<PAGE>
DELAWARE GROUP
A Tradition of Sound Investing Since 1929
(PHOTO OF COLONIAL OBJECTS)
1995
ANNUAL
REPORT
DELAWARE GROUP
CASH RESERVE FUND
TABLE OF CONTENTS
Letter to Shareholders 1
Portfolio Manager's Fiscal Year Review 2
Controlling Fund Expenses at the Core of New Programs 5
Delaware Cash Reserve Yield Has Climbed 6
Financial Statements 7
CASH RESERVE FUND INVESTMENT OBJECTIVE
To provide current income by investing in high-quality money market instruments
with maturities of no more than 13 months. Though there is no guarantee that
this goal will be met, the Fund strives to maintain a stable net asset value of
$1.00.
DELAWARE GROUP
A TRADITION OF SOUND INVESTING
Delaware's investment experience dates back to 1929. Our first mutual fund
was established in 1938. Headquartered in Philadelphia with an affiliate in
London, our team includes some of the best minds in the money management
business. Delaware International Advisers Ltd., our London-based
international affiliate, was established in 1990.
With some of the nation's largest public and private pension plans,
foundations and endowments as clients, Delaware Group manages mutual funds with
the same time-tested, disciplined strategies demanded by institutional
investors. With over 60 years of investment management standing behind us -- we
have experience you can count on and a commitment to excellent service.
Delaware manages some $26 billion in mutual funds and institutional investment
advisory accounts. We measure our success by the financial success and
satisfaction of our nearly 500,000 shareholders.
<PAGE>
LETTER TO SHAREHOLDERS
(PHOTO OF COLONIAL OBJECT)
May 1, 1995
Dear Shareholder,
Delaware Cash Reserve's 17-year lifetime has included a wide variety of economic
and interest rate cycles, and through each one, your Fund has achieved the goals
it originally set out to accomplish -- preserving principal and providing
shareholders with liquidity and a competitive level of dividend income.
The current economic situation, heavily influenced by the Federal Reserve
Board's actions over the past year, has enabled money market funds, including
Delaware Cash Reserve, to provide higher income for shareholders than in recent
years. Reversing course after nearly a five-year decline in interest rates, the
Federal Reserve Board ('the Fed'), our nation's central bank, boosted short-term
interest rates sharply during 1994 and into 1995 in an effort to control the
growth of the economy and keep the pace of inflation in check. Five of the seven
recent interest rate increases occurred during your Fund's 1994 fiscal year. At
the start of 1994, the influential federal funds rate, the interest rate banks
use to make short-term loans to each other, was 3.0%. At the end of the fiscal
year, it stood at 6.0%, double what it was just a little over a year ago.
DELAWARE CASH RESERVE CLASS A*
- ------------------------------
Total Return for Fiscal Year
Ended March 31, 1994
All Distributions Reinvested +4.01%
Seven-Day Yield at Fiscal Year-End,
Calculated in Accordance with SEC Regulations
1995 5.13%
1994 2.50%
Though many investments lost value as they adjusted to the Fed's actions,
money market funds were one of the few types of investments to enjoy almost
immediate rewards. With short-term interest rates higher than they have been for
the last several years, Delaware Cash Reserve has been able to provide
shareholders with an increasingly attractive yield. As shown in the chart to the
right, the Fund's yield for the seven-day period ending March 31, 1995 was
5.13%, more than twice the seven-day yield at fiscal year-end 1994.
In a market review which begins on the following page, your Fund's manager,
Gary A. Reed, explains how the movement of short-term interest rates has
affected money market funds like Delaware Cash Reserve. You'll also learn how we
continue working to control the Fund's expenses. Following these discussions are
the financial statements for the Fund.
Once again, thank you for choosing Delaware Group to invest your money. We
appreciate the opportunity you have given us to help you meet your short-term
investing needs through Delaware Cash Reserve. We look forward to serving your
investment needs throughout 1995 and in the years to come.
Sincerely,
Wayne A. Stork Brian F. Wruble
- ---------------------------- -------------------------------------
Wayne A. Stork Brian F. Wruble
Chairman, Board of Directors President and Chief Executive Officer
Delaware Group Cash Reserve Delaware Group Cash Reserve
*For Consultant and B Class information and additional performance
information for Class A, please see page 6. Unlike U.S. Government securities,
shares of money market funds are not insured or guaranteed by the U.S.
Government. Yields will fluctuate depending on market conditions.
<PAGE>
PORTFOLIO MANAGER'S FISCAL YEAR REVIEW
(PHOTO OF COLONIAL OBJECT)
At the beginning of fiscal year 1994, when money market yields were relatively
low, it seemed unlikely that the coming months held strong prospects for these
funds. However, several crosscurrents affected investment performance over the
past 12-month period, and as a result, cash equivalent investments have done
well relative to other asset classes. The very short-term securities held in
prime money market funds, such as Delaware Cash Reserve, help the Fund maintain
a constant $1.00 net asset value in both falling and rising interest rate
environments. This stability of principal is a key reason investors seek out
money market funds, and we've seen this become particularly important in the
higher interest rate climate as longer term bond funds have suffered.
Although there had been concerns over the past several years that the economy
was recovering too slowly, 1994 was the year to dispel those worries. Gross
Domestic Product recovered strongly, causing the Federal Reserve to begin
focusing on inflation. Its response was to raise short-term interest rates, as
mentioned in the opening letter. By raising the cost of borrowing money for
businesses and consumers, the Fed attempted to restrain economic growth. And, as
was intended, higher rates indeed slowed economic activity. This was evident by
the end of the first quarter of 1995, when the economy pulled back from its
earlier pace of growth, and long-term bond rates started to come down. Several
factors led to last year's decline in bond values. Increased uncertainty about
inflation and the economy's growth surely contributed to the difficulties.
However, a measure of the uncertainty that arose during the past year was due to
extraordinary events such as the publicized abuse of complicated financial
derivatives in hedge funds. Through these uncertain times, money market funds
stood forward as the asset of choice.
DELAWARE CASH RESERVE VS. VARIOUS BOND FUNDS
Total Return
3/31/94 to 3/31/95
------------------
Delaware Cash Reserve Class A +4.01%
Lipper Short U.S. Government Fund Category +2.90%
(123 funds, maturities of five years or less)
Lipper General U.S. Government Fund Category +2.95%
(151 funds, intermediate and longer term maturities)
Lipper General Global Income Fund Category +2.41%
(124 funds)
Lipper High-Yield Corporate Bond Fund Category +1.55%
(99 funds)
Returns for Delaware Cash Reserve and Lipper categories assume reinvestment of
all distributions. Returns for Lipper categories do not account for sales
charges which may apply to funds in these categories.
It is interesting to note just how well money market funds performed last year
in relation to other fixed-income fund categories. The table to the right shows
your Fund's annual return compared to Lipper fixed-income categories. Of course,
this is a very short time period and the other fixed-income investments in the
table are better suited to long-term goals. Thus, they shouldn't be judged by
one-year performance. While longer-term fixed income investments can offer
higher potential rewards during more typical market environments, they also
involve higher levels of risk. Better suited for short-term goals, money market
funds are more sheltered from market volatility and therefore, investors don't
have to worry about needing their money at a time when their investment value
may have declined.
<PAGE>
POSITIONING THE PORTFOLIO FOR MAXIMUM BENEFIT
In a rising interest rate environment, there are special factors that a money
market fund manager must take into account. For example, with the other
professionals on my team, I may make the decision to change the Fund's 'average
maturity,' which is the average length of time before the principal amount of
the securities in the portfolio become due and payable. Because they all mature
at different times, we are constantly buying additional securities to replace
those that have matured.
Depending on the current economic and interest rate environment, average
maturity for a money market fund can be very short, or as long as 90 days (the
maximum limit mandated by the Securities and Exchange Commission). At the fiscal
year-end, the average maturity of Delaware Cash Reserve was approximately 38
days, considerably shorter than the 53-day average maturity of one year ago.
Taking a more defensive posture, because we anticipated many of the Fed's
increases, we have shortened average maturity, which allows us more buying
opportunities. This way, we are better able to take advantage of higher yields
as they become available. We began shortening the average maturity about the
time rates started to rise, early in 1994, a strategic positioning that has
contributed to the Fund's higher yield. The chart to the right illustrates the
upward movement of the federal funds rate over the past several years. As you
can see, the increases of this rate, which sets the pace for many other
short-term rates, occurred in February, March, April, May, August and November
of 1994, and again in February 1995, rising from 3.0% to 6.0%.
FEDERAL FUNDS RATE MOVEMENT, 1992-1995
Sept. '92 3.0%
1993 (No Movement)
Feb. '94 3.25%
Mar. '94 3.5%
Apr. '94 3.75%
Aug. '94 4.75%
Nov. '94 5.5%
Feb. '95 6.0%
This chart is not intended to represent performance of Delaware Cash Reserve or
any other managed fund.
THE COMPOSITION OF DELAWARE CASH RESERVE'S PORTFOLIO
As you know, money market funds strive to keep a constant share price of $1.00,
unlike other types of mutual funds, whose net asset value will fluctuate up and
down - sometimes very sharply - as the stock and bond markets vacillate. In
order to preserve your principal, Delaware Cash Reserve invests in short-term
securities of the highest quality. Our investment choices currently range from
bank certificates of deposit and commercial paper to government obligations and
floating rate notes.
As of March 31, 1995, Delaware Cash Reserve had the largest portion of its net
assets, approximately 39%, invested in commercial paper, which represents
short-term loans issued by corporations for a period of time ranging from
overnight to 270 days. About 10% of the portfolio is held in jumbo certificates
of deposit. Unlike the CDs available to individuals at their local banks, the
Fund's CDs have investment minimums of about $1 million, more competitive yields
and are not FDIC insured. Short-term time deposits, similar to CDs, account for
another 21% of net assets. Floating rates notes, which can change their level of
yield before the notes mature, following either the upward or downward movement
of interest rates, comprise about 16% of net assets. U.S. Government agency
obligations account for nearly 9% of net assets and the remaining 5% is held in
cash reserves.
(PHOTO OF GARY A. REED)
A FOCUS ON HIGH QUALITY
Because we understand that Delaware Cash Reserve shareholders are primarily
concerned with protecting the principal value of their money, we invest the
Fund's money very conservatively. In managing the Fund's portfolio, we have
always adhered to the highest principles of quality. In fact, in terms of credit
quality, our investment disciplines are generally more rigid than those laid out
for money market funds by the Securities and Exchange Commission. As a matter of
investment principle, we have never sacrificed quality to reach for higher
yields. It is our belief that the few extra points of yield attainable by
stretching beyond the limitations we have set are simply not worth the risks
they entail.
Your Fund unquestionably 'goes the extra mile' in offering a very high quality
money market fund investment. We made the decision several years ago to take an
even more conservative position than what the prospectus allows the Fund. Now
Delaware Cash Reserve holds commercial paper with the highest ratings, A-1 by
Standard & Poor's or P-1 by Moody's. This means that your Fund is invested in
the top quality tier of securities available to money market funds. Of course,
there is no guarantee that any prime money market fund, such as Delaware Cash
Reserve, is free from credit and maturity risk. That's why there is no guarantee
of principal as offered by the FDIC on bank savings accounts and CDs. However,
you can be assured that your investment is in one of the very highest quality
prime money market funds available today.
<PAGE>
LOOKING FORWARD
Most economic indicators suggest the economy is still growing. Production is
high and inflation is relatively low at the current time. However, we believe
the Fed will continue to monitor underlying pressures in the economy and be
prepared to increase interest rates again if there is solid evidence of price
increases. If we see the economy starting to pick up speed, it is likely that
the Fed will 'tighten' once again, causing interest rates to rise. But the other
scenario is also possible. If it looks like the economy is headed to a
recession, the Fed may 'ease' its monetary policy, which would lower rates.
At the current time, we believe the interest rate situation is stabilized and
that the yield levels available make 'good sense' for the environment we are
experiencing. Though the Fed has not made any recent indication of its
intentions, longer term bond yields have declined of their own accord over the
past few months. Last year bonds led the Fed in 'tightening,' as rates rose even
before the Fed took action. Since the bond market's actions often precede the
Fed's rate movements, this recent 'easing' could be an indication that the Fed
will once again reverse its monetary policy. Though there is, of course, no
guarantee that money market investors can expect substantial inflation-adjusted,
after-tax returns throughout 1995 and into the coming years, today's yields are
certainly an improvement over recent years, in both absolute and
inflation-adjusted terms.
Gary A. Reed
- -------------------------
Gary A. Reed
Vice President
Senior Portfolio Manager
Delaware Cash Reserve
CONTROLLING FUND EXPENSES AT THE CORE OF NEW PROGRAMS
(PHOTO OF COLONIAL OBJECT)
Continuing with our goal to control fund expenses as the cost of doing business
rises, we have proceeded with several cost-saving measures we initiated last
year.
1) ENCOURAGED USE OF MONEYLINE(SM). New technological advances allow
shareholders to receive their dividends, capital gains or withdrawals through an
automatic deposit system that can send payments directly to checking or savings
accounts. Using this free service helps to reduce fund expenses because costs
for processing and mailing checks are eliminated. While this is of course good
for the Fund and ultimately its shareholders, it can also make investing much
more convenient for you. Many of our shareholders who already use MoneyLine find
it helpful because they don't need to wait for checks to arrive through the mail
and then take them to the bank to deposit or cash. The money moves directly into
the designated account, eliminating those two steps. This automatic transaction
is fast, easy, convenient and free. We can help you get MoneyLine working on
your account. Please call us at 800-523-4640 (nationwide) or 215-988-1333 (in
Philadelphia) and ask for the MoneyLine Authorization Agreement.
2) NEW STATEMENT FREQUENCY SCHEDULE. At year-end we began sending transaction
confirmation statements on a monthly basis, rather than confirming each
redemption, investment or exchange as it was made. If no transactions are made,
statements are sent on a quarterly rather than a monthly basis. Shareholders can
obtain current information about yields, account balances and distribution
payments through Delaphone(R), a toll-free, automated phone service
(800-362-FUND). Now that technology offers shareholders easier, faster ways to
receive account information, extra paperwork has become unnecessary. These steps
save thousands of dollars each month in processing, printing and mailing fees.
3) MINIMUM BALANCE PROGRAM. In April we embarked upon a new program which we
expect to result in cost savings over the long term. Under the new program,
shareholders with non-retirement Delaware Cash Reserve accounts, who have had an
account balance under the Fund's minimum of $1,000 for 90 days or more, will be
charged $3.00 per month. This will help to defray the Fund's high cost for
administering small accounts. Low balance accounts are an expense burden to the
Fund and tend to negatively impact all shareholders.
We believe these measures will prove effective in helping to control the costs
of managing and administering the Fund, which can ultimately translate into
higher yields for all Delaware Cash Reserve shareholders.
<PAGE>
CONTINUING WITH OUR GOAL TO CONTROL FUND EXPENSES AS THE COST OF DOING
BUSINESS RISES, WE HAVE PROCEEDED WITH SEVERAL COST-SAVING MEASURES WE
INITIATED LAST YEAR.
Delaware Cash Reserve Yield Has Climbed
(PHOTO OF COLONIAL OBJECT)
We are pleased at the effects the market climate, interest rate increases and
economic environment has had on Delaware Cash Reserve's yield. The chart below
shows how your Fund's yield has risen over the past 12 months. As you can see,
the yield as of March 31, 1995, is more than double what it was at the end of
the last fiscal year.
No matter what the future interest rate environment holds in store for us,
Delaware Cash Reserve will aim to offer the highest quality holdings consistent
with its objectives; a diversified portfolio and full-service management by a
professional investment staff; prompt liquidity; and the maximum current income
consistent with maintaining a stable share price of $1.00.
A LOOK AT DELAWARE CASH RESERVE'S YIELD MOVEMENT
Mar. '94 2.50%
Apr. '94 2.72%
May '94 3.08%
June '94 3.17%
July '94 3.44%
Aug. '94 3.62%
Sept. '94 3.89%
Oct. '94 4.01%
Nov. '94 4.45%
Dec. '94 4.88%
Jan. '95 4.85%
Feb. '95 5.09%
Mar. '95 5.13%
Apr. '95 5.17%
Chart indicates movement of seven-day yield of Delaware Cash Reserve Class A.
These yields take into account all charges and fees. Past performance is not a
guarantee of future results. An investment in a money market fund is neither
insured nor guaranteed by the U.S. Government.
THE GOAL OF A MONEY MARKET FUND IS TO MAINTAIN A CONSTANT SHARE PRICE OF $1.
HOWEVER, THERE CAN BE NO GUARANTEE THAT THIS GOAL WILL BE MET. YIELD
FLUCTUATES AND IS NOT GUARANTEED.
DELAWARE CASH RESERVE FUND
As of March 31, 1995
CLASS A
Average Annual Total Returns
10 Years +5.78%
Five Years +4.35%
One Year +4.01%
Seven-Day Yield (as of 3/31/95) +5.13%
CONSULTANT CLASS
Average Annual Total Returns
10 Years +5.57%
Five Years +4.09%
One Year +3.75%
Seven-Day Yield (as of 3/31/95) +4.88%
CLASS B*
Aggregate Total Returns
Lifetime +2.83%
Excluding Deferred Sales Charge
Lifetime -1.17%
Including Deferred Sales Charge
Seven-Day Yield (as of 3/31/95) +4.13%
<PAGE>
PERFORMANCE DATA QUOTED REPRESENTS PAST PERFORMANCE. RETURN AND YIELD WILL
FLUCTUATE.
Consultant Class performance after March 10, 1988, reflects the impact of 12b-1
distribution fees.
*Class B shares are subject to a 1% annual distribution and service fee and
will be subject to a deferred sales charge if redeemed before the end of the
sixth year.
Delaware Cash Reserve Class B, first introduced May 2, 1994, is only available
as part of an overall investment program using other Class B funds. Direct
investment into Delaware Cash Reserve Class B may only be made when establishing
a Wealth Builder plan.
FINANCIAL STATEMENTS
DELAWARE GROUP CASH RESERVE, INC.*
STATEMENT OF NET ASSETS
MARCH 31, 1995
PRINCIPAL
AMOUNT VALUE
--------- -----
COMMERCIAL PAPER - 39.12%
FINANCIAL SERVICES - 19.13%
ABN AMRO North American Finance,
Chicago 6.13% 7/10/95 ..................... $10,000,000 $ 9,829,722
ABN AMRO North American Finance,
Chicago 6.22% 8/10/95 ..................... 10,000,000 9,773,661
Bayerische Landesbank Girozentrale
5.96% 4/24/95 ............................. 10,000,000 9,961,922
Bayerische Landesbank Girozentrale
6.00% 5/1/95 .............................. 10,000,000 9,950,000
Bayerische Vereinsbank
6.00% 4/24/95 ............................. 10,000,000 9,961,667
Deutsche Bank Financial
5.96% 4/24/95 ............................. 10,000,000 9,961,922
General Electric Capital
5.95% 4/3/95 .............................. 10,000,000 9,996,694
Met Life Funding 6.00% 4/14/95 ............ 10,000,000 9,978,333
SAFECO Credit Co., Inc.
6.10% 5/22/95 ............................. 12,500,000 12,391,979
SAFECO Credit Co., Inc.
6.05% 6/6/95 .............................. 6,000,000 5,933,450
SAFECO Credit Co., Inc.
6.05% 6/14/95 ............................. 2,000,000 1,975,128
USAA Capital 5.97% 4/17/95 ................ 10,000,000 9,973,467
Westdeutsche Landesbank
Girozentrale, New York
6.00% 4/24/95 ............................. 10,000,000 9,961,667
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TOTAL FINANCIAL SERVICES .................. 119,649,612
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------------------------------
* This Fund is
known and does
business as
Delaware Cash
Reserve
- -------------------------------
<PAGE>
INDUSTRIAL - 7.33%
PHH Corp. 5.98% 4/6/95 .................... 10,000,000 9,991,694
PHH Corp. 6.00% 4/11/95 ................... 10,000,000 9,983,333
Pitney Bowes 5.97% 4/25/95 ................ 8,200,000 8,167,364
Sara Lee 6.34% 11/14/95 ................... 8,000,000 7,680,182
Schering-Plough 5.75% 4/3/95 .............. 10,000,000 9,996,806
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TOTAL INDUSTRIAL .......................... 45,819,379
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MORTGAGE BANKERS AND BROKERS -
12.66%
CS First Boston Inc. 6.23% 7/5/95 ......... 10,000,000 9,835,597
Goldman Sachs Group
6.10% 6/1/95 .............................. 10,000,000 9,896,639
Goldman Sachs Group
6.07% 7/20/95 ............................. 10,000,000 9,814,528
COMMERCIAL PAPER (Continued)
MORTGAGE BANKERS AND BROKERS - (Continued)
Merrill Lynch & Co. 6.05% 4/3/95 .......... $ 10,000,000 $ 9,996,639
Merrill Lynch & Co. 6.28% 8/7/95 .......... 10,000,000 9,776,711
Morgan Stanley Group, Inc.
6.45% 4/3/95 .............................. 10,000,000 9,996,417
Morgan Stanley Group, Inc.
6.00% 4/10/95 ............................. 10,000,000 9,985,000
Morgan Stanley Group, Inc.
6.03% 5/22/95 ............................. 10,000,000 9,914,575
------------
Total Mortgage Bankers and
Brokers .................................. 79,216,106
------------
TOTAL COMMERCIAL PAPER .................... 244,685,097
- ------------
CERTIFICATES OF DEPOSIT - 9.59%
EURO-CERTIFICATES OF DEPOSIT -
3.20%
Bank of Nova Scotia 6.25% 4/28/95.......... 10,000,000 10,000,712
Morgan Guaranty Trust Company
of New York 6.61% 7/31/95 ................. 10,000,000 10,000,976
------------
TOTAL EURO-CERTIFICATES OF DEPOSIT ........ 20,001,688
------------
YANKEE CERTIFICATES OF DEPOSIT -
6.39%
Bayerische Hypotheken Und
Wechsel Bank, New York
6.08% 5/22/95 ............................. 10,000,000 10,000,140
Bayerische Hypotheken Und
Wechsel Bank, New York
6.11% 5/22/95 ............................. 10,000,000 10,000,125
Commerzbank, New York
6.16% 6/6/95 .............................. 10,000,000 9,999,639
Societe Generale, New York
6.21% 5/15/95 ............................. 10,000,000 10,000,120
------------
TOTAL YANKEE CERTIFICATES OF
DEPOSIT .................................. 40,000,024
------------
TOTAL CERTIFICATES OF
DEPOSIT ................................... 60,001,712
------------
<PAGE>
FLOATING RATE NOTES+ - 15.91%
Boatmen's National Bank, St. Louis
Floating Rate Medium-Term Note
6.35% 4/3/95 .............................. 5,000,000 5,000,000
Federal Farm Credit Bank Floating
Rate Medium-Term Note
6.20% 5/9/95 ............................. 10,000,000 9,995,871
Federal Home Loan Bank Floating
Rate Note 6.20% 4/3/95 .................... 10,000,000 9,998,001
General Electric Capital Floating
Rate Note 6.35% 5/9/95 .................... 10,000,000 10,000,000
Merrill Lynch Floating Rate
Medium-Term Note
6.07% 4/5/95 .............................. 10,000,000 10,000,000
FLOATING RATE NOTES (Continued)
Morgan Guaranty Trust Floating
Rate Note 5.86% 4/4/95 .................... $ 15,000,000 $ 14,999,860
PNC Bank, Floating Rate
Medium-Term Note
6.07% 4/4/95 .............................. 10,000,000 9,997,457
Student Loan Marketing Association
5.87% 4/4/95 .............................. 9,500,000 9,500,000
Student Loan Marketing Association
6.04% 4/4/95 .............................. 5,000,000 5,000,000
Student Loan Marketing Association
5.97% 4/4/95 .............................. 15,000,000 15,000,000
-------------
TOTAL FLOATING RATE NOTES ................. 99,491,189
-------------
U.S. GOVERNMENT AGENCY
OBLIGATIONS - 9.00%
Federal Home Loan Bank Discount
Note 6.00% 4/21/95 ........................ 10,000,000 9,966,667
Federal National Mortgage Association
Discount Note 6.00% 6/12/95 ............... 10,000,000 9,880,000
Federal National Mortgage Association
Discount Note 5.98% 6/19/95 ............... 10,000,000 9,868,772
Federal National Mortgage Association
Discount Note 6.08% 7/5/95 ................. 10,000,000 9,839,556
Federal National Mortgage Association
Discount Note 6.04% 8/28/95 ................ 10,000,000 9,750,011
Student Loan Marketing Association
5.315% 6/30/95 ............................. 7,000,000 7,000,000
-------------
TOTAL U.S. GOVERNMENT AGENCY
OBLIGATIONS ............................... 56,305,006
-------------
<PAGE>
SHORT-TERM TIME DEPOSITS -
21.34%
Dresdner Bank, Toronto
6.4375% 4/3/95 ............................. 17,479,000 17,479,000
Fifth Third Bank, Cincinnati
6.375% 4/3/95 .............................. 29,000,000 29,000,000
Society National Bank Cleveland,
Cayman Island 6.375% 4/3/95 ................ 29,000,000 29,000,000
Trust Co. Bank, Atlanta
6.375% 4/3/95 .............................. 29,000,000 29,000,000
Union Bank of Switzerland, Toronto
6.4375% 4/3/95 ............................. 29,000,000 29,000,000
-------------
TOTAL SHORT-TERM TIME DEPOSITS ............. 133,479,000
-------------
MISCELLANEOUS INVESTMENTS -
3.20%
National Bank of Detroit, Bank Note
6.13% 5/17/95 .............................. $ 10,000,000 $ 10,000,378
Northern Trust Co., Bank Note
5.75% 7/20/95 .............................. 10,000,000 9,999,126
-------------
Total Miscellaneous Investments ............ 19,999,504
-------------
TOTAL MARKET VALUE OF SECURITIES
OWNED - 98.16% (WHICH APPROXIMATES
COST FOR FINANCIAL REPORTING AND
INCOME TAX PURPOSES) ....................... 613,961,508
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.84% ................. 11,505,498
-------------
NET ASSETS APPLICABLE TO 605,992,700
DELAWARE CASH RESERVE A CLASS SHARES,
18,386,295 DELAWARE CASH RESERVE CONSULTANT
CLASS SHARES AND 1,088,011 DELAWARE CASH
RESERVE B CLASS SHARES OUTSTANDING;
EQUIVALENT TO $1.00 PER SHARE - 100.00% ...... $625,467,006
=============
-----------------
+For Floating Rate Notes, the maturity date shown is the next interest reset
date.
See accompanying notes
<PAGE>
DELAWARE GROUP CASH RESERVE, INC.
STATEMENT OF OPERATIONS
YEAR ENDED MARCH 31, 1995
INVESTMENT INCOME:
Interest ..................................... $ 33,914,923
EXPENSES:
Management fees ($3,354,935) and
directors' fees ($46,976) .................... $3,401,911
Dividend disbursing, transfer agent
and shareholder servicing fees ............... 2,628,935
Reports and statements to
shareholders ................................ 309,146
Salaries expense ............................ 182,889
Custodian fees .............................. 161,089
Taxes, other than taxes on income ........... 117,173
Distribution expenses ........................ 64,319
Federal and state registration fees .......... 51,515
Professional ................................. 48,328
Other ........................................ 63,888 7,029,193
----------- -----------
NET INVESTMENT INCOME ....................... $26,885,730
===========
See accompanying notes
<PAGE>
DELAWARE GROUP CASH RESERVE, INC.
STATEMENTS OF CHANGES IN NET ASSETS
YEAR YEAR
ENDED ENDED
3/31/95 3/31/94
OPERATIONS:
Net investment income ....................... $ 26,885,730 $ 14,696,354
------------ ------------
DISTRIBUTIONS TO
SHAREHOLDERS FROM
NET INVESTMENT INCOME:
Delaware Cash Reserve A Class ............... (26,037,518) (14,377,854)
Delaware Cash Reserve
Consultant Class ............................ (819,627) (318,500)
Delaware Cash Reserve B Class ................ (28,585) -
------------ ------------
(26,885,730) (14,696,354)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Delaware Cash Reserve A Class ............... 915,796,166 1,330,349,642
Delaware Cash Reserve
Consultant Class ............................ 122,026,623 84,483,876
Delaware Cash Reserve B Class ............... 6,007,137 -
Net asset value of shares issued
upon reinvestment of dividends
from net investment income:
Delaware Cash Reserve A Class ............... 25,020,061 13,717,994
Delaware Cash Reserve
Consultant Class ............................ 776,742 304,461
Delaware Cash Reserve B Class ................ 26,110 -
------------- -------------
1,069,652,839 1,428,855,973
------------- -------------
Cost of shares repurchased:
Delaware Cash Reserve A Class ................ (1,033,935,245)(1,316,989,576)
Delaware Cash Reserve
Consultant Class ............................ (126,978,425) (75,418,151)
Delaware Cash Reserve B Class ............... (4,945,236) -
------------- -------------
(1,165,858,906)(1,392,407,727)
------------- -------------
Increase (decrease) in net assets
derived from capital share
transactions ................................ (96,206,067) 36,448,246
------------- -------------
NET INCREASE (DECREASE)
IN NET ASSETS ............................... (96,206,067) 36,448,246
------------- -------------
NET ASSETS:
Beginning of period ......................... 721,673,073 685,224,827
------------- -------------
End of period ............................... $ 625,467,006 $ 721,673,073
============= =============
See accompanying notes
<PAGE>
DELAWARE GROUP CASH RESERVE, INC.
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1995
Delaware Group Cash Reserve, Inc. (the 'Fund') is registered as a no-load,
diversified, open-end investment company under the Investment Company Act of
1940. The Fund is organized as a Maryland corporation and offers three
classes of shares.
1. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund for financial
statement preparation:
SECURITY VALUATION - Securities are valued at amortized cost which approximates
market value. Security transactions are recorded on the date the securities are
purchased or sold (trade date). Premiums and discounts are amortized on a
pro-rata basis and included in income.
FEDERAL INCOME TAXES - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for Federal income taxes is required in the financial
statements.
CLASS ACCOUNTING - Investment income and common expenses are allocated to the
various classes of the Fund on the basis of daily net assets of each class.
Distribution expenses relating to a specific class are charged directly to that
class.
OTHER - Expenses common to all funds within the Delaware Group Family of Funds
are allocated among the funds on the basis of average net assets. The Fund
declares dividends daily from net investment income and pays such dividends
monthly.
2. INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC) the Investment Manager of the Fund,
an annual fee which is calculated daily at the following rate less fees paid to
the independent directors: .50% of the first $500 million of average daily net
assets of the Fund, .475% on the next $250 million, .45% on the next $250
million, .425% on the next $250 million, .375% on the next $250 million, .325%
on the next $250 million, .3% on the next $250 million and .275% on the average
daily net assets over $2 billion.
At March 31, 1995, the Fund had a liability for Investment Management fees
payable to DMC of $9,977.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P., (DDLP) the Distributor and an affiliate of DMC, an annual fee of .25% of
the average daily net assets of the Consultant Class and 1.00% of the average
daily net assets of the B Class. No distribution expenses are paid by the A
Class.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to serve as dividend disbursing and transfer agent for the Fund. For the year
ended March 31, 1995, DSC received $2,163,772 for these services.
Certain officers of the Investment Manager are officers, directors and/or
employees of the Fund. These officers, directors and employees are paid no
compensation by the Fund.
On April 3, 1995, Delaware Management Holdings, Inc., the indirect parent of
DMC, DDLP and DSC, through a merger transaction (the 'Merger') became a
wholly-owned subsidiary of Lincoln National Corporation. Other than the
resulting change in ownership, the Merger will not materially change the manner
in which DMC has heretofore conducted its relationship with the Fund. The same
personnel who managed the operation and affairs of the Fund before the
acquisition have continued to manage its operations and affairs since the
Merger.
<PAGE>
3. Fund Shares
Transactions in Fund shares were as follows:
YEAR YEAR
ENDED ENDED
3/31/95 3/31/94
------- -------
Shares sold:
Delaware Cash Reserve A Class ............ 915,796,166 1,330,349,642
Delaware Cash Reserve
Consultant Class ........................ 122,026,623 84,483,876
Delaware Cash Reserve B Class ........... 6,007,137 -
Shares issued upon reinvestment
of dividends from net
investment income:
Delaware Cash Reserve A Class ........... 25,020,061 13,717,994
Delaware Cash Reserve
Consultant Class ......................... 776,742 304,461
Delaware Cash Reserve B Class ........... 26,110 -
------------- -------------
1,069,652,839 1,428,855,973
------------- -------------
Shares repurchased:
Delaware Cash Reserve A Class ............ (1,033,935,245) (1,316,989,576)
Delaware Cash Reserve
Consultant Class ........................ (126,978,425) (75,418,151)
Delaware Cash Reserve B Class ............ (4,945,236) -
------------- -------------
(1,165,858,906) (1,392,407,727)
------------- -------------
Net (decrease) increase ................... (96,206,067) 36,448,246
============= =============
Notes to Financial Statements (Continued)
4. FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DELAWARE CASH RESERVE A CLASS
-----------------------------------------------------------
YEAR ENDED
3/31/95 3/31/94 3/31/93 3/31/92 3/31/91
-----------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from investment
operations:
Net investment income...... 0.0394 0.0227 0.0283 0.0501 0.0727
Net realized and
unrealized gain from
security transactions...... none none none none none
-------- -------- -------- -------- --------
Total from investment
operations................. 0.0394 0.0227 0.0283 0.0501 0.0727
Less distributions:
Dividends.................. (0.0394) (0.0227) (0.0283) (0.0501) (0.0727)
Distributions from net
realized gain on
security transactions...... none none none none none
-------- -------- -------- -------- --------
Total distributions........ (0.0394) (0.0227) (0.0283) (0.0501) (0.0727)
-------- -------- -------- -------- --------
Net asset value, end of
period..................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======== ======== ======== ======== ========
Total return............... 4.01% 2.28% 2.87% 5.13% 7.52%
Ratios/supplemental data:
Net assets, end of period
(000 omitted)..............$605,993 $699,112 $672,034 $911,548 $1,042,489
Ratio of expenses to
average net assets......... 1.01% 1.00% 0.90% 0.81% 0.78%
Ratio of net investment
income to average
net assets................. 3.91% 2.27% 2.88% 5.04% 7.24%
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
DELAWARE CASH RESERVE A CLASS
------------------------------------------------------------
YEAR ENDED
3/29/90 3/30/89 3/31/88 3/26/87 3/27/86
------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning
of period.................. $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from investment
operations:
Net investment income...... 0.0820 0.0730 0.0629 0.0571 0.0748
Net realized and
unrealized gain from
security transactions...... none none none none none
-------- -------- -------- -------- -------
Total from investment
operations................. 0.0820 0.0730 0.0629 0.0571 0.0748
Less distributions:
Dividends.................. (0.0820) (0.0730) (0.0629) (0.0571) (0.0748)
Distributions from net
realized gain on
security transactions...... none none none none none
-------- -------- -------- -------- --------
Total distributions........ (0.0820) (0.0730) (0.0629) (0.0571) (0.0748)
-------- -------- -------- -------- --------
Net asset value, end of
period..................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======== ======== ======== ======== ========
Total return ............. 8.51% 7.55% 6.48% 5.86% 7.74%
Ratios/supplemental data:
Net assets, end of period
(000 omitted)............$1,087,547 $1,073,044 $986,408 $996,964 $1,286,897
Ratio of expenses to
average net assets....... 0.82% 0.90% 0.88% 0.90% 0.81%
Ratio of net investment
income to average
net assets............... 8.20% 7.32% 6.29% 5.76% 7.49%
</TABLE>
-----------------
All share and per share figures prior to January 1, 1991 have been restated to
reflect the 10-to-1 stock recapitalization.
<PAGE>
Notes to Financial Statements (Continued)
4. FINANCIAL HIGHLIGHTS (Continued)
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
--------------------------------------------------------------------------------------
DELAWARE
CASH RESERVE
CONSULTANT CLASS
--------------------------------------------------------------------------------------
Year Ended
3/31/95 3/31/94 3/31/93 3/31/92 3/31/91 3/29/90 3/30/89
--------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period ...................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income from investment
operations:
Net investment income........... 0.0369 0.0202 0.0259 0.0476 0.0702 0.0795 0.0705
Net realized and
unrealized gain from
security transactions........... none none none none none none none
-------- -------- -------- -------- -------- -------- --------
Total from investment
operations...................... 0.0369 0.0202 0.0259 0.0476 0.0702 0.0795 0.0705
Less distributions:
Dividends....................... (0.0369) (0.0202) (0.0259) (0.0476) (0.0702) (0.0795) (0.0705)
Distributions from net
realized gain on
security transactions........... none none none none none none none
-------- -------- -------- -------- -------- -------- --------
Total distributions............. (0.0369) (0.0202) (0.0259) (0.0476) (0.0702) (0.0795) (0.0705)
-------- -------- -------- -------- -------- -------- --------
Net asset value, end of
period.......................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======== ======== ======== ======== ======== ======== ========
Total return.................... 3.75% 2.04% 2.62% 4.87% 7.25% 8.24% 7.28%
Ratios/supplemental data:
Net assets, end of period
(000 omitted)................... $18,386 $22,561 $13,191 $26,183 $27,581 $26,350 $13,841
Ratio of expenses to
average net assets.............. 1.26% 1.25% 1.15% 1.06% 1.03% 1.07% 1.15%(1)
Ratio of net investment
income to average
net assets...................... 3.66% 2.02% 2.63% 4.79% 6.99% 7.95% 7.07%(1)
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
----------------------------------
DELAWARE DELAWARE
CASH RESERVE CASH RESERVE
CONSULTANT CLASS B CLASS
----------------------------------
Period Period
3/10/88(1) 5/2/94(2)
to to
3/31/88 3/31/95
----------------------------------
<S> <C> <C>
Net asset value, beginning
of period................... $1.0000 $1.0000
Income from investment
operations:
Net investment income...... 0.0035 0.0279
Net realized and
unrealized gain from
security transactions...... none none
-------- --------
Total from investment
operations................. 0.0035 0.0279
Less distributions:
Dividends.................. (0.0035) (0.0279)
Distributions from net
realized gain on
security transactions...... none none
-------- --------
Total distributions........ (0.0035) (0.0279)
-------- --------
Net asset value, end of
period..................... $1.0000 $1.0000
======== ========
Total return.............. 5.91% 3.10%(3)
Ratios/supplemental data:
Net assets, end of period
(000 omitted)............. $301 $1,088
Ratio of expenses to
average net assets........ (1) 2.01%
Ratio of net investment
income to average
net assets................ (1) 2.91%
</TABLE>
-----------------
All share and per share figures prior to January 1, 1991 have been restated to
reflect the 10-to-1 stock recapitalization.
(1) March 10, 1988 was the date of the initial public sale of the Delaware Cash
Reserve Consultant class shares; the ratios of expenses and net investment
income to average net assets have been omitted as management believes that such
ratios for this relatively short period are not meaningful. Total return has
been annualized.
(2) Date of initial public offering; ratios and total return have been
annualized.
(3) Does not include contingent deferred sales charge, which varies
from 1%-4%, depending upon the holding period.
<PAGE>
DELAWARE GROUP CASH RESERVE, INC.
REPORT OF INDEPENDENT AUDITORS
To the Shareholders and Board of Directors
Delaware Group Cash Reserve, Inc.
We have audited the accompanying statement of net assets of Delaware Group Cash
Reserve, Inc. as of March 31, 1995, and the related statement of operations for
the year then ended, the statement of changes in net assets for each of the two
years in the period then ended, and the financial highlights for each of the 10
years in the period then ended. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements. Our procedures included confirmation of securities owned as of March
31, 1995 by correspondence with the custodian and brokers. An audit also
includes assessing the accounting principles used and significant estimates made
by management, as well as evaluating the overall financial statement
presentation. We believe that our audits provide a reasonable basis for our
opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Cash Reserve, Inc. at March 31, 1995, the results of its
operations for the year then ended, the changes in its net assets for each of
the two years in the period then ended, and the financial highlights for each of
the 10 years in the period then ended, in conformity with generally accepted
accounting principles.
ERNST & YOUNG LLP
Philadelphia, Pennsylvania
May 5, 1995
<PAGE>
This annual report is for the information of Delaware Group Cash Reserve
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus, which gives details about charges,
expenses, investment objectives and operating policies of the Fund. Summary
investment results are documented in the current Statement of Additional
Information. If used with prospective investors after June 30, 1995, this report
must be accompanied by a Delaware Cash Reserve Performance Update for the most
recently completed calendar quarter. The figures in this report represent past
results. The goal of a money market fund is to maintain a constant share price
of $1. However, there can be no guarantee that this goal will be met.
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
are not obligations of or deposits of any bank or any credit union, and involve
investment risk, including the possible loss of principal. Shares of the Fund
are not bank or credit union deposits.
Investment Manager
Delaware Management Company, Inc.
Philadelphia
International Affiliate
Delaware International Advisers Ltd.
London
National Distributor
Delaware Distributors, L.P.
Philadelphia
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
Nationwide (800) 523-4640;
In Philadelphia (215) 988-1333
Securities Dealers Only
Nationwide (800) 362-7500;
In Philadelphia (215) 988-1050
Copy Rights Delaware Distributors, L.P.
5/95 - TKO - AR - 008
Printed in the U.S.A. on recycled paper.
Delaware Group
Philadelphia
London
<LOGO>
