July 1, 1998
DELAWARE GROUP FOUNDATION FUNDS
Income Portfolio Institutional
Balanced Portfolio Institutional
Growth Portfolio Institutional
SUPPLEMENT TO PROSPECTUS
DATED DECEMBER 31, 1997
(AS REVISED JANUARY 23, 1998)
1. The following supplements or amends the information that
relates to the table which discusses the Underlying Funds located
at the bottom of page 3 of the Prospectus:
Each Portfolio, as a shareholder in the Underlying
Funds, will indirectly bear its proportionate share of any
management fees and other expenses paid by the Underlying
Funds. These fees and expenses, which are embedded in the
prices of the Underlying Fund shares purchased by the
Portfolios, are in addition to the fees and expenses of the
Portfolios set forth in the Prospectus in the tables entitled
Shareholder Transaction Expenses and Annual Operating
Expenses. The expense ratio set forth for each of the
Institutional Class shares of the Underlying Funds includes
management and other fees. The expense ratio for New
Pacific Fund has changed from 1.50% to 1.70%.
2. The Portfolio's Semi-Annual Report may be obtained by
calling 800-523-1918.
3. The percentage target range for the Balanced Portfolio's
investments in international equity securities has been increased
from 5%-15% to 5%-20%. The table entitled Percentage Ranges of
Investment in Asset Classes on page 7 of the Prospectus is replaced
with the following:
Percentage Ranges of Investment in Asset Classes
Asset Class Income Balanced Growth
Portfolio Portfolio Portfolio
U.S. Equity 20%-50% 35%-65% 45%-75%
International Equity 0%-10% 5%-20% 10%-30%
Fixed Income 45%-75% 25%-55% 5%-35%
Money Market 0%-35% 0%-35% 0%-35%
4. The following sentence is added to the beginning of the third
paragraph under Investment Manager on page 29 of the Prospectus:
The Manager is a series of Delaware Mangement Business Trust.
The Manager changed its form of organization from a
corporation to a business trust on March 1, 1998.
5. The following sentence is added to the end of the first
paragraph under Options on page 38 of the Prospectus:
With respect to the portfolios, the Manager will employ
these techniques in an attempt to protect appreciation
attained, to offset capital losses and to take
advantage of the liquidity available in the option
markets.
6. The following paragraph is inserted immediately beneath the
heading Futures Contracts and Options on Futures Contracts on page 39
of the Prospectus:
Each Portfolio may enter into futures contracts on
stocks, stock indices, interest rates and foreign
currencies, and purchase or sell options on such
futures contracts. These activities will not be
entered into for speculative purposes, but rather for
hedging purposes and to facilitate the ability to
quickly deploy into the stock market a Portfolio's
positions in cash, short-term debt securities and other
money market instruments, at times when such
Portfolio's assets are not fully invested in equity
securities. Such positions will generally be
eliminated when it becomes possible to invest in
Underlying Funds or directly in securities that are
appropriate for the Portfolio involved.
7. Pursuant to an Order received from the Securities and
Exchange Commission on April 6, 1998, the Portfolios may, to the
extent consistent with their respective investment objectives,
invest directly in the same securities and employ the same
investment strategies as any of the Underlying Funds.
8. As with other mutual funds, financial and business
organizations and individuals around the world, the Portfolios
and the Underlying Funds could be adversely affected if the
computer systems used by their service providers do not properly
process and calculate date-related information from and after
January 1, 2000. This is commonly known as the "Year 2000
Problem." The Trust and the Underlying Funds are taking steps to
obtain satisfactory assurances that their major service providers
are taking steps reasonably designed to address the Year 2000
Problem with respect to the computer systems that such service
providers use. There can be no assurances that these steps will
be sufficient to avoid any adverse impact on the business of any
of the Portfolios or the Underlying Funds.
Several European countries are participating in the European
Economic and Monetary Union, which will establish a common
European currency for participating countries. This currency
will commonly be known as the "Euro." It is anticipated that
each such participating country will replace its existing
currency with the Euro on January 1, 1999. Additional European
countries may elect to participate after that date. The
Portfolios and the Underlying Funds investing in securities of
participating countries could be adversely affected if the
computer systems used by their major service providers are not
properly prepared to handle the implementation of this single
currency or the adoption of the Euro by additional countries in
the future. The Trust and the Underlying Funds are taking steps
to obtain satisfactory assurances that their major service
providers are taking steps reasonably designed to address these
matters with respect to the computer systems that such service
providers use. There can be no assurances that these steps will
be sufficient to avoid any adverse impact on the business of any
Portfolio or Underlying Fund.
