<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
- ------------------------------------------------------------------------------
A CLASS SHARES
- ------------------------------------------------------------------------------
1818 Market Street
Philadelphia, PA 19103
- ------------------------------------------------------------------------------
For Prospectus and Performance:
Nationwide 800-523-4640
Philadelphia 988-1333
Information on Existing Accounts:
Nationwide 800-523-1918
Philadelphia 988-1241
- ------------------------------------------------------------------------------
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 Service 6
- ------------------------------------------------------------------------------
Retirement Planning 7
- ------------------------------------------------------------------------------
Buying Shares 8
- ------------------------------------------------------------------------------
Redemption and Exchange 10
- ------------------------------------------------------------------------------
Dividends and Distributions 13
- ------------------------------------------------------------------------------
Taxes 13
- ------------------------------------------------------------------------------
Net Asset Value Per Share 14
- ------------------------------------------------------------------------------
Management of the Fund 14
- ------------------------------------------------------------------------------
This Prospectus describes the Delaware Cash Reserve A Class of shares ("Class
A Shares") of Delaware Group Cash Reserve, Inc. (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 Class
A Shares is $1,000 and for subsequent investments is $25. The Class A Shares are
not subject to front-end or contingent deferred sales charges and are not
subject to annual 12b-1 Plan distribution expenses. See Buying Shares.
This Prospectus relates only to the Class A 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 Consultant Class of shares
("Consultant Class Shares") and Delaware Cash Reserve B Class of shares ("Class
B Shares"). Shares of those classes 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, and shares of those
classes are subject to ongoing 12b-1 Plan distribution expenses pursuant to
separate Plans adopted by the respective classes. Class B Shares are also
subject to a contingent deferred sales charge in instances of redemption.
Prospectuses for the Consultant Class Shares and Class B Shares 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> 2
SYNOPSIS
Capitalization
The Fund offers three classes of shares: the Delaware Cash Reserve A Class,
the Delaware Cash Reserve Consultant Class and the 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. Two billion shares of that stock
have been allocated to the Delaware Cash Reserve A Class, five hundred million
shares have been allocated to the Delaware Cash Reserve Consultant 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
Shares of the Class A Shares offered by this Prospectus are available at net
asset value, without a front-end or contingent deferred sales charge and are not
subject to distribution fees under a Rule 12b-1 distribution plan. See Buying
Shares.
Minimum Investment
The minimum initial investment for the Class A 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
Class A Shares of the Fund are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
2
<PAGE> 3
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.............................. None
Maximum Sales Charge Imposed on Other Operating Expenses................ 0.51%
Reinvested Dividends -----
(as a percentage of offering price)...... None Total Operating Expenses.............. 1.00%
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 Class A 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 Consultant
Class 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
------ ------- ------- --------
$10 $32 $55 $122
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> 4
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>
- ------------------------------------------------------------------------------------------------------------------------------------
Year Ended
3/31/94 3/31/93 3/31/92 3/31/91 3/29/90 3/30/89 3/31/88 3/26/87
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value, Beginning
of Period(1)....................... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment
- ----------------------
Operations
----------
Net Investment Income................ 0.0227 0.0283 0.0501 0.0727 0.0820 0.0730 0.0629 0.0571
Net Gains or Losses on Securities
(both realized and unrealized)..... none none none none none none none none
------- ------- ------- ------- ------- ------- ------- -------
Total From Investment
Operations....................... 0.0227 0.0283 0.0501 0.0727 0.0820 0.0730 0.0629 0.0571
------- ------- ------- ------- ------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment
income) ........................... (0.0227) (0.0283) (0.0501) (0.0727) (0.0820) (0.0730) (0.0629) (0.0571)
Distributions (from capital gains)... -- -- -- -- -- -- -- --
Returns of Capital................... -- -- -- -- -- -- -- --
------- ------- ------- ------- ------- ------- ------- -------
Total Distributions................ (0.0227) (0.0283) (0.0501) (0.0727) (0.0820) (0.0730) (0.0629) (0.0571)
------- ------- ------- ------- ------- ------- ------- -------
Net Asset Value, End of Period....... $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= ======= ======= ======= ======= =======
- ------------------------------------------------------------------------------------------------------------------------------------
Total Return ........................ 2.28% 2.87% 5.13% 7.52% 8.51% 7.55% 6.48% 5.86%
- ------------
- ------------------------------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)...................... $699,112 $672,034 $911,548 $1,042,489 $1,087,547 $1,073,044 $986,408 $996,964
Ratio of Expenses to Average
Daily Net Assets................... 1.00% 0.90% 0.81% 0.78% 0.82% 0.90% 0.88% 0.90%
Ratio of Net Investment Income to
Average Daily Net Assets........... 2.27% 2.88% 5.04% 7.24% 8.20% 7.32% 6.29% 5.76%
- ------------
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
- ---------------------------------------------------------------
Year Ended
3/27/86 3/28/85
<S> <C> <C>
Net Asset Value, Beginning
of Period(1)....................... $1.0000 $1.0000
Income From Investment
- ----------------------
Operations
----------
Net Investment Income................ 0.0748 0.0962
Net Gains or Losses on Securities
(both realized and unrealized)..... none none
------- -------
Total From Investment
Operations....................... 0.0748 0.0962
------- -------
Less Distributions
- ------------------
Dividends (from net investment
income) ........................... (0.0748) (0.0962)
Distributions (from capital gains)... -- --
Returns of Capital................... -- --
------- -------
Total Distributions................ (0.0748) (0.0962)
------- -------
Net Asset Value, End of Period....... $1.0000 $1.0000
======= =======
- ---------------------------------------------------------------
Total Return ........................ 7.74% 10.06%
- ------------
- ---------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period
(000 omitted)...................... $1,286,897 $1,501,080
Ratio of Expenses to Average
Daily Net Assets................... 0.81% 0.81%
Ratio of Net Investment Income to
Average Daily Net Assets........... 7.49% 9.60%
- ------------
</TABLE>
(1)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.
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 & 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.
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.
5
<PAGE> 7
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.
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.
6
<PAGE> 8
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 Class A
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 of funds 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
Class A 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 Class A 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.
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 Class A 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 Class A 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.
7
<PAGE> 9
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.
BUYING SHARES
The Distributor serves as the national distributor for the Fund.
The minimum initial purchase of Class A Shares is $1,000 and all subsequent
purchases must be $25 or more. 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 Class A 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 A 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 A 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 A Class,
New Accounts, P.O. Box 7977, Philadelphia, PA 19101.
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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
Class A 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 Class A 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 Class A 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.
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 Class A
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 Class A 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.
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Consultant Class and Class B Shares
In addition to offering the Class A Shares, the Fund offers two other classes
of shares, the Class B Shares and the Consultant Class Shares, each of which are
described in a separate prospectus. The Consultant Class Shares and 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 Consultant Class Shares have no front-end or
contingent deferred sales charge; such class has a 12b-1 Plan whereby the Fund
is permitted to pay the Distributor annual fees payable monthly up to a maximum
of .30% of the average daily net assets of such shares in order to compensate
the Distributor for providing distribution and related services and bearing
certain distribution-related expenses. 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) and
are subject to a contingent deferred sales charge upon redemption. Sales or
service compensation available in respect of these classes, therefore, differs
from that available to the Class A 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 Consultant Class Shares were 1.25%. Class B Shares were not
offered prior to May 2, 1994.
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.
Class A Shares 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
Class A 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 Class A
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.
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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 Class A Shares of the Fund without the imposition of
the Limited CDSC at the time of the exchange. However, upon subsequent
redemption from the Class A Shares of the Fund 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 Class A Shares. Shareholders will be given credit for the period during
which the Class A Shares were held.
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 Class A 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 Class A 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.
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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.
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 Class A 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 Class A 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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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 the per share dividends and distributions on
the Class A Shares will be higher than the per share dividends and distributions
on the Class B Shares and the Consultant Class Shares as the Class A Shares will
not incur the expenses under the 12b-1 Plans for the Class B Shares and
Consultant Class Shares described on page 10.
For the seven-day period ended March 31, 1994, the annualized current yield of
the Class A Shares was 2.51% and the compounded effective yield was 2.54%.
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.
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.
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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.
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.
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<PAGE> 16
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 Class A Shares. Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of the Class A 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 Class A 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 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 Distributor bears all of the costs of promotion and
distribution.
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. Certain recordkeeping and other shareholder services
that otherwise would be performed by the Transfer Agent may be performed by
certain other entities and the Transfer Agent may elect to enter into an
agreement to pay such other entities for these services.
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 Class A Shares' ratio
of expenses to average daily net assets for the fiscal year ended March 31, 1994
was 1.00%.
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 B Shares and Consultant Class Shares. Shares of
each class represent a proportionate interest in the assets of the Fund and have
the same voting and other rights and preferences as the Class A Shares, except
that the Class A Shares are not subject to, and may not vote on matters
affecting, the Plans under Rule 12b-1 relating to the Class B Shares and the
Consultant Class Shares. Similarly, the shareholders of 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, and the shareholders of
the Class B Shares may not vote on matters affecting the Fund's Plan under Rule
12b-1 relating to the Consultant Class 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 A Class is known as Delaware Cash Reserve A Class. Prior to May
1994, the Delaware 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 Delaware 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.
15
<PAGE> 17
SHARES OF THIS FUND ARE NOT FEDERALLY INSURED Delaware
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION, Cash Reserve
THE FEDERAL RESERVE BOARD OR ANY OTHER AGENCY. ---------------
SHARES ARE NOT DEPOSITS, OBLIGATIONS OF, A Class
GUARANTEED OR ENDORSED BY ANY BANK. NO SALES CHARGE
PROSPECTUS
- -----------------------------------------------
MAY 30, 1994
The Delaware Group includes 20 different
funds with a wide range of investment
objectives. Stock funds, income funds,
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
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
WHILE THE FUND WILL
Legal Counsel MAKE EVERY EFFORT TO
Stradley, Ronon, Stevens & Young MAINTAIN A STABLE NET
One Commerce Square ASSET VALUE OF $1 PER
Philadelphia, PA 19103 SHARE, THERE, IS NO
ASSURANCE THAT THE FUND
Independent Auditors WILL BE ABLE TO DO SO.
Ernst & Young THE SHARES OF THE FUND
Two Commerce Square ARE NEITHER INSURED NOR
Philadelphia, PA 19103 GUARANTEED BY THE U.S.
GOVERNMENT.
Custodian
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
DELAWARE
P-008-5/94-RRD GROUP
Printed in the U.S.A. ========
