<PAGE>
Supplement Dated April 15, 1995
to the Current Prospectuses
of the Following Delaware Group Funds
Delaware Group Delaware Fund, Inc., Delaware
Group Trend Fund, Inc., Delaware Group Value
Fund, Inc., Delaware Group Decatur Fund, Inc.,
Delaware Group DelCap Fund, Inc., Delaware
Group Delchester High-Yield Bond Fund, Inc.,
Delaware Group Government Fund, Inc.,
Delaware Group Tax-Free Fund, Inc., Delaware
Group Treasury Reserves, Inc., Delaware Group
Tax-Free Money, Inc., Delaware Group Cash
Reserve, Inc.
On March 29, 1995, shareholders of each of the above
referenced Funds or, as relevant, the series thereof, approved a new
Investment Management Agreement with Delaware Management
Company, Inc. ("DMC"), an indirect wholly-owned subsidiary of
Delaware Management Holdings, Inc. ("DMH"). The approval of
new Investment Management Agreements was subject to the
completion of the merger (the "Merger") between DMH and a wholly-
owned subsidiary of Lincoln National Corporation ("Lincoln
National") which occurred on April 3, 1995. Accordingly, the
previous Investment Management Agreements terminated and the new
Investment Management Agreements became effective on that date.
As a result of the Merger, DMC and its two affiliates,
Delaware Service Company, Inc., the Funds' shareholder servicing,
dividend disbursing and transfer agent and Delaware Distributors,
L.P., the Funds' national distributor became indirect wholly-owned
subsidiaries of Lincoln National. Lincoln National, with headquarters
in Fort Wayne, Indiana, is a diversified organization with operations
in many aspects of the financial services industry, including insurance
and investment management.
Under the new Investment Management Agreements, DMC
will be paid at the same annual fee rates and on the same terms as it
was under the previous Investment Management Agreements. In
addition, the investment approach and operation of each Fund and, as
relevant, each series of a Fund, will remain substantially unchanged.
PS-OTH-4/95
<PAGE>
February 28, 1995
Delaware Group Cash Reserve, Inc.
Supplement to Prospectus
Dated May 30, 1994
Beginning April 1, 1995, following notice by the Fund, the Fund will assess
a service fee of $3.00 per month against any non-retirement accounts which
have remained below the $1,000 minimum balance for at least three
consecutive months. The fee will go to help defray the costs of maintaining
low balance accounts. No CDSCs will apply to such assessments.
PS-008-2/95-U
<PAGE>
NOVEMBER 9, 1994
DELAWARE CASH RESERVE
A CLASS
(May 30, 1994)
DELAWARE CASH RESERVE
B CLASS
(May 30, 1994)
DELAWARE CASH RESERVE
CONSULTANT CLASS
(May 30, 1994)
U.S. GOVERNMENT MONEY FUND
A CLASS
(March 25, 1994)
U.S. GOVERNMENT MONEY FUND
CONSULTANT CLASS
(March 25, 1994)
TAX-FREE MONEY FUND
A CLASS
(June 29, 1994)
TAX-FREE MONEY FUND
CONSULTANT CLASS
(June 29, 1994)
Supplement To Prospectuses As Noted Above
The following supplements the information appearing on the front cover of
the Prospectus:
Shares of this Fund are not federally insured by the Federal Deposit
Insurance Corporation, the Federal Reserve Board, or any other agency. Shares
are not deposits, obligations of, guaranteed or endorsed by any bank and
involve investment risks including possible loss of principal.
Shares of the Fund are not NCUSIF insured, are not guaranteed by the credit
union, are not obligations of the credit union, and involve investment risk,
including the possible loss of principal. Shares of the Fund are not credit
union deposits.
PS-MM
<PAGE> 1
- ------------------------------------------------------------------------------
PROSPECTUS
MAY 30, 1994
- ------------------------------------------------------------------------------
DELAWARE CASH RESERVE
- ------------------------------------------------------------------------------
CONSULTANT CLASS SHARES
- ------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- ------------------------------------------------------------------------------
For Prospectus and Performance:
Nationwide 800-523-4640
Philadelphia 988-1333
Information on Existing Accounts:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Philadelphia 988-1241
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Philadelphia 988-1050
- ------------------------------------------------------------------------------
TABLE OF CONTENTS
- ------------------------------------------------------------------------------
Cover Page 1
- ------------------------------------------------------------------------------
Synopsis 2
- ------------------------------------------------------------------------------
Summary of Expenses 3
- ------------------------------------------------------------------------------
Financial Highlights 4
- ------------------------------------------------------------------------------
Investment Objective and Policy
Suitability 5
Investment Strategy 5
- ------------------------------------------------------------------------------
The Delaware Difference
Plans and Services 7
- ------------------------------------------------------------------------------
Retirement Planning 8
- ------------------------------------------------------------------------------
Buying Shares 9
- ------------------------------------------------------------------------------
Redemption and Exchange 11
- ------------------------------------------------------------------------------
Dividends and Distributions 14
- ------------------------------------------------------------------------------
Taxes 14
- ------------------------------------------------------------------------------
Net Asset Value Per Share 15
- ------------------------------------------------------------------------------
Management of the Fund 15
- ------------------------------------------------------------------------------
This Prospectus describes the Delaware Cash Reserve Consultant Class of
shares (the "Consultant Class Shares") of Delaware Group Cash Reserve, Inc.
(the "Fund"). Consultant Class Shares are available for sale through brokers,
financial institutions and other entities which have a dealer agreement with
the Fund's Distributor or a service agreement with the Fund. The Fund is a
professionally-managed mutual fund seeking maximum current income while
preserving principal and maintaining liquidity. The Fund intends to achieve
its objective by investing its assets in a diversified portfolio of money
market instruments.
The Fund is a money market fund. The minimum initial investment for the
Consultant Class Shares is $1,000 and for subsequent investments is $25. See
Buying Shares. The Consultant Class Shares have no front-end or contingent
deferred sales charges but are subject to annual 12b-1 Plan distribution
expenses. See Distribution (12b-1) and Service under Management of the Fund.
<PAGE> 2
This Prospectus relates only to the Consultant Class Shares and sets forth
information that you should read and consider before you invest. Please
retain it for future reference. Part B of the registration statement, dated
May 30, 1994, as it may be amended from time to time, contains additional
information about the Fund and has been filed with the Securities and Exchange
Commission. Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, Inc. at the
above address or by calling the above numbers. The Fund's financial statements
appear in its Annual Report, which will accompany any response to requests for
Part B.
The Fund also offers the Delaware Cash Reserve A Class ("Class A Shares")
and Delaware Cash Reserve B Class ("Class B Shares"). Class A Shares can be
purchased directly from the Fund or its Distributor, and have no front-end or
contingent deferred sales charges and are not subject to annual 12b-1 Plan
distribution expenses. Class B Shares are available for sale through brokers,
financial institutions and other entities which have a dealer agreement with
the Fund's Distributor or a service agreement with the Fund. Class B Shares
have no front-end sales charge, but are subject to annual 12b-1 Plan
distribution expenses and a contingent deferred sales charge upon redemption.
A prospectus for those classes can be obtained by writing to Delaware
Distributors, Inc. at the above address or by calling the above numbers.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
1
<PAGE> 3
SYNOPSIS
Capitalization
The Fund offers three classes of shares: Delaware Cash Reserve Consultant
Class, Delaware Cash Reserve A Class and Delaware Cash Reserve B Class. The
Fund has a present authorized capitalization of ten billion shares of common
stock with a $.001 par value per share. Five hundred million shares of that
stock have been allocated to the Delaware Cash Reserve Consultant Class, two
billion shares have been allocated to the Delaware Cash Reserve A Class and
two billion shares have been allocated to the Delaware Cash Reserve B Class.
See Shares under Management of the Fund.
Investment Manager, Distributor and Service Agent
Delaware Management Company, Inc. (the "Manager") is the investment manager
for the Fund. The Manager or its affiliate, Delaware International Advisers
Ltd., manages the other funds in the Delaware Group. Delaware Distributors,
Inc. (the "Distributor") is the national distributor for the Fund and for all
of the other mutual funds in the Delaware Group. Delaware Service Company, Inc.
(the "Transfer Agent") is the shareholder servicing, dividend disbursing and
transfer agent for the Fund and for all of the other mutual funds in the
Delaware Group. See Management of the Fund.
Purchase Price
Consultant Class Shares offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are
subject to distribution fees under a Rule 12b-1 distribution plan. See Buying
Shares; Distribution (12b-1) and Service under Management of the Fund.
Minimum Investment
Shares of the Consultant Class Shares are available for sale through brokers,
financial institutions and other entities which have a dealer agreement with
the Fund's Distributor or a service agreement with the Fund. The minimum
initial investment for the Consultant Class Shares is $1,000 (see Part B or
contact your investment dealer for each Retirement Plan minimum), and
subsequent investments must be at least $25. See Buying Shares.
Investment Objective
The objective of the Fund is to seek maximum current income while
preserving principal and maintaining liquidity. The Fund intends to achieve
its objective by investing its assets in a diversified portfolio of money
market instruments. See Investment Objective and Policy.
Open-End Investment Company
The Fund was originally created in 1977, organized as a Pennsylvania
business trust in 1983 and reorganized as a Maryland corporation in 1990. In
addition, the Fund is a diversified, open-end management investment company.
See Shares under Management of the Fund.
Investment Management Fees
The Manager furnishes investment management services to the Fund, subject
to the supervision and direction of the Board of Directors. Under the
Investment Management Agreement, the annual compensation paid to the Manager
is equal to .5% on 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, less all directors' fees paid to the unaffiliated
directors by the Fund. If the Fund's average daily net assets exceed $3
billion for any month, the Board of Directors will conduct a review of the
Investment Management Agreement. See Management of the Fund.
Redemption and Exchange
Consultant Class Shares are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
2
<PAGE> 4
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
Annual Operating Expenses
Shareholder Transaction Expenses (as a percentage of average daily net assets)
- ----------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases Management Fees................................. 0.49%
(as a percentage of offering price)........... None 12b-1 Fees...................................... 0.25%
Maximum Sales Charge Imposed on Other Operating Expenses........................ 0.51%
Reinvested Dividends -----
(as a percentage of offering price)........... None Total Operating Expenses...................... 1.25%
Redemption Fees................................. None* =====
Exchange Fees................................... None**
</TABLE>
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Consultant Class Shares
will bear directly or indirectly. *CoreStates Bank, N.A. currently charges
$7.50 per redemption for redemptions payable by wire. **Exchanges are subject
to the requirements of each fund and a front-end sales charge may apply. See
Class A Shares and Class B Shares for expense information about those classes.
The following example illustrates the expenses that you would pay on a
$1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. As noted in the
table above, the Fund charges no redemption fees.
1 year 3 years 5 years 10 years
------ ------- ------- --------
$13 $40 $69 $151
This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.
3
<PAGE> 5
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements of
Delaware Group Cash Reserve and have been audited by Ernst & Young, independent
auditors. The data should be read in conjunction with the financial statements,
related notes, and the report of Ernst & Young covering such financial
information and highlights, all of which are incorporated by reference into
Part B.
<TABLE>
<CAPTION>
- --------------------------------------------------------------------------------------------------------------------------------
Period
3/10/88(1)
Year Ended through
3/31/94 3/31/93 3/31/92 3/31/91 3/29/90 3/30/89 3/31/88
<S> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period(2)...... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment Operations
- ---------------------------------
Net Investment Income........................ 0.0202 0.0259 0.0476 0.0702 0.0795 0.0705 0.0035
Net Gains or Losses on Securities
(both realized and unrealized)............. none none none none none none none
------- ------- ------- ------- ------- ------- -------
Total From Investment Operations........... 0.0202 0.0259 0.0476 0.0702 0.0795 0.0705 0.0035
------- ------- ------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)....... (0.0202) (0.0259) (0.0476) (0.0702) (0.0795) (0.0705) (0.0035)
Distributions (from capital gains)........... -- -- -- -- -- -- --
Returns of Capital........................... -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- -------
Total Distributions........................ (0.0202) (0.0259) (0.0476) (0.0702) (0.0795) (0.0705) (0.0035)
------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period............... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= =======
- --------------------------------------------------------------------------------------------------------------------------------
Total Return................................. 2.04% 2.62% 4.87% 7.25% 8.24% 7.28% 5.91%
- ------------
- --------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000 omitted)...... $22,561 $13,191 $26,183 $27,581 $26,350 $13,841 $301
Ratio of Expenses to Average Daily
Net Assets................................. 1.25% 1.15% 1.06% 1.03% 1.07% 1.15% (1)
Ratio of Net Investment Income to Average
Daily Net Assets........................... 2.29% 2.63% 4.79% 6.99% 7.95% 7.07% (1)
</TABLE>
- ------------
(1)March 10, 1988 was the date of the Delaware Cash Reserve Consultant Class'
initial public sale; total return has been annualized; the ratios of
expenses and net investment income to average daily net assets have been
omitted as management believes that such ratios for this relatively short
period are not meaningful.
(2)All figures prior to January 1, 1991 have been restated to reflect a stock
recapitalization.
4
<PAGE> 6
INVESTMENT OBJECTIVE
AND POLICY
As a money market fund, the Fund's objective is to provide maximum current
income, while preserving principal and maintaining liquidity. The Fund seeks
to do this by investing its assets in a diversified portfolio of money market
securities and managing the portfolio to maintain a constant $1.00 per share
value. While the Fund will make every effort to maintain a fixed net asset
value of $1.00 per share, there can be no assurance that this objective will
be achieved.
SUITABILITY
The Fund is suited for investors who seek the current income available from
money market investments along with easy access to their money and stable
principal value. Ownership of Fund shares also reduces the bookkeeping and
administrative inconveniences of directly purchasing money market securities.
Shares of the Class are offered for sale through brokers, financial
institutions and other entities which have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The Class may be suitable
for investors who desire the additional investment and administrative services
offered by such brokers and other entities.
INVESTMENT STRATEGY
The Fund invests at least 80% of its assets in money market instruments in
order to achieve its objective. While there is no assurance that this
objective can be achieved, the Fund must follow certain policies that can only
be changed by shareholder approval.
Asset-Backed Securities
The Fund may also invest in securities which are backed by assets such as
receivables on home equity and credit card loans, and receivables regarding
automobile, mobile home and recreational vehicle loans, wholesale dealer floor
plans and leases. All such securities must be rated in the highest rating
category by a reputable credit rating agency (e.g., AAA by Standard and Poor's
Corporation ("S&P") or Aaa by Moody's Investors Service, Inc. ("Moody's")).
Such receivables are securitized in either a pass-through or a pay-through
structure. Pass-through securities provide investors with an income stream
consisting of both principal and interest payments in respect of the
receivables in the underlying pool. Pay-through asset-backed securities are
debt obligations issued usually by a special purpose entity, which are
collateralized by the various receivables and in which the payments on the
underlying receivables provide the funds to pay the debt service on the debt
obligations issued. The Fund may invest in these and other types of
asset-backed securities that may be developed in the future. It is the Fund's
current policy to limit asset-backed investments to those represented by
interests in credit card receivables, wholesale dealer floor plans, home equity
loans and automobile loans.
The rate of principal payment on asset-backed securities generally depends
upon the rate of principal payments received on the underlying assets. Such
rate of payments may be affected by economic and various other factors such as
changes in interest rates. Therefore, the yield may be difficult to predict
and actual yield to maturity may be more or less than the anticipated yield to
maturity. Such asset-backed securities involve other risks, including the
risk that security interests cannot be adequately or in many cases, ever,
established. In addition, with respect to credit card receivables, a number of
state and federal consumer credit laws give debtors the right to set off
certain amounts owed on the credit cards, thereby reducing the outstanding
balance. In the case of automobile receivables, there is a risk that the
holders may not have either a proper or first security interest in all of the
obligations backing such receivables due to the large number of vehicles
involved in a typical issuance and technical requirements under state laws.
Therefore, recoveries on repossessed collateral may not always be available to
support payments on the securities. For further discussion concerning the
risks of investing in such asset-backed securities, see Part B.
5
<PAGE> 7
Quality Restrictions
The Fund limits its investments to those which the Board of Directors has
determined present minimal credit risks and are of high quality and which will
otherwise meet the maturity, quality and diversification conditions with which
taxable money market funds must comply.
The Fund's investments include securities issued or guaranteed by the U.S.
government (e.g., Treasury Bills and Notes), or by the credit of its agencies
or instrumentalities (e.g., Federal Housing Administration and Federal Home
Loan Bank). The Fund may invest in the certificates of deposit and obligations
of both U.S. and foreign banks if they have assets of at least one billion
dollars in accordance with the maturity, quality and diversification
conditions with which taxable money market funds must comply. The Fund may
also purchase commercial paper and other corporate obligations; if a security
or, as relevant, its issuer is considered to be rated at the time of the
proposed purchase, it or, as relevant, its issuer must be so rated in one of
the two highest rating categories (e.g., for commercial paper, A-2 or better
by S&P and P-2 or better by Moody's; and, for other corporate obligations, AA
or better by S&P and Aa or better by Moody's) by at least two nationally-
recognized statistical rating organizations approved by the Board of Directors
or, if such security is not so rated, the purchase of the security must be
approved or ratified by the Board of Directors in accordance with the maturity,
quality and diversification conditions with which taxable money market funds
must comply. Appendix A of Part B describes the ratings of S&P, Moody's, Duff
and Phelps, Inc. and Fitch Investors Service, Inc., four of the better-known
statistical rating organizations.
Maturity Restrictions
The Fund maintains an average maturity of not more than 90 days. Also, it
does not purchase any instruments with an effective remaining maturity of more
than 13 months.
Investment Techniques
The Fund intends to hold its investments until maturity, but may sell them
prior to maturity for a number of reasons. These reasons include: to shorten
or lengthen the average maturity, to increase the yield, to maintain the
quality of the portfolio or to maintain a stable share value.
The Fund may also use repurchase agreements which are at least 100%
collateralized by securities in which the Fund can invest directly. Repurchase
agreements help the Fund to invest cash on a temporary basis. Under a
repurchase agreement, the Fund acquires ownership and possession of a
security, and the seller agrees to buy the security back at a specified time
and higher price. If the seller is unable to repurchase the security, the Fund
could experience delays and losses in liquidating the securities. To minimize
this possibility, the Fund considers the creditworthiness of banks and dealers
when entering into repurchase agreements.
The Fund may invest up to 10% of its portfolio in illiquid assets, including
repurchase agreements maturing in more than seven days. The Fund may borrow
money as a temporary measure for extraordinary purposes or to facilitate
redemptions, but it does not presently intend to do so.
If there were a national credit crisis, an issuer became insolvent or
interest rates were to rise, principal values could be adversely affected.
Investments in foreign banks and overseas branches of U.S. banks may be
subject to less stringent regulations and different risks than U.S. domestic
banks.
Part B provides more information on the Fund's investment policies and
restrictions.
6
<PAGE> 8
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
(Philadelphia 988-1333)
Fund Information; Literature;
Price, Yield and Performance Figures
Shareholder Service Center
800-523-1918
(Philadelphia 988-1241)
Information on Existing Regular Investment
Accounts and Retirement Plan Accounts;
Wire Investments; Wire Liquidations;
Telephone Liquidations; Telephone Exchanges
Delaphone
800-362-FUND
(800-362-3863)
Performance Information
You can call the Investor Information Center anytime to get current yield
information. Yield information is updated each weekday and is based on the
annualized yield over the past seven-day or longer period.
Shareholder Services
During business hours, you can call the Fund's Shareholder Service Center.
The representatives can answer any of your questions about your account, the
Fund, the various service features and other funds in the Delaware Group.
Delaphone Service
Delaphone is an account inquiry service for investors with Touch-Tone (R)
phone service. It enables you to get information on your account faster than
the mailed statements and confirmations seven days a week, 24 hours a day.
Account Statements
A statement of account will be mailed each quarter summarizing all
transactions during the period. However, accounts in which there has been
activity, other than regular investment programs such as Automatic Investing
or Direct Deposit Plans, will receive a monthly statement reflecting
transactions for that period. You should examine statements and confirmations
immediately and promptly report any discrepancy by calling the Shareholder
Service Center.
Duplicate Confirmations
If your investment dealer is noted on your investment application, we will
send your dealer a duplicate confirmation. This makes it easier for your
investment dealer to help you manage your investments.
Tax Information
In January of each year, the Fund will mail you information on the tax status
of your dividends and distributions.
Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or dividend
income) paid to you by check or reinvested in your account without a charge or
you may be permitted to invest your distributions in other funds in the
Delaware Group without a sales charge, subject to eligibility and minimum
purchase requirements set forth in each fund's prospectus. The dividends from
Consultant Class Shares may not be invested in the Class B Shares of the Fund
or any other Class B Shares of the funds in the Delaware Group which offer
such a class of shares ("Class B Funds"). For reinvestment in other funds in
the Delaware Group, call the Shareholder Service Center.
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of their
Consultant Class Shares into shares of the other funds in the Delaware Group,
subject to the eligibility and minimum purchase requirements set forth in each
fund's prospectus, including any applicable front-end sales charges. Exchanges
are not permitted between Consultant Class Shares and the Class B Shares of
the Fund or other Class B Shares of the Class B Funds. See Redemption and
Exchange.
The exchange feature is available only in states where shares of the fund
being acquired can be sold. The Fund reserves the right to suspend or
terminate, or amend the terms of, the exchange privilege upon 60 days' written
notice to shareholders. See Redemption and Exchange.
7
<PAGE> 9
Wealth Builder Option
You may be permitted to elect to have amounts in your account automatically
invested in other funds in the Delaware Group. Investments under this feature
are exchanges and are therefore subject to the same conditions and limitations
as other exchanges of Consultant Class Shares. See Redemption and Exchange.
Financial Information about the Fund
Each fiscal year, you will receive an annual report containing financial
statements audited by Ernst & Young (the Fund's independent auditors), and an
unaudited semi-annual report. These reports provide detailed information about
the Fund's investments and performance. The Fund's fiscal year ends on
March 31.
The Delaware Digest
You will receive newsletters covering topics of interest about your
investment alternatives and services from the Delaware Group.
RETIREMENT PLANNING
The Consultant Class Shares are also suitable for tax-deferred Retirement
Plans. Prototype Profit Sharing and Money Purchase Pension Plans are each
subject to a one-time fee of $200 per plan, or $300 for paired plans. No such
fee is charged for owner-only plans if the Delaware Group does not provide a
Summary Plan Description. In addition, these plans are subject to an annual
maintenance fee of $30 per participant account. Each of the other Retirement
Plans described below (other than 401(k) Defined Contribution Plans) is
subject to an annual maintenance fee of $15 for each participant's account,
regardless of the number of funds selected. Annual maintenance fees for 401(k)
Defined Contribution Plans are based on the number of participants in the Plan
and the services selected by the employer. Fees are quoted upon request. All
of the fees noted above are subject to change. Additional information about
fees is contained in Part B. The minimum initial investment for each Plan is
$250; subsequent investments must be at least $25.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to Retirement Plan shareholders. For
additional information on any of the Plans and Delaware's retirement services,
call the Shareholder Service Center or see Part B.
Individual Retirement Account ("IRA")
Individuals, even if they participate in an employer-sponsored retirement
plan, may establish their own retirement program. Contributions to an IRA may
be tax-deductible and earnings are tax-deferred. Under the Tax Reform Act of
1986, the tax deductibility of IRA contributions is restricted, and in some
cases eliminated, for individuals who participate in certain employer-sponsored
retirement plans and whose annual income exceeds certain limits. Existing
IRAs and future contributions up to the IRA maximums, whether deductible or
not, still earn on a tax-deferred basis.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established on a group basis by an employer who wishes to
sponsor a tax-sheltered retirement program by making IRA contributions on
behalf of all eligible employees.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the ability to
establish a SEP/IRA that permits salary deferral contributions. An employer
may also elect to make additional contributions to this Plan.
403(b)(7) Deferred Compensation Plan
Permits employees of public school systems or of certain types of non-profit
organizations to enter into a deferred compensation arrangement for the
purchase of shares.
457 Deferred Compensation Plan
Permits employees of state and local governments and certain other entities
to enter into a deferred compensation arrangement for the purchase of shares.
Prototype Profit Sharing or Money Purchase Pension Plan
Offers self-employed individuals, partnerships and corporations a
tax-qualified plan which provides for the investment of contributions in
shares.
Prototype 401(k) Defined Contribution Plan
Permits employers to establish a tax-qualified plan based on salary deferral
contributions. An employer may elect to make profit sharing contributions
and/or matching contributions into the Plan.
8
<PAGE> 10
BUYING SHARES
The Distributor serves as the national distributor for the Fund.
The Consultant Class Shares may be purchased through brokers, financial
institutions and other entities that have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The minimum initial purchase
of shares is $1,000 and all subsequent purchases must be at least $25. All
purchases are at net asset value. There is no front-end or contingent deferred
sales charge.
Retirement Plans have other minimums. Refer to Part B or call the
Shareholder Service Center for more information on these Plans.
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
Investing through Your Investment Dealer
You can make a purchase of Consultant Class Shares through most investment
dealers who, as part of the service they provide, must transmit orders
promptly. They may charge for this service. If you want a dealer but do not
have one, we can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application must be completed, signed
and sent with a check payable to Delaware Cash Reserve Consultant Class,
P.O. Box 7977, Philadelphia, PA 19101.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to Delaware Cash Reserve Consultant Class. Your check
should be identified with your name(s) and account number. An investment slip
(similar to a deposit slip) is provided at the bottom of transaction
confirmations and dividend statements that you will receive from the Fund, and
should be used when you are making additional purchases. You can expedite
processing by including an investment slip with your check when making
additional purchases. Your investment may be delayed if you send additional
purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by wire to
CoreStates Bank, N.A., ABA #031000011, account number 0114-2596 (include your
name(s) and account number for the class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Fund's Shareholder
Service Center at 800-523-1918 (in Philadelphia, 988-1241) to get an account
number. If you do not call first, it may delay processing your investment. In
addition, you must promptly send your Investment Application to Delaware Cash
Reserve Consultant Class, New Accounts, P.O. Box 7977, Philadelphia, PA 19101.
2. Subsequent Purchases--You may make additional investments anytime by
wiring funds to CoreStates Bank, N.A., as described above. You should advise
the Fund's Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a Retirement Plan Account, call the
Shareholder Service Center for special wiring instructions.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group, you
may write and authorize an exchange of part or all of your investment into the
Consultant Class Shares. The Class B Shares of the Fund and the Class B Shares
of the other Class B Funds may not be exchanged into the Consultant Class
Shares. If you wish to open an account by exchange, call the Shareholder
Service Center for more information.
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish to use
the following services:
1. Direct Deposit
You may wish your employer or bank to make regular investments directly to
your account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and
private payments by Electronic Fund Transfer, which avoids mail time and check
clearing holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.
2. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly investments
without writing or mailing checks. You may authorize the Fund to transfer a
designated amount monthly from your checking account to your Consultant Class
Shares account. Many shareholders use this as an automatic savings plan for
IRAs and other purposes. Shareholders should allow a reasonable amount of
time for initial purchases and changes to these plans to become effective.
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This option is not available to participants in the following plans: Salary
Reduction/SEP, Simplified Employee Pension/IRA, Profit Sharing and Money
Purchase Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans.
* * *
Should investments by these two methods be reclaimed or returned for some
reason, the Fund has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your
Consultant Class Shares account, you are obligated to reimburse the Fund.
Dividend Orders
Some shareholders want the dividends earned in one fund automatically
invested in another Delaware Group fund with a different investment objective.
For more information on the requirements of the other funds see Dividend
Reinvestment Plan under The Delaware Difference or please call the Shareholder
Service Center.
Purchase Price and Effective Date
The offering price (net asset value) of the Consultant Class Shares is
determined as of the close of regular trading on the New York Stock Exchange
(ordinarily, 4 p.m., Eastern time) on days when such exchange is open.
Investments by Federal Funds wire will be effective upon receipt. If the
wire is received after the time the offering price of shares is determined, as
noted above, it will be effective the next business day. If the investment is
made by check, the check must be converted to Federal Funds before your
purchase can be effective (normally one business day after receipt).
Your purchase begins earning dividends the next business day after becoming
effective. See Dividends and Distributions for additional information.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase or exchange. If a
purchase is cancelled because your check is returned unpaid, you are
responsible for any loss incurred. The Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in the Delaware Group. The Fund
reserves the right, upon 60 days' written notice, to redeem accounts that
remain under $1,000 as a result of redemptions. An investor making the minimum
initial investment will be subject to involuntary redemption if he or she
redeems any portion of his or her account.
Class A Shares and Class B Shares
In addition to offering the Consultant Class Shares, the Fund offers two
other classes of shares, the Class A Shares and the Class B Shares, each of
which are described in a separate prospectus. The Class A Shares can be
purchased directly from the Fund or its Distributor, and have no front-end or
contingent deferred sales charge or annual 12b-1 Plan expenses. The Class B
Shares are available for sale through brokers, financial institutions and
other entities which have a dealer agreement with the Fund's Distributor or a
service agreement with the Fund. The Class B Shares have no front-end sales
charge, are subject to annual 12b-1 expenses equal to a maximum of 1% (.25% of
which are service fees paid to the Distributor, dealers and others) in order
to compensate the Distributor for providing distribution-related services and
bearing certain distribution related expenses. Class B Shares are also subject
to a contingent deferred sales charge upon redemption. Sales or service
compensation available in respect to these classes, therefore, differs from
that available to the Consultant Class Shares. All three classes of the Fund's
shares have a proportionate interest in the underlying portfolio of securities
of the Fund. For the fiscal year ended March 31, 1994, the Total Operating
Expenses for the Class A Shares were 1.00%. Class B Shares were not offered
prior to May 2, 1994.
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REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways. The
exchange service is useful if your investment requirements change and you want
an easy way to invest in equity funds, more aggressive bond funds or
tax-advantaged funds. Exchanges are subject to the eligibility and minimum
purchase requirements set forth in each fund's prospectus. Any applicable
front-end sales charge will apply to exchanges from money market funds, like
the Fund, to other funds, except for exchanges from money market funds
involving assets that were previously invested in a fund with a front-end
sales charge and exchanges from a money market fund involving the reinvestment
of dividends. Consultant Class Shares of the Fund may not be exchanged for
Class B Shares of the Fund or the Class B Shares of the other Class B Funds.
Shares acquired in an exchange must be registered in the state where they are
so purchased. You may want to call us for more information or consult your
financial adviser or investment dealer to discuss which funds in the Delaware
Group will best meet your changing objectives.
Your shares will be redeemed or exchanged based on the net asset value next
determined after we receive your request in good order. Redemption or exchange
requests received in good order after the time the offering price of shares is
determined, as noted above, will be processed the next business day. See
Purchase Price and Effective Date under Buying Shares. Except as otherwise
noted below, for a redemption request to be in "good order," you must provide
your Consultant Class Shares account number, account registration, and the
total number of shares or dollar amount of the transaction. Exchange
instructions and redemption requests must be signed by the record owner(s)
exactly as the shares are registered. With regard to exchanges, you must also
provide the name of the fund you want to receive the proceeds. You may request
a redemption or an exchange by calling the Fund at 800-523-1918 (in
Philadelphia, 988-1241).
The Fund will not honor check, telephone or wire redemptions for Consultant
Class Shares recently purchased by check unless it is reasonably satisfied
that the purchase check has cleared, which may take up to 15 days from the
purchase date. The Fund may honor written redemption requests, but will not
mail the proceeds until it is reasonably satisfied the purchase check has
cleared. You can avoid this potential delay if you purchase shares by wiring
Federal Funds. You may call the Shareholder Service Center to determine if
your funds are available for redemption. The Fund reserves the right to reject
a written or telephone redemption request or delay payment of redemption
proceeds if there has been a recent change to the shareholder's address of
record.
Different redemption and exchange methods are outlined below. There is no
fee charged by the Fund or the Distributor for redeeming or exchanging your
shares, but such fees could be charged in the future. You may also have your
investment dealer arrange to have your shares redeemed or exchanged. Your
investment dealer may charge for this service.
All authorizations given by shareholders with respect to an account,
including selection of any of the features described below, shall continue in
effect until revoked or modified in writing and until such time as such
written revocation or modification has been received by the Fund or its agent.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and
carefully read that fund's prospectus before buying shares in an exchange. The
prospectus contains more complete information about the fund, including
charges and expenses.
The Class A Shares of other Delaware Group funds (those carrying a front-end
sales charge) will be subject to a contingent deferred sales charge ("Limited
CDSC") upon redemption if the shares were purchased at net asset value without
payment of a front-end sales charge and if a dealer's commission was paid to a
financial adviser, except in certain limited instances. Such shares may be
exchanged for shares of the Consultant Class Shares without the imposition of
the Limited CDSC at the time of the exchange. However, upon subsequent
redemption from the Consultant Class Shares or after a subsequent exchange
into a fund that is subject to the Limited CDSC, such shares will be subject
to the Limited CDSC imposed by the fund whose shares were initially exchanged
into the Consultant Class Shares. Shareholders will be given credit for the
period during which the Consultant Class Shares were held.
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Checkwriting Feature
A convenient access feature that allows you to earn dividends until your
check is presented to the Fund.
You can request special checks by marking the box on the Investment
Application. There is a one-time $5 charge for this service.
The checks must be drawn for $500 or more and, unless otherwise indicated on
the Investment Application or your checkwriting authorization form, must be
signed by all owners of the account.
Shareholders will be subject to CoreStates Bank, N.A.'s rules and
regulations governing similar accounts. If the amount of the check is greater
than the value of the shares in the account, the check will be returned and
the shareholder may be subject to a charge.
Investors may request a stop payment on checks by providing the Fund with a
written authorization (oral requests will be accepted only if followed
promptly with written authorization). Such requests will remain in effect for
six months unless renewed or cancelled. There will be a $5 charge per check
for each six-month period.
Checks paid will be returned to shareholders semi-annually (January and
July). Shareholders needing a copy of a check prior to the regular mailing
should call the Shareholder Service Center.
The Checkwriting Feature is not available for Retirement Plans. Also, since
dividends are declared daily, you may not use the Checkwriting Feature to
close your account. (See Part B for additional information.)
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Consultant Class Shares. The request must be signed
by all owners of the account or your investment dealer of record. For
redemptions of more than $50,000, or when the proceeds are not sent to the
shareholder(s) at the address of record, the Fund requires a signature by all
owners of the account and a signature guarantee for each owner. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
The redemption request is effective when it is received in good order.
Payment is normally mailed the next business day, but no later than seven days
after receipt of your request. The Fund does not issue certificates for shares
unless you submit a specific request. If your shares are in certificate form,
the certificate must accompany your request and also be in good order.
Written Exchange
You can also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your Consultant Class Shares
into another mutual fund in the Delaware Group, subject to the same conditions
and limitations as other exchanges noted above.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your shares in certificate form, you can only
redeem or exchange by written request and you must return your certificates.
The Telephone Redemption service enabling you to have redemption proceeds
mailed to your address of record and the Telephone Exchange service, both of
which are described below, are automatically provided unless the Fund receives
written notice from the shareholder to the contrary. The Fund reserves the
right to modify, terminate or suspend these procedures upon 60 days' written
notice to shareholders. It may be difficult to reach the Fund by telephone
during periods when market or economic conditions lead to an unusually large
volume of telephone requests.
Neither the Fund nor the Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption
or exchange of Fund shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone
are generally tape recorded, and a written confirmation will be provided for
all purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, the shareholder is acknowledging prior receipt
of a prospectus for the fund into which shares are being exchanged.
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Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your record address. Checks will be
payable to the shareholder(s) of record and will normally be sent the next
business day, but no later than seven days, after receipt of the request. This
service is only available to individual, joint, and individual fiduciary-type
accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, the Fund requires an Authorization Form with your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption. If you ask for a check, it will normally be mailed the next
business day, but no later than seven days after receipt of your request, to
your predesignated bank account. There are no fees for this method, but the
mail time may delay getting funds into your bank account. Simply call the
Fund's Shareholder Service Center prior to the time the offering price of
shares is determined, as noted above.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to adjust
your investment holdings as your liquidity requirements and investment
objectives change.
You or your investment dealer of record can exchange shares into any fund in
the Delaware Group under the same registration. Any such exchange is subject
to the same conditions and limitations as other exchanges noted above.
Telephone exchanges may be subject to limitations as to amounts or frequency.
Systematic Withdrawal Plan
1. Regular Plans
This plan provides shareholders with a consistent monthly (or quarterly)
payment. This is particularly useful to shareholders living on fixed incomes,
since it provides them with a stable supplemental amount. With accounts of at
least $5,000, you may elect monthly withdrawals of $25 (quarterly $75) or
more. The Fund does not recommend any particular monthly amount, as each
shareholder's situation and needs vary.
2. Retirement Plans
For shareholders eligible under the applicable Retirement Plan to receive
benefits in periodic payments, the Fund's Systematic Withdrawal Plan provides
you with maximum flexibility. A number of formulas are available for
calculating your withdrawals, depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required.
For more information on both of these plans, please call the Shareholder
Service Center.
Wealth Builder Option
Shareholders may elect to invest in other mutual funds in the Delaware Group
through our Wealth Builder Option. Under this automatic exchange program,
shareholders can authorize regular monthly investments (minimum of $100 per
fund) to be liquidated from their Consultant Class Shares' account and
invested automatically into one or more funds in the Delaware Group, subject
to the same conditions and limitations as other exchanges noted above.
Shareholders can also use the Wealth Builder Option to invest in the
Consultant Class Shares through regular liquidations of shares in their
accounts in other funds in the Delaware Group, subject to the same conditions
and limitations as other exchanges noted above. See Investing by Exchange
under Buying Shares. Shareholders can terminate their participation at any
time by written notice to the Fund.
This option is not available to participants in the following plans: Salary
Reduction/SEP, Simplified Employee Pension/IRA, Profit Sharing and Money
Purchase Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans.
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<PAGE> 15
DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend to all shareholders of record at the time the
offering price of shares is determined. See Purchase Price and Effective Date
under Buying Shares. Thus, when redeeming shares, dividends continue to accrue
up to and including the date of redemption.
Purchases of shares by wire begin earning dividends when converted into
Federal Funds and available for investment, normally the next business day
after receipt. However, if the Fund is given prior notice of Federal Funds
wire and an acceptable written guarantee of timely receipt from an investor
satisfying the Fund's credit policies, the purchase will start earning
dividends on the date the wire is received. Purchases by check earn dividends
upon conversion to Federal Funds, normally one business day after receipt.
The Fund's dividends are declared daily and paid monthly on the last day of
each month. Payment by check of cash dividends will ordinarily be mailed
within three business days after the payable date. Short-term capital gains
distributions, if any, may be paid with the daily dividend; otherwise, they
will be distributed annually during the first quarter following the close of
the fiscal year.
Each class of the Fund will share proportionately in the investment income
and expenses of the Fund, except that (i) the per share dividends and
distributions on the Class B Shares will be lower than the per share dividends
and distributions on the Class A Shares and the Consultant Class Shares as a
result of the higher expenses under the 12b-1 Plan relating to the Class B
Shares described on page 10; and (ii) the per share dividends and
distributions on both the Class B Shares and the Consultant Class Shares will
be lower than the per share dividends and distributions on the Class A Shares
as such class will not incur any expenses under the 12b-1 Plans described on
pages 10 and 16.
For the seven-day period ended March 31, 1994, the annualized current yield
of the Consultant Class Shares was 2.26% and the compounded effective yield
was 2.29%.
Both dividends and distributions will be automatically reinvested in your
account unless you elect otherwise. Any check in payment of dividends or other
distributions which cannot be delivered by the Post Office or which remains
uncashed for a period of more than one year may be reinvested in the
shareholder's account at the then-current net asset value and the dividend
option may be changed from cash to reinvest. (See The Delaware Difference for
additional information.)
TAXES
The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code (the
"Code"). As such, the Fund will not be subject to federal income tax, or to
any excise tax, to the extent its earnings are distributed as provided in the
Code.
The Fund intends to distribute substantially all of its net investment
income and net capital gains. Dividends from net investment income or net
short-term capital gains will be taxable to you as ordinary income, whether
received in cash or in additional shares. No portion of the Fund's
distributions will be eligible for the dividends-received deduction for
corporations.
Although the Fund does not expect to distribute any long-term capital gains,
any capital gains distributions paid by the Fund, whether received in cash or
in additional shares, are taxable to those investors who are subject to income
taxes as long-term capital gains, regardless of the length of time an investor
owns shares in the Fund.
The sale of Fund shares is a taxable event and may result in a capital gain
or loss to shareholders subject to tax. Capital gain or loss may be realized
from an ordinary redemption of shares or an exchange of shares between two
mutual funds (or two series or portfolios of a mutual fund). However, since
the Fund seeks to maintain a constant $1.00 share price for both purchases and
redemptions, shareholders are not expected to realize a capital gain or loss
upon sale.
Dividends which are declared in October, November or December but which, for
operational reasons, may not be paid to the shareholder until the following
January, will be treated for tax purposes as if paid by the Fund and received
by the shareholder on December 31 of the calendar year in which they are
declared.
In addition to federal taxes, shareholders may be subject to state and local
taxes on distributions. Distributions of interest income and capital gains
realized from certain types of U.S. government securities may be exempt from
state personal income taxes. Shares of the Fund are exempt from Pennsylvania
county personal property taxes.
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<PAGE> 16
Each year, the Fund will mail you information on the tax status of the
Fund's dividends and distributions. Shareholders will also receive each year
information as to the portion of dividend income that is derived from U.S.
government securities that are exempt from state income tax. Of course,
shareholders who are not subject to tax on their income would not be required
to pay tax on amounts distributed to them by the Fund.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Account Registration Form your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
The tax discussion set forth above is included for general information only.
Prospective investors should consult their own tax advisers concerning the
federal, state, local or foreign tax consequences of an investment in the
Fund.
NET ASSET VALUE PER SHARE
The purchase and redemption price of the Fund's shares is equal to the
Fund's net asset value ("NAV") per share after the order is received. The NAV
is computed as of the close of regular trading on the New York Stock Exchange
(ordinarily, 4 p.m., Eastern time) on days when such exchange is open.
The NAV per share is computed by adding the value of all securities and
other assets in the portfolio, deducting any liabilities (expenses and fees
are accrued daily) and dividing by the number of shares outstanding.
The Fund's total net assets are determined by valuing the portfolio
securities at amortized cost. Under the direction of the Board of Directors,
certain procedures have been adopted to monitor the value of the Fund's
securities and stabilize the price per share at $1.00. Prior to January 1,
1991, the portfolio of the Fund was managed to maintain a constant $10 per
share value. The Fund accomplished this change by effecting a ten-to-one stock
split for shareholders of record on that date.
Each share of the Fund's three classes will bear, pro-rata, all of the
common expenses of the Fund. The net asset values of all outstanding shares of
each class of the Fund will be computed on a pro-rata basis for each
outstanding share based on the proportionate participation in the Fund
represented by the value of shares of that class. All income earned and
expenses incurred by the Fund will be borne on a pro-rata basis by each
outstanding share of a class, based on each class' percentage in the Fund
represented by the value of shares of such classes, except that Class A Shares
will not incur any of the expenses under the Fund's 12b-1 Plans and Class B
Shares and Consultant Class Shares alone will bear the 12b-1 Plan expenses
payable under their respective Plans. Due to the specific distribution
expenses and other costs that will be allocable to each class, the dividends
paid to each class of the Fund may vary. However, the NAV per share of the
Class B Shares, the Class A Shares and the Consultant Class Shares is expected
to be equivalent.
See Part B for additional information.
MANAGEMENT OF THE FUND
Directors
The business and affairs of the Fund are managed under the direction of its
Board of Directors. Part B contains additional information regarding the
directors and officers.
Investment Manager
The Manager furnishes investment management services to the Fund.
The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. On March 31, 1994, the Manager and its affiliate,
Delaware International Advisers Ltd., were supervising in the aggregate more
than $25 billion in assets in the various institutional (approximately
$16,254,212,000) and investment company (approximately $9,642,945,000)
accounts.
The Manager is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). By reason of its percentage ownership of DMH common
stock and through a Voting Trust Agreement with certain other DMH
shareholders, Legend Capital Group, L.P. ("Legend") controls DMH and the
Manager. As General Partners of Legend, Leonard M. Harlan and John K. Castle
have the ability to direct the voting of more than a majority of the shares of
DMH common stock and thereby control the Manager.
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<PAGE> 17
The Manager manages the Fund's portfolio, makes investment decisions and
implements them. The Manager also pays the Fund's rent and the salaries of all
the directors, officers and employees of the Fund who are affiliated with the
Manager.
The annual compensation paid by the Fund for investment management services
is equal to .5% on 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, less all directors' fees paid to the unaffiliated
directors by the Fund. If the Fund's average daily net assets exceed $3
billion for any month, the Board of Directors will conduct a review of the
Investment Management Agreement. Investment management fees paid by the Fund
were 0.49% of average daily net assets for the fiscal year ended March 31, 1994.
Portfolio Trading Practices
Portfolio trades are generally made on a net basis without brokerage
commissions. However, the price may include a mark-up or mark-down.
Banks, brokers or dealers are selected by the Manager to execute the Fund's
portfolio transactions.
The Manager uses its best efforts to obtain the best available price and
most favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager
or its advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the
Manager may consider a broker/dealer's sales of Fund shares in placing
portfolio orders, and may place orders with broker/dealers that have agreed to
defray certain Fund expenses such as custodian fees.
Performance Information
From time to time, the Fund may publish the "yield" and "effective yield"
for the Consultant Class Shares. Both yield figures are based on historical
earnings and are not intended to indicate future performance. The "yield" of
the Consultant Class Shares refers to the income generated by an investment in
the Class over a specified seven-day period. This income is then "annualized,"
which means the amount of income generated by the investment during that week
is assumed to be generated each week over a 52-week period and is shown as a
percentage of the investment. The "effective yield" is calculated in a similar
manner but, when annualized, the income earned by an investment in the
Consultant Class Shares is assumed to be reinvested. The "effective yield"
will be slightly higher than the "yield" because of the compounding effect of
this assumed reinvestment. The Fund may also publish aggregate and average
annual total return information concerning the Class which will reflect the
compounded rate of return of an investment in the Class over a specified
period of time and will assume the investment of all distributions at net
asset value. Yield fluctuates and is not guaranteed. Past performance is not
an indication of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, Inc., serves as the national
distributor for the Fund under an Amended and Restated Distribution Agreement
dated as of May 2, 1994.
The Fund has adopted a distribution plan under Rule 12b-1 (the "Plan") for
the Consultant Class Shares which permits the Fund to pay the Distributor from
Class assets a monthly fee for its services and expenses in distributing and
promoting sales of its shares. These expenses include preparing and
distributing advertisements, sales literature and prospectuses and reports
used for sales purposes, compensating sales and marketing personnel, holding
special promotions for specified periods of time, and paying distribution and
maintenance fees to brokers, dealers and other entities which sell Consultant
Class Shares. In connection with the promotion of Consultant Class Shares, the
Distributor may, from time to time, pay to participate in dealer-sponsored
seminars and conferences, and reimburse dealers for expenses incurred in
connection with preapproved seminars, conferences and advertising. The
Distributor may pay or allow additional promotional incentives to dealers as
part of preapproved sales contests and/or to dealers who provide extra
training and information concerning the Consultant Class Shares and increase
sales of the Class. In addition, the Fund may make payments from Class assets
directly to others, such as banks, who aid in the distribution of Class shares
or provide services to the Class, pursuant to service agreements with the
Fund. Registered representatives of brokers, dealers or other entities who
have sold a specified level of Delaware Group funds having a 12b-1 Plan, are
paid a .25% continuing trail fee by the Distributor from 12b-1 Plan payments
of the Class for assets maintained in the Class.
The aggregate fees paid by the Fund from Consultant Class Shares assets to
the Distributor and others under the Plan may not exceed .30% of the Class'
average daily net assets in any year. The Class will not incur any
distribution expenses beyond this limit, which may not be increased without
shareholder approval. The Board of Directors has set the current fee for the
Class at .25% of average daily net assets. The Distributor may, however, incur
additional expenses and make additional payments to dealers from its own
resources to promote the distribution of Class shares.
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The Plan does not apply to the Class A Shares or the Class B Shares. Those
shares are not included in calculating the Plan's fees, and the Plan is not
used to assist in the distribution and marketing of Class A Shares or Class B
Shares.
While Plan payments may not exceed .30% annually, the Plan does not limit
fees to amounts actually expended by the Distributor. It is therefore possible
that the Distributor may realize a profit in any particular year. However, the
Distributor currently expects that its distribution expenses will likely equal
or exceed payments to it under the Plan. The monthly fee paid to the
Distributor is subject to the review and approval of the Fund's unaffiliated
directors who may reduce the fee or terminate the Plan at any time.
The National Association of Securities Dealers, Inc. has adopted amendments
to its Rules of Fair Practice relating to investment company sales charges.
The Fund and the Distributor intend to operate in compliance with these rules.
The staff of the Securities and Exchange Commission ("SEC") has proposed
amendments to Rule 12b-1 and other related regulations that could impact Rule
12b-1 Distribution Plans. The Fund intends to amend the Plan, if necessary, to
comply with any new rules or regulations the SEC may adopt with respect to
Rule 12b-1.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund
under an Agreement dated December 20, 1990. The directors annually review
service fees paid to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
Expenses
The Fund is responsible for all of its own expenses other than those
expenses borne by the Manager under the Investment Management Agreement and
those borne by the Distributor under the Distribution Agreement. The
Consultant Class Shares' ratio of expenses to average daily net assets for the
fiscal year ended March 31, 1994 was 1.25%. The expense ratio of the
Consultant Class Shares reflects the impact of the 12b-1 Plan.
Shares
Delaware Group Cash Reserve was originally created in 1977, organized as a
Pennsylvania business trust in 1983 and reorganized as a Maryland corporation
in 1990. The Fund currently has authorized capital of ten billion shares of
common stock, $.001 par value per share.
The Fund also offers Class A Shares and Class B Shares which represent a
proportionate interest in the assets of the Fund and have the same voting and
other rights and preferences as the Consultant Class Shares, except that Class
A Shares and Class B Shares are not subject to, and may not vote on matters
affecting the Plan under Rule 12b-1 relating to the Consultant Class Shares.
Similarly, the Consultant Class Shares are not subject to, and may not vote on
matters affecting, the Fund's Plan under Rule 12b-1 relating to the Class B
Shares.
All such shares have equal voting rights and are equal in all other
respects. All Fund shares have noncumulative voting rights which means that
the holders of more than 50% of the Fund's shares voting for the election of
directors can elect 100% of the directors if they choose to do so. Under
Maryland law, the Fund is not required, and does not intend, to hold annual
meetings of shareholders unless, under certain circumstances, it is required
to do so under the Investment Company Act of 1940. Shareholders of 10% or more
of the Fund's shares may request that a special meeting be called to consider
the removal of a director.
Cash Reserve Consultant Class is known as Delaware Cash Reserve Consultant
Class. Prior to May 1994, the Cash Reserve A Class was known as the Delaware
Cash Reserve class, and prior to May 1992, was known as the original class.
Prior to May 1994, the Cash Reserve Consultant Class was known as the Delaware
Cash Reserve Consultant class, which prior to November 1992, was known as the
Delaware Cash Reserve (Institutional) class, and which, prior to May 1992, was
known as the consultant class.
17
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<PAGE> 20
SHARES OF THIS FUND ARE NOT Delaware
FEDERALLY INSURED BY THE FEDERAL Cash Reserve
DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD OR ANY ------------
OTHER AGENCY. SHARES ARE NOT
DEPOSITS, OBLIGATIONS OF, CONSULTANT
GUARANTEED OR ENDORSED BY ANY BANK. CLASS
NO SALES CHARGE
- -------------------------------------
The Delaware Group includes 20 different PROSPECTUS
funds with a wide range of investment
objectives. Stock funds, income funds, MAY 30, 1994
tax-free funds, money market funds and
closed-end equity funds give investors
the ability to create a portfolio that fits
their personal financial goals. For more
information contact your financial adviser
or call the Delaware Group at 800-523-4640,
in Philadelphia 215-988-1333.
Investment Manager (Photo of George Washington
Delaware Management Company, Inc. Crossing the Delaware River)
One Commerce Square
Philadelphia, PA 19103
National Distributor
Delaware Distributors, Inc.
1818 Market Street
Philadelphia, PA 19103
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent WHILE THE FUND WILL
Delaware Service Company, Inc. MAKE EVERY EFFORT TO
1818 Market Street MAINTAIN A STABLE NET
Philadelphia, PA 19103 ASSET VALUE OF $1 PER
SHARE, THERE IS NO
Legal Counsel ASSURANCE THAT THE FUND
Stradley, Ronon, Stevens & Young WILL BE ABLE TO DO SO.
One Commerce Square THE SHARES OF THE FUND
Philadelphia, PA 19103 ARE NEITHER INSURED NOR
GUARANTEED BY THE U.S.
Independent Auditors GOVERNMENT.
Ernst & Young
Two Commerce Square
Philadelphia, PA 19103
Custodian
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
DELAWARE
P-028-5/94-RRD GROUP
Printed in the U.S.A. ========
