonds 4.92 %
Supranational Bank 0.67 %
U.S. Treasury Obligations 0.28 %
Leveraged Non-Recourse Security 0.00 %
Residual Interest Trust Certificate 0.00 %
Exchange-Traded Fund 2.61 %
Preferred Stock 0.83 %
Short-Term Investments 5.53 %
Securities Lending Collateral 18.74 %
Total Value of Securities 138.53 %
Obligation to Return Securities Lending Collateral (18.92 %)
Borrowing Under Line of Credit (22.63 %)
Receivables and Other Assets Net of Other Liabilities 3.02 %
Total Net Assets 100.00 %

(continues)       1
 

 

Security type/sector/country allocations
 
Delaware Enhanced Global Dividend and Income Fund
 
  Percentage
Country of Net Assets
Australia 1.01 %
Barbados 0.18 %
Belgium 0.01 %
Bermuda 0.38 %
Brazil 1.20 %
Canada 2.52 %
Cayman Islands 0.56 %
Chile 0.68 %
China 0.74 %
Colombia 0.61 %
Croatia 0.17 %
France 7.99 %
Germany 2.01 %
Hong Kong 0.99 %
Indonesia 1.18 %
Ireland 0.55 %
Israel 0.64 %
Italy 1.89 %
Japan 3.30 %
Luxembourg 1.43 %
Mexico 0.70 %
Netherlands 1.60 %
Panama 0.61 %
Peru 0.23 %
Philippines 0.61 %
Poland 0.62 %
Qatar 0.17 %
Republic of Korea 0.44 %
Russia 0.84 %
Singapore 0.88 %
Supranational 0.67 %
Spain 1.33 %
Sweden 1.39 %
Switzerland 1.41 %
Taiwan 0.88 %
Turkey 0.11 %
United Kingdom 4.12 %
United States 69.36 %
Uruguay 0.25 %
Total 114.26 %

The percentage of net assets exceeds 100% because the Fund utilizes a line of credit with The Bank of New York Mellon, as described in Note 7 in “Notes to financial statements.” The Fund utilizes leveraging techniques in an attempt to obtain a higher return for the Fund. There is no assurance that the Fund will achieve its investment objectives through the use of such techniques.
 
2
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
May 31, 2011 (Unaudited)
 
      Number of   Value
                 Shares      (U.S. $)
Common Stock – 54.27%v          
Consumer Discretionary – 5.39%          
  Bayerische Motoren Werke   9,381   $ 832,249
  DIRECTV Class A   1,900     95,494
* Don Quijote   14,500     506,829
* Genuine Parts   13,100     717,880
  Home Depot   15,700     569,596
  Hyundai Department Store   3,546     604,247
  Mattel   25,800     680,991
* PPR   3,440     600,292
* Publicis Groupe   10,729     591,128
  Sumitomo Rubber Industries   12,409     143,765
* Techtronic Industries   537,000     657,999
  Toyota Motor   33,284     1,390,824
  Vivendi   41,336     1,157,660
* Yue Yuen Industrial Holdings   280,500     975,483
            9,524,437
Consumer Staples – 5.75%          
* Aryzta   23,314     1,297,068
  Coca-Cola Amatil   41,168     517,867
  ConAgra Foods   41,700     1,060,431
  Greggs   100,081     867,370
  Heinz (H.J.)   18,900     1,037,988
  Kimberly-Clark   15,400     1,051,820
  Kraft Foods Class A   30,600     1,070,082
  Lorillard   9,000     1,037,520
  Metro   13,726     917,013
  Parmalat   354,438     1,314,691
            10,171,850
Diversified REITs – 0.62%          
  Cyrela Brazil Realty   4,100     43,919
* Duke Realty   8,600     129,344
* Entertainment Properties Trust   8,236     400,104
  Lexington Reality Trust   28,070     264,981
  Stockland   70,059     264,445
            1,102,793
Energy – 4.30%          
  Chevron   6,500     681,915
  CNOOC   415,000     1,042,010
  ConocoPhillips   10,900     798,098
  Petroleo Brasileiro ADR   30,900     965,934
* Royal Dutch Shell ADR   14,300     1,034,176
  Spectra Energy   37,600     1,037,384
* Total   19,083     1,102,015
* Total ADR   16,400     944,476
            7,606,008
Financials – 6.42%          
  Allstate   32,500     1,019,850
* AXA   60,009     1,286,569
  Banco Santander   60,743     723,790
  BB&T   19,100     526,014
* Fifth Street Finance   26,754     329,877
  Gallagher (Arthur J.)   28,900     829,719
  Marsh & McLennan   23,300     714,611
* Mitsubishi UFJ Financial Group   190,989     880,525
  Nordea Bank   90,500     1,063,284
  Solar Capital   43,539     1,077,590
  Standard Chartered   38,931     1,045,174
  Travelers   14,300     887,744
  UniCredit   420,721     959,653
            11,344,400
Healthcare – 6.55%          
  Abbott Laboratories   14,900     778,525
*† Alliance HealthCare Services   6,522     28,240
  Baxter International   9,400     559,488
  Bristol-Myers Squibb   33,700     969,212
  Johnson & Johnson   14,000     942,060
* Meda Class A   124,711     1,392,279
  Merck   37,400     1,374,450
  Novartis   18,471     1,191,486
  Pfizer   53,944     1,157,099
* Sanofi   14,228     1,128,092
* Sanofi ADR   23,100     914,991
  Teva Pharmaceutical          
            Industries ADR   22,300     1,135,070
            11,570,992
Healthcare REITs – 0.12%          
  Cogdell Spencer   15,000     90,000
  Nationwide Health Properties   2,800     122,640
            212,640
Hotel REITs – 0.13%          
  Ashford Hospitality Trust   4,500     64,215
  DiamondRock Hospitality   15,000     172,500
            236,715
Industrial REITs – 0.99%          
  Cambridge Industrial Trust   1,170,000     474,221
  DCT Industrial Trust   16,877     95,524
*† First Industrial Realty Trust   47,109     592,631
  Goodman Group   247,237     194,229
  STAG Industrial   31,263     397,040
            1,753,645
Industrials – 7.93%          
  Alstom   18,889     1,173,101
  Asahi Glass   58,000     685,308
  Compaigne de Saint-Gobain   15,228     1,010,342
  Deutsche Post   77,364     1,459,822
* Finmeccanica   85,107     1,062,105
Flextronics International   6,400     46,336
  ITOCHU   116,398     1,204,155
  Koninklijke Philips Electronics   32,279     898,775
*† Mobile Mini   2,394     53,865

(continues)       3
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
      Number of   Value
                 Shares      (U.S. $)
Common Stock (continued)          
Industrials (continued)          
* Northrop Grumman   11,200   $ 731,248
  Raytheon   21,100     1,063,018
  Singapore Airlines   90,000     1,033,677
* Teleperformance   39,480     1,352,034
  Vallourec   9,466     1,189,285
* Waste Management   27,200     1,057,536
            14,020,607
Information Technology – 4.45%          
  Automatic Data Processing   16,400     903,804
  Canon ADR   15,600     748,488
CGI Group Class A   107,484     2,477,627
  HTC   36,450     1,557,561
  Intel   53,100     1,195,281
  Microsoft   30,300     757,803
Sohu.com   2,800     225,764
            7,866,328
Mall REITs – 0.46%          
  General Growth Properties   12,763     210,334
  Simon Property Group   5,095     601,516
            811,850
Manufactured Housing REIT – 0.08%          
  Equity Lifestyle Properties   2,300     135,125
            135,125
Materials – 2.89%          
  ArcelorMittal   16,161     541,003
  duPont (E.I.) deNemours   11,000     586,300
* Lafarge   15,702     1,087,332
  MeadWestvaco   18,900     642,978
  Rexam   193,041     1,274,161
  Rio Tinto   14,011     976,259
            5,108,033
Mixed REIT – 0.29%          
* Digital Realty Trust   8,300     517,671
            517,671
Mortgage REITs – 0.09%          
* Chimera Investment   12,100     47,311
* Cypress Sharpridge Investments   8,200     105,288
            152,599
Multifamily REITs – 0.22%          
  Camden Property Trust   4,469     287,268
* Investors Real Estate Trust   10,260     99,419
            386,687
Office REITs – 0.59%          
@ Alstria Office REIT   9,710     152,141
* Government Properties          
            Income Trust   3,852     102,001
  Mack-Cali Realty   8,300     293,488
  Orix JREIT   17     92,025
  Parkway Properties   3,500     64,260
  SL Green Realty   3,679     331,147
            1,035,062
Real Estate Management & Development – 0.35%      
  Mitsubishi Estate   10,549     188,439
* Renhe Commercial Holdings   264,000     47,220
  Starwood Property Trust   17,700     384,798
            620,457
Self-Storage REIT – 0.04%          
  Extra Space Storage   3,455     75,181
            75,181
Shopping Center REITs – 0.83%          
Charter Hall Retail REIT   71,117     254,011
  Corio   2,648     181,893
* Kimco Realty   8,157     159,143
  Link REIT   33,000     112,286
* Ramco-Gershenson          
            Properties Trust   13,783     181,109
  Regency Centers   900     41,679
  Unibail-Rodamco   1,399     316,368
  Westfield Group   16,989     165,117
  Westfield Retail Trust   21,112     60,019
            1,471,625
Single Tenant REIT – 0.14%          
* National Retail Properties   9,337     240,708
            240,708
Telecommunications – 3.75%          
  AT&T   33,500     1,057,260
  CenturyLink   17,100     738,549
* Frontier Communications   65,000     575,250
GeoEye   500     16,585
  Mobile TeleSystems ADR   38,300     776,341
NII Holdings   25,100     1,095,866
  Telefonica   44,444     1,080,572
  Verizon Communications   18,100     668,433
  Vodafone Group   221,417     615,633
            6,624,489
Utilities – 1.89%          
  Edison International   13,300     523,488
  National Grid   105,742     1,091,643
* National Grid ADR   14,000     728,140
  NorthWestern   3,800     125,666
  Progress Energy   18,400     876,208
            3,345,145
Total Common Stock (cost $87,765,157)     95,935,047
       
Convertible Preferred Stock – 2.59%          
Auto Parts & Equipment – 0.12%          
  Goodyear Tire & Rubber 5.875%          
            exercise price $18.21,          
            expiration date 4/1/14   3,750     221,016
            221,016

4
 

 

      Number of   Value
                 Shares      (U.S. $)
Convertible Preferred Stock (continued)          
Banking, Finance & Insurance – 0.81%          
  Aspen Insurance Holdings          
           5.625% exercise price $29.28,          
           expiration date 12/31/49   5,024   $ 270,354
* Bank of America 7.25%          
           exercise price $50.00,          
           expiration date 12/31/49   412     430,642
  Citigroup 7.50%          
           exercise price $39.38,          
           expiration date 12/15/12   3,440     414,520
  MetLife 5.00%          
           exercise price $44.27,          
           expiration date 9/11/13   3,810     315,125
            1,430,641
Computers & Technology – 0.04%          
* Unisys 6.25%          
           exercise price $45.66,          
           expiration date 3/1/14   800     65,700
            65,700
Energy – 0.74%          
* Apache 6.00%          
           exercise price $109.12,          
           expiration date 8/1/13   3,100     206,243
*# Chesapeake Energy 144A          
           5.75% exercise price $27.94,          
           expiration date 12/31/49   400     530,500
  SandRidge Energy 8.50%          
           exercise price $8.01,          
           expiration date 12/31/49   3,485     568,926
            1,305,669
Healthcare & Pharmaceuticals – 0.32%          
  HealthSouth 6.50%          
           exercise price $30.50,          
           expiration date 12/31/49   479     565,340
            565,340
Telecommunications – 0.56%          
  Lucent Technologies          
           Capital Trust I 7.75%          
           exercise price $24.80,          
           expiration date 3/15/17   1,000     990,000
            990,000
Total Convertible Preferred Stock          
  (cost $4,154,445)         4,578,366

              Principal      
         Amount°         
Agency Collateralized Mortgage Obligations – 0.24%      
  Fannie Mae REMICs                 
           Series 2001-50 BA              
           7.00% 10/25/41   USD   130,616     150,932
           Series 2003-122              
           4.50% 2/25/28       64,478     66,933
  Freddie Mac REMICs              
           Series 2557 WE              
           5.00% 1/15/18       60,000     66,252
           Series 3131 MC              
           5.50% 4/15/33       40,000     43,572
           Series 3173 PE              
           6.00% 4/15/35       65,000     72,470
           Series 3337 PB              
           5.50% 7/15/30       24,563     24,952
Total Agency Collateralized              
  Mortgage Obligations (cost $385,612)     425,111
         
Agency Mortgage-Backed Securities – 1.54%      
Fannie Mae ARM              
           2.572% 4/1/36       14,338     15,055
           5.031% 3/1/38       29,806     31,891
           5.141% 11/1/35       18,559     19,782
           5.997% 10/1/36       8,296     8,824
           6.013% 10/1/36       14,499     15,393
           6.264% 4/1/36       71,128     77,018
  Fannie Mae S.F. 15 yr              
           4.00% 7/1/25       122,580     127,993
           4.00% 8/1/25       169,716     177,211
           4.00% 11/1/25       178,412     186,625
           5.50% 1/1/23       41,942     45,512
  Fannie Mae S.F. 30 yr              
           5.00% 12/1/36       144,755     154,818
           5.00% 12/1/37       17,146     18,284
           5.00% 2/1/38       13,243     14,116
           6.50% 6/1/36       29,915     33,855
           6.50% 10/1/36       20,052     22,676
           6.50% 12/1/37       34,872     39,587
  Freddie Mac 6.00% 1/1/17       37,263     39,568
Freddie Mac ARM              
           5.619% 7/1/36       15,077     15,839
           5.801% 10/1/36       35,635     38,399
  Freddie Mac S.F. 15 yr              
           5.00% 6/1/18       16,024     17,214
           5.00% 12/1/22       85,139     91,701
  Freddie Mac S.F. 30 yr              
           5.00% 1/1/34       730,777     782,517
           7.00% 11/1/33       45,816     52,990
           9.00% 9/1/30       52,496     62,573
  GNMA I S.F. 30 yr              
           7.50% 12/15/23       92,310     109,545
           7.50% 1/15/32       73,515     86,195
           9.50% 9/15/17       70,202     81,665
           12.00% 5/15/15       38,679     44,251
  GNMA II S.F. 30 yr              
           6.00% 11/20/28       82,794     92,125
           6.50% 2/20/30       192,158     217,748
Total Agency Mortgage-Backed              
  Securities (cost $2,506,039)             2,720,970

(continues)       5
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
    Principal   Value
            Amount°       (U.S. $)
Commercial Mortgage-Backed Securities – 1.16%      
# American Tower Trust 144A            
            Series 2007-1A AFX            
            5.42% 4/15/37 USD       75,000   $ 80,839
  Bank of America            
            Commercial Mortgage            
          Series 2004-3 A5            
            5.441% 6/10/39     49,548     53,645
            Series 2004-5 A3            
            4.561% 11/10/41     358,591     361,055
            Series 2005-1 A3            
            4.877% 11/10/42     25,437     25,436
          Series 2005-6 A4            
            5.195% 9/10/47     180,000     198,132
  Bear Stearns Commercial            
            Mortgage Securities            
          Series 2005-PW10 A4            
            5.405% 12/11/40     100,000     110,262
          Series 2006-PW12 A4            
            5.722% 9/11/38     25,000     27,877
            Series 2007-PW15 A4            
            5.331% 2/11/44     75,000     80,497
w Commercial Mortgage Pass            
            Through Certificates            
            Series 2005-C6 A5A            
            5.116% 6/10/44     95,000     103,586
  Goldman Sachs Mortgage            
            Securities II            
        *Series 2004-GG2 A6            
            5.396% 8/10/38     60,000     65,346
            Series 2005-GG4 A4A            
            4.751% 7/10/39     115,000     123,760
          Series 2006-GG6 A4            
            5.553% 4/10/38     60,000     65,403
JPMorgan Chase Commercial            
            Mortgage Securities            
            Series 2005-LDP3 A4A            
            4.936% 8/15/42     35,000     38,018
LB-UBS Commercial            
            Mortgage Trust            
            Series 2004-C4 A4            
            5.323% 6/15/29     475,000     514,480
Morgan Stanley Capital I            
            Series 2007-T27 A4            
            5.641% 6/11/42     160,000     179,835
# Timberstar Trust            
            Series 2006-1A A 144A            
            5.668% 10/15/36     25,000     26,501
Total Commercial Mortgage-Backed            
  Securities (cost $1,808,341)           2,054,672
               
Convertible Bonds – 10.37%            
Aerospace & Defense – 0.29%            
  AAR 1.75%            
            exercise price $29.43,            
            expiration date 2/1/26     462,000     507,045
              507,045
Auto Parts & Equipment – 0.32%            
* ArvinMeritor 4.00%            
            exercise price $26.73,            
            expiration date 2/15/27     583,000     569,883
              569,883
Banking, Finance & Insurance – 0.48%            
# Ares Capital 144A 5.75%            
            exercise price $19.13,            
            expiration date 2/1/16     225,000     236,250
* Jefferies Group 3.875%            
            exercise price $38.72,            
            expiration date 11/1/29     615,000     624,225
              860,475
Basic Materials – 0.55%            
# Owens-Brockway Glass            
            Container 144A 3.00%            
            exercise price $47.47,            
            expiration date 5/28/15     528,000     550,440
# Sino-Forest 144A 5.00%            
            exercise price $20.29,            
            expiration date 8/1/13     377,000     426,953
              977,393
Cable, Media & Publishing – 0.15%            
Φ General Cable 4.50%            
            exercise price $36.75,            
            expiration date 11/15/29     196,000     268,520
              268,520
Computers & Technology – 2.11%            
  Advanced Micro Devices 6.00%            
            exercise price $28.08,            
            expiration date 5/1/15     626,000     653,387
  Euronet Worldwide 3.50%            
            exercise price $40.48,            
            expiration date 10/15/25     900,000     904,499
* Intel 3.25% exercise price $22.68,            
            expiration date 8/1/39     338,000     420,810
  Linear Technology 3.00%            
            exercise price $44.11,            
            expiration date 5/1/27     850,000     921,187
  Rovi 2.625%            
            exercise price $47.36,            
            expiration date 2/15/40     326,000     449,473
* SanDisk 1.50%            
            exercise price $52.37,            
            expiration date 8/15/17     327,000     375,233
              3,724,589

6
 

 

    Principal   Value
            Amount°       (U.S. $)
Convertible Bonds (continued)            
Energy – 0.41%            
  Peabody Energy 4.75%            
            exercise price $58.31,            
            expiration date 12/15/41 USD       245,000   $ 309,925
  Transocean            
            1.50% exercise price $166.65,            
            expiration date 12/15/37     400,000     395,500
          *1.50% exercise price $166.65,            
            expiration date 12/15/37     14,000     14,035
              719,460
Healthcare & Pharmaceuticals – 1.78%            
  Alere 3.00%            
            exercise price $43.98,            
            expiration date 5/15/36     613,000     711,846
* Amgen 0.375%            
            exercise price $79.48,            
            expiration date 2/1/13     510,000     517,650
* Dendreon 2.875%            
            exercise price $51.24,            
            expiration date 1/15/16     331,000     377,340
ϕ
Hologic 2.00%            
            exercise price $38.59,            
            expiration date 12/15/37     910,000     892,938
  Medtronic 1.625%            
            exercise price $54.00,            
            expiration date 4/15/13     280,000     290,500
  Mylan 3.75%            
            exercise price $13.32,            
            expiration date 9/15/15     193,000     366,459
              3,156,733
Leisure, Lodging & Entertainment – 0.75%      
# Gaylord Entertainment            
            144A 3.75%            
            exercise price $27.25,            
            expiration date 10/1/14     310,000     418,888
  Live Nation            
            Entertainment 2.875%            
            exercise price $27.14,            
            expiration date 7/15/27     959,000     901,459
              1,320,347
Machinery – 0.11%            
# Altra Holdings 144A 2.75%            
            exercise price $27.70,            
            expiration date 3/1/31     165,000     191,606
              191,606
Real Estate – 0.94%            
# Digital Realty Trust 144A 5.50%            
            exercise price $42.49,            
            expiration date 4/15/29     380,000     576,888
* Health Care REIT 3.00%            
            exercise price $51.08,            
            expiration date 12/1/29     574,000     651,490
# Lexington Realty            
            Trust 144A 6.00%            
            exercise price $7.09,            
            expiration date 1/15/30     305,000     431,575
              1,659,953
Telecommunications – 2.48%            
# Alaska Communications            
            Systems Group 144A 6.25%            
            exercise price $10.28,            
            expiration date 5/1/18     459,000     462,443
# Ciena 144A 3.75%            
            exercise price $20.17,            
            expiration date 10/15/18     318,000     488,925
# Clearwire Communications            
            144A 8.25%            
            exercise price $7.08,            
            expiration date 12/1/40     252,000     253,890
  Equinix 4.75%            
            exercise price $84.32,            
            expiration date 6/15/16     178,000     253,873
* Leap Wireless            
            International 4.50%            
            exercise price $93.21,            
            expiration date 7/15/14     710,000     698,462
  Level 3 Communications 6.50%            
            exercise price $1.23,            
            expiration date 10/1/16     200,000     403,750
  NII Holdings 3.125%            
            exercise price $118.32,            
            expiration date 6/15/12     700,000     703,499
  SBA Communications 4.00%            
            exercise price $30.38,            
            expiration date 10/1/14     378,000     545,738
* VeriSign 3.25%            
            exercise price $34.37,            
            expiration date 8/15/37     480,000     571,799
              4,382,379
Total Convertible Bonds            
  (cost $15,754,686)           18,338,383
               
Corporate Bonds – 33.65%            
Banking – 1.09%            
  Abbey National            
            Treasury Services            
            4.00% 4/27/16     30,000     30,194
  BAC Capital Trust VI            
            5.625% 3/8/35     440,000     407,246
  Bank of America            
           *5.625% 7/1/20     5,000     5,260
            6.50% 8/1/16     5,000     5,662
  City National            
            5.25% 9/15/20     15,000     15,593
* Fifth Third Bancorp            
            3.625% 1/25/16     20,000     20,480
Fifth Third Capital Trust IV            
            6.50% 4/15/37     270,000     270,000
  Goldman Sachs Group            
           *3.625% 2/7/16     15,000     15,058
            5.375% 3/15/20     10,000     10,330
            6.25% 2/1/41     5,000     5,071

(continues)       7
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
    Principal       Value
             Amount°   (U.S. $)
Corporate Bonds (continued)                
Banking (continued)            
# HBOS Capital Funding 144A            
            6.071% 6/29/49 USD   285,000   $ 257,925
  JPMorgan Chase            
            4.40% 7/22/20     20,000     19,856
          *4.625% 5/10/21     25,000     25,139
  JPMorgan Chase Capital XXV            
            6.80% 10/1/37     55,000     56,421
  KeyCorp 5.10% 3/24/21     20,000     20,856
  PNC Funding            
            5.125% 2/8/20     30,000     32,579
            5.25% 11/15/15     60,000     65,663
            5.625% 2/1/17     35,000     38,837
  Santander Holdings USA            
            4.625% 4/19/16     10,000     10,304
  SunTrust Banks            
            3.60% 4/15/16     5,000     5,125
SunTrust Capital VIII            
            6.10% 12/15/36     420,000     417,132
  SVB Financial Group            
            5.375% 9/15/20     25,000     25,363
  US Bancorp            
            4.125% 5/24/21     20,000     20,130
USB Capital IX            
            3.50% 10/29/49     80,000     67,390
  Wachovia            
          0.648% 10/15/16     10,000     9,515
            5.25% 8/1/14     20,000     21,789
            5.625% 10/15/16     35,000     39,133
  Wells Fargo 4.60% 4/1/21     10,000     10,259
Wells Fargo Capital XIII            
            7.70% 12/29/49     5,000     5,163
              1,933,473
Basic Industry – 3.21%            
* AK Steel 7.625% 5/15/20     346,000     361,570
  Alcoa 6.75% 7/15/18     30,000     34,203
# Algoma Acquisition 144A            
            9.875% 6/15/15     248,000     232,500
# APERAM 144A 7.75% 4/1/18     225,000     233,438
# Appleton Papers 144A            
            10.50% 6/15/15     188,000     200,220
  ArcelorMittal            
            5.50% 3/1/21     25,000     25,232
            9.85% 6/1/19     25,000     32,250
# Barrick North America            
            Finance 144A            
            4.40% 5/30/21     15,000     15,091
            5.70% 5/30/41     10,000     10,021
# Corp Nacional de Cobre            
            de Chile 144A            
            3.75% 11/4/20     500,000     482,631
  Dow Chemical            
            4.25% 11/15/20     6,000     5,958
            8.55% 5/15/19     34,000     44,343
  duPont (E.I.) de Nemours            
            3.625% 1/15/21     5,000     4,928
# FMG Resources            
            August 2006 144A            
            6.875% 2/1/18     90,000     94,500
            7.00% 11/1/15     180,000     188,100
  Georgia-Pacific            
            8.00% 1/15/24     255,000     308,550
          #144A 5.40% 11/1/20     15,000     15,623
# Headwaters 144A            
            7.625% 4/1/19     265,000     259,700
* Hexion US Finance            
            9.00% 11/15/20     222,000     239,760
  International Coal Group            
            9.125% 4/1/18     344,000     419,680
* International Paper            
            9.375% 5/15/19     30,000     39,476
*# James River Escrow 144A            
            7.875% 4/1/19     230,000     235,750
# JMC Steel Group 144A            
            8.25% 3/15/18     260,000     269,750
*# Longview Fiber Paper &            
            Packaging 144A            
            8.00% 6/1/16     260,000     265,200
  Lyondell Chemical            
            11.00% 5/1/18     325,000     367,656
# MacDermid 144A            
            9.50% 4/15/17     238,000     255,255
# Millar Western Forest            
            Products 144A            
            8.50% 4/1/21     245,000     235,200
# Momentive Performance            
            Materials 144A            
            9.00% 1/15/21     416,000     446,159
  Reliance Steel & Aluminum            
            6.85% 11/15/36     9,000     9,125
  Ryerson            
         7.648% 11/1/14     141,000     143,644
            12.00% 11/1/15     166,000     179,695
  Teck Resources            
            9.75% 5/15/14     13,000     15,889
              5,671,097
Brokerage – 0.34%            
  E Trade Financial            
            6.75% 6/1/16     100,000     100,500
            PIK 12.50% 11/30/17     331,000     399,682
  Jefferies Group            
            6.25% 1/15/36     5,000     4,880
            6.45% 6/8/27     60,000     61,294
  Lazard Group            
            6.85% 6/15/17     34,000     38,084
              604,440

8
 

 

    Principal   Value
             Amount°   (U.S. $)
Corporate Bonds (continued)            
Capital Goods – 2.95%            
# Associated Materials            
            144A 9.125% 11/1/17 USD       150,000       $ 155,438
  Berry Plastics            
            9.75% 1/15/21     267,000     268,669
            10.25% 3/1/16     130,000     131,300
# Building Materials            
            of America 144A            
            6.75% 5/1/21     263,000     265,630
# Cemex Espana            
            Luxembourg 144A            
            9.25% 5/12/20     529,000     544,208
# DAE Aviation Holdings 144A            
            11.25% 8/1/15     184,000     194,350
  Kratos Defense &            
            Security Solutions            
            10.00% 6/1/17     225,000     248,625
* Manitowoc            
            9.50% 2/15/18     215,000     239,188
*# Masonite International            
            144A 8.25% 4/15/21     255,000     258,188
 * Mueller Water Products            
            7.375% 6/1/17     255,000     256,913
# Nortek 144A            
            8.50% 4/15/21     265,000     254,069
* Ply Gem Industries            
            13.125% 7/15/14     230,000     251,850
# Polypore International            
            144A 7.50% 11/15/17     245,000     261,538
  Pregis 12.375% 10/15/13     244,000     243,390
* RBS Global/Rexnord            
            11.75% 8/1/16     302,000     323,894
  Temple-Inland            
            6.875% 1/15/18     10,000     11,180
  TriMas 9.75% 12/15/17     180,000     200,925
# Votorantim Cimentos            
            144A 7.25% 4/5/41     1,118,000     1,109,614
              5,218,969
Consumer Cyclical – 3.67%            
* American Axle &            
            Manufacturing            
            7.875% 3/1/17     395,000     406,850
  ArvinMeritor            
            8.125% 9/15/15     246,000     259,530
  Beazer Homes USA            
            9.125% 6/15/18     65,000     62,075
          #144A 9.125% 5/15/19     305,000     290,513
# Brown Group 144A            
            7.125% 5/15/19     205,000     199,875
# Burlington Coat Factory            
            Warehouse 144A            
            10.00% 2/15/19     405,000     408,037
*# Chrysler Group 144A            
            8.25% 6/15/21     250,000     250,625
  CKE Restaurants            
            11.375% 7/15/18     171,000     188,100
  CVS Caremark            
            5.75% 5/15/41     25,000     24,875
* Dana Holding            
            6.75% 2/15/21     210,000     211,050
  Dave & Buster’s            
            11.00% 6/1/18     280,000     306,600
*# DineEquity 144A            
            9.50% 10/30/18     225,000     247,500
*# Dunkin Finance 144A            
            9.625% 12/1/18     198,000     200,721
  Express 8.75% 3/1/18     93,000     101,370
  Family Dollar Stores            
            5.00% 2/1/21     15,000     14,925
* Ford Motor            
            7.45% 7/16/31     235,000     268,014
  Ford Motor Credit            
            12.00% 5/15/15     195,000     249,423
  Hanesbrands            
            6.375% 12/15/20     280,000     276,500
  Interface 7.625% 12/1/18     175,000     188,125
# International Automotive            
            Components Group            
            144A 9.125% 6/1/18     175,000     179,813
# Jaguar Land Rover 144A            
            8.125% 5/15/21     260,000     266,500
# M/I Homes 144A            
            8.625% 11/15/18     421,000     415,210
*# Needle Merger Sub 144A            
            8.125% 3/15/19     210,000     213,675
  Norcraft            
            10.50% 12/15/15     151,000     158,928
          #144A 10.50% 12/15/15     135,000     142,088
# Pinafore 144A            
            9.00% 10/1/18     376,000     414,539
  Quiksilver            
            6.875% 4/15/15     250,000     245,625
  Standard Pacific            
            10.75% 9/15/16     119,000     138,040
  WMG Acquisition            
            9.50% 6/15/16     150,000     159,938
              6,489,064
Consumer Non-Cyclical – 2.91%            
# Accellent 144A            
            10.00% 11/1/17     115,000     114,425
  Amgen 3.45% 10/1/20     25,000     24,231

(continues)       9
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
    Principal   Value
             Amount°       (U.S. $)
Corporate Bonds (continued)            
Consumer Non-Cyclical (continued)            
# AMGH Merger Sub 144A            
            9.25% 11/1/18 USD       245,000   $ 264,294
  Anheuser-Busch            
            InBev Worldwide            
            5.375% 11/15/14     20,000     22,412
# Armored Autogroup            
            144A 9.25% 11/1/18     290,000     295,438
  Bio-Rad Laboratories            
            4.875% 12/15/20     20,000     20,400
# Blue Merger Sub 144A            
            7.625% 2/15/19     255,000     261,534
# Bumble Bee Acquisition            
            144A 9.00% 12/15/17     165,000     170,363
  CareFusion            
            6.375% 8/1/19     65,000     74,606
  Celgene 3.95% 10/15/20     20,000     19,562
  Cott Beverages            
            8.375% 11/15/17     132,000     141,900
  Covidien International Finance            
            4.20% 6/15/20     20,000     20,599
* Dean Foods            
            7.00% 6/1/16     364,000     366,729
  Delhaize Group            
            5.70% 10/1/40     7,000     6,819
            6.50% 6/15/17     5,000     5,818
# DJO Finance 144A            
            9.75% 10/15/17     374,000     391,297
  Dole Food            
            13.875% 3/15/14     91,000     110,679
  Express Scripts            
            3.125% 5/15/16     20,000     20,238
  Hospira 6.40% 5/15/15     95,000     108,268
  Kraft Foods            
            6.125% 8/23/18     20,000     23,064
  Laboratory Corp. of            
            America Holdings            
            4.625% 11/15/20     25,000     25,615
  Lantheus Medical Imaging            
            9.75% 5/15/17     321,000     330,629
  Life Technologies            
            6.00% 3/1/20     5,000     5,482
  LVB Acquisition            
            11.625% 10/15/17     244,000     275,110
  McKesson 4.75% 3/1/21     10,000     10,530
  Medco Health Solutions            
            4.125% 9/15/20     20,000     19,847
            7.125% 3/15/18     10,000     12,033
  Merck 3.875% 1/15/21     15,000     15,142
# NBTY 144A            
            9.00% 10/1/18     263,000     283,383
  PHH 9.25% 3/1/16     186,000     207,855
  Pinnacle Foods Finance            
            10.625% 4/1/17     180,000     193,950
  Quest Diagnostics            
            4.70% 4/1/21     5,000     5,161
# Quintiles Transnational PIK            
            144A 9.50% 12/30/14     106,000     109,180
# Reynolds Group Issuer 144A            
            8.25% 2/15/21     125,000     127,813
            9.00% 4/15/19     310,000     330,537
* Safeway 3.95% 8/15/20     15,000     14,823
# STHI Holding 144A            
            8.00% 3/15/18     235,000     243,225
  Tops Holding            
            10.125% 10/15/15     131,000     140,661
# Viskase 144A            
            9.875% 1/15/18     228,000     240,255
# Woolworths 144A            
            4.55% 4/12/21     15,000     15,389
  Yale University            
            2.90% 10/15/14     45,000     47,371
  Zimmer Holdings            
            4.625% 11/30/19     30,000     32,176
              5,148,843
Energy – 5.32%            
  American Petroleum            
            Tankers Parent            
            10.25% 5/1/15     268,000     286,090
  Antero Resources Finance            
            9.375% 12/1/17     156,000     170,820
  Aquilex Holdings            
            11.125% 12/15/16     178,000     176,220
# Calumet Specialty            
            Products Partners            
            144A 9.375% 5/1/19     255,000     269,184
  CenterPoint Energy            
            5.95% 2/1/17     13,000     14,479
*# Chaparral Energy 144A            
            8.25% 9/1/21     330,000     343,199
  Chesapeake Energy            
            6.50% 8/15/17     135,000     146,475
            6.625% 8/15/20     87,000     91,894
            6.875% 11/15/20     13,000     13,748
  Comstock Resources            
            7.75% 4/1/19     260,000     264,225
  Copano Energy            
            7.75% 6/1/18     169,000     177,873
  Crosstex Energy            
            8.875% 2/15/18     175,000     190,750

10
 

 

    Principal   Value
             Amount°       (U.S. $)
Corporate Bonds (continued)            
Energy (continued)            
  Ecopetrol            
            7.625% 7/23/19 USD       900,000   $ 1,072,124
  El Paso            
            6.875% 6/15/14     44,000     50,203
            7.00% 6/15/17     205,000     238,700
Enbridge Energy Partners            
            8.05% 10/1/37     20,000     22,149
  Energy Transfer Partners            
            4.65% 6/1/21     40,000     39,950
            9.70% 3/15/19     25,000     33,329
  Enterprise Products Operating            
          7.034% 1/15/68     35,000     36,974
            9.75% 1/31/14     5,000     6,023
# Helix Energy Solutions            
            Group 144A            
            9.50% 1/15/16     291,000     309,915
*# Hercules Offshore 144A            
            10.50% 10/15/17     187,000     199,623
*# Hilcorp Energy I 144A            
            8.00% 2/15/20     226,000     241,820
  Holly 9.875% 6/15/17     171,000     192,803
  Kinder Morgan Energy            
            Partners 9.00% 2/1/19     30,000     38,997
# Laredo Petroleum 144A            
            9.50% 2/15/19     275,000     293,563
  Linn Energy            
            8.625% 4/15/20     201,000     221,100
          #144A 6.50% 5/15/19     55,000     55,138
  MarkWest Energy Partners            
            6.50% 8/15/21     270,000     273,713
# Murray Energy 144A            
            10.25% 10/15/15     230,000     248,975
*# NFR Energy 144A            
            9.75% 2/15/17     224,000     221,200
* Noble Energy            
            8.25% 3/1/19     20,000     25,834
  Noble Holding International            
            4.625% 3/1/21     30,000     30,997
# Oasis Petroleum 144A            
            7.25% 2/1/19     200,000     202,000
  Offshore Group Investments            
            11.50% 8/1/15     185,000     204,888
          #144A 11.50% 8/1/15     20,000     22,100
*# OPTI Canada 144A            
            9.00% 12/15/12     200,000     202,000
  Pemex Project Funding            
            Master Trust            
            6.625% 6/15/35     1,000,000     1,047,982
  Petrobras International Finance            
            5.375% 1/27/21     20,000     20,621
  Petrohawk Energy            
            7.25% 8/15/18     255,000     268,706
  Petroleum Development            
            12.00% 2/15/18     217,000     245,210
  Pioneer Drilling            
            9.875% 3/15/18     106,000     115,408
  Plains All American Pipeline            
            8.75% 5/1/19     10,000     12,899
  Pride International            
            6.875% 8/15/20     20,000     23,677
  Quicksilver Resources            
            7.125% 4/1/16     190,000     188,100
# SandRidge Energy 144A            
            7.50% 3/15/21     265,000     274,606
  TNK-BP Finance            
            7.875% 3/13/18     400,000     464,999
TransCanada Pipelines            
            6.35% 5/15/67     35,000     35,795
  Transocean            
            6.50% 11/15/20     10,000     11,356
  Weatherford Bermuda            
            9.625% 3/1/19     15,000     19,610
  Williams Partners            
            7.25% 2/1/17     10,000     12,045
# Woodside Finance 144A            
            8.125% 3/1/14     15,000     17,485
            8.75% 3/1/19     15,000     19,373
              9,406,947
Finance & Investments – 1.68%            
American International Group            
            8.175% 5/15/58     270,000     299,025
  Cardtronics 8.25% 9/1/18     84,000     92,190
Chubb 6.375% 3/29/67     15,000     15,975
  General Electric Capital            
            4.375% 9/16/20     5,000     4,991
            5.30% 2/11/21     15,000     15,785
            6.00% 8/7/19     95,000     106,575
Genworth Financial            
            6.15% 11/15/66     171,000     132,953
# Health Care Services            
            144A 4.70% 1/15/21     10,000     10,372
# ILFC E-Capital Trust I            
            144A 5.97% 12/21/65     265,000     223,970
# ILFC E-Capital Trust II            
            144A 6.25% 12/21/65     355,000     314,175
ING Groep            
            5.775% 12/29/49     345,000     322,575
  International            
            lease Finance            
            6.25% 5/15/19     32,000     32,170

(continues)       11
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
    Principal   Value
             Amount°       (U.S. $)
Corporate Bonds (continued)            
Finance & Investments (continued)            
# Liberty Mutual Group            
            144A 7.00% 3/15/37 USD       355,000   $ 354,208
  MetLife 6.40% 12/15/36     100,000     100,173
* Nuveen Investments            
            10.50% 11/15/15     378,000     402,569
          #144A 10.50% 11/15/15     110,000     116,600
  Prudential Financial            
            3.875% 1/14/15     35,000     36,922
XL Group            
            6.50% 12/29/49     410,000     391,038
              2,972,266
Media – 2.50%            
# Affinion Group 144A            
            7.875% 12/15/18     352,000     336,160
# AMO Escrow 144A            
            11.50% 12/15/17     126,000     137,025
  Cablevision Systems            
            8.00% 4/15/20     114,000     125,685
* CCO Holdings            
            8.125% 4/30/20     315,000     342,169
          #144A 7.00% 1/15/19     20,000     20,475
# Clear Channel            
            Communications            
            144A 9.00% 3/1/21     260,000     261,950
# Columbus International            
            144A 11.50% 11/20/14     270,000     312,039
* DIRECTV Holdings            
            5.00% 3/1/21     15,000     15,627
  Entravision Communications            
            8.75% 8/1/17     350,000     373,624
* GXS Worldwide            
            9.75% 6/15/15     247,000     252,558
# inVentiv Health 144A            
            10.00% 8/15/18     175,000     182,656
# Kabel BW Erste            
            Beteiligungs 144A            
            7.50% 3/15/19     185,000     193,556
  MDC Partners            
            11.00% 11/1/16     222,000     247,808
          #144A 11.00% 11/1/16     110,000     121,688
# NBC Universal Media            
            144A 4.375% 4/1/21     25,000     24,900
  Nexstar Broadcasting            
            8.875% 4/15/17     200,000     218,000
*# Ono Finance II 144A            
            10.875% 7/15/19     240,000     267,600
# Sinclair Television Group            
            144A 9.25% 11/1/17     147,000     165,008
  Time Warner            
            4.75% 3/29/21     5,000     5,108
  Time Warner Cable            
            4.125% 2/15/21     5,000     4,829
            8.25% 4/1/19     20,000     25,058
# UPC Holding 144A            
            9.875% 4/15/18     345,000     388,124
* Visant 10.00% 10/1/17     120,000     127,500
# Vivendi 144A            
            6.625% 4/4/18     25,000     28,688
# XM Satellite Radio 144A            
            7.625% 11/1/18     225,000     240,188
              4,418,023
Real Estate – 0.42%            
  Brandywine Operating            
            Partnership            
            4.95% 4/15/18     15,000     15,434
  Developers Diversified            
            Realty            
            4.75% 4/15/18     5,000     5,004
            7.50% 4/1/17     5,000     5,813
          *7.875% 9/1/20     20,000     23,430
  Digital Realty Trust            
            5.25% 3/15/21     20,000     20,376
            5.875% 2/1/20     10,000     10,761
  Health Care REIT            
            5.25% 1/15/22     30,000     30,328
  Host Marriott            
            6.375% 3/15/15     245,000     251,738
# Qatari Diar Finance 144A            
            5.00% 7/21/20     300,000     308,249
  Regency Centers            
            5.875% 6/15/17     20,000     22,591
  UDR 4.25% 6/1/18     10,000     9,983
  Ventas Realty            
            4.75% 6/1/21     20,000     19,976
# WEA Finance            
            4.625% 5/10/21     20,000     19,999
              743,682
Services Cyclical – 2.43%            
  ARAMARK 8.50% 2/1/15     150,000     156,750
# ARAMARK Holdings 144A            
            PIK 8.625% 5/1/16     255,000     262,013
# Brambles USA 144A            
            3.95% 4/1/15     15,000     15,496
            5.35% 4/1/20     15,000     15,505
  Burlington Northern Santa Fe            
            4.70% 10/1/19     10,000     10,707
            5.65% 5/1/17     5,000     5,710
# CMA CGM 144A            
            8.50% 4/15/17     260,000     237,900

12
 

 

    Principal   Value
             Amount°   (U.S. $)
Corporate Bonds (continued)            
Services Cyclical (continued)            
  CSX            
            4.25% 6/1/21 USD       15,000       $ 15,054
            5.50% 4/15/41     5,000     5,025
# Delta Air Lines 144A            
            12.25% 3/15/15     193,000     217,366
# Equinox Holdings 144A            
            9.50% 2/1/16     221,000     237,575
# ERAC USA Finance 144A            
            5.25% 10/1/20     35,000     37,497
* Harrah’s Operating            
            10.00% 12/15/18     572,000     531,959
# Icon Health &            
            Fitness 144A            
            11.875% 10/15/16     108,000     113,670
  Kansas City Southern            
            de Mexico            
            8.00% 2/1/18     187,000     208,038
          #144A 6.125% 6/15/21     60,000     60,600
  Kansas City Southern Railway            
            13.00% 12/15/13     2,000     2,365
*# Marina District Finance            
            144A 9.875% 8/15/18     133,000     139,650
  MGM MIRAGE            
            11.125% 11/15/17     2,000     2,330
            11.375% 3/1/18     658,000     759,989
* Pinnacle Entertainment            
            8.75% 5/15/20     198,000     214,335
# Pokagon Gaming            
            Authority 144A            
            10.375% 6/15/14     10,000     10,313
  RSC Equipment Rental            
            8.25% 2/1/21     135,000     140,063
            10.25% 11/15/19     5,000     5,688
  Ryder System            
            3.50% 6/1/17     25,000     25,383
# Seven Seas Cruises 144A            
            9.125% 5/15/19     250,000     258,125
*# Swift Services            
            Holdings 144A            
            10.00% 11/15/18     95,000     105,925
*# Swift Transportation 144A            
            12.50% 5/15/17     151,000     162,703
# United Air Lines 144A            
            12.00% 11/1/13     292,000     316,820
  Wyndham Worldwide            
            5.625% 3/1/21     10,000     10,164
            5.75% 2/1/18     5,000     5,290
              4,290,008
Services Non-Cyclical – 1.06%            
  Allied Waste North America            
            6.875% 6/1/17     40,000     43,504
# Casella Waste Systems            
            144A 7.75% 2/15/19     265,000     269,638
  Community Health Systems            
            8.875% 7/15/15     240,000     248,400
# Darling International            
            144A 8.50% 12/15/18     125,000     136,875
*# HCA Holdings 144A            
            7.75% 5/15/21     235,000     247,044
  HealthSouth            
            7.75% 9/15/22     50,000     53,625
# Highmark 144A            
            4.75% 5/15/21     10,000     10,141
            6.125% 5/15/41     5,000     5,083
  Iron Mountain            
            8.375% 8/15/21     140,000     150,500
# Multiplan 144A            
            9.875% 9/1/18     273,000     296,204
* Radiation Therapy Services            
            9.875% 4/15/17     216,000     220,050
  Radnet Management            
            10.375% 4/1/18     174,000     181,830
  Republic Services            
            4.75% 5/15/23     15,000     15,102
              1,877,996
Technology – 1.43%            
* Advanced Micro Devices            
            7.75% 8/1/20     325,000     342,875
  Aspect Software            
            10.625% 5/15/17     194,000     210,490
* First Data            
            9.875% 9/24/15     306,000     317,475
            11.25% 3/31/16     260,000     261,950
  Hewlett-Packard            
            4.30% 6/1/21     15,000     15,152
*# iGate 144A            
            9.00% 5/1/16     250,000     258,125
# International Wire Group            
            144A 9.75% 4/15/15     155,000     163,525
  MagnaChip Semiconductor            
            10.50% 4/15/18     156,000     176,865
# MedAssets 144A            
            8.00% 11/15/18     137,000     141,966
  National Semiconductor            
            6.60% 6/15/17     20,000     23,933
# Seagate HDD Cayman            
            144A 7.75% 12/15/18     255,000     269,663
# Seagate Technology            
            International 144A            
            10.00% 5/1/14     10,000     11,700
* SunGard Data Systems            
            10.25% 8/15/15     314,000     327,345
  Symantec            
            4.20% 9/15/20     5,000     4,870
              2,525,934

(continues)       13
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
    Principal Value
             Amount° (U.S. $)
Corporate Bonds (continued)            
Telecommunications – 3.90%            
  AT&T 4.45% 5/15/21 USD       25,000       $ 25,514
  Avaya            
            9.75% 11/1/15     40,000     41,750
          #144A 7.00% 4/1/19     255,000     250,538
            PIK 10.125% 11/1/15     160,000     167,200
# Buccaneer Merger 144A            
            9.125% 1/15/19     200,000     215,250
# Clearwire Communications 144A            
            12.00% 12/1/15     408,000     447,269
          *12.00% 12/1/17     315,000     344,531
  Cricket Communications            
            7.75% 5/15/16     130,000     138,775
          *7.75% 10/15/20     135,000     133,988
# Crown Castle Towers            
            144A 4.883% 8/15/20     30,000     30,466
# Digicel Group 144A            
            9.125% 1/15/15     120,000     124,500
            10.50% 4/15/18     230,000     261,050
# EH Holding 144A            
            7.625% 6/15/21     210,000     215,775
* Frontier Communications            
            7.125% 3/15/19     120,000     124,650
  Historic TW            
            6.875% 6/15/18     20,000     23,690
# Integra Telecom Holdings            
            144A 10.75% 4/15/16     190,000     200,450
  Intelsat Bermuda            
            11.25% 2/4/17     640,000     694,399
            PIK 11.50% 2/4/17     273,217     297,465
* Level 3 Financing            
            10.00% 2/1/18     252,000     274,050
  MetroPCS Wireless            
            6.625% 11/15/20     165,000     165,000
          *7.875% 9/1/18     90,000     97,313
# MTS International            
            Funding 144A            
            8.625% 6/22/20     275,000     315,983
  NII Capital            
          *7.625% 4/1/21     130,000     138,613
            10.00% 8/15/16     56,000     64,540
# PAETEC Holding 144A            
            9.875% 12/1/18     165,000     177,788
  Qwest 8.375% 5/1/16     40,000     47,700
  Qwest Communications            
            International            
            7.50% 2/15/14     85,000     86,381
*# Satmex Escrow 144A            
            9.50% 5/15/17     125,000     128,750
  Sprint Capital            
            8.75% 3/15/32     248,000     274,970
# Telcordia Technologies            
            144A 11.00% 5/1/18     415,000     471,024
  Telecom Italia Capital            
            5.25% 10/1/15     40,000     42,435
  Telefonica Emisiones            
            5.462% 2/16/21     10,000     10,409
  Telesat Canada            
            12.50% 11/1/17     164,000     196,800
  Virgin Media Finance            
            8.375% 10/15/19     120,000     135,600
# West 144A            
            7.875% 1/15/19     255,000     260,419
  Windstream            
            7.50% 4/1/23     205,000     212,175
            7.875% 11/1/17     45,000     49,444
              6,886,654
Utilities – 0.74%            
  AES            
            7.75% 3/1/14     129,000     141,900
            8.00% 6/1/20     44,000     47,850
            9.75% 4/15/16     10,000     11,625
  Ameren Illinois            
            9.75% 11/15/18     80,000     106,183
# American Transmission            
            Systems 144A            
            5.25% 1/15/22     25,000     26,841
  CMS Energy            
            4.25% 9/30/15     10,000     10,435
            6.25% 2/1/20     5,000     5,478
  Commonwealth Edison            
            4.00% 8/1/20     5,000     5,009
            5.80% 3/15/18     5,000     5,681
  Dominion Resources            
            4.45% 3/15/21     20,000     20,599
  Duke Energy Carolinas            
            3.90% 6/15/21     10,000     10,120
  Elwood Energy            
            8.159% 7/5/26     154,853     154,078
  Florida Power            
            5.65% 6/15/18     5,000     5,758
* GenOn Energy            
            9.50% 10/15/18     127,000     134,303
  Great Plains Energy            
            4.85% 6/1/21     20,000     20,389
# Ipalco Enterprises 144A            
            5.00% 5/1/18     10,000     10,100
* Mirant Americas            
            8.50% 10/1/21     245,000     255,412
  NiSource Finance            
            6.40% 3/15/18     10,000     11,488
          *6.80% 1/15/19     5,000     5,855

14
 

 

    Principal   Value
             Amount°   (U.S. $)
Corporate Bonds (continued)                
Utilities (continued)            
  Pennsylvania Electric            
            5.20% 4/1/20 USD       25,000   $ 26,590
  Public Service Oklahoma            
            5.15% 12/1/19     30,000     32,408
# Puget Energy 144A            
            6.00% 9/1/21     25,000     25,000
Puget Sound Energy            
            6.974% 6/1/67     165,000     168,711
  Sempra Energy            
            6.15% 6/15/18     20,000     22,976
  Southern California            
            Edison 5.50% 8/15/18     20,000     22,971
Wisconsin Energy            
            6.25% 5/15/67     10,000     10,137
              1,297,897
Total Corporate Bonds            
  (cost $56,648,559)           59,485,293
                
Non-Agency Asset-Backed Securities – 0.15%            
Citibank Credit Card            
            Issuance Trust Series            
            2004-C1 C1            
            0.848% 7/15/13     10,000     9,998
Citicorp Residential            
            Mortgage Securities            
            2006-3 A5            
            5.948% 11/25/36     100,000     81,873
  Discover Card Master            
            Trust Series 2007-A1            
            A1 5.65% 3/16/20     100,000     114,916
  John Deere Owner Trust            
            Series 2009-A A4            
            3.96% 5/16/16     25,000     25,771
            Series 2010-A 4A            
            2.13% 10/17/16     15,000     15,364
Merrill Auto Trust            
            Securitization            
            Series 2007-1 A4            
            0.258% 12/15/13     8,871     8,869
Total Non-Agency Asset-Backed            
  Securities (cost $246,859)           256,791
                
Non-Agency Collateralized Mortgage Obligations – 0.19%            
@ Bear Stearns ARM Trust            
            Series 2007-1 3A2            
            5.447% 2/25/47     169,287     24,633
  Citicorp Mortgage Securities            
            Series 2006-4 3A1            
            5.50% 8/25/21     9,586     9,656
            Series 2007-1 2A1            
            5.50% 1/25/22     73,490     73,218
Citigroup Mortgage Loan            
            Trust Series 2007-AR8            
            1A3A 5.714% 8/25/37     71,542     52,985
GSR Mortgage Loan Trust            
            Series 2006-AR1 3A1            
            5.075% 1/25/36     138,798     124,618
MASTR ARM Trust            
            Series 2006-2 4A1            
            4.98% 2/25/36     54,007     50,428
Total Non-Agency Collateralized            
  Mortgage Obligations (cost $510,704)           335,538
                
«Senior Secured Loans – 0.79%            
  Brock Holdings III            
            10.50% 2/15/18     85,000     87,656
  Endo Pharmaceuticals Holdings            
            7.25% 4/10/12     175,000     175,000
  Level 3 Financing            
            14.00% 4/11/12     215,000     215,000
  PQ 6.72% 7/30/15     265,000     262,847
  Silgan Holdings            
            7.75% 1/20/12     390,000     390,000
  Texas Competitive            
            Electric Holdings            
            3.50% 10/10/14     310,000     264,514
Total Senior Secured Loans            
  (cost $1,371,681)           1,395,017
               
Sovereign Bonds – 4.92%Δ            
Chile – 0.40%            
  Chile Government            
            International Bond            
            5.50% 8/5/20 CLP   330,000,000     712,490
                712,490
Croatia – 0.17%            
*# Croatia Government            
            International Bond            
            144A 6.75% 11/5/19 USD   280,000     300,885
              300,885
Indonesia – 1.18%            
  Indonesia Treasury Bond            
            11.00% 11/15/20 IDR   14,399,000,000     2,090,527
               2,090,527
Mexico – 0.48%            
  Mexican Bonos            
            7.75% 12/14/17 MXN   9,049,700     838,612
              838,612
Panama – 0.47%            
  Panama Government            
            International Bond            
            6.70% 1/26/36 USD   700,000     820,750
              820,750

(continues)       15
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
        Principal   Value
                 Amount°       (U.S. $)
Sovereign Bonds (continued)            
Peru – 0.23%            
  Republic of Peru            
            7.35% 7/21/25 USD       340,000   $ 413,100
              413,100
Philippines – 0.61%            
  Philippine Government            
            International Bond            
            6.375% 10/23/34     1,000,000     1,085,000
              1,085,000
Poland – 0.62%            
  Poland Government Bond            
            5.00% 10/24/13 PLN   1,700,000     619,102
  Poland Government            
            International Bond            
            5.125% 4/21/21 USD   450,000     468,563
              1,087,665
Russia – 0.40%            
  Russia-Eurobond            
            7.50% 3/31/30     596,850     704,659
                704,659
Turkey – 0.11%            
  Turkey Government            
            International Bond            
            7.375% 2/5/25     170,000     201,663
              201,663
Uruguay – 0.25%            
  Uruguay Government            
            International Bond            
            8.00% 11/18/22     350,000     447,650
                447,650
Total Sovereign Bonds            
  (cost $8,396,083)           8,703,001
               
Supranational Bank – 0.67%            
  European Investment            
            Bank 9.625% 4/1/15 TRY   1,800,000     1,176,905
Total Supranational Bank            
  (cost $1,189,579)           1,176,905
                 
U.S. Treasury Obligations – 0.28%            
  U.S. Treasury Bonds            
            4.25% 11/15/40 USD   20,000     20,091
            4.75% 2/15/41     20,000     21,838
  U.S. Treasury Notes            
            1.75% 5/31/16     315,000     315,984
          *3.125% 5/15/21     140,000     140,919
Total U.S. Treasury Obligations            
  (cost $494,587)           498,832
           
Leveraged Non-Recourse Security – 0.00%      
w#@ JPMorgan Fixed Income            
            Pass Through Trust            
            Series 2007-B            
            144A 0.00% 1/15/87     500,000     0
Total Leveraged Non-Recourse            
  Security (cost $425,000)           0
                
    Number of      
    Shares      
Residual Interest Trust Certificate – 0.00%      
=w#@ Freddie Mac Auction Pass            
            Through Trust Series            
            2007-6 144A     175,000     0
Total Residual Interest Trust            
  Certificate (cost $190,466)           0
               
Exchange-Traded Fund – 2.61%            
* iShares IBOXX $ High Yield            
            Corporate Bond Fund     50,000     4,620,000
Total Exchange-Traded Fund            
  (cost $4,499,835)           4,620,000
               
Preferred Stock – 0.83%            
  Alabama Power 5.625%     410     10,199
  Ally Financial            
        ∏8.50 %     10,000     263,400
          #144A 7.00%     400     386,413
* Developers Diversified            
            Realty 7.50%     1,925     48,606
Freddie Mac 6.02%     33,000     87,830
GMAC Capital            
            Trust I 8.125%     15,000     394,049
PNC Financial Services            
            Group 8.25%     10,000     10,710
  ProLogis 6.75%     7,050     173,571
* Vornado Realty 6.625%     3,700     91,945
Total Preferred Stock            
  (cost $2,046,059)           1,466,723
                
    Principal      
    Amount°      
Short-Term Investments – 5.53%            
Discount Notes – 5.53%            
  Federal Home Loan Bank            
            0.01% 6/1/11 USD   9,454,005     9,454,005
            0.06% 6/7/11     314,584     314,584
Total Short-Term Investments            
  (cost $9,768,586)           9,768,589
                
Total Value of Securities            
  Before Securities Lending            
  Collateral – 119.79%            
  (cost $198,162,278)           211,759,238

16
 

 

            Number of   Value  
    Shares       (U.S. $)  
Securities Lending Collateral** – 18.74%        
Investment Companies          
            BNY Mellon SL DBT II          
                      Liquidating Fund 213,233   $ 207,987  
            Delaware Investments Collateral          
                      Fund No. 1 32,921,835     32,921,835  
        @†Mellon GSL Reinvestment          
                      Trust II 311,516     0  
Total Securities Lending Collateral          
  (cost $33,446,584)       33,129,822  
Total Value of Securities – 138.53%          
  (cost $231,608,862)       244,889,060 ©
Obligation to Return Securities          
  Lending Collateral** – (18.92%)       (33,446,584 )
Borrowing Under Line of Credit – (22.63%)     (40,000,000 )
Receivables and Other Assets          
  Net of Other Liabilities – 3.02%       5,328,961  
Net Assets Applicable to 13,061,153          
  Shares Outstanding; Equivalent to          
  $13.53 Per Share – 100.00%     $ 176,771,437  
              
Components of Net Assets at May 31, 2011:        
Shares of beneficial interest          
  (unlimited authorization – no par)     $ 212,762,315  
Distributions in excess of net investment income     (856,259 )
Accumulated net realized loss on investments     (48,890,310 )
Net unrealized appreciation of investments          
  and foreign currencies       13,755,691  
Total net assets     $ 176,771,437  
 
° Principal amount shown is stated in the currency in which each security is denominated.
 
CLP — Chilean Peso
IDR — Indonesian Rupiah
MXN — Mexican Peso
PHP — Philippine Peso
PLN — Polish Zloty
TRY — Turkish Lira
USD — United States Dollar
 
v
Securities have been classified by type of business. Classification by country of origin has been presented in Security type/sector/country allocations on page 2.
Non income producing security.
* Fully or partially on loan.
@ Illiquid security. At May 31, 2011, the aggregate amount of illiquid securities was $176,774, which represented 0.10% of the Fund’s net assets. See Note 10 in “Notes to financial statements.”
Restricted security. These investments are in securities not registered under the Securities Act of 1933, as amended, and have certain restrictions on resale which may limit their liquidity. At May 31, 2011, the aggregate amount of the restricted securities was $517,411, which represented 0.29% of the Fund’s net assets. See Note 10 in “Notes to financial statements.”
#
Security exempt from registration under Rule 144A of the Securities Act of 1933, as amended. At May 31, 2011, the aggregate amount of Rule 144A securities was $32,633,990, which represented 18.46% of the Fund’s net assets. See Note 10 in “Notes to financial statements.”
Variable rate security. The rate shown is the rate as of May 31, 2011. Interest rates reset periodically.
w
Pass Through Agreement. Security represents the contractual right to receive a proportionate amount of underlying payments due to the counterparty pursuant to various agreements related to the rescheduling of obligations and the exchange of certain notes.
Φ Step coupon bond. Coupon increases or decreases periodically based on a predetermined schedule. Stated rate in effect at May 31, 2011.
« Senior Secured Loans generally pay interest at rates which are periodically redetermined by reference to a base lending rate plus a premium. These base lending rates are generally: (i) the prime rate offered by one or more United States banks, (ii) the lending rate offered by one or more European banks such as the London Inter-Bank Offered Rate (LIBOR), and (iii) the certificate of deposit rate. Senior Secured Loans may be subject to restrictions on resale. Stated rate in effect at May 31, 2011.
Δ
Securities have been classified by country of origin.
=
Security is being fair valued in accordance with the Fund’s fair valuation policy. At May 31, 2011, the aggregate amount of fair valued securities was $0, which represented 0.00% of the Fund’s net assets. See Note 1 in “Notes to financial statements.”
The rate shown is the effective yield at the time of purchase.
**
See Note 9 in “Notes to financial statements.”
©
Includes $32,612,835 of securities loaned.
 
Summary of Abbreviations:
ADR — American Depositary Receipt
ARM — Adjustable Rate Mortgage
BAML — Bank of America Merrill Lynch
BCLY — Barclays Bank
CDS — Credit Default Swap
CITI — Citigroup Global Markets
GNMA — Government National Mortgage Association
JPMC — JPMorgan Chase Bank
MASTR — Mortgage Asset Securitization Transactions, Inc.
PIK — Pay-in-kind
REIT — Real Estate Investment Trust
REMIC — Real Estate Mortgage Investment Conduit
S.F. — Single Family
yr — Year
 
(continues)         17
 

 

Statement of net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
 
 
The following foreign currency exchange contract and swap contracts were outstanding at May 31, 20111:
 
Foreign Currency Exchange Contract        
                Unrealized
    Contract to       Settlement   Appreciation
Counterparty       Receive       In Exchange For       Date       (Depreciation)
BAML   PHP10,000,000   USD (229,832)   6/30/11   $1,101

Swap Contracts                        
CDS Contracts                        
    Swap         Annual       Unrealized
    Referenced   Notional   Protection   Termination   Appreciation
Counterparty      Obligation      Value      Payments      Date      (Depreciation)
    Protection                        
              Purchased:                        
BCLY   ITRAXX Europe                        
              Subordinate                        
              Financials 15.1                        
              5 yr CDS   $ 95,000   1.00%   6/20/16     $ 319  
CITI   Sara Lee 5 yr CDS     7,000   1.00%   3/20/16       (493 )
JPMC   ITRAXX Europe Subordinate                          
              Financials 15.1                        
              5 yr CDS     80,000   1.00%   6/20/16       269  
JPMC   Viacom                        
              5 yr CDS     25,000   1.00%   9/20/15       (390 )
        $ 207,000             $ (295 )
    Protection Sold /                        
              Moody’s Rating:                    
CITI   MetLife 5 yr                        
              CDS/A   $ 25,000   5.00%   9/20/14     $ 1,819  
JPMC   Comcast 5 yr                        
              CDS/Baa     25,000   1.00%   9/20/15       481  
JPMC   Tyson Foods                        
              CDS/Ba     15,000   1.00%   3/20/16       195  
        $ 65,000             $ 2,495  
Total                       $ 2,200  

The use of foreign currency exchange contracts and swap contracts involves elements of market risk and risks in excess of the amounts recognized in the financial statements. The notional values presented above represent the 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, which are an integral part of the financial statements.
 
18
 

 

Statement of operations
 
Delaware Enhanced Global Dividend and Income Fund
Six Months Ended May 31, 2011 (Unaudited)
 
Investment Income:                      
       Interest   $ 3,668,376        
       Dividends     2,129,960        
       Securities lending income     103,697        
       Foreign tax withheld     (102,356 )   $ 5,799,677
 
Expenses:              
       Management fees     1,052,667        
       Reports to shareholders     43,070        
       Accounting and administration expenses     41,404        
       Legal fees     36,954        
       Dividend disbursing and transfer agent fees and expenses     20,042        
       Custodian fees     17,000        
       Leverage expenses     12,639        
       NYSE fees     11,987        
       Audit and tax     10,009        
       Pricing fees     9,298        
       Trustees’ fees     4,456        
       Dues and services     4,062        
       Insurance fees     3,007        
       Consulting fees     958        
       Trustees’ expenses     338        
       Registration fees     332        
       Total operating expenses (before interest expense)             1,268,223
       Interest expense             315,972
       Total operating expenses (after interest expense)             1,584,195
Net Investment Income             4,215,482
 
Net Realized and Unrealized Gain on Investments and Foreign Currencies:              
       Net realized gain on:              
       Investments             5,598,662
       Options written             49,412
       Foreign currencies             32,470
       Foreign currency exchange contracts             7,733
       Swap contracts             6,686
       Net realized gain             5,694,963
       Net change in unrealized appreciation/depreciation of investments and foreign currencies             13,936,576
Net Realized and Unrealized Gain on Investments and Foreign Currencies             19,631,539
 
Net Increase in Net Assets Resulting from Operations           $ 23,847,021

See accompanying notes, which are an integral part of the financial statements.
 
19
 

 

Statements of changes in net assets
 
Delaware Enhanced Global Dividend and Income Fund
 
    Six Months   Year
    Ended   Ended
        5/31/11       11/30/10
    (Unaudited)        
Increase in Net Assets from Operations:                
       Net investment income   $ 4,215,482     $ 7,373,688  
       Net realized gain on investments and foreign currencies     5,694,963       3,678,581  
       Net change in unrealized appreciation/depreciation of investments and foreign currencies     13,936,576       8,310,279  
       Net increase in net assets resulting from operations     23,847,021       19,362,548  
 
Dividends and Distributions to Shareholders from:1                
       Net investment income     (8,018,905 )     (11,913,695 )
       Return of capital           (4,052,200 )
      (8,018,905 )     (15,965,895 )
 
Capital Share Transactions:2                
       Cost of shares reinvested     478,707       1,020,065  
       Increase in net assets derived from capital share transactions     478,707       1,020,065  
 
Net Increase in Net Assets     16,306,823       4,416,718  
 
Net Assets:                
       Beginning of period     160,464,614       156,047,896  
       End of period (including distributions in excess of net investment income of $856,259                
              and $787,504, respectively)   $ 176,771,437     $ 160,464,614  

1See Note 4 in “Notes to financial statements.”
2See Note 6 in “Notes to financial statements.”
 
See accompanying notes, which are an integral part of the financial statements.
 
20
 

 

Statement of cash flows
 
Delaware Enhanced Global Dividend and Income Fund
Six Months Ended May 31, 2011 (Unaudited)
 
Net Cash (Including Foreign Currency) Provided by Operating Activities:      
Net increase in net assets resulting from operations $ 23,847,021  
 
       Adjustments to reconcile net increase in net assets from      
    operations to cash provided by operating activities:      
    Amortization of premium and discount on investments purchased   (39,407 )
    Proceeds from disposition of investment securities   94,437,925  
    Purchase of short-term investment securities, net   (1,386,311 )
    Purchase of investment securities   (89,010,989 )
    Net realized gain on investment transactions   (5,612,860 )
    Net change in unrealized appreciation/depreciation of investments and foreign currencies   (13,936,576 )
    Increase in receivable for investments sold   (1,736,493 )
    Increase in interest and dividends receivable   (101,675 )
    Increase in payable for investments purchased   823,795  
    Decrease in accrued expenses and other liabilities   (29,619 )
       Total adjustments   (16,592,210 )
Net cash provided by operating activities   7,254,811  
 
Cash Flows Used for Financing Activities:      
       Cash dividends and distributions paid   (8,018,905 )
       Cost of fund shares reinvested   478,707  
Net cash used for financing activities   (7,540,198 )
Effect of exchange rates on cash   248,622  
Net decrease in cash   (36,765 )
Cash at beginning of period   4,079,857  
Cash at end of period $ 4,043,092  
 
Interest paid for borrowings during the period $ 315,972  

See accompanying notes, which are an integral part of the financial statements.
 
21
 

 

Financial highlights
 
Delaware Enhanced Global Dividend and Income Fund
 
 
 
Selected data for each share of the Fund outstanding throughout each period were as follows:
 
    Six Months                     6/29/072  
    Ended   Year Ended   to  
    5/31/111   11/30/10     11/30/09         11/30/08     11/30/07  
    (Unaudited)                                          
Net asset value, beginning of period        $12.320        $12.060     $ 8.770     $17.640        $19.100    
     
Income (loss) from investment operations:                                  
Net investment income3     0.323     0.568     0.685     0.769     0.288    
Net realized and unrealized gain (loss) on investments and foreign currencies     1.502     0.922     3.875     (7.935 )   (1.285 )  
Total from investment operations     1.825     1.490     4.560     (7.166 )   (0.997 )  
     
Less dividends and distributions from:                                  
Net investment income     (0.615 )   (0.918 )   (0.668 )   (0.644 )   (0.284 )  
Return of capital         (0.312 )   (0.602 )   (1.060 )   (0.142 )  
Total dividends and distributions     (0.615 )   (1.230 )   (1.270 )   (1.704 )   (0.426 )  
     
Capital share transactions:                                  
Common share offering cost charged to paid in capital                     (0.037 )  
Total capital share transactions                     (0.037 )  
     
Net asset value, end of period     $13.530     $12.320     $12.060     $ 8.770     $17.640    
     
Market value, end of period     $13.620     $12.310     $12.290     $ 6.080     $15.370    
     
Total return based on:4                                  
Market value     15.92%     10.92%     134.96%     (54.14% )   (17.24% )  
Net asset value     15.07%     13.13%     59.12%     (42.25% )   (4.97% )  
     
Ratios and supplemental data:                                  
Net assets, end of period (000 omitted)     $176,771     $160,465     $156,048     $113,400     $228,204    
Ratio of expenses to average net assets     1.86%     1.95%     2.14%     1.66%     1.17%    
Ratio of expenses to adjusted average net assets (before interest expense)5     1.20%     1.22%     1.26%     1.24%     1.17%    
Ratio of interest expense to adjusted average net assets5     0.30%     0.33%     0.35%     0.29%        
Ratio of net investment income to average net assets     4.94%     4.68%     6.73%     5.33%     3.68%    
Ratio of net investment income to adjusted average net assets5     4.00%     3.73%     5.06%     4.91%     3.68%    
Portfolio turnover     45%     83%     88%     97%     175%    
     
Leverage Analysis:                                  
Debt outstanding at end of period at par (000 omitted)     $40,000     $40,000     $40,000     $40,000        
Asset coverage per $1,000 of debt outstanding at end of period     $5,419     $5,012     $4,901     $3,835        
 
1 Ratios have been annualized and total return and portfolio turnover have not been annualized.
2 Date of commencement of operations; ratios have been annualized and total return and portfolio turnover have not been annualized.
3 The average shares outstanding method has been applied for per share information.
4 Total investment return is calculated assuming a purchase of common stock on the opening of the first day and a sale on the closing of the last day of each period reported. Dividends and distributions, if any, are assumed for the purpose of this calculation, to be reinvested at prices obtained under the Fund’s dividend reinvestment plan. Generally, total investment return based on net asset value will be higher than total investment return based on market value in periods where there is an increase in the discount or decrease in the premium of the market value to the net asset value from the beginning to the end of such periods. Conversely, total investment return based on net asset value will be lower than total investment return based on market value in periods where there is a decrease in the discount or an increase in the premium of the market value to the net asset value from the beginning to the end of such periods.
5 Adjusted average net assets excludes debt outstanding.
 
See accompanying notes, which are an integral part of the financial statements.
 
22 
 

 

Notes to financial statements
 
Delaware Enhanced Global Dividend and Income Fund
May 31, 2011 (Unaudited)
 
Delaware Enhanced Global Dividend and Income Fund (Fund) is organized as a Delaware statutory trust and is a diversified closed-end management investment company under the Investment Company Act of 1940, as amended. The Fund’s shares trade on the New York Stock Exchange (NYSE) under the symbol DEX.
 
The primary investment objective of the Fund is to seek current income, with a secondary objective of capital appreciation.
 
1. Significant Accounting Policies
 
The following accounting policies are in accordance with U.S. generally accepted accounting principles (U.S. GAAP) and are consistently followed by the Fund.
 
Security Valuation — Equity securities, except those traded on the Nasdaq Stock Market, Inc. (Nasdaq), are valued at the last quoted sales price as of the time of the regular close of the NYSE on the valuation date. Securities traded on the Nasdaq are valued in accordance with the Nasdaq Official Closing Price, which may not be the last sales price. If on a particular day an equity security does not trade, then the mean between the bid and ask prices will be used. Securities listed on a foreign exchange are valued at the last quoted sales price on the valuation date. Short-term debt securities are valued at market value. U.S. government and agency securities are valued at the mean between the bid and ask prices. Other debt securities and credit default swap (CDS) contracts are valued by an independent pricing service or broker. To the extent current market prices are not available, the pricing service may take into account developments related to the specific security, as well as transactions in comparable securities. Investment company securities are valued at net asset value per share. Open-end investment companies are valued at their published net asset value. 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. Exchange-traded options are valued at the last reported sale price or, if no sales are reported, at the mean between the bid and ask prices. 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 generally as of 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 continue to qualify for federal income tax purposes as a regulated investment company under Subchapter M of the Internal Revenue Code of 1986, as amended, and make the requisite distributions to shareholders. The Fund evaluates tax positions taken or expected to be taken in the course of preparing the Fund’s tax returns to determine whether the tax positions are “more-likely-than-not” of being sustained by the applicable tax authority. Tax positions not deemed to meet the more-likely-than-not threshold are recorded as a tax benefit or expense in the current year. Management has analyzed the Fund’s tax positions taken on federal income tax returns for all open tax years (November 30, 2007–November 30, 2010), and has concluded that no provision for federal income tax is required in the Fund’s financial statements.
 
Distributions — The Fund has implemented a managed distribution policy. Under the policy, the Fund is managed with a goal of generating as much of the distribution as possible from net investment income and short-term capital gains. The balance of the distribution will then come from long-term capital gains to the extent permitted, and if necessary, a return of capital. Even though the Fund may realize current year capital gains, such gains may be offset, in whole or in part, by the Fund’s capital loss carryovers from prior years. For federal income tax purposes, the effect of such capital loss carryovers may be to convert (to the extent of such current year gains) what would otherwise be returns of capital into distributions taxable as ordinary income. This tax effect can occur during times of extended market volatility. Under the Regulated Investment Company Modernization Act of 2010, this tax effect attributable to the Fund’s capital loss carryovers (the conversion of returns of capital into distributions taxable as ordinary income) will no longer apply to net capital losses of the Fund arising in Fund tax years beginning after November 30, 2011. The actual determination of the source of the Fund’s distributions can be made only at year-end. Shareholders should receive written notification regarding the actual components and tax treatments of all Fund distributions for the calendar year 2011 in early 2012.
 
To Be Announced Trades — The Fund may contract to purchase securities for a fixed price at a transaction date beyond the customary settlement period (e.g., “when issued,” “delayed delivery,” “forward commitment,” or “TBA transactions”) consistent with the Fund’s ability to manage its investment portfolio and meet redemption requests. These transactions involve a commitment by the Fund to purchase securities for a predetermined price or yield with payment and delivery taking place more than three days in the future, or after a period longer than the customary settlement period for that type of security. No interest will be earned by the Fund on such purchases until the securities are delivered; however the market value may change prior to delivery.
 
Mortgage Dollar Rolls — The Fund may enter into mortgage “dollar rolls” in which the Fund sells mortgage-backed securities for delivery in the current month and simultaneously contracts to repurchase substantially similar (same type, coupon, and maturity) securities on a specified future date. Any difference between the sale price and the purchase price is netted against the interest income foregone on the securities to arrive at an implied borrowing (reverse repurchase) rate. Alternatively, the sale and purchase transactions which constitute the dollar roll can be executed at the same price, with the Fund being paid a fee as consideration for entering into the commitment to purchase. Dollar rolls may be renewed prior to cash settlement and initially may involve only a firm commitment agreement by the Fund to buy a security. The Fund accounts for mortgage-dollar-roll transactions as purchases and sales, these transactions may increase the Fund’s portfolio turnover rate.
 
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
 
(continues)       23
 

 

Notes to financial statements
 
Delaware Enhanced Global Dividend and Income Fund
 
 
 
1. Significant Accounting Policies (continued)
 
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 generally isolates that portion of realized gains and losses on investments in debt securities which is due to changes in foreign exchange rates from that which is due to changes in market prices of debt securities. For foreign equity securities, these changes are included in net realized and unrealized gain or loss on investments. 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. GAAP requires management to make estimates and assumptions that affect the reported amounts of assets and liabilities and disclosure of contingent 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 and the differences could be material.
 
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. Taxable non-cash dividends are recorded as dividend income. Discounts and premiums on non-convertible bonds are amortized to interest income over the lives of the respective securities. Realized gains (losses) on paydowns of mortgage- and asset-backed securities are classified as interest income. Distributions received from investments in Real Estate Investment Trusts (REITs) are recorded as dividend income on the ex-dividend date, subject to reclassification upon notice of the character of such distributions by the issuer. Foreign dividends are also recorded on the ex-dividend date or as soon after the ex-dividend date that the Fund is aware of such dividends, net of all non-rebatable tax withholdings. Withholding taxes on foreign dividends and interest have been recorded in accordance with the Fund’s understanding of the applicable country’s tax rules and rates.
 
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 for the six months ended May 31, 2011.
 
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 of 1.00% of the adjusted average daily net assets of the Fund. For purposes of the calculation of investment management fees, adjusted average weekly net assets excludes the line of credit liability.
 
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 adjusted average daily net assets in excess of $50 billion. For purposes of the calculation of DSC fees, adjusted average daily net assets excludes the line of credit liability. 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, 2011, the Fund was charged $5,212 for these services.
 
At May 31, 2011, the Fund had liabilities payable to affiliates as follows:
 
Investment management fee payable to DMC $183,118
Fees and other expenses payable to DSC 904
Other expenses payable to DMC and affiliates* 8,171

*DMC, as part of its administrative services, pays operating expenses on behalf of the Fund and is reimbursed on a periodic basis. Expenses include items such as printing of shareholder reports, fees for audit, legal and tax services, stock exchange fees, custodian 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 six months ended May 31, 2011, the Fund was charged $30,655 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 and DSC are officers and/or Trustees of the Fund. These officers and Trustees are paid no compensation by the Fund.
 
3. Investments
 
For the six months ended May 31, 2011, the Fund made purchases of $86,070,018 and sales of $91,557,761 of investment securities other than U.S. government securities and short-term investments. For the six months ended May 31, 2011, the Fund made purchases of $2,940,971 and sales of $2,880,164 of long-term U.S. government securities.
 
At May 31, 2011, 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, 2011, the cost of investments was $233,284,262. At May 31, 2011, net unrealized appreciation was $11,604,798, of which $20,947,831 related to unrealized appreciation of investments and $9,343,033 related to unrealized depreciation of investments.
 
U.S. GAAP 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. A three level hierarchy for fair value measurements has been established based upon the transparency of inputs to the valuation of an asset or liability. Inputs may be observable or unobservable and
 
24
 

 

refer broadly to the assumptions that market participants would use in pricing the asset or liability. Observable inputs reflect the assumptions market participants would use in pricing the asset or liability based on market data obtained from sources independent of the reporting entity. Unobservable inputs reflect the reporting entity’s own assumptions about the assumptions that market participants would use in pricing the asset or liability developed based on the best information available under the circumstances. The 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 level hierarchy of inputs is summarized below.
 
Level 1 –   inputs are quoted prices in active markets for identical investments (e.g., equity securities, open-end investment companies, futures contracts, options contracts)
   
Level 2 –  other observable inputs (including, but not limited to: quoted prices for similar assets or liabilities in markets that are active, quoted prices for identical or similar assets or liabilities in markets that are not active, inputs other than quoted prices that are observable for the assets or liabilities (such as interest rates, yield curves, volatilities, prepayment speeds, loss severities, credit risks and default rates) or other market-corroborated inputs) (e.g., debt securities, government securities, swap contracts, foreign currency exchange contracts, foreign securities utilizing international fair value pricing)
   
Level 3 – 
inputs are significant unobservable inputs (including the Fund’s own assumptions used to determine the fair value of investments) (e.g., broker-quoted securities, fair valued securities)
 
The following table summarizes the valuation of the Fund’s investments by fair value hierarchy levels as of May 31, 2011:
 
  Level 1         Level 2         Level 3           Total
Agency, Asset-Backed                    
       & Mortgage-Backed                      
       Securities $   $ 5,793,082   $   $ 5,793,082
Common Stock   49,950,503     45,984,544         95,935,047
Corporate Debt       83,319,889     565,000     83,884,889
Foreign Debt       9,879,906         9,879,906
Exchange-Traded Fund   4,620,000             4,620,000
U.S. Treasury Obligations       498,832         498,832
Preferred Stock   971,572     407,321         1,378,893
Short-Term Investments       9,768,589         9,768,589
Securities Lending                      
       Collateral       33,129,822         33,129,822
Total $ 55,542,075   $ 188,781,985   $ 565,000   $ 244,889,060
Foreign Currency                      
       Exchange Contract $   $ 1,101   $   $ 1,101
Swap Contracts $   $ 2,200   $   $ 2,200

The following is a reconciliation of investments in which significant unobservable inputs (Level 3) were used in determining fair value:
 
    Agency,                                
    Asset-Backed                                
    and Mortgage-   Common   Corporate                
       Backed Securities      Stock      Debt      Other      Total
Balance as of                                        
       11/30/10   $             54,625     $ 10,866     $ 353,027     $ 1     $ 418,519  
Purchases           (11,491 )     565,000             553,509  
Sales     (13,552 )           (355,164 )     (1 )     (368,717 )
Net realized gain     9             2,165       1       2,175  
Transfers out of                                        
       Level 3     (37,239 )                       (37,239 )
Net change in                                        
       unrealized                                        
       appreciation/                                        
       depreciation     (3,843 )     625       (28 )     (1 )     (3,247 )
Balance as of                                        
       5/31/11   $     $     $ 565,000     $     $ 565,000  
 
Net change in                                        
       unrealized                                        
       appreciation/                                        
       depreciation                                        
       from investments                                        
       still held as of                                        
       5/31/11   $     $     $     $     $  

During the six months ended May 31, 2011, the Fund had transfers out of Level 3 investments into Level 2 investments in the amount of $37,239, which was due to the Fund’s pricing vendor being able to supply matrix prices for investments that had been utilizing broker quoted prices. During the six months ended May 31, 2011, there were no transfers between Level 1 investments and Level 2 investments that had a material impact to the Fund. This does not include transfers between Level 1 investments and Level 2 investments due to the Fund utilizing international fair value pricing during 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. GAAP. Additionally, distributions from net gains on foreign currency transactions and net short-term gains on sales of investment securities are treated as ordinary income for federal income tax purposes. The tax character of dividends and distributions paid during the six months ended May 31, 2011 and the year ended November 30, 2010 was as follows:
 
    Six Months   Year
    Ended   Ended
       5/31/11*      11/30/10
Ordinary income   $ 8,018,905   $ 11,913,695
Return of capital         4,052,200
Total   $ 8,018,905   $ 15,965,895

*Tax information for the six months ended May 31, 2011 is an estimate and the tax character of dividends and distributions may be redesignated at fiscal year end.
 
(continues)       25
 

 

Notes to financial statements
 
Delaware Enhanced Global Dividend and Income Fund
 
 
 
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, 2011, the estimated components of net assets on a tax basis were as follows:
 
Shares of beneficial interest       $ 212,762,315  
Capital loss carryforwards as of 11/30/10     (53,576,805 )
Realized gains 12/1/10–5/31/11     5,523,354  
Other temporary differences     (15,716 )
Unrealized appreciation of investments        
       and foreign currencies     12,078,289  
Net assets   $ 176,771,437  

The differences between book basis and tax basis components of net assets are primarily attributable to tax deferral of losses on wash sales, straddles, contingent payment debt instruments, partnership income, tax treatment of CDS contracts, market discount and premium on debt instruments and passive foreign investment companies.
 
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 gain (loss) on foreign currency transactions, dividends and distributions, CDS contracts, foreign capital gains tax, market discount and premium on certain debt instruments and paydowns of mortgage- and asset-backed securities. Results of operations and net assets were not affected by these reclassifications. For the six months ended May 31, 2011, the Fund recorded an estimate of these differences since final tax characteristics cannot be determined until fiscal year end.
 
Distributions in excess of net investment income       $ 3,734,668  
Accumulated net realized loss     (392,150 )
Paid-in capital     (3,342,518 )

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, 2010 will expire as follows: $31,328,583 expires in 2016 and $22,248,222 expires in 2017.
 
For the six months ended May 31, 2011, the Fund had capital gains of $5,523,354, which may reduce the capital loss carryforwards.
 
6. Capital Stock
 
Shares obtained under the Fund’s dividend reinvestment plan are purchased by the Fund’s transfer agent, The Bank of New York Mellon (BNY Mellon) Shareowner Services, in the open market if the shares of the Fund are trading at a discount to the Fund’s net asset value on the dividend payment date. However, the dividend reinvestment plan provides that if the shares of the Fund are trading at a premium to the Fund’s net asset value on the dividend payment date, the Fund will issue shares to shareholders of record at net asset value. During the six months ended May 31, 2011, the Fund issued 36,309 shares for $478,707 under the Fund’s dividend reinvestment plan because the Fund was trading at a premium to net asset value on the respective dividend payment dates. During the year ended November 30, 2010, the Fund issued 83,412 shares for $1,020,065 under the Fund’s dividend reinvestment plan because the Fund was trading at a premium to net asset value on the respective dividend payment dates.
 
7. Line of Credit
 
For the six months ended May 31, 2011, the Fund borrowed money pursuant to a $50,000,000 Credit Agreement with BNY Mellon that expires on June 29, 2011. Depending on market conditions, the amount borrowed by the Fund pursuant to the Credit Agreement may be reduced or possibly increased in the future.
 
At May 31, 2011, the par value of loans outstanding was $40,000,000 at a variable interest rate of 1.5625%. During the six months ended May 31, 2011, the average daily balance of loans outstanding was $40,000,000 at a weighted average interest rate of approximately 1.5842%. Interest on borrowings is based on a variable short-term rate plus an applicable margin. The commitment fee is computed at a rate of 0.25% per annum on the unused balance. The loan is collateralized by the Fund’s portfolio.
 
8. Derivatives
 
U.S. GAAP requires enhanced disclosures that enable investors to understand: 1) how and why an entity uses derivatives; 2) how they are accounted for; and 3) how they affect an entity’s results of operations and financial position.
 
Foreign Currency Exchange Contracts — The Fund enters 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 an unfavorable change in the value of the hedged currency, they also limit any potential gain that might result should the value of the currency change favorably. In addition, the Fund could be exposed to risks if the counterparties to the contracts are unable to meet the terms of their contracts. The 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.
 
Options Contracts — During the six months ended May 31, 2011, the Fund entered into options contracts in the normal course of pursuing its investment objective. The Fund may buy or write options contracts for any number of reasons, including without limitation: to manage the Fund’s exposure to changes in securities prices and foreign currencies; as an efficient means of adjusting the Fund’s overall exposure to certain markets; to earn income; to protect the value of portfolio securities; and as a cash management tool. The Fund may buy or write call or put options on securities, futures, swaps “swaptions,” financial indices, and foreign currencies. When the Fund buys an option, a premium is paid and an
 
26
 

 

asset is recorded and adjusted on a daily basis to reflect the current market value of the options purchased. When the Fund writes an option, a premium is received and a liability is recorded and adjusted on a daily basis to reflect the current market value of the options written. Premiums received from writing options that expire unexercised are treated by the Fund on the expiration date as realized gains. The difference between the premium received and the amount paid on effecting a closing purchase transaction, including brokerage commissions, is treated as realized gain or loss. If a call option is exercised, the premium is added to the proceeds from the sale of the underlying security in determining whether the Fund has a realized gain or loss. If a put option is exercised, the premium reduces the cost basis of the securities purchased by the Fund. The Fund, as writer of an option, bears the market risk of an unfavorable change in the price of the security underlying the written option. When writing options, the Fund is subject to minimal counterparty risk because the counterparty is only obligated to pay premiums and does not bear the market risk of an unfavorable market change.
 
Transactions in options written during the six months ended May 31, 2011 for the Fund were as follows:
 
    Number of        
         contracts       Premiums
Options outstanding at November 30, 2010       $  
Options written   1,214       62,038  
Options expired   (1,010 )     (49,412 )
Options terminated in              
       closing purchase transactions   (204 )     (12,626 )
Options outstanding at May 31, 2011       $  

Swap Contracts — The Fund may enter into interest rate swap contracts, inflation swap contracts, index swap contracts and CDS contracts in the normal course of pursuing its investment objective. The Fund may use interest rate swaps to adjust the Fund’s sensitivity to interest rates or to hedge against changes in interest rates. Index swaps may be used to gain exposure to markets that the Fund invests in, such as the corporate bond market. The Fund may also use index swaps as a substitute for futures or options contracts if such contracts are not directly available to the Fund on favorable terms. The Fund may use inflation swaps to hedge the inflation risk in nominal bonds, thereby creating synthetic inflation-indexed bonds. The Fund may enter into CDS contracts in order to hedge against a credit event, to enhance total return or to gain exposure to certain securities or markets.
 
Credit Default Swaps. A CDS contract is a risk-transfer instrument through which one party (purchaser of protection) transfers to another party (seller of protection) the financial risk of a credit event (as defined in the CDS agreement), as it relates to a particular reference security or basket of securities (such as an index). In exchange for the protection offered by the seller of protection, the purchaser of protection agrees to pay the seller of protection a periodic amount at a stated rate that is applied to the notional amount of the CDS contract. In addition, an upfront payment may be made or received by the Fund in connection with an unwinding or assignment of a CDS contract. Upon the occurrence of a credit event, the seller of protection would pay the par (or other agreed-upon) value of the reference security (or basket of securities) to the counterparty. Credit events generally include, among others, bankruptcy, failure to pay, and obligation default.
 
During the six months ended May 31, 2011, the Fund entered into CDS contracts as a purchaser and seller of protection. Periodic payments (receipts) on such contracts are accrued daily and recorded as unrealized losses (gains) on swap contracts. Upon payment (receipt), such amounts are recorded as realized losses (gains) on swap contracts. Upfront payments made or received in connection with CDS contracts are amortized over the expected life of the CDS contracts as unrealized losses (gains) on swap contracts. The change in value of CDS contracts is recorded as unrealized appreciation or depreciation daily. A realized gain or loss is recorded upon a credit event (as defined in the CDS agreement) or the maturity or termination of the agreement. At May 31, 2011, the net unrealized appreciation of credit default swaps was $2,200. If a credit event had occurred for all swap transactions where collateral posting was required as of May 31, 2011, the swaps’ credit-risk-related contingent features would have been triggered and the Fund would have received $142,000 less the value of the contracts’ related reference obligations.
 
As disclosed in the footnotes to the statement of net assets, at May 31, 2011, the notional value of the protection sold was $65,000, which reflects the maximum potential amount the Fund would have been required to make as a seller of credit protection if a credit event had occurred. The quoted market prices and resulting market values for credit default swap agreements on securities and credit indices serve as an indicator of the current status of the payment/performance risk and represent the likelihood of an expected liability (or profit) for the credit derivative if the swap agreement has been closed/sold as of the period end. Increasing market values, in absolute terms when compared to the notional amount of the swap, represent a deterioration of the reference entity’s credit soundness and a greater likelihood of risk of default or other credit event occurring as defined under the terms of the agreement. At May 31, 2011, the net unrealized appreciation of the protection sold was $2,495.
 
CDS contracts may involve greater risks than if the Fund had invested in the reference obligation directly. CDS contracts are subject to general market risk, liquidity risk, counterparty risk and credit risk. The Fund’s maximum risk of loss from counterparty credit risk, either as the seller of protection or the buyer of protection, is the fair value of the contract. This risk is mitigated by having a netting arrangement between 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.
 
Swaps Generally. Because there is no organized market for swap contracts, the value of open swaps may differ from that which would be realized in the event the Fund terminated its position in the agreement. Risks of entering into these contracts include the potential inability of the counterparty to meet the terms of the contracts. This type of risk is generally limited to the amount of favorable movement in the value of the underlying security, instrument or basket of instruments, if any, at the day of default. Risks also arise from potential losses from adverse market movements and such losses could exceed the unrealized amounts shown on the statement of net assets.
 
(continues)       27
 

 

Notes to financial statements
 
Delaware Enhanced Global Dividend and Income Fund
 
 
 
8. Derivatives (continued)
 
Fair values of derivative instruments as of May 31, 2011 were as follows:
 
    Asset Derivatives   Liability Derivatives
    Statement of       Statement of    
    Net Assets       Net Assets    
        Location       Fair Value       Location       Fair Value
Foreign currency exchange contracts
       (Forward currency exchange contracts)
 
Receivables and other assets net of other liabilities
   
$
1,101    
Receivables and other assets net of other liabilities
   
$—
 
                           
Credit contracts
       (Swap contracts)
 
Receivables and other assets net of other liabilities
     
2,200
   
Receivables and other assets net of other liabilities
   
 
                           
Total
       
$
3,301
         
$—
 

The effect of derivative instruments on the statement of operations for the period ended May 31, 2011 was as follows:
 
            Change in
            Unrealized
    Location of Gain   Realized Gain   Appreciation
    or Loss on   or Loss on   (Depreciation)
    Derivatives   Derivatives   on Derivatives
    Recognized in   Recognized in   Recognized in
        Income       Income       Income
Foreign currency exchange contracts
       (Forward currency exchange contracts)
 
Net realized gain on foreign currency exchange contracts and net change in unrealized appreciation/ depreciation of investments and foreign currencies
   
$
7,773
     
$
(2,346
)
 
Credit contracts
       (Swap contracts)
 
Net realized gain on swap contracts and net change in unrealized appreciation/ depreciation of investments and foreign currencies
     
6,686
       
(13,576
)
 
                           
Total
       
$
14,459
     
$
(15,922
)
 

The volume of derivative transactions varies throughout the period. Information about derivative transactions reflected on the financial statements is as of the date of this report, but may not be indicative of the type and volume of derivative activity for the six months ended May 31, 2011.
 
9. Securities Lending
 
The Fund, along with other funds in the Delaware Investments® Family of Funds, may lend its securities pursuant to a security lending agreement (Lending Agreement) with BNY Mellon. With respect to each loan, if on any business day the aggregate market value of securities collateral plus cash collateral held 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 by the end of the following business day which, together with the collateral already held, will be not less than the applicable collateral requirements for such security loan. If the aggregate market value of securities collateral and cash collateral held with respect to a security loan exceeds the applicable collateral requirement, upon the request of the borrower, BNY Mellon must return enough collateral to the borrower by the end of the following business day to reduce the value of the remaining collateral to the applicable collateral requirement for such security loan. As a result of the foregoing, the value of the collateral held with respect to a loaned security may be temporarily more or less than the value of the security on loan.
 
Cash collateral received is generally invested in the Delaware Investments Collateral Fund No. 1 (Collective Trust) established by BNY Mellon for the purpose of investment on behalf of funds managed by DMC that participate in BNY Mellon’s securities lending program. The Collective Trust may invest in U.S. government securities and high quality corporate debt, asset-backed and other money market securities and in repurchase agreements collateralized by such securities, provided that the Collective Trust will generally have a dollar-weighted average portfolio maturity of 60 days or less. The Collective Trust seeks to maintain a net asset value per unit of $1.00, but there can be no assurance that it will always be able to do so. The Fund may incur investment losses as a result of investing securities lending collateral in the Collective Trust or another collateral investment pool. This could occur if an investment in a collateral investment pool defaulted or if it were necessary to liquidate assets in the collateral investment pool to meet returns on outstanding security loans at a time when the collateral investment pool’s net asset value per unit was less than $1.00. Under those circumstances, the Fund may not receive an amount from the collateral investment pool that is equal in amount to the collateral the Fund would be required to return to the borrower of the securities and the Fund would be required to make up for this shortfall. Effective April 20, 2009, BNY Mellon transferred the assets of the Fund’s previous collateral investment pool other than cash and assets with a maturity of one business day or less to the BNY Mellon SL DBT II Liquidating Fund (Liquidating Fund), effectively bifurcating the previous collateral investment pool. The Fund’s exposure to the Liquidating Fund is expected to decrease as the Liquidating Fund’s assets mature or are sold. In October 2008, BNY Mellon transferred certain distressed securities from the previous collateral investment pool into the Mellon GSL Reinvestment Trust II. The Fund can also accept U.S. government securities and letters of credit (non-cash collateral) in connection with securities loans. In the event of default or bankruptcy by the lending agent, realization and/or retention of the collateral may be subject to legal proceedings. In the event the borrower fails to return loaned securities and the collateral received is insufficient to cover the value of the loaned
 
28
 

 

securities and provided such collateral shortfall is not the result of investment losses, the lending agent has agreed to pay the amount of the shortfall to the Fund, or at the discretion of the lending agent, replace the loaned securities. The Fund continues to record dividends or interest, as applicable, on the securities loaned and is subject to change in value of the securities loaned that may occur during the term of the loan. The Fund has the right under the Lending Agreement to recover the securities from the borrower on demand. With respect to security loans collateralized by non-cash collateral, the Fund receives loan premiums paid by the borrower. With respect to security loans collateralized by cash collateral, the earnings from the collateral investments are shared among the Fund, the security lending agent and the borrower. The Fund records security lending income net of allocations to the security lending agent and the borrower.
 
At May 31, 2011, the value of securities on loan was $32,612,835, for which the Fund received collateral, comprised of non-cash collateral valued at $143,739 and cash collateral of $33,446,584. At May 31, 2011, the value of invested collateral was $33,129,822. Investments purchased with cash collateral are presented on the statement of net assets under the caption “Securities Lending Collateral.”
 
10. Credit and Market Risk
 
The Fund borrows through its line of credit for purposes of leveraging. Leveraging may result in higher degrees of volatility because the Fund’s net asset value could be subject to fluctuations in short-term interest rates and changes in market value of portfolio securities attributable to the leverage.
 
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 is held by a smaller number of investors. This may limit the number of shares available for acquisition or disposition by the Fund.
 
The Fund invests a portion of its assets in high yield fixed income securities, which carry ratings of BB or lower by Standard & Poor’s and Ba or lower by Moody’s Investor Services. Investments in these higher yielding securities are generally accompanied by a greater degree of credit risk than higher rated securities. Additionally, lower rated securities may be more susceptible to adverse economic and competitive industry conditions than investment grade securities.
 
The Fund invests in fixed income securities whose value is derived from an underlying pool of mortgages or consumer loans. The value of these securities is sensitive to changes in economic conditions, including delinquencies and/or defaults, and may be adversely affected by shifts in the market’s perception of the issuers and changes in interest rates. Investors receive principal and interest payments as the underlying mortgages and consumer loans are paid back. Some of these securities are collateralized mortgage obligations (CMOs). CMOs are debt securities issued by U.S. government agencies or by financial institutions and other mortgage lenders, which are collateralized by a pool of mortgages held under an indenture. Prepayment of mortgages may shorten the stated maturity of the obligations and can result in a loss of premium, if any has been paid. Certain of these securities may be stripped (securities which provide only the principal or interest feature of the underlying security). The yield to maturity on an interest-only CMO is extremely sensitive not only to changes in prevailing interest rates, but also to the rate of principal payments (including prepayments) on the related underlying mortgage assets. A rapid rate of principal payments may have a material adverse effect on the Fund’s yield to maturity. If the underlying mortgage assets experience greater than anticipated prepayments of principal, the Fund may fail to fully recoup its initial investment in these securities even if the securities are rated in the highest rating categories.
 
The Fund invests in REITs and is subject to the risks associated with that industry. If the Fund holds real estate directly as a result of defaults or receives rental income directly from real estate holdings, its tax status as a regulated investment company may be jeopardized. There were no direct real estate holdings during the six months ended May 31, 2011. The Fund’s REIT holdings are also affected by interest rate changes, particularly if the REITs it holds use floating rate debt to finance their ongoing operations.
 
The Fund may invest up to 10% 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 securities. Securities eligible for resale pursuant to Rule 144A, which are determined to be liquid, are not subject to the Fund’s 10% limit on investments in illiquid securities. Rule 144A and illiquid securities have been identified on the statement of net assets.
 
11. 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.
 
(continues)       29
 

 

Notes to financial statements
 
Delaware Enhanced Global Dividend and Income Fund
 
 
 
12. Proposed Fund Merger
 
On May 19, 2011, the Fund’s Board of Trustees approved a proposal to merge Delaware Investments® Global Dividend and Income Fund, Inc. (NYSE:DGF) into the Fund. Under the terms of the proposed reorganization, the Fund would acquire substantially all of DGF’s assets in exchange for newly issued shares of common beneficial interest of the Fund. Those shares of the Fund would then be distributed pro rata to DGF’s shareholders, and DGF would subsequently be liquidated and dissolved. Common shares of DGF would be exchanged for common shares of the Fund based on the relative net asset values of each Fund’s common shares. These transactions, which are expected to be tax-free, are subject to the approval of the Agreement and Plan of Acquisition by each Fund’s shareholders. Each Fund’s Board plans to submit the proposals described above to each Fund’s shareholders at a special meeting, currently expected to take place on September 21, 2011.
 
13. Subsequent Events
 
Management has determined that no material events or transactions occurred subsequent to May 31, 2011 that would require recognition or disclosure in the Fund’s financial statements.
 
30
 

 

Other Fund information
(Unaudited)
 
Delaware Enhanced Global Dividend and Income Fund
 
Changes to portfolio management team
 
Laura A. Ostrander was appointed co-portfolio manager of the Fund on April 15, 2011. Ms. Ostrander joined Babak Zenouzi, Damon J. Andres, D. Tysen Nutt, Jr., Liu-Er Chen, Edward A. Gray, Kevin P. Loome, Roger A. Early, Thomas H. Chow, and Wayne Anglace in making day-to-day decisions for the Fund.
 
Fund management
 
Babak “Bob” Zenouzi
Senior Vice President, Chief Investment Officer — Real Estate Securities and Income Solutions (RESIS)
 
Bob Zenouzi is the lead manager for the real estate securities and income solutions (RESIS) group at Delaware Investments, which includes the team, its process, and its institutional and retail products, which he created during his prior time with the firm. He also focuses on opportunities in Japan, Singapore, and Malaysia for the firm’s global REIT product. Additionally, he serves as lead portfolio manager for the firm’s Dividend Income products, which he helped to create in the 1990s. He is also a member of the firm’s asset allocation committee, which is responsible for building and managing multi-asset class portfolios. He rejoined Delaware Investments in May 2006 as senior portfolio manager and head of real estate securities. In his first term with the firm, he spent seven years as an analyst and portfolio manager, leaving in 1999 to work at Chartwell Investment Partners, where from 1999 to 2006 he was a partner and senior portfolio manager on Chartwell’s Small-Cap Value portfolio. He began his career with The Boston Company, where he held several positions in accounting and financial analysis. Zenouzi earned a master’s degree in finance from Boston College and a bachelor’s degree from Babson College. He is a member of the National Association of Real Estate Investment Trusts and the Urban Land Institute.
 
Damon J. Andres, CFA
Vice President, Senior Portfolio Manager
 
Damon J. Andres, who joined Delaware Investments in 1994 as an analyst, currently serves as a portfolio manager for the firm’s real estate securities and income solutions (RESIS) group. He also serves as a portfolio manager for the firm’s Dividend Income products. From 1991 to 1994, he performed investment-consulting services as a consulting associate with Cambridge Associates. Andres earned a bachelor’s degree in business administration with an emphasis in finance and accounting from the University of Richmond.
 
Wayne A. Anglace, CFA
Vice President, Portfolio Manager
 
Wayne A. Anglace currently serves as a portfolio manager and trader for the firm’s convertible bond strategies. Prior to joining the firm in March 2007 as a research analyst and trader, he spent more than two years as a research analyst at Gartmore Global Investments for its convertible bond strategy. From 2000 to 2004, Anglace worked in private client research at Deutsche Bank Alex. Brown in Baltimore where he focused on equity research, and he started his financial services career with Ashbridge Investment Management in 1999. Prior to moving to the financial industry, Anglace worked as a professional civil engineer. He earned his bachelor’s degree in civil engineering from Villanova University and an MBA with a concentration in finance from Saint Joseph’s University, and he is a member of the CFA Society of Philadelphia.
 
(continues)       31
 

 

Other Fund information
(Unaudited)
 
Delaware Enhanced Global Dividend and Income Fund
 
Fund management (continued)
 
Liu-Er Chen, CFA
Senior Vice President, Chief Investment Officer — Emerging Markets and Healthcare
 
Liu-Er Chen heads the firm’s global Emerging Markets team, and he is also the portfolio manager for Delaware Healthcare Fund, which launched in September 2007. Prior to joining Delaware Investments in September 2006 in his current position, he spent nearly 11 years at Evergreen Investment Management Company, where he most recently served as managing director and senior portfolio manager. He co-managed the Evergreen Emerging Markets Growth Fund from 1999 to 2001, and became the Fund’s sole manager in 2001. He also served as the sole manager of the Evergreen Health Care Fund since its inception in 1999. Chen began his career at Evergreen in 1995 as an analyst covering Asian and global healthcare stocks, before being promoted to portfolio manager in 1998. Prior to his career in asset management, Chen worked for three years in sales, marketing, and business development for major American and European pharmaceutical and medical device companies. He is licensed to practice medicine in China and has experience in medical research at both the Chinese Academy of Sciences and Cornell Medical School. He holds an MBA with a concentration in management from Columbia Business School.
 
Thomas H. Chow, CFA
Senior Vice President, Senior Portfolio Manager
 
Thomas H. Chow is a member of the firm’s taxable fixed income portfolio management team, with primary responsibility for portfolio construction and strategic asset allocation in investment grade credit exposures. He is the lead portfolio manager for Delaware Corporate Bond Fund and Delaware Extended Duration Bond Fund, as well as several institutional mandates. His experience includes significant exposure to asset liability management strategies and credit risk opportunities. Prior to joining Delaware Investments in 2001 as a portfolio manager working on the Lincoln General Account, he was a trader of high grade and high yield securities, and was involved in the portfolio management of collateralized bond obligations (CBOs) and insurance portfolios at SunAmerica/AIG from 1997 to 2001. Before that, he was an analyst, trader, and portfolio manager at Conseco Capital Management from 1989 to 1997. Chow received a bachelor’s degree in business analysis from Indiana University, and he is a Fellow of Life Management Institute.
 
Roger A. Early, CPA, CFA, CFP
Senior Vice President, Co-Chief Investment Officer – Total Return Fixed Income Strategy
 
Roger A. Early rejoined Delaware Investments in March 2007 as a member of the firm’s taxable fixed income portfolio management team, with primary responsibility for portfolio construction and strategic asset allocation. During his previous time at the firm, from 1994 to 2001, he was a senior portfolio manager in the same area, and he left Delaware Investments as head of its U.S. investment grade fixed income group. In recent years, Early was a senior portfolio manager at Chartwell Investment Partners and Rittenhouse Financial and served as the chief investment officer for fixed income at Turner Investments. Prior to joining Delaware Investments in 1994, he worked for more than 10 years at Federated Investors where he managed more than $25 billion in mutual fund and institutional portfolios in the short-term and investment grade markets. He left the firm as head of institutional fixed income management. Earlier in his career, he held management positions with the Federal Reserve Bank, PNC Financial, Touche Ross, and Rockwell International. Early earned his bachelor’s degree in economics from The Wharton School of the University of Pennsylvania and an MBA with concentrations in finance and accounting from the University of Pittsburgh. He is a member of the CFA Society of Philadelphia.
 
32
 

 

Edward A. “Ned” Gray, CFA
Senior Vice President, Chief Investment Officer — Global and International Value Equity
 
Ned Gray joined Delaware Investments in June 2005 in his current position, developing the firm’s Global and International Value Equity team, from Arborway Capital, which he co-founded in January 2005. He previously worked in the investment management business at Thomas Weisel Asset Management, and ValueQuest, which was acquired by TWAM in 2002. At ValueQuest, which he joined in 1987, Gray served as a senior investment professional with responsibilities for portfolio management, security analysis, quantitative research, performance analysis, global research, back office/investment information systems integration, trading, and client and consultant relations. Prior to ValueQuest, he was a research analyst at the Center for Competitive Analysis. Gray received his bachelor’s degree in history from Reed College and a master of arts in law and diplomacy, in international economics, business and law from Tufts University’s Fletcher School of Law and Diplomacy.
 
Kevin P. Loome, CFA
Senior Vice President, Senior Portfolio Manager, Head of High Yield Investments
 
Kevin P. Loome is head of the High Yield fixed income team, responsible for portfolio construction and strategic asset allocation of all high yield fixed income assets. Prior to joining Delaware Investments in August 2007 in his current position, Loome spent 11 years at T. Rowe Price, starting as an analyst and leaving the firm as a portfolio manager. He began his career with Morgan Stanley as a corporate finance analyst in the New York and London offices. Loome received his bachelor’s degree in commerce from the University of Virginia and earned an MBA from the Tuck School of Business at Dartmouth.
 
D. Tysen Nutt Jr.
Senior Vice President, Senior Portfolio Manager, Team Leader
 
D. Tysen Nutt Jr. is senior portfolio manager and team leader for the firm’s Large-Cap Value team. Before joining Delaware Investments in 2004 as senior vice president and senior portfolio manager, Nutt led the U.S. Active Large-Cap Value team within Merrill Lynch Investment Managers, where he managed mutual funds and separate accounts for institutions and private clients. He departed Merrill Lynch Investment Managers as a managing director. Prior to joining Merrill Lynch Investment Managers in 1994, Nutt was with Van Deventer & Hoch where he managed large-cap value portfolios for institutions and private clients. He began his investment career at Dean Witter Reynolds, where he eventually became vice president, investments. Nutt earned his bachelor’s degree from Dartmouth College, and he is a member of the New York Society of Security Analysts and the CFA Institute.
 
Laura A. Ostrander
Vice President, Senior Portfolio Manager
 
Laura A. Ostrander joined Delaware Investments in August 2010 as a senior portfolio manager specializing in emerging markets debt. Before joining the firm, she worked at Columbia Management, serving as lead portfolio manager on the firm’s multi-sector product since 2002, and as co-portfolio manager of the product since 1999. As lead portfolio manager, Ostrander was responsible for the overall asset allocation across U.S. government, emerging market, developed market foreign government, and high yield corporate bonds, and was directly responsible for the investment of assets in the U.S. and foreign sectors of the product. She was head of the Columbia Management international team from 1996 until her departure. Earlier on, Ostrander held portfolio management roles at American Express Financial, American Express Bank, and Offitbank. She has more than 20 years of experience in the financial services industry and more than 10 years of experience managing global fixed income portfolios. She earned her bachelor’s degree in economics from St. John Fisher College.
 
(continues)       33
 

 

Other Fund information
(Unaudited)
 
Delaware Enhanced Global Dividend and Income Fund
 
Change in independent registered public accounting firm
 
Due to independence matters under the Securities and Exchange Commission’s auditor independence rules relating to the January 4, 2010 acquisition of Delaware Investments (including DMC and DSC) by Macquarie Group, Ernst & Young LLP (E&Y) has resigned as the independent registered public accounting firm for Delaware Enhanced Global Dividend and Income Fund (the Fund) effective May 20, 2010. At a meeting held on May 20, 2010, the Board of Trustees of the Fund, upon recommendation of the Audit Committee, selected PricewaterhouseCoopers LLP (PwC) to serve as the independent registered public accounting firm for the Fund for the fiscal year ending November 30, 2010. During the fiscal years ended November 30, 2009 and 2008, E&Y’s audit reports on the financial statements of the Fund did not contain any adverse opinion or disclaimer of opinion, nor were they qualified or modified as to uncertainty, audit scope, or accounting principles. In addition, there were no disagreements between the Fund and E&Y on accounting principles, financial statements disclosures or audit scope, which, if not resolved to the satisfaction of E&Y, would have caused them to make reference to the disagreement in their reports. Neither the Fund nor anyone on its behalf has consulted with PwC at any time prior to their selection with respect to the application of accounting principles to a specified transaction, either completed or proposed or the type of audit opinion that might be rendered on the Fund’s financial statements.
 
34
 

 

About the organization
 
This semiannual report is for the information of Delaware Enhanced Global Dividend and Income Fund shareholders. 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 Fund will fluctuate so that shares, when sold, may be worth more or less than their original cost.
 
Notice is hereby given in accordance with Section 23(c) of the Investment Company Act of 1940 that the Fund may, from time to time, purchase shares of its common stock on the open market at market prices.
 
Board of Directors
Affiliated officers
Contact information
     
Patrick P. Coyne
Chairman, President,
and Chief Executive Officer
Delaware Investments® Family of Funds
Philadelphia, PA
 
Thomas L. Bennett
Private Investor
Rosemont, PA
 
John A. Fry
President
Drexel University
Philadelphia, PA
 
Anthony D. Knerr
Founder and Managing Director
Anthony Knerr & Associates
New York, NY
 
Lucinda S. Landreth
Former Chief Investment Officer
Assurant Inc.
Philadelphia, PA
 
Ann R. Leven
Consultant
ARL Associates
New York, NY
 
Thomas F. Madison
President and Chief Executive Officer
MLM Partners Inc.
Minneapolis, MN
 
Janet L. Yeomans
Vice President and Treasurer
3M Corporation
St. Paul, MN
 
J. Richard Zecher
Founder
Investor Analytics
Scottsdale, AZ
David F. Connor
Vice President, Deputy General Counsel,
and Secretary
Delaware Investments Family of Funds
Philadelphia, PA
 
Daniel V. Geatens
Vice President and Treasurer
Delaware Investments Family of Funds
Philadelphia, PA
 
David P. O’Connor
Senior Vice President, General Counsel,
and Chief Legal Officer
Delaware Investments Family of Funds
Philadelphia, PA
 
Richard Salus
Senior Vice President and
Chief Financial Officer
Delaware Investments Family of Funds
Philadelphia, PA
 
The Fund files its complete schedule of portfolio holdings with the Securities and Exchange Commission (SEC) 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; (ii) on the Fund’s website at www.delawareinvestments.com; and (iii) on the SEC’s website at www.sec.gov. The Fund’s Forms N-Q may be reviewed and copied at the SEC’s Public Reference Room in Washington, DC; 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 website at www.delawareinvestments.com; and (ii) on the SEC’s website at www.sec.gov.
 
Investment manager
Delaware Management Company
a series of Delaware Management
Business Trust
Philadelphia, PA
 
Principal office of the Fund
2005 Market Street
Philadelphia, PA 19103-7094
 
Independent registered public
accounting firm
PricewaterhouseCoopers LLP
Two Commerce Square
Suite 1700
2001 Market Street
Philadelphia, PA 19103-7042
 
Registrar and stock transfer
agent
BNY Mellon Shareowner Services
480 Washington Blvd.
Jersey City, NJ 07310
800 851-9677
 
For securities dealers
and financial institutions
representatives
800 362-7500
 
Website
www.delawareinvestments.com
Delaware Investments, a member of Macquarie Group, refers to Delaware Management Holdings, Inc. and its subsidiaries. Macquarie Group refers to Macquarie Group Limited and its subsidiaries and affiliates worldwide.
 
Your reinvestment options
Delaware Enhanced Global Dividend and Income Fund offers an automatic dividend reinvestment program. If you would like to change your reinvestment option, and shares are registered in your name, contact BNY Mellon Shareowner Services, at 800 851-9677. You will be asked to put your request in writing. If you have shares registered in “street” name, contact the broker/dealer holding the shares or your financial advisor.
 
Audit committee member
 
35
 

 

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
 
     Applicable to Form N-CSRs filed after fiscal years ending on or after December 31, 2005.
 
     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 Enhanced Global Dividend and Income Fund
 
PATRICK P. COYNE
By:    Patrick P. Coyne
Title: Chief Executive Officer
Date: July 25, 2011
 
     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 25, 2011
 
RICHARD SALUS
By:    Richard Salus
Title: Chief Financial Officer
Date: July 25, 2011