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SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, DC 20549
FORM N-1A
File No. 2-60770
File No. 811-02806
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 /X/
Pre-Effective Amendment No.
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Post-Effective Amendment No. 46 /X/
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AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 /X/
Amendment No. 46
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DELAWARE GROUP CASH RESERVE
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(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
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(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 255-1255
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Eric Miller, Esquire 1818 Market Street, Philadelphia, PA 19103
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(Name and Address of Agent for Service)
Approximate Date of Public Offering: May 30, 2000
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It is proposed that this filing will become effective:
_____ immediately upon filing pursuant to paragraph (b)
__X__ on May 30, 2000 pursuant to paragraph (b)
_____ 60 days after filing pursuant to paragraph (a)(1)
_____ on (date) pursuant to paragraph (a)(1)
_____ 75 days after filing pursuant to paragraph (a)(2)
_____ on (date) pursuant to paragraph (a)(2) of Rule 485
If appropriate:
_____ this post-effective amendment designates a new effective
date for a previously filed post-effective amendment
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--- C O N T E N T S ---
This Post-Effective Amendment No. 46 to Registration File No. 2-60770 includes
the following:
1. Facing Page
2. Contents Page
3. Part A--Prospectuses
4. Part B--Statement of Additional Information
5. Part C--Other Information
6. Signatures
7. Exhibits
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DELAWARE(SM)
INVESTMENTS
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Philadelphia o London
Delaware Cash
Reserve
Class A
Consultant Class
Prospectus
May 30, 2000
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Money Market Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
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Table of contents
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Fund profile page 2
Delaware Cash Reserve 2
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How we manage the Fund page 4
Our investment strategies 4
The securities we typically invest in 4
The risks of investing in the Fund 6
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Who manages the Fund page 7
Investment manager 7
Fund administration (Who's who) 8
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About your account page 9
Investing in the Fund 9
How to buy shares 10
Retirement plans 11
How to redeem shares 11
Account minimum 13
Special services 13
Dividends, distributions and taxes 15
Certain management considerations 15
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Financial highlights page 16
1
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Profile: Delaware Cash Reserve
What is the Fund's goal?
Delaware Cash Reserve seeks to provide maximum current income, while preserving
principal and maintaining liquidity. Although the Fund will strive to achieve
its goal, there is no assurance that it will.
Who should invest in the Fund
o Investors with short-term financial goals who seek current income.
o Investors who do not want an investment whose value may fluctuate over the
short term.
o Investors who are looking for a short-term, relatively safe investment to
complement more long-term investments in their portfolio.
Who should not invest in the Fund
o Investors with long-term financial goals.
o Investors looking for relatively high current income.
What are the Fund's main investment strategies?
Delaware Cash Reserve invests in short-term money market securities, including
securities issued or guaranteed by the U.S. government, its agencies or
instrumentalities and short-term debt instruments of banks and corporations.
Delaware Cash Reserve is a money market fund. A money market fund is designed
for stability of principal; consequently, the level of income fluctuates.
We maintain an average maturity of 90 days or less. Also, we do not purchase any
instruments with an effective remaining maturity of more than 397 calendar days
(approximately 13 months). We intend to hold our investments until maturity, but
we may sell them prior to maturity in order to shorten or lengthen the average
maturity of the bonds in the portfolio, increase the yield, maintain the quality
of the portfolio or maintain a stable share value.
What are the main risks of investing in the Fund?
Delaware Cash Reserve will be affected primarily by declines in interest rates
that would reduce the income provided by the Fund. For a more complete
discussion of risk, please turn to page 6.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by investing in the
Fund.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
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How has the Fund performed?
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This bar chart and table can help you Year-by-year total return (Class A)
evaluate the risks of investing in the
Fund. We show how returns for the Fund's
Class A shares have varied over the past 7.77% 5.81% 3.30% 2.30% 3.34% 5.11% 4.63% 4.84% 4.75% 4.42%
ten calendar years, as well as average -----------------------------------------------------------------------------
annual returns for Class A and 1990 1991 1992 1993 1994 1995 1996 1997 1998 1999
Consultant Class shares for one-, five-
and ten-year periods. The Fund's past
performance does not necessarily
indicate how it will perform in the
future.
As of March 31, 2000, the Fund's Class A
had a year-to-date return of 1.30%.
During the periods illustrated in this
bar chart, Class A's highest quarterly
return was 1.93% for the quarter ended
June 30, 1990 and its lowest quarterly
return was 0.56% for the quarter ended
June 30, 1993.
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2
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How has the Fund performed? (continued)
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Average annual returns for periods ending 12/31/99
CLASS A Consultant Class
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<S> <C> <C> <C>
1 year 4.42% 4.16%
5 years 4.75% 4.49%
10 years 4.62% 4.36%
Investors interested in obtaining the 7-day yield for either class can call 800.523.1918.
What are the Fund's fees and expenses? CLASS A Consultant Class
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Shareholder fees are paid directly Maximum sales charge (load) imposed on
from your investment. purchases as a percentage of offering price none none
Maximum sales charge (load) imposed on
reinvested dividends none none
Redemption fees none none
Exchange fees(1) none none
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Annual fund operating expenses are Management fees 0.44% 0.44%
deducted from the Fund's assets. Distribution and service (12b-1) fees none 0.25%(2)
Other expenses 0.47% 0.47%
Total operating expenses 0.91% 1.16%
CLASS A Consultant Class
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This example is intended to help you 1 year $93 $118
compare the cost of investing in the 3 years $290 $368
Fund to the cost of investing in other 5 years $504 $638
mutual funds with similar investment 10 years $1,120 $1,409
objectives. We show the cumulative
amount of Fund expenses on a
hypothetical investment of $10,000 with
an annual 5% return over the time
shown.(3) This is an example only, and
does not represent future expenses,
which may be greater or less than those
shown here.
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(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) Consultant Class shares are subject to a 12b-1 fee of no greater than 0.30%
of average daily net assets, but the Board of Trustees has set the fee at
0.25% of average daily net assets.
(3) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.
3
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How we manage the Fund
Our investment strategies
We invest primarily in short-term money market securities, including securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities
and short-term debt instruments of banks and corporations. We maintain an
average maturity of 90 days or less. Also, we do not purchase any securities
with an effective remaining maturity of more than 397 days (approximately 13
months). We may shorten or lengthen the Fund's average maturity based on our
analysis of interest rate trends.
We intend to hold our investments until maturity, but we may sell them prior to
maturity in order to shorten or lengthen the average maturity of the bonds in
the portfolio, increase the yield, maintain the quality of the portfolio or
maintain a stable share value.
The Fund's investment objective is non-fundamental. This means that the Board of
Trustees may change the objective without obtaining shareholder approval. If the
objective were changed, we would notify shareholders before the change in the
objective became effective.
The securities we typically invest in
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Securities How we use them
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Delaware Cash Reserve
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Direct U.S. Treasury obligations: We may invest without limit in U.S. Treasury securities. We would typically
Treasury bills, notes and bonds of invest in Treasury bills or longer term Treasury securities whose remaining
varying maturities. U.S. Treasury effective maturity is less than 13 months.
securities are backed by the "full faith
and credit" of the United States.
Certificates of deposit and obligations We may invest in certificates of deposit and obligations from banks that have
of both U.S. and foreign banks: Debt assets of at least one billion dollars.
instruments issued by banks that pay
interest.
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.
Corporate commercial paper and other We may invest in commercial paper and other corporate obligations rated in one
corporate obligations: Short-term debt of the two highest ratings categories by at least two nationally recognized
obligations with maturities ranging from statistical ratings organizations (NRSROs). The purchase of a security that does
2 to 270 days, issued by companies. not possess those ratings must be approved or ratified by the Board of Trustees
in accordance with the maturity, quality and diversification conditions with
which taxable money markets must comply. The Fund will not invest more than
5% of its total assets in securities rated in the second highest category
by an NRSRO.
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</TABLE>
How to use
this glossary
This glossary includes definitions of investment terms used throughout the
Prospectus. If you would like to know the meaning of an investment term that is
not explained in the text please check the glossary.
<TABLE>
<CAPTION>
Glossary A-C
Amortized cost Average maturity
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Amortized cost is a method used to value An average of when the individual bonds
a fixed-income security that starts with and other debt securities held in a
the face value of the security and then portfolio will mature.
adds or subtracts from that value
depending on whether the purchase price
was greater or less than the value of
the security at maturity. The amount
greater or less than the par value is
divided equally over the time remaining
until maturity.
</TABLE>
4
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<TABLE>
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The securities we typically invest in (continued)
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Securities How we use them
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Delaware Cash Reserve
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Asset-backed securities: Bonds or notes We may invest without limit in asset-backed securities. We may invest only in
backed by accounts receivables including securities rated in the highest rating category by an NRSRO. We currently
home equity, automobile or credit loans. intend to invest only in asset-backed securities backed by credit card
receivables, home equity loans, automobile loans and wholesale dealer floor
plans.
Repurchase agreements: An agreement We may use repurchase agreements as a short-term investment for the Fund's cash
between a buyer of securities such as position. In order to enter into these repurchase agreements, the Fund must
the Fund and a seller of securities, in have collateral of at least 102% of the repurchase price. The Fund will only
which the seller agrees to buy the enter into repurchase agreements in which the collateral is composed of U.S.
securities back within a specified time government securities.
at the same price the buyer paid for
them, plus an amount equal to an agreed
upon interest rate.
Restricted securities: Privately placed We may invest in privately placed securities, including those that are eligible
securities whose resale is restricted for resale only among certain institutional buyers without registration which
under securities law. are commonly known as "Rule 144A Securities." Other restricted securities which
are illiquid must be limited to 10% of total Fund assets.
Illiquid securities: Securities that do We may not invest more than 10% of total assets in illiquid securities
not have a ready market, and cannot be including repurchase agreements that mature in more than seven days.
easily sold, if at all, at approximately
the price that the Fund has valued them.
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</TABLE>
Please see the Statement of Additional Information for additional descriptions
about the securities listed in the table above.
Borrowing from banks The Fund may borrow money as a temporary measure for
extraordinary purposes or to facilitate redemptions. To the extent that it does
so, the Fund may be unable to meet its investment objective. The Fund will not
borrow money in excess of one-third of the value of its net assets.
<TABLE>
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Bond Bond ratings Capital
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A debt security, like an IOU, issued by Independent evaluations of The amount of money you invest.
a company, municipality or government creditworthiness, ranging from Aaa/AAA
agency. In return for lending money to (highest quality) to D (lowest quality).
the issuer, a bond buyer generally Bonds rated Baa/BBB or better are
receives fixed periodic interest considered investment grade. Bonds rated
payments and repayment of the loan Ba/BB or lower are commonly known as
amount on a specified maturity date. A junk bonds. See also Nationally
bond's price changes prior to maturity recognized statistical rating
and is inversely related to current organization.
interest rates. When interest rates
rise, bond prices fall, and when
interest rates fall, bond prices rise.
</TABLE>
5
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<PAGE>
How we manage the Fund (continued)
The risks of investing in the Fund
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
money. Before you invest in the Fund you should carefully evaluate the risks.
The following are the chief risks you assume when investing in the Fund. Please
see the Statement of Additional Information for further discussion of these
risks and risks not discussed here.
<TABLE>
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Risks How we strive to manage them
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<S> <C>
Delaware Cash Reserve
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Interest rate risk is the risk that securities, particularly Because the Fund invests exclusively in short-term securities,
bonds with longer matgurities, will decrease in value if interest rate changes are not a major risk to the value of its
interest rates rise. portfolio. However, a decline in interest rates would reduce the
level of income provided by the Fund.
Credit risk is the risk that there is the possibility that a The Fund holds only high quality short-term securities.
bond's issuer (or an entity that insures the bond) will be Therefore, it is generally not subject to significant credit
unable to make timely payments of interest and principal. risk.
We limit our investments to those that the Board of Trustees
considers to be of high quality with minimal credit risks. All
investments must also meet the maturity, quality and
diversification standards that apply to taxable money market
funds.
Counterparty risk is the risk that the Fund may lose We try to minimize this risk by considering the creditworthiness
money because a party that we contract with to buy or of all parties before we enter into transactions with them.
sell securities fails to fulfill its side of the agreement.
Where appropriate, we will also hold collateral from the
counterparties consistent with applicable regulations.
Inflation risk is the risk that the return from your The Fund is designed for short-term investment goals and
investments will be less than the increase in the cost of therefore may not outpace inflation over longer time periods. For
living due to inflation, thus preventing you from this reason, the Fund is not recommended as a primary investment
reaching your financial goals. for people with long-term goals.
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</TABLE>
<TABLE>
<CAPTION>
C-D Capital appreciation Commission Compounding Consumer Price Index (CPI)
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<S> <C> <C> <C> <C>
An increase in the The fee an investor pays to a Earnings on an investment's Measurement of U.S.
value of an investment. financial adviser for investment previous earnings. inflaton, represents the
advice and help in buying or price of a basket of
selling mutual funds, stocks, commonly purchased goods.
bonds or other securities.
</TABLE>
6
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<PAGE>
Who manages the Fund
Investment manager
The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust, which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware Management Company makes investment
decisions for the Fund, manages the Fund's business affairs and provides daily
administrative services. For its services to the Fund, the manager was paid
0.44% of average daily net assets for the last fiscal year.
<TABLE>
<CAPTION>
Contingent deferred sales charge (CDSC) Corporate bond Cost basis Diversification
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<S> <C> <C> <C>
Fee charged by some mutual funds when A debt security issued The original purchase price The process of spreading
shares are redeemed (sold back to the by a corporation. of an investment, used in investments among a number of
fund) within a set number of years; an See Bond. determining capital gains different securities, asset
alternative method for investors to and losses. classes or investment styles to
compensate a financial adviser for advice reduce the risks of investing.
and service, rather than an up-front
commission.
</TABLE>
7
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<PAGE>
Who manages the Fund (continued)
Who's who?
This diagram shows the various organizations involved with managing,
administering and servicing the Delaware Investments funds.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Board of Trustees
Investment manager Custodian
Delaware Management Company The Fund The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Service agent Distributor
Portfolio managers Delaware Service Company, Inc. Delaware Distributors, L.P.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
Financial advisers
Shareholders
</TABLE>
Board of Trustees A mutual fund is governed by a Board of Trustees which has
oversight responsibility for the management of the fund's business affairs.
Trustees establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the Board of Trustees must be independent of the fund's
investment manager and distributor. These independent fund trustees, in
particular, are advocates for shareholder interests.
Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.
Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.
Custodian Mutual funds are legally required to protect their portfolio
securities and most funds place them with a qualified bank custodian who
segregates fund securities from other bank assets.
<PAGE>
Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASD) rules governing mutual fund sales practices.
Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.
Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.
Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect trustees. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.
<TABLE>
<CAPTION>
D-L Dividend distribution Expense ratio Financial adviser
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<S> <C> <C> <C>
Payments to mutual A mutual fund's total operating expenses, expressed Financial prfessional (e.g.,
fund shareholders of as a percentage of its total net assets. Operating broker, banker, accountant,
dividends passed along expenses are the costs of running a mutual fund, planner or insurance agent)
from the fund's including management fees, offices, staff, equipment who analyzes clients' finances
portfolio of securities. and expenses related to maintaining the fund's and prepares personalized
portfolio of securities and distributing its shares. programs to meet objectives.
They are paid from the fund's assets before any
earnings are distributed to shareholders.
</TABLE>
8
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<PAGE>
About your account
Investing in the Fund
CLASS A
o Class A shares are available for purchase at net asset value.
o Class A shares do not have an up-front sales charge.
o Class A shares are not subject to 12b-1 fees.
o Class A shares are not subject to a contingent deferred sales charge.
CONSULTANT CLASS
o Consultant Class shares may be purchased through financial advisers,
including brokers, financial institutions and other entities that have a
dealer agreement with the Fund's distributor or a service agreement with the
Fund.
o Consultant Class shares do not have an up-front sales charge.
o Consultant Class shares are subject to an annual 12b-1 fee no greater than
0.30% (currently the 12b-1 fee is set at 0.25%) of average daily net assets.
The 12b-1 fee is typically used to compensate your financial adviser for the
ongoing guidance and service he or she provides to you.
o Consultant Class shares are not subject to a contingent deferred sales
charge.
<TABLE>
<CAPTION>
Fixed-income securities Inflation Investment goal Liquidity
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With fixed-income securities, the money you The increase in the cost The objective, such as The ease with which an
originally invested is paid back at a of goods and services long-term capital investment can be converted
pre-specified maturity date. These securities, over time. U.S. inflation growth or high current into cash without a
which include government, corporate or municipal is frequently measured by income, that a mutual significant loss of principal.
bonds, as well as money market securities, changes in the Consumer fund pursues. Money market funds are
typically pay a fixed rate of return (often Price Index (CPI). considered to be highly liquid.
referred to as interest). See Bond.
</TABLE>
9
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<PAGE>
About your account (continued)
How to buy shares
[GRAPHIC OMITTED]
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.
[GRAPHIC OMITTED]
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, P.O. Box
7577, Philadelphia, PA 19101. If you are making an initial purchase by mail, you
must include a completed investment application (or an appropriate retirement
plan application if you are opening a retirement account) with your check.
[GRAPHIC OMITTED]
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.
[GRAPHIC OMITTED]
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Generally,
you may not exchange between different classes of shares; however you may
exchange between the Consultant Class and Class A shares of the Delaware
Investments funds. To open an account by exchange, call the Shareholder Service
Center at 800.523.1918.
[GRAPHIC OMITTED]
Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawareinvestments.com. For more
information about how to sign up for these services, call our Shareholder
Service Center at 800.523.1918.
<TABLE>
<CAPTION>
M-P Management fee Maturity NASD Regulation, Inc. (NASD)
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<S> <C> <C> <C>
The amount paid by a mutual The length of time until a bond A self-regulation organization, consisting
fund to the investment adviser for issuer must repay the underlying of brokerage firms (including distributors
management services, expressed loan principal to bondholders. of mutual funds), that is responsible for
as an annual percentage of the overseeing the actions of its members.
fund's average daily net assets.
</TABLE>
10
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<PAGE>
How to buy shares (continued)
Once you have completed an application, you can generally open an account with
an initial investment of $1,000--and make additional investments at any time for
as little as $100. If you are buying shares in an IRA or Roth IRA, under the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act; or through
an Automatic Investing Plan, the minimum purchase is $250, and you can make
additional investments of only $25. The minimum for an Education IRA is $500.
The minimums vary for retirement plans other than IRAs, Roth IRAs or Education
IRAs.
We determine the Fund's net asset value (NAV) per share at the close of regular
trading of the New York Stock Exchange each business day that the Exchange is
open. We strive to manage the value of the Fund's securities to stabilize the
Fund's net asset value at $1.00 per share. Although we make every effort to
maintain a stable net asset value, there is no assurance that we will always be
able to do so. We calculate net asset value by adding the market value of all
the securities and assets in the Fund's portfolio, deducting all liabilities,
and dividing the resulting number by the number of shares outstanding. The
result is the net asset value per share. We value the Fund's portfolio
securities at amortized cost.
The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a
business day, you will pay that day's closing share price which is based on the
Fund's net asset value. If we receive your order after the close of regular
trading, you will pay the next business day's price. A business day is any day
that the New York Stock Exchange is open for business. We reserve the right to
reject any purchase order.
Retirement plans
In addition to being an appropriate investment for your Individual Retirement
Account (IRA), Roth IRA and Education IRA, shares in the Fund may be suitable
for group retirement plans. You may establish your IRA account even if you are
already a participant in an employer-sponsored retirement plan. For more
information on how shares in the Fund can play an important role in your
retirement planning or for details about group plans, please consult your
financial adviser, or call 800.523.1918.
How to redeem shares
[GRAPHIC OMITTED]
Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.
[GRAPHIC OMITTED]
By mail
You can redeem shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of more than
$50,000, you must include a signature guarantee for each owner. Signature
guarantees are also required when redemption proceeds are going to an address
other than the address of record on an account.
<TABLE>
<CAPTION>
Nationally recognized statistical rating organization (NRSRO) Net asset value (NAV) Principal Prospectus
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<S> <C> <C> <C>
A company that assesses the credit quality of bonds, commercial The daily dollar value of Amount of money The official offering
paper, preferred and common stocks and municipal short-term one mutual fund share. you invest (also document that
issues, rating the probability that the issuer of the debt will Equal to a fund's net called capital). describes a mutual
meet the scheduled interest payments and repay the principal. assets divided by the Also refers to a fund, containing
Ratings are published by such companies as Moody's Investors number of shares bond's original information required
Service, Inc. (Moody's), Standard & Poor's (S&P), Duff & outstanding. face value, due by the SEC, such as
Phelps, Inc. (Duff), and Fitch IBCA, Inc. (Fitch). to be repaid at investment objectives,
maturity. policies, services
and fees.
</TABLE>
11
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About your account (continued)
How to redeem shares (continued)
[GRAPHIC OMITTED]
By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.
[GRAPHIC OMITTED]
By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, a bank wire fee may be deducted from
your proceeds. Bank information must be on file before you request a wire
redemption.
[GRAPHIC OMITTED]
Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawareinvestments.com. For more information about
how to sign up for these services, call our Shareholder Service Center at
800.523.1918.
[GRAPHIC OMITTED]
Through checkwriting
You may redeem shares by writing checks of $500 or more. Checks must be signed
by all owners of the account unless you indicate otherwise on your Investment
Application. The checkwriting feature is not available for retirement plans.
Also, because dividends are declared daily, you may not close your account by
writing a check. When you write checks you are subject to bank regulations and
may be subject to a charge if the check amount exceeds the value of your
account.
<TABLE>
<CAPTION>
R-S Redeem Risk Sales Charge
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
To cash in your shares Generally defined as variability of value; Charge on the purchase or redemption of fund
by selling them back also credit risk, inflation risk, currency shares sold through financial advisers. May vary
to the mutual fund. and interest rate risk. Different with the amount invested. Typically used to
investments involve different types and compensate advisers for advice and service provided.
degrees or risk.
</TABLE>
12
- ----
<PAGE>
How to redeem shares (continued)
If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.
When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will send you a check, normally the next business day, but no
later than seven days after we receive your request to sell your shares. If you
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.
Account minimum
If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for IRAs, Uniform Gift to Minors Act accounts or
accounts with automatic investing plans, $500 for Education IRAs) for three or
more consecutive months, you will have until the end of the current calendar
quarter to raise the balance to the minimum. If your account is not at the
minimum by the required time, you will be charged a $9 fee for that quarter and
each quarter after that until your account reaches the minimum balance. If your
account does not reach the minimum balance, the Fund may redeem your account
after 60 days' written notice to you.
Special services
To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.
- --------------------------------------------------------------------------------
Automatic Investing Plan
The Automatic Investing Plan allows you to make regular monthly or quarterly
investments directly from your checking account.
Direct Deposit
With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as Social Security or
direct transfers from your bank account.
Wealth Builder Option
With the Wealth Builder Option you can arrange automatic monthly exchanges
between your shares in one or more Delaware Investments funds. Wealth Builder
exchanges are subject to the same rules as regular exchanges (see below) and
require a minimum monthly exchange of $100 per fund.
Dividend Reinvestment Plan
Through our Dividend Reinvestment Plan, you can have your distributions
reinvested in your account or the same share class in another fund in the
Delaware Investments family. The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales charge or to a contingent
deferred sales charge. You may not reinvest distributions in Class B or Class C
shares of the funds in the Delaware Investments family.
<TABLE>
<CAPTION>
SEC (Securities and Statement of Additional
Exchange Commission) Share classes Signature guarantee Information (SAI)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal agency established by Different classifications of Certification by a bank, The document serving as "Part B" of
Congress to administer the shares; mutual fund share brokerage firm or other a fund's prospectus that provides
laws governing the securities classes offer a variety of financial institution that more detailed information about the
industry, including mutual sales charge choices. a customer's signature is fund's organization, investments,
fund companies. valid; signature guarantees policies and risks.
can be povided by members of
the STAMP program.
</TABLE>
13
----
<PAGE>
About your account (continued)
Special services (continued)
- --------------------------------------------------------------------------------
Exchanges
You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund. If you exchange shares to a fund that has a
sales charge you will pay any applicable sales charges on your new shares. You
don't pay sales charges on shares that are acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's prospectus and read it carefully before buying shares through an
exchange. Generally, you may not exchange between different classes of shares;
however you may exchange between the Consultant Class and Class A of any
Delaware Investments funds.
In certain circumstances, Class A shares of funds other than the Fund may be
subject to a contingent deferred sales charge for up to two years after
purchase. This would occur if the fund normally had a front-end sales charge,
but the shares were purchased without paying a sales charge and a financial
adviser was paid a commission on the purchase. If you purchase Class A shares of
another fund in this manner, you may exchange them for shares of the Fund's
Class A or Consultant Class. You will not have to pay the contingent deferred
sales charge at the time of the exchange. However, you may have to pay the
contingent deferred sales if you later redeem your shares of the Fund's Class A
or Consultant Class or if you exchange them for shares of another fund and then
redeem those shares. The time that you are invested in the Fund will count
toward the fulfillment of the two-year holding period.
MoneyLine(SM) On Demand Service
Through our MoneyLine(SM) On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. This service is not available for retirement plans, except
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000. Delaware Investments does not charge a fee for this
service; however, your bank may assess one.
<TABLE>
<CAPTION>
S-V Uniform Gift to Minors Act and
Stock Total return Uniform Transfers to Minors Act
--------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
An investment that represents An investment performance measurement, Federal and state laws that provide a
a share of ownership (equity) expressed as a percentage, based on the simple way to transfer property to a
in a corporation. Stocks are combined earnings from dividends, capital minor with special tax advantages.
often refereed to as gains and change in price over a given
"equities." period.
</TABLE>
14
- ----
<PAGE>
Special services (continued)
MoneyLine Direct Deposit Service
Through our MoneyLine Direct Deposit Service you can have $25 or more in
dividends and distributions deposited directly to your bank account. Delaware
Investments does not charge a fee for this service; however, your bank may
assess one. This service is not available for retirement plans.
Systematic Withdrawal Plan
Through our Systematic Withdrawal Plan you can arrange a regular monthly or
quarterly payment from your account made to you or someone you designate. If the
value of your account is $5,000 or more, you can make withdrawals of at least
$25 monthly, or $75 quarterly. You may also have your withdrawals deposited
directly to your bank account through our MoneyLine Direct Deposit Service.
Dividends, distributions and taxes
Dividends are declared daily and paid monthly. Short-term capital gains may be
paid with the daily dividend or distributed annually. We automatically reinvest
all dividends and capital gains, unless you tell us otherwise.
Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from the Fund is the same whether you reinvest
your dividends or receive them in cash. Distributions from the Fund's long-term
capital gains, if any, are taxable as capital gains, while distributions from
short-term capital gains and net investment income are generally taxable as
ordinary income. Any capital gains may be taxable at different rates depending
on the length of time the Fund held the assets. In addition, you may be subject
to state and local taxes on distributions.
We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
Certain management considerations
Investment by fund of funds
The Fund accepts investments from the portfolios of Delaware Group Foundation
Funds, a fund of funds. From time to time, the Fund may experience large
investments or redemptions due to allocations or rebalancings by Foundation
Funds. While it is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on portfolio management.
For example, the Fund may be required to sell securities or invest cash at times
when it would not otherwise do so. These transactions could also have tax
consequences if sales of securities result in gains, and could also increase
transaction costs or portfolio turnover. The manager will monitor transactions
by Foundation Funds and will attempt to minimize any adverse effects on both the
Fund and Foundation Funds as a result of these transactions.
Volatility
- --------------------------------------------------------------------------------
The tendency of an investment to go up or down in value by different magnitudes.
Investments that generally go up or down in value in relatively small amounts
are considered "low volatility" investments, whereas those investments that
generally go up or down in value in relatively large amounts are considered
"high volatility" investments.
15
----
<PAGE>
Financial highlights
The Financial highlights table is intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the
Fund's annual report, which is available upon request by calling 800.523.1918.
<TABLE>
<CAPTION>
Class A
- -----------------------------------------------------------------------------------------------------------------------
Year Ended
3/31
Delaware Cash Reserve 2000 1999 1998 1997 1996
- -----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income 0.046 0.045 0.048 0.045 0.049
------ ------ ------ ------ ------
Total from investments operations 0.046 0.045 0.048 0.045 0.049
------ ------ ------ ------ ------
Less dividends:
Dividends from net investment income (0.046) (0.045) (0.048) (0.045) (0.049)
------ ------ ------ ------ ------
Total dividends (0.046) (0.045) (0.048) (0.045) (0.049)
------ ------ ------ ------ ------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
Total return(1) 4.69% 4.61% 4.88% 4.61% 5.01%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $566,193 $588,249 $524,477 $594,877 $585,485
Ratio of expenses to average net assets 0.91% 0.90% 0.88% 0.88% 0.95%
Ratio of net investment income to
average net assets 4.59% 4.51% 4.78% 4.52% 4.90%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distribution at net asset
value and does not reflect the impact of a sales charge.
<TABLE>
<CAPTION>
How to read the
Financial highlights Net investment income Net asset value (NAV) Total return
-------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Net investment income includes This is the value of a mutual This represents the rate that an investor
interest income earned from a fund share, calculated by would have earned or lost on an investment in
fund's securities; it is after dividing the net assets by a fund. In calculating this figure for the
expenses have been deducted. the number of shares financial highlights table, we include
outstanding. applicable fee waivers, exclude applicable
front-end and contingent deferred sales
charges, and assume the shareholder has
reinvested all dividends.
</TABLE>
16
- ----
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------
Consultant Class
- ----------------------------------------------------------------------------------------------------------------------
Year Ended
3/31
2000 1999 1998 1997 1996
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income 0.043 0.043 0.045 0.043 0.047
------ ------ ------ ------ ------
Total from investments operations 0.043 0.043 0.045 0.043 0.047
------ ------ ------ ------ ------
Less dividends:
Dividends from net investment income (0.043) (0.043) (0.045) (0.043) (0.047)
------ ------ ------ ------ ------
Total dividends (0.043) (0.043) (0.045) (0.043) (0.047)
------ ------ ------ ------ ------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
Total return(1) 4.43% 4.35% 4.62% 4.36% 4.75%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $32,648 $42,732 $40,037 $23,468 $20,344
Ratio of expenses to average net assets 1.16% 1.15% 1.13% 1.13% 1.20%
Ratio of net investment income to
average net assets 4.34% 4.26% 4.53% 4.27% 4.65%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distribution at net asset
value and does not reflect the impact of a sales charge.
<TABLE>
<CAPTION>
Ratio of net investment income to
Net assets Ratio of expenses to average net assets average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net assets represent the The expense ratio is the percentage of net assets We determine this ratio by dividing net
total value of all the that a fund pays annually for operating expenses investment income by average net assets.
assets in a fund's and management fees. These expenses include
portfolio, minus any accounting and administration expenses, services
liabilities, that are for shareholders, and similar expenses.
attributable to that
class of a fund.
</TABLE>
17
----
<PAGE>
Delaware Cash Reserve
Additional information about the Fund's investments is available in the Fund's
annual and semi-annual report to shareholders. In the Fund's shareholder
reports, you will find a discussion of the market conditions and investment
strategies that significantly affected the Fund's performance during the report
period. You can find more detailed information about the Fund in the current
Statement of Additional Information, which we have filed electronically with the
Securities and Exchange Commission (SEC) and which is legally a part of this
prospectus. If you want a free copy of the Statement of Additional Information,
the annual or semi-annual report, or if you have any questions about investing
in the Fund, you can write to us at 1818 Market Street, Philadelphia, PA 19103,
or call toll-free 800.523.1918. You may also obtain additional information about
the Fund from your financial adviser.
You can find reports and other information about the Fund on the EDGAR database
on the SEC web site (http://www.sec.gov). You can also get copies of this
information, after payment of a duplicating fee, by e-mailing the SEC at
[email protected] or by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-0102. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the Securities and
Exchange Commission's Public Reference Room in Washington, D.C. You can get
information on the public reference room by calling the SEC at 202.942.8090.
Web site
www.delawareinvestments.com
E-mail
[email protected]
Shareholder Service Center
800.523.1918
Call the Shareholder Service Center:
Monday to Friday, 8 a.m. to 8 p.m. Eastern time:
o For fund information; literature; price, yield and performance figures.
o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions
and telephone exchanges.
Delaphone Service
800.362.FUND (800.362.3863)
o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.
Investment Company Act file number: 811-2806
Delaware Cash Reserve Symbols
CUSIP NASDAQ
----- ------
Class A 245910104 DCRXX
Consultant Class 245910203
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
<PAGE>
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
Delaware Cash
Reserve
Class B o Class C
Prospectus May 30, 2000
[GRAPHIC OMITTED]
Money Market Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
<PAGE>
Table of contents
.................................................................
Fund profile page 2
Delaware Cash Reserve 2
.................................................................
How we manage the Fund page 4
Our investment strategies 4
The securities we typically invest in 4
The risks of investing in the Fund 5
.................................................................
Who manages the Fund page 6
Investment manager 6
Fund administration (Who's who) 7
.................................................................
About your account page 8
Investing in the Fund 8
How to buy shares 10
Retirement plans 11
How to redeem shares 12
Account minimum 13
Special services 13
Dividends, distributions and taxes 15
Certain management considerations 15
.................................................................
Financial highlights page 16
1
----
<PAGE>
Profile: Delaware Cash Reserve
What is the Fund's goal?
Delaware Cash Reserve seeks to provide maximum current income, while preserving
principal and maintaining liquidity. Although the Fund will strive to achieve
its goal, there is no assurance that it will.
What are the Fund's main investment strategies? Delaware Cash Reserve invests in
short-term money market securities, including securities issued or guaranteed by
the U.S. government, its agencies or instrumentalities and short-term debt
instruments of banks and corporations.
Delaware Cash Reserve is a money market fund. A money market fund is designed
for stability of principal; consequently, the level of income fluctuates.
We maintain an average maturity of 90 days or less. Also, we do not purchase any
instruments with an effective remaining maturity of more than 397 calendar days
(approximately 13 months). We intend to hold our investments until maturity, but
we may sell them prior to maturity in order to shorten or lengthen the average
maturity of the bonds in the portfolio, increase the yield, maintain the quality
of the portfolio or maintain a stable share value.
What are the main risks of investing in the Fund? Delaware Cash Reserve will be
affected primarily by declines in interest rates that would reduce the income
provided by the Fund. For a more complete discussion of risk, please turn to
page 5.
An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency. Although the Fund seeks to preserve the value of your
investment at $1 per share, it is possible to lose money by investing in the
Fund.
You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.
Who should invest in the Fund
o Investors with short-term financial goals who seek current income.
o Investors who do not want an investment whose value may fluctuate over the
short term.
o Investors who are looking for a short-term, relatively safe investment to
complement more long-term investments in their portfolio.
o Investors who are using this Fund as a component of an overall investment
plan that includes Class B or Class C shares of other Delaware Investments
funds.
Who should not invest in the Fund
o Investors with long-term financial goals.
o Investors looking for relatively high current income.
o Investors who are not already investing or planning to invest in Class B or
Class C shares of other Delaware Investments funds.
<PAGE>
<TABLE>
<CAPTION>
How has the Fund performed?
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
This bar chart and table can help you Year-by-year total return (Class B)
evaluate the risks of investing in the
Fund. We show how returns for the Fund's
Class B shares have varied over the past
five calendar years, as well as average 4.07% 3.59% 3.80% 3.71% 3.38%
annual returns for the one-year, -----------------------------------------
five-year and lifetime periods, if 1995 1996 1997 1998 1999
applicable.
</TABLE>
As of March 31, 2000, the Fund's Class B had a year-to-date return of 1.05%.
During the periods illustrated in this bar chart, Class B's highest quarterly
return was 1.04% for the quarter ended June 30, 1995 and its lowest quarterly
return was 0.77% for the quarter ended June 30, 1999.
The maximum Class B contingent deferred sales charge of 5%, which is normally
deducted when you redeem shares, is not reflected in the year-by-year total
returns shown opposite. If this fee were included, the returns would be less
than those shown. The average annual returns shown on page 3 do include the
sales charge.
2
- ----
<PAGE>
<TABLE>
<CAPTION>
How has the Fund performed? (continued)
- ------------------------------------------------------------------------------------------------------------------------------------
Average annual returns for periods ending 12/31/99
- ------------------------------------------------------------------------------------------------------------------------------------
Class B C
(if redeemed)* (if redeemed)*
- ------------------------------------------------------------------------------------------------------------------------------------
Inception 5/2/94 Inception 11/29/95
<S> <C> <C>
1 year -1.62% 2.38%
5 years 3.36% N/A
Lifetime 3.44% 3.63%
* If shares were not redeemed, the returns for Class B would be 3.38%, 3.71% and 3.59% for the one-year, five-years and lifetime
periods, respectively. Returns for Class C would be 3.38% and 3.63% for the one-year and lifetime periods, respectively.
Investors interested in obtaining the 7-day yield for either class can call 800.523.1918.
What are the Fund's fees and expenses? CLASS B C
- ------------------------------------------------------------------------------------------------------------------------------------
Sales charges are fees paid directly Maximum sales charge (load) imposed on
from your investment. purchases as a percentage of offering price none none
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower 5%(1) 1%(2)
Maximum sales charge (load) imposed on
reinvested dividends none none
Redemption fees none none
- ------------------------------------------------------------------------------------------------------------------------------------
Annual fund operating expenses are Management fees 0.44% 0.44%
deducted from the Fund's assets.
Distribution and service (12b-1) fees 1.00% 1.00%
Other expenses 0.47% 0.47%
Total operating expenses 1.91% 1.91%
CLASS(4) B B C C
(if redeemed) (if redeemed)
- ------------------------------------------------------------------------------------------------------------------------------------
This example is intended to help you 1 year $194 $694 $194 $294
compare the cost of investing in the
Fund to the cost of investing in other 3 years $600 $900 $600 $600
mutual funds with similar investment
objectives. We show the cumulative 5 years $1,032 $1,232 $1,032 $1,032
amount of Fund expenses on a
hypothetical investment of $10,000 with 10 years $2,038 $2,038 $2,233 $2,233
an annual 5% return over the time
shown.(3) This is an example only, and
does not represent future expenses,
which may be greater or less than those
shown here.
(1) If you redeem Class B shares during the first year after you buy them, you will pay a contingent deferred sales charge of 5%,
which declines to 4% during the second year, 3% during the third and fourth years, 2% during the fifth year, 1% during the
sixth year, and 0% thereafter.
(2) Class C shares redeemed within one year of purchase are subject to a 1% contingent deferred sales charge.
(3) The Fund's actual rate of return may be greater or less than the hypothetical 5% return we use here. Also, this example assumes
that the Fund's total operating expenses remain unchanged in each of the periods we show.
(4) The Class B example reflects the conversion of Class B shares to Consultant Class shares after approximately eight years.
Information for the ninth and tenth years reflects expenses of the Consultant Class.
</TABLE>
3
----
<PAGE>
How we manage the Fund
Our investment strategies
We invest primarily in short-term money market securities, including securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities
and short-term debt instruments of banks and corporations.
We maintain an average maturity of 90 days or less. Also, we do not purchase any
securities with an effective remaining maturity of more than 397 days
(approximately 13 months). We may shorten or lengthen the Fund's average
maturity based on our analysis of interest rate trends.
We intend to hold our investments until maturity, but we may sell them prior to
maturity in order to shorten or lengthen the average maturity of the bonds in
the portfolio, increase the yield, maintain the quality of the portfolio or
maintain a stable share value.
The Fund's investment objective is non-fundamental. This means that the Board of
Trustees may change the objective without obtaining shareholder approval. If the
objective were changed, we would notify shareholders before the change in the
objective became effective.
The securities we typically invest in
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Cash Reserve
-----------------------------------------------------------------------------------
<S> <C>
Direct U.S. Treasury obligations: We may invest without limit in U.S. Treasury securities. We would typically
Treasury bills, notes and bonds of invest in Treasury bills or longer term Treasury securities whose remaining
varying maturities. U.S. Treasury effective maturity is less than 13 months.
securities are backed by the "full faith
and credit" of the United States.
Certificates of deposit and obligations We may invest in certificates of deposit and obligations from banks that have
of both U.S. and foreign banks: Debt assets of at least one billion dollars.
instruments issued by banks that pay
interest.
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.
Corporate commercial paper and other We may invest in commercial paper and other corporate obligations rated in one
corporate obligations: Short-term debt of the two highest ratings categories by at least two nationally recognized
obligations with maturities ranging from statistical ratings organizations (NRSROs). The purchase of a security that does
2 to 270 days, issued by companies. not possess those ratings must be approved or ratified by the Board of Trustees
in accordance with the maturity, quality and diversification conditions with
which taxable money markets must comply. The Fund will not invest more than 5% of
its total assets in securities rated in the second highest category by an NRSRO.
Asset-backed securities: Bonds or notes We may invest without limit in asset-backed securities. We may invest only in
backed by accounts receivables including securities rated in the highest rating category by an NRSRO. We currently intend
home equity, automobile or credit loans. to invest only in asset-backed securities backed by credit card receivables,
home equity loans, automobile loans and wholesale dealer floor plans.
- ------------------------------------------------------------------------------------------------------------------------------------
Glossary A-C
How to use
this glossary Amortized cost Average maturity
-----------------------------------------------------------------------------------------
This glossary includes definitions of Amortized cost is a method used to value An average of when the individual bonds
investment terms used throughout the a fixed-income security that starts with and other debt securities held in a
Prospectus. If you would like to know the face value of the security and then portfolio will mature.
the meaning of an investment term that adds or subtracts from that value
is not explained in the text please depending on whether the purchase price
check the glossary. was greater or less than the value of
the security at maturity. The amount
greater or less than the par value is
divided equally over the time remaining
until maturity.
</TABLE>
4
- ----
<PAGE>
The securities we typically invest in (continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Cash Reserve
-----------------------------------------------------------------------------------
<S> <C>
Repurchase agreements: An agreement We may use repurchase agreements as a short-term investment for the Fund's cash
between a buyer of securities such as position. In order to enter into these repurchase agreements, the Fund must have
the Fund and a seller of securities, in collateral of at least 102% of the repurchase price. The Fund will only enter
which the seller agrees to buy the into repurchase agreements in which the collateral is composed of U.S.
securities back within a specified time government securities.
at the same price the buyer paid for
them, plus an amount equal to an agreed
upon interest rate.
Restricted securities: Privately placed We may invest in privately placed securities, including those that are eligible
securities whose resale is restricted for resale only among certain institutional buyers without registration which
under securities law. are commonly known as "Rule 144A Securities." Other restricted securities which
are illiquid must be limited to 10% of total Fund assets.
Illiquid securities: Securities that do We may not invest more than 10% of total assets in illiquid securities including
not have a ready market, and cannot be repurchase agreements that mature in more than seven days.
easily sold, if at all, at approximately
the price that the Fund has valued them.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
Please see the Statement of Additional Information for additional descriptions
about the securities listed in the table above.
Borrowing from banks The Fund may borrow money as a temporary measure for
extraordinary purposes or to facilitate redemptions. To the extent that it does
so, the Fund may be unable to meet its investment objective. The Fund will not
borrow money in excess of one-third of the value of its net assets.
The risks of investing in the Fund
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
money. Before you invest in the Fund you should carefully evaluate the risks.
The following are the chief risks you assume when investing in the Fund. Please
see the Statement of Additional Information for further discussion of these
risks and risks not discussed here.
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------------------------------------------------------
Delaware Cash Reserve
-----------------------------------------------------------------------------------
<S> <C>
Interest rate risk is the risk that Because the Fund invests exclusively in short-term securities, interest rate
securities, particularly bonds with changes are not a major risk to the value of itt portfolio. However, a decline
longer maturities, will decrease in in interest rates would reduce the level of income provided by the Fund.
value if interest rates rise.
Credit risk is the risk that there is The Fund holds only high quality short-term securities. Therefore, it is
the possibility that a bond's issuer (or generally not subject to significant credit risk.
an entity that insures the bond) will be
unable to make timely payments of We limit our investments to those that the board of trustees considers to be of
interest and principal. high quality with minimal credit risks. All investments must also meet the
maturity, quality and diversifi-cation standards that apply to taxable money
market funds.
Counterparty risk is the risk that the We try to minimize this risk by considering the creditworthiness of all parties
Fund may lose money because a party that before we enter into transactions with them.
we contract with to buy or sell
securities fails to fulfill its side of Where appropriate, we will also hold collateral from the counterparties
the agreement. consistent with applicable regulations.
Inflation risk is the risk that the The Fund is designed for short-term investment goals and therefore may not
return from your investments will be outpace inflation over longer time periods. For this reason, the Fund is not
less than the increase in the cost of recommended as a primary investment for people with long-term goals.
living due to inflation, thus preventing
you from reaching your financial goals.
- ------------------------------------------------------------------------------------------------------------------------------------
Bond Bond ratings Capital Capital appreciation
- ------------------------------------------------------------------------------------------------------------------------------------
A debt security, like an IOU, issued by Independent evaluations of The amount of An increase in the
a company, municipality or government creditworthiness, ranging from Aaa/AAA money you invest. value of an investment.
agency. In return for lending money to (highest quality) to D (lowest quality).
the issuer, a bond buyer generally Bonds rated Baa/BBB or better are
receives fixed periodic interest considered investment grade. Bonds rated
payments and repayment of the loan Ba/BB or lower are commonly known as
amount on a specified maturity date. A junk bonds. See also Nationally
bond's price changes prior to maturity recognized statistical rating
and is inversely related to current organization.
interest rates. When interest rates
rise, bond prices fall, and when
interest rates fall, bond prices rise.
</TABLE>
5
----
<PAGE>
Who manages the Fund
Investment manager
The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust, which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware Management Company makes investment
decisions for the Fund, manages the Fund's business affairs and provides daily
administrative services. For its services to the Fund, the manager was paid
0.44% of average daily net assets for the last fiscal year.
<TABLE>
<CAPTION>
C-E
Consumer Price Index Contingent deferred sales
Commission Compounding (CPI) charge (CDSC)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The fee an investor pays to a Earnings on an investment's Measurement of U.S. inflation; Fee charged by some mutual
financial adviser for previous earnings. represents the price of a basket funds when shares are redeemed
investment advice and help in of commonly purchased goods. (sold back to the fund) within
buying or selling mutual a set number of years; an
funds, stocks, bonds or other alternative method for
securities. investors to compensate a
financial adviser for advice
and service, rather than an
up-front commission.
</TABLE>
6
- ----
<PAGE>
Who's who?
This diagram shows the various organizations involved with managing,
administering and servicing the Delaware Investments funds.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Board of Trustees
Investment manager Custodian
Delaware Management Company The Fund The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Service agent Distributor
Portfolio managers Delaware Service Company, Inc. Delaware Distributors, L.P.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103
Financial advisers
Shareholders
</TABLE>
Board of Trustees A mutual fund is governed by a Board of Trustees which has
oversight responsibility for the management of the fund's business affairs.
Trustees establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the Board of Trustees must be independent of the fund's
investment manager and distributor. These independent fund trustees, in
particular, are advocates for shareholder interests.
Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.
Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.
Custodian Mutual funds are legally required to protect their portfolio
securities and most funds place them with a qualified bank custodian who
segregates fund securities from other bank assets.
Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASD) rules governing mutual fund sales practices.
Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.
Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.
Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect trustees. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.
<PAGE>
<TABLE>
<CAPTION>
Dividend Expense
Corporate Bond Cost Basis Diversification Distributions Ratio
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A debt security issued by a The original purchase The process of spreading Payments to mutual fund A mutual fund's
corporation. See Bond. price of an investment, investments among a shareholders of dividends total operating
used in determining number of different passed along from the expenses, expressed
capital gains and losses. securities, asset classes fund's portfolio of as a percentage of
or investment styles to securities. its total net
reduce the risks of assets. Operating
investing. expenses are the
costs of running a
mutual fund,
including management
fees, offices,
staff, equipment and
expenses related to
maintaining the
fund's portfolio of
securities and
distributing its
shares. They are
paid from the fund's
assets before any
earnings are
distributed to
shareholders.
</TABLE>
7
----
<PAGE>
About your account
Investing in the Fund
You can choose from a number of share classes for the Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.
Unlike shares of most money market funds, Delaware Cash Reserve B and C Class
shares are subject to a contingent deferred sales charge and relatively high
distribution and service fees. Because of these costs, Class B and C shares are
available only to investors who already have Class B and C shares of other
Delaware Investments funds and want a temporary defensive investment
alternative. They are also available to investors who have chosen the Wealth
Builder Option (see page 14) to exchange their shares of Delaware Cash Reserve
for Class B and C shares of other Delaware Investments funds.
Choosing a share class
CLASS
B
o Class B shares have no up-front sales charge, so the full amount of your
purchase is invested in the Fund. However, you will pay a contingent
deferred sales charge if you redeem your shares within six years after you
buy them.
o If you redeem Class B shares during the first year after you buy them, the
shares will be subject to a contingent deferred sales charge of 5%. The
contingent deferred sales charge is 4% during the second year, 3% during
the third and fourth years, 2% during the fifth year, 1% during the sixth
year, and 0% thereafter.
o Under certain circumstances, the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.
o For approximately eight years after you buy your Class B shares, they are
subject to annual 12b-1 fees no greater than 1% of average daily net
assets, of which 0.25% are service fees paid to the distributor, dealers or
others for providing services and maintaining accounts.
o Because of the higher 12b-1 fees, Class B shares have higher expenses and
any dividends paid on these shares are lower than dividends on Class A
shares and Consultant Class shares.
o Approximately eight years after you buy them, Class B shares automatically
convert into Consultant Class shares with a 12b-1 fee of no more than 0.30%
(currently no more than 0.25%). Conversion may occur as late as three
months after the eighth anniversary of purchase, during which time Class
B's higher 12b-1 fees apply.
o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.
<PAGE>
F-M
<TABLE>
<CAPTION>
Financial adviser Fixed-income securities Inflation
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Financial professional (e.g., broker, With fixed-income securities, the money The increase in the cost of goods and
banker, accountant, planner or insurance you originally invested is paid back at services over time. U.S. inflation is
agent) who analyzes clients' finances a pre-specified maturity date. These frequently measured by changes in the
and prepares personalized programs to securities, which include government, Consumer Price Index (CPI).
meet objectives. corporate or municipal bonds, as well as
money market securities, typically pay a
fixed rate of return (often referred to
as interest). See Bond.
</TABLE>
8
- ----
<PAGE>
CLASS
C
o Class C shares have no up-front sales charge, so the full amount of your
purchase is invested in the Fund. However, you will pay a contingent
deferred sales charge of 1% if you redeem your shares within 12 months
after you buy them.
o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.
o Class C shares are subject to an annual 12b-1 fee which may not be greater
than 1% of average daily net assets, of which 0.25% are service fees paid
to the distributor, dealers or others for providing services and
maintaining shareholder accounts.
o Because of the higher 12b-1 fees, Class C shares have higher expenses and
pay lower dividends than Class A shares and Consultant Class shares.
o Unlike Class B shares, Class C shares do not automatically convert into
another class.
o You may purchase any amount less than $1,000,000 of Class C shares at any
one time. The limitation on maximum purchases varies for retirement plans.
Each of the Class B and Class C shares of the Fund has adopted a separate 12b-1
plan that allows it to pay distribution fees for the sales and distribution of
its shares. Because these fees are paid out of the Fund's assets on an ongoing
basis, over time these fees will increase the cost of your investment and may
cost you more than paying other types of sales charges.
<TABLE>
<CAPTION>
Investment goal Liquidity Management fee Maturity
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
The objective, such as The ease with which an The amount paid by a mutual The length of time until a
long-term capital growth or investment can be converted fund to the investment adviser bond issuer must repay the
high current income, that a into cash without a for management services, underlying loan principal to
mutual fund pursues. significant loss of principal. expressed as an annual bondholders.
Money market funds are percentage of the fund's
considered to be highly average daily net assets.
liquid.
</TABLE>
9
----
<PAGE>
About your account (continued)
How to buy shares
[GRAPHIC OMITTED]
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.
[GRAPHIC OMITTED]
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, P.O. Box
7577, Philadelphia, PA 19101. If you are making an initial purchase by mail, you
must include a completed investment application (or an appropriate retirement
plan application if you are opening a retirement account) with your check.
[GRAPHIC OMITTED]
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.
[GRAPHIC OMITTED]
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the
Shareholder Service Center at 800.523.1918.
[GRAPHIC OMITTED]
Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawareinvestments.com. For more
information about how to sign up for these services, call our Shareholder
Service Center at 800.523.1918.
<PAGE>
<TABLE>
<CAPTION>
N-S
Nationally recognized statistical Net asset value
NASD Regulation, Inc. (NASD) rating organization (NRSRO) (NAV)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A self-regulating organization, A company that assesses the credit The daily dollar value of one mutual
consisting of brokerage firms (including quality of bonds, commercial paper, fund share. Equal to a fund's net assets
distributors of mutual funds), that is preferred and common stocks and divided by the number of shares
responsible for overseeing the actions municipal short-term issues, rating the outstanding.
of its members. probability that the issuer of the debt
will meet the scheduled interest
payments and repay the principal.
Ratings are published by such companies
as Moody's Investors Service, Inc.
(Moody's), Standard & Poor's (S&P), Duff
& Phelps, Inc. (Duff), and Fitch IBCA,
Inc. (Fitch).
</TABLE>
10
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<PAGE>
How to buy shares
(continued)
Once you have completed an application, you can generally open an account with
an initial investment of $1,000--and make additional investments at any time for
as little as $100. If you are buying shares in an IRA or Roth IRA, under the
Uniform Gifts to Minors Act or the Uniform Transfers to Minors Act; or through
an Automatic Investing Plan, the minimum purchase is $250, and you can make
additional investments of only $25. The minimum for an Education IRA is $500.
The minimums vary for retirement plans other than IRAs, Roth IRAs or Education
IRAs.
We determine the Fund's net asset value (NAV) per share at the close of regular
trading of the New York Stock Exchange each business day that the Exchange is
open. We strive to manage the value of the Fund's securities to stabilize the
Fund's net asset value at $1.00 per share. Although we make every effort to
maintain a stable net asset value, there is no assurance that we will always be
able to do so. We calculate net asset value by adding the market value of all
the securities and assets in the Fund's portfolio, deducting all liabilities,
and dividing the resulting number by the number of shares outstanding. The
result is the net asset value per share. We value the Fund's portfolio
securities at amortized cost.
The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of regular
trading on the New York Stock Exchange (normally 4:00 p.m. Eastern Time) on a
business day, you will pay that day's closing share price which is based on the
Fund's net asset value. If we receive your order after the close of regular
trading, you will pay the next business day's price. A business day is any day
that the New York Stock Exchange is open for business. We reserve the right to
reject any purchase order.
Retirement plans
In addition to being an appropriate investment for your Individual Retirement
Account (IRA), Roth IRA and Education IRA, shares in the Fund may be suitable
for group retirement plans. You may establish your IRA account even if you are
already a participant in an employer-sponsored retirement plan. For more
information on how shares in the Fund can play an important role in your
retirement planning or for details about group plans, please consult your
financial adviser, or call 800.523.1918.
<TABLE>
<CAPTION>
Principal Prospectus Redeem Risk Sales charge
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Amount of money you The official To cash in your Generally defined as Charge on the
invest (also called offering document shares by selling variability of purchase or
capital). Also that describes a them back to the value; also credit redemption of fund
refers to a bond's mutual fund, mutual fund. risk, inflation shares sold through
original face value, containing risk, currency and financial advisers.
due to be repaid at information required interest rate risk. May vary with the
maturity. by the SEC, such as Different amount invested.
investment investments involve Typically used to
objectives, different types and compensate advisers
policies, services degrees of risk. for advice and
and fees. service provided.
</TABLE>
11
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<PAGE>
About your account (continued)
How to redeem shares
[GRAPHIC OMITTED]
Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.
[GRAPHIC OMITTED]
By mail
You can redeem shares (sell them back to the fund) by mail by
writing to: Delaware Investments, 1818 Market Street, Philadelphia, PA
19103-3682. All owners of the account must sign the request, and for redemptions
of more than $50,000, you must include a signature guarantee for each owner.
Signature guarantees are also required when redemption proceeds are going to an
address other than the address of record on an account.
[GRAPHIC OMITTED]
By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.
[GRAPHIC OMITTED]
By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, a bank wire fee may be deducted from
your proceeds. Bank information must be on file before you request a wire
redemption.
[GRAPHIC OMITTED]
Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawareinvestments.com. For more information about
how to sign up for these services, call our Shareholder Service Center at
800.523.1918.
S-V
<TABLE>
<CAPTION>
SEC (Securities and Signature Statement of Additional
Exchange Commission) Share classes guarantee Information (SAI)
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Federal agency established by Different classifications of Certification by a bank, The document serving as "Part
Congress to administer the shares; mutual fund share brokerage firm or other B" of a fund's prospectus that
laws governing the securities classes offer a variety of financial institution that a provides more detailed
industry, including mutual sales charge choices. customer's signature is valid; information about the fund's
fund companies. signature guarantees can be organization, investments,
provided by members of the policies and risks.
STAMP program.
</TABLE>
12
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<PAGE>
How to redeem shares
(continued)
When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will deduct any applicable contingent deferred sales charges.
You may also have to pay taxes on the proceeds from your sale of shares. We will
send you a check, normally the next business day, but no later than seven days
after we receive your request to sell your shares. If you purchased your shares
by check, we will wait until your check has cleared, which can take up to 15
days, before we send your redemption proceeds.
If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares, not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.
Account minimum
If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for IRAs, Uniform Gift to Minors Act and Uniform
Transfers to Minors Act accounts or accounts with automatic investing plans,
$500 for Education IRAs) for three or more consecutive months, you will have
until the end of the current calendar quarter to raise the balance to the
minimum. If your account is not at the minimum by the required time, you will be
charged a $9 fee for that quarter and each quarter after that until your account
reaches the minimum balance. If your account does not reach the minimum balance,
the Fund may redeem your account after 60 days' written notice to you.
Special services
To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.
Automatic
Investing Plan
The Automatic Investing Plan allows you to make regular monthly or quarterly
investments directly from your checking account.
Direct Deposit
With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as Social Security or
direct transfers from your bank account.
<PAGE>
<TABLE>
<CAPTION>
Uniform Gift to Minors Act and
Stock Total return Uniform Transfers to Minors Act Volatility
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
An investment that represents An investment performance Federal and state laws that The tendency of an investment
a share of ownership (equity) measurement, expressed as a provide a simple way to to go up or down in value by
in a corporation. Stocks are percentage, based on the transfer property to a minor different magnitudes.
often referred to as combined earnings from with special tax advantages. Investments that generally go
"equities." dividends, capital gains and up or down in value in
change in price over a given relatively small amounts are
period. considered "low volatility"
investments, whereas those
investments that generally go
up or down in value in
relatively large amounts are
considered "high volatility"
investments.
</TABLE>
13
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<PAGE>
About your account (continued)
Special services
(continued)
Wealth Builder Option
With the Wealth Builder Option you can arrange automatic monthly exchanges
between your shares in one or more Delaware Investments funds. Wealth Builder
exchanges are subject to the same rules as regular exchanges (see below) and
require a minimum monthly exchange of $100 per fund.
Dividend Reinvestment Plan
Through our Dividend Reinvestment Plan, you can have your distributions
reinvested in your account or the same share class in another fund in the
Delaware Investments family. The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales charge or to a contingent
deferred sales charge. Under most circumstances, you may reinvest dividends only
into like classes of shares.
Exchanges
You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund without paying a contingent deferred sales
charge at the time of the exchange. However, if you exchange shares from a money
market fund that does not have a sales charge you will pay any applicable sales
charges on your new shares. When exchanging Class B and Class C shares of one
fund for similar shares in other funds, your new shares will be subject to the
same contingent deferred sales charge as the shares you originally purchased.
The holding period for the contingent deferred sales charge will also remain the
same, with the amount of time you held your original shares being credited
toward the holding period of your new shares. You don't pay sales charges on
shares that you acquired through the reinvestment of dividends. You may have to
pay taxes on your exchange. When you exchange shares, you are purchasing shares
in another fund so you should be sure to get a copy of the fund's prospectus and
read it carefully before buying shares through an exchange.
MoneyLineSM On Demand Service
Through our MoneyLineSM On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. This service is not available for retirement plans, except
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000. Delaware Investments does not charge a fee for this
service; however, your bank may assess one.
MoneyLine Direct Deposit Service
Through our MoneyLine Direct Deposit Service you can have $25 or more in
dividends and distributions deposited directly to your bank account. Delaware
Investments does not charge a fee for this service; however, your bank may
assess one. This service is not available for retirement plans.
14
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<PAGE>
Special services
(continued)
Systematic Withdrawal Plan
Through our Systematic Withdrawal Plan you can arrange a regular monthly or
quarterly payment from your account made to you or someone you designate. If the
value of your account is $5,000 or more, you can make withdrawals of at least
$25 monthly, or $75 quarterly. You may also have your withdrawals deposited
directly to your bank account through our MoneyLine Direct Deposit Service.
Dividends, distributions and taxes
Dividends are declared daily and paid monthly. Short-term capital gains may be
paid with the daily dividend or distributed annually. We automatically reinvest
all dividends and capital gains, unless you tell us otherwise.
Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from the Fund is the same whether you reinvest
your dividends or receive them in cash. Distributions from the Fund's long-term
capital gains are taxable as capital gains, while distributions from short-term
capital gains and net investment income are generally taxable as ordinary
income. Any capital gains may be taxable at different rates depending on the
length of time the Fund held the assets. In addition, you may be subject to
state and local taxes on distributions.
We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
Certain management considerations
Investments by fund of funds
The Fund accepts investments from the portfolios of Delaware Group Foundation
Funds, a fund of funds. From time to time, the Fund may experience large
investments or redemptions due to allocations or rebalancings by Foundation
Funds. While it is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on portfolio management.
For example, the Fund may be required to sell securities or invest cash at times
when it would not otherwise do so. These transactions could also have tax
consequences if sales of securities result in gains, and could also increase
transactions costs or portfolio turnover. The manager will monitor transactions
by Foundation Funds and will attempt to minimize any adverse effects on both the
Fund and Foundation Funds as a result of these transactions.
15
----
<PAGE>
<TABLE>
<CAPTION>
Financial highlights
B Class
- ------------------------------------------------------------------------------------------------------------------------------------
Year ended
3/31
The Financial Delaware Cash Reserve 2000 1999 1998 1997 1996
highlights table is -----------------------------------------------------------------------------------------------------
intended to help you <S> <C> <C> <C> <C> <C>
understand the Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
Fund's financial
performance. All Income from investment operations:
"per share"
information reflects Net investment income 0.036 0.035 0.038 0.035 0.039
financial results ------ ------ ------ ------ ------
for a single Fund Total from investment operations 0.036 0.035 0.038 0.035 0.039
share. This ------ ------ ------ ------ ------
information has been Less dividends:
audited by Ernst &
Young LLP, whose Dividends from net investment income (0.036) (0.035) (0.038) (0.035) (0.039)
report, along with ------ ------ ------ ------ ------
the Fund's financial Total dividends (0.036) (0.035) (0.038) (0.035) (0.039)
statements, is ------ ------ ------ ------ ------
included in the Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000
Fund's annual ====== ====== ====== ====== ======
report, which is Total return(1) 3.65% 3.57% 3.84% 3.58% 3.97%
available upon
request by calling Ratios and supplemental data:
800.523.1918.
Net assets, end of period (000 omitted) $23,349 $19,908 $6,522 $12,988 $8,127
Ratio of expenses to average net assets 1.91% 1.90% 1.88% 1.88% 1.95%
Ratio of net investment income to average
net assets 3.59% 3.51% 3.78% 3.52% 3.90%
-----------------------------------------------------------------------------------------------------
(1) Total investment return is based on the change in the net asset value of a share during the
period and assumes reinvestment of distributions at net asset value and does not reflect the
impact of a sales charge.
</TABLE>
How to read the
financial highlights
<TABLE>
<CAPTION>
Net investment income Net asset value (NAV) Total return
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net investment income includes interest This is the value of a mutual fund This represents the rate that an
income earned from a fund's securities; share, calculated by dividing the net investor would have earned or lost on an
it is after expenses have been deducted. assets by the number of shares investment in a fund. In calculating
outstanding. this figure for the financial highlights
table, we include applicable fee
waivers, exclude contingent deferred
sales charges, and assume the
shareholder has reinvested all
dividends.
</TABLE>
16
- ----
<PAGE>
<TABLE>
<CAPTION>
C Class
- ----------------------------------------------------------------------------------------------------
Period
Year ended 11/29/95
3/31 through
2000 1999 1998 1997 3/31/96
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $1.000 $1.000 $1.000 $1.000 $1.000
Income from investment operations:
Net investment income 0.036 0.035 0.038 0.035 0.012
------ ------ ------ ------ ------
Total from investment operations 0.036 0.035 0.038 0.035 0.012
------ ------ ------ ------ ------
Less dividends:
Dividends from net investment income (0.036) (0.035) (0.038) (0.035) (0.012)
------ ------ ------ ------ ------
Total dividends (0.036) (0.035) (0.038) (0.035) (0.012)
------ ------ ------ ------ ------
Net asset value, end of period $1.000 $1.000 $1.000 $1.000 $1.000
====== ====== ====== ====== ======
Total return(1) 3.65% 3.58% 3.84% 3.58% 1.24%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $7,760 $11,134 $3,702 $2,799 $304
Ratio of expenses to average net assets 1.91% 1.90% 1.88% 1.88% 1.95%
Ratio of net investment income to average
net assets 3.59% 3.51% 3.78% 3.52% 3.90%
- ----------------------------------------------------------------------------------------------------
(1) Total investment return is based on the change in the net asset value of a share during the
period and assumes reinvestment of distributions at net asset value and does not reflect the
impact of a sales charge.
</TABLE>
<TABLE>
<CAPTION>
Ratio of expenses to average Ratio of net investment income to
Net assets net assets average net assets
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Net assets represent the total value of The expense ratio is the percentage of We determine this ratio by dividing net
all the assets in a fund's portfolio, net assets that a fund pays annually for investment income by average net assets.
minus any liabilities, that are operating expenses and management fees.
attributable to that class of a fund. These expenses include accounting and
administration expenses, services for
shareholders, and similar expenses.
</TABLE>
17
----
<PAGE>
Delaware Cash Reserve
Additional information about the Fund's investments is available in the
Fund's annual and semi-annual reports to shareholders. In the Fund's
shareholder reports, you will find a discussion of the market conditions
and investment strategies that significantly affected the Fund's
performance during the report period. You can find more detailed
information about the Fund in the current Statement of Additional
Information, which we have filed electronically with the Securities and
Exchange Commission (SEC) and which is legally a part of this prospectus.
If you want a free copy of the Statement of Additional Information, the
annual or semi-annual report, or if you have any questions about investing
in this Fund, you can write to us at 1818 Market Street, Philadelphia, PA
19103, or call toll-free 800.523.1918. You may also obtain additional
information about the Fund from your financial adviser. You can find
reports and other information about the Fund on the EDGAR database on the
SEC web site (http://www.sec.gov).
You can also get copies of this information, after payment of a duplicating
fee, by e-mailing the SEC at [email protected] or by writing to the Public
Reference Section of the SEC, Washington, D.C. 20549-0102. Information
about the Fund, including its Statement of Additional Information, can be
reviewed and copied at the Securities and Exchange Commission's Public
Reference Room in Washington, D.C. You can get information on the public
reference room by calling the SEC at 202.942.8090.
Web site
www.delawareinvestments.com
E-mail
[email protected]
Shareholder Service Center
800.523.1918
Call the Shareholder Service Center Monday to Friday, 8 a.m. to 8 p.m.
Eastern time:
o For fund information; literature; price, yield and performance figures.
o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone
redemptions and telephone exchanges.
Delaphone Service
800.362.FUND (800.362.3863)
o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.
Investment Company Act file number: 811-2806
Delaware Cash Reserve Symbols
CUSIP
-----------
Class B 245910302
Class C 245910401
DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London
<PAGE>
<TABLE>
<CAPTION>
<S> <C>
Delaware Investments includes funds with a wide DELAWARE CASH RESERVE
range of investment objectives. Stock funds,
income funds, national and state-specific tax-exempt
funds, money market funds, global and
international funds and closed-end funds give
investors the ability to create a portfolio that
fits their personal financial goals. For more
information, contact your financial adviser or
call Delaware Investments at 800-523-1918.
A CLASS
B CLASS
C CLASS
CONSULTANT CLASS
INVESTMENT MANAGER
Delaware Management Company
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P. DELAWARE GROUP CASH RESERVE
1818 Market Street
Philadelphia, PA 19103 No Front-End Sales Charge
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT PART B
Delaware Service Company, Inc.
1818 Market Street STATEMENT OF ADDITIONAL INFORMATION
Philadelphia, PA 19103
MAY 30, 2000
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN DELAWARE(SM)
The Chase Manhattan Bank INVESTMENTS
4 Chase Metrotech Center ------------
Brooklyn, NY 11245
</TABLE>
<PAGE>
STATEMENT OF ADDITIONAL INFORMATION
MAY 30, 2000
DELAWARE GROUP CASH RESERVE
Delaware Cash Reserve Fund
1818 Market Street
Philadelphia, PA 19103
For Prospectus and Performance:
Nationwide 800-523-1918
Information on Existing Accounts:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918
Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500
Delaware Group Cash Reserve ("Cash Reserve") is a
professionally-managed mutual fund of the series type which currently offers one
series of shares: Delaware Cash Reserve Fund (the "Fund").
The Fund offers Class A Shares, Class B Shares, Class C Shares and
Consultant Class Shares (individually, a "Class" and collectively, the
"Classes").
This Statement of Additional Information ("Part B" of the registration
statement) supplements the information contained in the current Prospectuses for
the Fund dated May 30, 2000, as they may be amended from time to time. Part
B should be read in conjunction with the respective Class' Prospectus. Part B is
not itself a prospectus but is, in its entirety, incorporated by reference into
each Class' Prospectus. A prospectus may be obtained by writing or calling your
investment dealer or by contacting the Fund's national distributor, Delaware
Distributors, L.P. (the "Distributor"), at the above address or by calling the
above phone numbers. The Fund's financial statements, the notes relating
thereto, the financial highlights and the report of independent auditors are
incorporated by reference from the Annual Report into this Part B. The Annual
Report will accompany any request for Part B. The Annual Report can be obtained,
without charge, by calling 800-523-1918.
<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------
TABLE OF CONTENTS
- -------------------------------------------------------------------------------------------------------
<S> <C>
Investment Objective and Policy Taxes
- -------------------------------------------------------------------------------------------------------
Performance Information Investment Management Agreement
- -------------------------------------------------------------------------------------------------------
Trading Practices Officers and Trustees
- -------------------------------------------------------------------------------------------------------
Purchasing Shares General Information
- -------------------------------------------------------------------------------------------------------
Retirement Plans Financial Statements
- -------------------------------------------------------------------------------------------------------
Offering Price Appendix A - Description of Ratings
- -------------------------------------------------------------------------------------------------------
Redemption and Exchange
- --------------------------------------------------- Appendix B - Investment Objectives of the
Dividends and Realized Securities Profits Funds in the Delaware Investments Family
Distributions
- -------------------------------------------------------------------------------------------------------
</TABLE>
1
<PAGE>
INVESTMENT OBJECTIVE AND POLICY
The investment objective of the Fund is to obtain maximum current
income consistent with preservation of principal and maintenance of liquidity by
investing substantially all of its assets in a portfolio of money market
instruments. There is no assurance that this objective can be achieved.
The Fund intends to achieve its objective by investing at least 80% of
its assets in a diversified portfolio of money market instruments. See Money
Market Instruments, below, and Appendix A - Description of Ratings.
The Fund limits its investments to those which the Board of Trustees
has determined present minimal credit risks and are of high quality and which
are otherwise in accordance with the maturity, quality and diversification
conditions with which taxable money market funds must comply.
The Fund maintains its net asset value at $1.00 per share by valuing
its securities on an amortized cost basis. See Offering Price. The Fund
maintains a dollar-weighted average portfolio maturity of not more than 90 days
and does not purchase any issue having a remaining maturity of more than 13
months. In addition, the Fund limits its investments, including repurchase
agreements, to those instruments which the Board of Trustees determines present
minimal credit risks and which are of high quality. The Fund may sell portfolio
securities prior to maturity in order to realize gains or losses or to shorten
the average maturity if it deems such actions appropriate to maintain a stable
net asset value per share. 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.
While the Fund intends to hold its investments until maturity when they
will be redeemable at their full principal value plus accrued interest, attempts
may be made from time to time to increase its yield by trading to take advantage
of market variations. Also, revised evaluations of the issuer or redemptions by
shareholders of the Fund may cause sales of portfolio investments prior to
maturity or at times when such sales might otherwise not be desirable. The
Fund's right to borrow to make redemption payments may reduce, but does not
guarantee a reduction in, the need for such sales. The Fund will not purchase
new securities while any borrowings are outstanding. See Taxes for the effect of
any capital gains distributions.
A shareholder's rate of return will vary with the general interest rate
levels applicable to the money market instruments in which the Fund invests. In
the event of an increase in current interest rates or a national credit crisis,
or if one or more of the issuers became insolvent prior to the maturity of the
instruments, principal values could be adversely affected. Investments in
obligations of foreign banks and of overseas branches of U.S. banks may be
subject to less stringent regulations and different risks than those of U.S.
domestic banks. The rate of return and the net asset value will be affected by
such other factors as sales of portfolio securities prior to maturity and the
Fund's operating expenses.
Money Market Instruments
The Fund will invest all of its available assets in money market
instruments maturing in one year or less. The types of instruments which the
Fund may purchase are described below:
1. U.S. Government Securities--Securities issued or guaranteed by the
U.S. government, including Treasury Bills, Notes and Bonds.
2. U.S. Government Agency Securities--Obligations issued or guaranteed
by agencies or instrumentalities of the U.S. government whether supported by the
full faith and credit of the U.S. Treasury or the credit of a particular agency
or instrumentality.
2
<PAGE>
3. Bank Obligations--Certificates of deposit, bankers' acceptances and
other short-term obligations of U.S. commercial banks and their overseas
branches and foreign banks of comparable quality, provided each such bank
combined with its branches has total assets of at least one billion dollars. Any
obligations of foreign banks shall be denominated in U.S. dollars. Obligations
of foreign banks and obligations of overseas branches of U.S. banks are subject
to somewhat different regulations and risks than those of U.S. domestic banks.
In particular, a foreign country could impose exchange controls which might
delay the release of proceeds from that country. Such deposits are not covered
by the Federal Deposit Insurance Corporation. Because of conflicting laws and
regulations, an issuing bank could maintain that liability for an investment is
solely that of the overseas branch which could expose the Fund to a greater risk
of loss. The Fund will buy only short-term instruments of banks in nations where
these risks are minimal. The Fund will consider these factors along with other
appropriate factors in making an investment decision to acquire such obligations
and will only acquire those which, in the opinion of management, are of an
investment quality comparable to other debt securities bought by the Fund. In
addition, the Fund is subject to certain maturity, quality and diversification
conditions applicable to taxable money market funds. Thus, at the time of
purchase a bank obligation or, as relevant, its issuer must be rated in one of
the two highest rating categories (e.g. A-2 or better by Standard & Poor's
("S&P") and P-2 or better by Moody's Investors Service, Inc. ("Moody's")) by at
least two nationally-recognized statistical rating organizations or, if such
security or, as relevant, its issuer is not so rated, the purchase of the
security must be approved or ratified by the Board of Trustees in accordance
with the maturity, quality and diversification conditions with which taxable
money market funds must comply.
4. Commercial Paper--The Fund may invest in short-term promissory notes
issued by corporations if at the time of purchase, such security or, as
relevant, its issuer, is rated in one of the two highest rating categories
(e.g., A-2 or better by S&P and P-2 or better by Moody's) by at least two
nationally-recognized statistical rating organizations approved by the Board of
Trustees or, if such security is not so rated, the purchase of the security must
be approved or ratified by the Board of Trustees in accordance with the
maturity, quality and diversification conditions with which taxable money market
funds must comply.
5. Short-term Corporate Debt--The Fund may invest in corporate notes,
bonds and debentures if at the time of purchase, such security or, as relevant,
its issuer, is rated in one of the two highest rating categories (e.g., 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 Trustees or, if such
security is not so rated, the purchase of the security must be approved or
ratified by the Board of Trustees in accordance with the maturity, quality and
diversification conditions with which taxable money market funds must comply.
Such securities generally have greater liquidity and are subject to considerably
less market fluctuation than longer issues.
6. Repurchase Agreements--Instruments under which securities are
purchased from a bank or securities dealer with an agreement by the seller to
repurchase the securities. The Fund may use repurchase agreements which are at
least 102% collateralized by securities in which the Fund can invest directly.
Under a repurchase agreement, the purchaser acquires ownership of the security
but the seller agrees, at the time of sale, to repurchase it at a mutually
agreed-upon time and price. The Fund will take custody of the collateral under
repurchase agreements. Repurchase agreements may be construed to be
collateralized loans by the purchaser to the seller secured by the securities
transferred. The resale price is in excess of the purchase price and reflects an
agreed-upon market rate unrelated to the coupon rate or maturity of the
purchased security. Such transactions afford an opportunity for the Fund to
invest temporarily available cash on a short-term basis. The Fund's risk is
limited to the seller's ability to buy the security back at the agreed-upon sum
at the agreed-upon time, since the repurchase agreement is secured by the
underlying obligation. Should such an issuer default, the investment manager
believes that, barring extraordinary circumstances, the Fund will be entitled to
sell the underlying securities or otherwise receive adequate protection for its
interest in such securities, although there could be a delay in recovery. The
Fund considers the creditworthiness of the bank or dealer from whom it purchases
repurchase agreements. The Fund will monitor such transactions to assure that
the value of the underlying securities subject to repurchase agreements is at
least equal to the repurchase price. The underlying securities will be limited
to those described above.
3
<PAGE>
The ratings of S&P, Moody's and other rating services represent their
opinion as to the quality of the money market instruments which they undertake
to rate. It should be emphasized, however, that ratings are general and are not
absolute standards of quality. These ratings are the initial criteria for
selection of portfolio investments, but the Fund will further evaluate these
securities. See Appendix A - Description of Ratings.
AssetBacked Securities
The Fund may also invest in securities which are backed by assets such
as receivables on home equity loans, credit card loans, and 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 S&P or Aaa by Moody's). The credit quality of
most asset-backed securities depends primarily on the credit quality of the
assets underlying such securities, how well the entities issuing the securities
are insulated from the credit risk of the originator or affiliated entities, and
the amount of credit support provided to the securities. Such receivables
typically are securitized in either a pass-through or a pay-through structure.
Passthrough 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 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 loans, 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 also involve certain other risks,
including the risk that security interests cannot be adequately or in many
cases, ever, established. In addition, with respect to credit card loans, 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 loans, there is a risk that the holders may
not have either a proper or first security interest in all of the obligations
backing the 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.
Asset-backed securities are often backed by a pool of assets
representing the obligations of a number of different parties. To lessen the
effect of failures by obligors on underlying assets to make payments, such
securities may have credit support supplied by a third party or derived from the
structure of the transaction. Such credit support falls into two categories: (i)
liquidity protection, and (ii) protection against losses resulting from ultimate
default by an obligor on the underlying assets.
Liquidity protection refers to the provision of advances, generally by
the entity administering the pool of assets, to ensure that the receipt of
payments due on the underlying pool is timely. Protection against losses
resulting from ultimate default enhances the likelihood of payments of the
obligations on at least some of the assets in the pool. Such protection may be
provided through guarantees, insurance policies or letters of credit obtained by
the issuer or sponsor from third parties, through various means of structuring
the transaction or through a combination of such approaches. The Fund will not
pay any additional fees for such credit support, although the existence of
credit support may increase the price of a security.
4
<PAGE>
Examples of credit support arising out of the structure of the
transaction include "senior-subordinated securities" (multiple class securities
with one or more classes subordinate to other classes as to the payment of
principal thereof and interest thereon, with the result that defaults on the
underlying assets are borne first by the holders of the subordinated class),
creation of "reserve funds" (where cash or investments, sometimes funded from a
portion of the payments on the underlying assets, are held in reserve against
future losses) and "over-collateralization" (where the scheduled payments on, or
the principal amount of, the underlying assets exceeds that required to make
payments of the securities and pay any servicing or other fees). The degree of
credit support provided for each issue is generally based on historical
information respecting the level of credit risk associated with the underlying
assets. Delinquencies or losses in excess of those anticipated could adversely
affect the return on an investment in such issue.
Rule 144A Securities
The Fund may invest in restricted securities, including securities
eligible for resale without registration pursuant to Rule 144A ("Rule 144A
Securities") under the Securities Act of 1933 (the "1933 Act"). Rule 144A
permits many privately placed and legally restricted securities to be freely
traded among certain institutional buyers such as the Fund. The Fund may invest
no more than 10% of the value of its net assets in illiquid securities,
including repurchase agreements maturing in more than seven days.
While maintaining oversight, the Board of Trustees has delegated to
Delaware Management Company (the "Manager") the day-to-day function of
determining whether or not individual Rule 144A Securities are liquid for
purposes of the Fund's 10% limitation on investments in illiquid assets. The
Board has instructed the Manager to consider the following factors in
determining the liquidity of a Rule 144A Security: (i) the frequency of trades
and trading volume for the security; (ii) whether at least three dealers are
willing to purchase or sell the security and the number of potential purchasers;
(iii) whether at least two dealers are making a market in the security; and (iv)
the nature of the security and the nature of the marketplace trades (e.g., the
time needed to dispose of the security, the method of soliciting offers, and the
mechanics of transfer).
If the Manager determines that a Rule 144A Security which was
previously determined to be liquid is no longer liquid and, as a result, the
Fund's holdings of illiquid securities exceed the Fund's 10% limit on
investments in such securities, the Manager will determine what action to take
to ensure that the Fund continues to adhere to such limitation.
Investment Restrictions
Fundamental Restrictions--Cash Reserve has adopted the following
restrictions for the Fund which cannot be changed without approval by the
holders of a "majority" of the Fund's outstanding shares, which is a vote by the
holders of the lesser of a) 67% or more of the voting securities present in
person or by proxy at a meeting, if the holders of more than 50% of the
outstanding voting securities are present or represented by proxy; or b) more
than 50% of the outstanding voting securities. The percentage limitations
contained in the restrictions and policies set forth herein apply at the time of
purchase of securities.
5
<PAGE>
The Fund shall not:
1. Make investments that will result in the concentration (as that term
may be defined in the 1940 Act, any rule or other thereunder, or U.S. Securities
and Exchange Commission ("SEC") staff interpretation thereof) of its investments
in the securities of issuers primarily engaged in the same industry, provided
that this restriction does not limit the Fund from investing in obligations
issued or guaranteed by the U.S. government, its agencies or instrumentalities,
or in certificates of deposit. In addition, the Fund may concentrate its
investments in bankers' acceptances of banks with over one billion dollars in
assets or bank holding companies whose securities are rated A-2 or better by
Standard & Poor's ("S&P") or P-2 or better by Moody's Investors Service, Inc.
("Moody's").
2. Borrow money or issue senior securities, except as Investment
Company Act of 1940 (the "1940 Act"), any rule or order thereunder, or SEC staff
interpretation thereof, may permit.
3. Underwrite the securities of other issuers, except that the Fund may
engage in transactions involving the acquisition, disposition or resale of its
portfolio securities, under circumstances where it may be considered to be an
underwriter under the Securities Act of 1933.
4. Purchase or sell real estate, unless acquired as a result of
ownership of securities or other instruments and provided that this restriction
does not prevent the Fund from investing in issuers which invest, deal or
otherwise engage in transactions in real estate or interests therein, or
investing in securities that are secured by real estate or interests therein.
5. Purchase or sell physical commodities, unless acquired as a result
of ownership of securities or other instruments and provided that this
restriction does not prevent the Fund from engaging in transactions involving
futures contracts and options thereon or investing in securities that are
secured by physical commodities.
6. Make loans, provided that this restriction does not prevent the Fund
from purchasing debt obligations, entering into repurchase agreements, loaning
its assets to broker/dealers or institutional investors and investing in loans,
including assignments and participation interests.
Non-Fundamental Investment Restrictions--In addition to the fundamental
policies and investment restrictions described above, and the various general
investment policies described in the prospectus, the Fund will be subject to the
following investment restrictions, which are considered non-fundamental and may
be changed by the Board of Trustees without shareholder approval.
1. The Fund is permitted to invest in other investment companies,
including open-end, closed-end or unregistered investment companies, either
within the percentage limits set forth in the 1940 Act, any rule or order
thereunder, or SEC staff interpretation thereof, or without regard to percentage
limits in connection with a merger, reorganization, consolidation or other
similar transaction. However, the Fund may not operate as a "fund of funds"
which invests primarily in the shares of other investment companies as permitted
by Section 12(d)(1)(F) or (G) of the 1940 Act, if its own shares are utilized as
investments by such a "fund of funds."
2. The Fund may not invest more than 15% of its net assets in
securities which it cannot sell or dispose of in the ordinary course of business
within seven days at approximately the value at which the Fund has valued the
investment.
6
<PAGE>
Concentration
In applying the Fund's policy on concentration: (i) utility companies
will be divided according to their services, for example, gas, gas transmission,
electric and telephone will each be considered a separate industry; (ii)
financial service companies will be classified according to the end users of
their services, for example, automobile finance, bank finance and diversified
finance will each be considered a separate industry; and (iii) asset backed
securities will be classified according to the underlying assets securing such
securities.
Following are additional investment restrictions and policies which are
considered non-fundamental and may be changed by the Board of Trustees
without shareholder approval.
1. Invest more than 20% of its assets in securities other than money
market instruments as defined above.
2. Borrow money in excess of one-third of the value of its net assets
and then only as a temporary measure for extraordinary purposes or to facilitate
redemptions. The Fund has no intention of increasing its net income through
borrowing. Any borrowing will be done from a bank and to the extent that such
borrowing exceeds 5% of the value of the Fund's net assets, asset coverage of at
least 300% is required. In the event that such asset coverage shall at any time
fall below 300%, the Fund shall, within three days thereafter (not including
Sunday or holidays) or such longer period as the SEC may prescribe by rules and
regulations, reduce the amount of its borrowings to such an extent that the
asset coverage of such borrowings shall be at least 300%. The Fund will not
pledge more than 10% of its net assets. The Fund will not issue senior
securities as defined in the 1940 Act, except for notes to banks.
3. Sell securities short or purchase securities on margin.
4. Write or purchase put or call options.
5. Underwrite the securities of other issuers, except that the Fund may
acquire portfolio securities under circumstances where, if the securities are
later publicly offered or sold by the Fund, it might be deemed an underwriter
for purposes of the ^ 1933 Act. Not more than 10% of the value of the Fund's
net assets at the time of acquisition will be invested in such securities.
6. Purchase or sell commodities or commodity contracts.
7. Purchase or sell real estate, but this shall not prevent the Fund
from investing in securities secured by real estate or interests therein, or
securities issued by companies which invest in real estate or interests therein.
8. Make loans to other persons except by the purchase of obligations in
which the Fund is authorized to invest and to enter into repurchase agreements.
Not more than 10% of the Fund's total assets will be invested in repurchase
agreements maturing in more than seven days and in other illiquid assets.
9. Invest more than 5% of the value of its assets in the securities of
any one issuer (other than obligations issued or guaranteed by the U.S.
government or federal agencies) or acquire more than 10% of the voting
securities of such an issuer. Where securities are issued by one entity but are
guaranteed by another, "issuer" shall not be deemed to include the guarantor so
long as the value of all securities owned by the Fund which have been issued or
guaranteed by that guarantor does not exceed 10% of the value of the Fund's
assets.
10. Purchase more than 10% of the outstanding securities of any issuer
or invest in companies for the purpose of exercising control.
7
<PAGE>
11. Invest in securities of other investment companies, except as they
may be acquired as part of a merger, consolidation or acquisition of assets.
12. Invest more than 25% of its total assets in any particular
industry, except that the Fund may invest more than 25% of the value of its
total assets in obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities, certificates of deposit and bankers' acceptances
of banks with over one billion dollars in assets or bank holding companies whose
securities are rated A-2 or better by S&P or P-2 or better by Moody's.
13. Retain in its portfolio securities issued by an issuer any of whose
officers, trustees or security holders is an officer or trustee of the Fund or
of the investment manager of the Fund if after the purchase of the securities of
such issuer by the Fund one or more of such officers or trustees owns
beneficially more than 1/2 of 1% of the shares or securities or both of such
issuer and such officers and trustees owning more than 1/2 of 1% of such shares
or securities together own beneficially more than 5% of such shares or
securities.
14. Invest funds of the Fund in the securities of companies which have
a record of less than three years' continuous operation if such purchase at the
time thereof would cause more than 5% of the Fund's total assets to be invested
in the securities of such company or companies. Such period of three years may
include the operation of any predecessor company or companies, partnership or
individual enterprise if the company whose securities are proposed as an
investment for funds of the Fund has come into existence as the result of a
merger, consolidation, reorganization or the purchase of substantially all of
the assets of such predecessor company or companies, partnerships or individual
enterprises.
15. Invest in direct interests in oil, gas or other mineral exploration
or development programs.
16. Invest more than 25% of its assets in foreign banks except that
this limitation shall not apply to United States branches of foreign banks which
are subject to the same regulation as United States banks or to foreign branches
of United States banks where such a bank is liable for the obligations of the
branch.
Although not a fundamental investment restriction, the Fund currently
does not invest its assets in real estate limited partnerships.
PERFORMANCE INFORMATION
For the seven-day period ended March 31, 2000, the annualized current
yield of Class A Shares, Class B Shares, Class C Shares and Consultant Class
Shares was 5.34%, 4.34%, 4.34% and 5.09%, respectively, and the compounded
effective yield was 4.18%, 3.15%, 3.15% and 3.92%, respectively. These yields
will fluctuate daily as income earned fluctuates. On this date, the weighted
average portfolio maturity was 55 days for each Class. The current yield of
Class A Shares is expected to be higher than that of Consultant Class Shares,
Class B Shares and Class C Shares because Class A Shares are not subject to the
maximum aggregate expenses under the Fund's 12b-1 Plans of up to 0.30% for
Consultant Class Shares and up to 1% for each of the Class B Shares and Class C
Shares. See Plans Under Rule 12b-1 for Consultant Class Shares, Class B Shares
and Class C Shares.
Shareholders and prospective investors will be interested in learning
from time to time the current and the effective compounded yield of a Class of
shares. As explained under Dividends and Realized Securities Profits
Distributions, dividends are declared daily from net investment income. In order
to determine the current return, yield is calculated as follows.
8
<PAGE>
The calculation begins with the value of a hypothetical account of one
share at the beginning of a seven-day period; this is compared with the value of
that same account at the end of the same period (including shares purchased for
the account with dividends earned during the period). The net change in the
account value is generally the net income earned per share during the period,
which consists of accrued interest income plus or minus amortized purchase
discount or premium, less all accrued expenses (excluding expenses reimbursed by
the investment manager) but does not include realized gains or losses or
unrealized appreciation or depreciation.
The current yield of each Class represents the net change in this
hypothetical account annualized over 365 days. In addition, a shareholder may
achieve a compounding effect through reinvestment of dividends, which is
reflected in the effective yield shown below.
The following is an example, for purposes of illustration only, of the
current and effective yield calculations for the seven-day period ended March
31, 2000:
<TABLE>
<CAPTION>
Consultant Class
Class A Shares Class B Shares Class C Shares Shares
-------------- -------------- -------------- ---------------
<S> <C> <C> <C> <C>
Value of a hypothetical account with one
share at the beginning of the period...... $1.00000000 $1.00000000 $1.00000000 $1.00000000
Value of the same account at the
end of the period......................... $1.00102438 $1.00083310 $1.00083310 $1.00097657
=========== =========== =========== ===========
Net change in account value...................... 0.00102438(1) 0.00083310(1) 0.00083310(1) 0.00097657(1)
Base period return = net change in account
value/beginning account value............. 0.00102438 0.00083310 0.00083310 0.00097657
Current yield [base period return x (365/7)]..... 5.34%(2) 4.34%(2) 4.34%(2) 5.09%(2)
=========== =========== =========== ===========
Effective yield (1 + base period) 365/7 - 1...... 5.48%(3) 4.44%(3) 4.44%(3) 5.22%(3)
=========== =========== =========== ===========
</TABLE>
Weighted average life to maturity of the portfolio on March 31, 2000 was
44 days.
(1) This represents the net income per share for the seven calendar days
ended March 31, 2000.
(2) This represents the average of annualized net investment income per
share for the seven calendar days ended March 31, 2000.
(3) This represents the current yield for the seven calendar days ended
March 31, 2000 compounded daily.
9
<PAGE>
The average annual total rate of return for a Class is based on a
hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. With respect to Class B Shares and Class
C Shares, each calculation will include the CDSC that would be applicable upon
complete redemption of such shares during the stated period. In addition, the
Fund may present total return information that does not reflect the deduction of
any applicable CDSC. The following formula will be used for the actual
computations:
n
P(1+T) = ERV
Where: P = a hypothetical initial purchase order of $1,000;
T = average annual total return;
n = number of years;
ERV = redeemable value of the hypothetical $1,000
purchase at the end of the period after the
deduction of the applicable CDSC, if any,
with respect to Class B Shares and Class C
Shares
Aggregate or cumulative total return is calculated in a similar manner,
except that the results are not annualized. The performance, as shown below, is
the average annual total return quotations for each Class through March 31,
2000, calculated as an average annual compounded rate of return for the periods
indicated. For this purpose, the calculations assume the reinvestment of all
dividend distributions paid during the indicated periods. Interest rates
fluctuated during the periods covered by the table and the Fund's results should
not be considered as representative of future performance. Total return for
Consultant Class Shares for periods prior to commencement of operations of such
Class is based on the performance of Class A Shares. For periods prior to
commencement of operations of Consultant Class Shares, the total return does not
reflect the 12b-1 payments applicable to such Class. If such payments were
reflected in the calculations, performance would have been affected. The average
annual total return for Class B and C Shares (including deferred sales charge)
reflects the deduction of the applicable CDSC that would be paid if the shares
were redeemed at March 31, 2000. The average annual total return for Class B and
Class C Shares (excluding deferred sales charge) assumes the shares were not
redeemed at March 31, 2000 and, therefore, does not reflect the deduction of a
CDSC.
10
<PAGE>
<TABLE>
<CAPTION>
Average Annual Total Return
- --------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares
Consultant Class B Shares (Excluding Class C Shares (Excluding
Class (Including Deferred (Including Deferred Deferred
Class A Shares Shares Deferred Sales Charge) Sales Charge) Sales Charge)
(Inception (Inception Sales Charge) (1) (Inception (Inception (Inception
6/30/78) 3/10/88) (Inception 5/2/94) 5/2/94) 11/29/95) 11/29/95)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
1 year ended
3/31/00 4.69% 4.43% -1.35% 3.65% 2.65% 3.65%
- ------------------- ----------------- ------------- ------------------- ---------------- -------------------- ------------------
3 years ended
3/31/00 4.73% 4.47% 2.75% 3.69% 3.69% 3.69%
- ------------------- ----------------- ------------- ------------------- ---------------- -------------------- ------------------
5 years ended
3/31/00 4.76% 4.50% 3.37% 3.72% N/A N/A
- ------------------- ----------------- ------------- ------------------- ---------------- -------------------- ------------------
10 years ended
3/31/00 4.55% 4.29% N/A N/A N/A N/A
- ------------------- ----------------- ------------- ------------------- ---------------- -------------------- ------------------
15 years ended
3/31/00 5.44% 5.21% N/A N/A N/A N/A
- ------------------- ----------------- ------------- ------------------- ---------------- -------------------- ------------------
Life of Fund 7.38% 7.22% 3.48% 3.62% 3.66% 3.66%
- --------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Effective May 30, 1999, the CDSC schedule for Class B Shares is as
follows: (i) 5% if shares are redeemed within one year of purchase (ii)
4% if shares are redeemed during the second year of purchase; (iii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iv) 2% if shares are redeemed during the fifth year
following purchase; (v) 1% if shares are redeemed during the sixth year
following purchase; and (vi) 0% thereafter. The above performance
figures are calculated using the new applicable CDSC schedule.
From time to time, the Fund may quote current yield information of the
Classes with the sample average rates paid on bank money market deposit
accounts. The bank money market deposit averages are the stated rates of 100
large banks and thrifts in the top five standard metropolitan statistical areas
as determined by the Bank Rate Monitor. The Fund's figures for a Class will be
the annualized yields representing an average of that Class' after-expense per
share earnings divided by cost per share for each day of the fiscal month, or
period, noted. Yield fluctuates depending on portfolio type, quality, maturity
and operating expenses. Principal is not insured and the results shown should
not be considered as representative of the yield which may be realized from an
investment made in the Fund at any time in the future.
From time to time, the Fund may quote actual total return and/or yield
performance for its Classes in advertising and other types of literature. This
information may be compared to that of other mutual funds with similar
investment objectives and to stock, bond and other relevant indices or to
rankings prepared by independent services or other financial or industry
publications that monitor the performance of mutual funds. For example, the
performance comparisons of the Fund (or Class) may include the average return of
various bank instruments, some of which may carry certain return guarantees
offered by leading banks and thrifts, as monitored by the Bank Rate Monitor, and
those of corporate and government security price indices may be compared to data
prepared by Lipper Analytical Services, Inc., IBC/Donoghue or the performance of
unmanaged indices compiled or maintained by statistical research firms such as
Lehman Brothers or Salomon Brothers, Inc.
11
<PAGE>
Lipper Analytical Services, Inc. and IBC/Donoghue maintain statistical
performance databases, as reported by a diverse universe of
independently-managed mutual funds. Rankings that compare the Fund's performance
to another fund in appropriate categories over specific time periods also may be
quoted in advertising and other types of literature. The total return
performance reported for these indices will reflect the reinvestment of all
distributions on a quarterly basis and market price fluctuations. The indices do
not take into account any fees. A direct investment in an unmanaged index is not
possible.
Salomon Brothers and Lehman Brothers are statistical research firms
that maintain databases of international market, bond market, corporate and
government-issued securities of various maturities. This information, as well as
unmanaged indices compiled and maintained by these firms, will be used in
preparing comparative illustrations. In addition, the performance of multiple
indices compiled and maintained by these firms may be combined to create a
blended performance result for comparative purposes. Generally, the indices
selected will be representative of the types of securities in which the Fund may
invest and the assumptions that were used in calculating the blended performance
will be described.
Comparative information on the Consumer Price Index may also be
included in advertisements or other literature. The Consumer Price Index, as
prepared by the U.S. Bureau of Labor Statistics, is the most commonly used
measure of inflation. It indicates the cost fluctuations of a representative
group of consumer goods. It does not represent a return from an investment.
Current interest rate and yield information on government debt
obligations of various durations, as reported weekly by the Federal Reserve
(Bulletin H.15) may also be used. Also, current rate information on municipal
debt obligations of various durations, as reported daily by The Bond Buyer may
also be used. The Bond Buyer is published daily and is an industry-accepted
source for current municipal bond market information.
Ibbotson Associates of Chicago, Illinois ("Ibbotson") provides
historical returns of the capital markets in the United States, including common
stocks, small capitalization stocks, long-term corporate bonds,
intermediate-term government bonds, long-term government bonds, Treasury bills,
the U.S. rate of inflation (based on the Consumer Price Index), and combinations
of various capital markets. The performance of these capital markets is based on
the returns of different indices. The Fund may use the performance of these
capital markets in order to demonstrate general risk-versus-reward investment
scenarios. Performance comparisons may also include the value of a hypothetical
investment in any of these capital markets. The risks associated with the
security types in any capital market may or may not correspond directly to those
of the Fund. The Fund may also compare performance to that of other compilations
or indices that may be developed and made available in the future.
The Fund may include discussions or illustrations of the potential
investment goals of a prospective investor (including materials that describe
general principles of investing, such as asset allocation, diversification, risk
tolerance, and goal setting, questionnaires designed to help create a personal
financial profile, worksheets used to project savings needs based on assumed
rates of inflation and hypothetical rates of return and action plans offering
investment alternatives), investment management techniques, policies or
investment suitability of the Fund (such as value investing, market timing,
dollar cost averaging, asset allocation, constant ratio transfer, automatic
account rebalancing, the advantages and disadvantages of investing in
tax-deferred and taxable investments), economic and political conditions, the
relationship between sectors of the economy and the economy as a whole, the
effects of inflation and historical performance of various asset classes,
12
<PAGE>
including but not limited to, stocks, bonds and Treasury bills. From time to
time advertisements, sales literature, communications to shareholders or other
materials may summarize the substance of information contained in shareholder
reports (including the investment composition of the Fund), as well as the views
as to current market, economic, trade and interest rate trends, legislative,
regulatory and monetary developments, investment strategies and related matters
believed to be of relevance to the Fund. In addition, selected indices may be
used to illustrate historic performance of selected asset classes. The Fund may
also include in advertisements, sales literature, communications to shareholders
or other materials, charts, graphs or drawings which illustrate the potential
risks and rewards of investment in various investment vehicles, including but
not limited to, domestic stocks, and/or bonds, treasury bills and shares of the
Fund. In addition, advertisements, sales literature, communications to
shareholders or other materials may include a discussion of certain attributes
or benefits to be derived by an investment in the Fund and/or other mutual
funds, shareholder profiles and hypothetical investor scenarios, timely
information on financial management, tax and retirement planning (such as
information on Roth IRAs and Education IRAs) and investment alternatives to
certificates of deposit and other financial instruments. Such sales literature,
communications to shareholders or other materials may include symbols, headlines
or other material which highlight or summarize the information discussed in more
detail therein.
Materials may refer to the CUSIP numbers of the Fund and may illustrate
how to find the listings of the Fund in newspapers and periodicals. Materials
may also include discussions of other funds, products, and services.
The Fund may quote various measures of volatility and benchmark
correlation in advertising. In addition, the Fund may compare these measures to
those of other funds. Measures of volatility seek to compare the historical
share price fluctuations or total returns to those of a benchmark. Measures of
benchmark correlation indicate how valid a comparative benchmark may be.
Measures of volatility and correlation may be calculated using averages of
historical data. The Fund may advertise its current interest rate sensitivity,
duration, weighted average maturity or similar maturity characteristics.
Advertisements and sales materials relating to the Fund may include information
regarding the background and experience of its portfolio managers.
13
<PAGE>
The following tables present examples, for purposes of illustration
only, of cumulative total return performance for the shares of each Class of the
Fund through March 31, 2000. For these purposes, the calculations assume the
reinvestment of any realized securities profits distributions and income
dividends paid during the indicated periods. Total return shown for Consultant
Class Shares for the periods prior to commencement of operations of such Class
is based on the performance of Class A Shares. For periods prior to commencement
of operations of Consultant Class Shares, the total return does not reflect the
12b-1 payments applicable to such Class. If such payments were reflected in the
calculations, performance would have been affected.
<TABLE>
<CAPTION>
Cumulative Total Return
- -----------------------------------------------------------------------------------------------------------------------------------
Class B Shares Class C Shares
Consultant (Excluding (Including Class C Shares
Class Class B Shares Deferred Deferred (Excluding
Class A Shares Shares (Including Deferred Sales Charge) Sales Charge) Deferred
(Inception (Inception Sales Charge) (1) (Inception (Inception Sales Charge)
6/30/78) 3/10/88) (Inception 5/2/94) 5/2/94) 11/29/95) (Inception 11/29/95)
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
3 months ended
3/31/00 1.30% 1.24% -3.95% 1.05% 0.05% 1.05%
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
6 months ended
3/31/00 2.52% 2.39% -2.99% 2.01% 1.01% 2.01%
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
9 months ended
3/31/00 3.64% 3.44% -2.14% 2.86% 1.86% 2.86%
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
1 year ended 4.69% 4.43% -1.35% 3.65% 2.65% 3.65%
3/31/00
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
3 years ended
3/31/00 14.86% 14.01% 8.48% 11.48% 11.48% 11.48%
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
5 years ended
3/31/00 26.19% 24.63% 18.05% 20.05% N/A N/A
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
10 years ended
3/31/00 56.11% 52.27% N/A N/A N/A N/A
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
15 years ended
3/31/00 121.24% 114.23% N/A N/A N/A N/A
- ------------------- ---------------- --------------- -------------------- ---------------- ------------------ ---------------------
Life of Fund 370.52% 355.61% 22.44% 23.44% 16.90% 16.90%
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Effective May 30, 1999, the CDSC schedule for Class B Shares is as
follows: (i) 5% if shares are redeemed within one year of purchase (ii)
4% if shares are redeemed during the second year of purchase; (iii) 3%
if shares are redeemed during the third or fourth year following
purchase; (iv) 2% if shares are redeemed during the fifth year
following purchase; (v) 1% if shares are redeemed during the sixth year
following purchase; and (vi) 0% thereafter. The above performance
figures are calculated using the new applicable CDSC schedule.
14
<PAGE>
Because every investor's goals and risk threshold are different, the
Distributor, as distributor for the Fund and other mutual funds available from
the Delaware Investments family, will provide general information about
investment alternatives and scenarios that will allow investors to assess their
personal goals. This information will include general material about investing
as well as materials reinforcing various industry-accepted principles of prudent
and responsible personal financial planning. One typical way of addressing these
issues is to compare an individual's goals and the length of time the individual
has to attain these goals to his or her risk threshold. In addition, the
Distributor will provide information that discusses the overriding investment
philosophy of Delaware Management Company (the "Manager") and how that
philosophy impacts the Fund's, and other Delaware Investments funds', investment
disciplines employed in seeking their objectives. The Distributor may also from
time to time cite general or specific information about the institutional
clients of the Manager, including the number of such clients serviced by the
Manager.
Dollar-Cost Averaging
Money market funds, which are generally intended for your short-term
investment needs, can often be used as a basis for building a long-term
investment plan. For many people, deciding when to purchase long-term
investments, such as stock or longer-term bond funds, can be a difficult
decision. Unlike money market fund shares, prices of other securities, such as
stocks and bonds, tend to move up and down over various market cycles. Though
logic says to invest when prices are low, even experts can't always pick the
highs and the lows. By using a strategy known as dollar-cost averaging, you
schedule your investments ahead of time. If you invest a set amount on a regular
basis (perhaps using assets from your money market fund) that money will always
buy more shares when the price is low and fewer when the price is high. You can
choose to invest at any regular interval--for example, monthly or quarterly--as
long as you stick to your regular schedule. Dollar-cost averaging looks simple
and it is, but there are important things to remember.
Dollar-cost averaging works best over longer time periods, and it
doesn't guarantee a profit or protect against losses in declining markets. If
you need to sell your investment when prices are low, you may not realize a
profit no matter what investment strategy you utilize. That's why dollar-cost
averaging can make sense for long-term goals. Since the potential success of a
dollar-cost averaging program depends on continuous investing, even through
periods of fluctuating prices, you should consider your dollar-cost averaging
program a long-term commitment and invest an amount you can afford and probably
won't need to withdraw. You should also consider your financial ability to
continue to purchase shares during low fund share prices. Delaware Investments
offers three services -- Automatic Investing Program, Direct Deposit Program and
the Wealth Builder Option -- that can help to keep your regular investment
program on track. See Investing by Electronic Fund Transfer - Direct Deposit
Purchase Plan and Automatic Investing Plan under Purchasing Shares and Wealth
Builder Option under Purchasing Shares for a complete description of these
services, including restrictions or limitations.
15
<PAGE>
The example below illustrates how dollar-cost averaging can work. In a
fluctuating market, the average cost per share of a stock or bond fund over a
period of time will be lower than the average price per share of the fund for
the same time period.
Investment Price Number of Shares
Amount Per Share Purchased
Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $5.00 20
Month 4 $100 $10.00 10
------------------------------------------------------------------
$400 $37.50 48
Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)
This example is for illustration purposes only. It is not intended to
represent the actual performance of the Fund or any stock or bond fund in the
Delaware Investments family. Dollar-cost averaging can be appropriate for
investments in shares of funds that tend to fluctuate in value. Please obtain
the prospectus of any fund in the Delaware Investments family in which you plan
to invest through a dollar-cost averaging program. The prospectus contains
additional information, including charges and expenses. Please read it carefully
before you invest or send money.
THE POWER OF COMPOUNDING
When you opt to reinvest your current income for additional Fund shares,
your investment is given yet another opportunity to grow. It's called the Power
of Compounding. The Fund may include illustrations showing the power of
compounding in advertisements and other types of literature.
The yield quoted at any time represents the amount being earned on a
current basis and is a function of the types of instruments in the Fund's
portfolio, their quality and length of maturity and the Fund's operating
expenses. The length of maturity for the portfolio is the average dollar
weighted maturity of the portfolio. This means that the portfolio has an average
maturity of a stated number of days for its issues. The calculation is weighted
by the relative value of the investment.
The yield will fluctuate daily as the income earned on the investments of
the Fund fluctuates. Accordingly, there is no assurance that the yield quoted on
any given occasion will remain in effect for any period of time. It should also
be emphasized that the Fund is an open-end investment company and that there is
no guarantee that the net asset value per share or any stated rate of return
will remain constant. A shareholder's investment in the Fund is not insured.
Investors comparing results of the Fund with investment results and yields from
other sources such as banks or savings and loan associations should understand
these distinctions. Historical and comparative yield information may, from time
to time, be presented by the Fund. Although the Fund determines the yield on the
basis of a seven-calendar-day period, it may from time to time use a different
time span.
Other funds of the money market type may calculate their yield on a
different basis and the yield quoted by the Fund could vary upward or downward
if another method of calculation or base period were used. Shareholders and
prospective investors who wish to learn the current yield of the Fund may call
toll free, nationwide 800-523-1918.
16
<PAGE>
TRADING PRACTICES
Portfolio transactions are executed by the Manager on behalf of the Fund
in accordance with the standards described below.
Brokers, dealers and banks are selected to execute transactions for the
purchase or sale of portfolio securities on the basis of the Manager's judgment
of their professional capability to provide the service. The primary
consideration is to have brokers, dealers or banks execute transactions at best
execution. Best execution refers to many factors, including the price paid or
received for a security, the commission charged, the promptness and reliability
of execution, the confidentiality and placement accorded the order and other
factors affecting the overall benefit obtained by the account on the
transaction. When a commission is paid, the Fund pays reasonably competitive
brokerage commission rates based upon the professional knowledge of the
Manager's trading department as to rates paid and charged for similar
transactions throughout the securities industry. In some instances, the Fund
pays a minimal share transaction cost when the transaction presents no
difficulty. Trades are generally made on a net basis where securities are either
bought or sold directly from or to a broker, dealer or bank. In these instances,
there is no direct commission charged, but there is a spread (the difference
between the buy and sell price) which is the equivalent of a commission.
The Manager may allocate out of all commission business generated by all
of the funds and accounts under its management, brokerage business to brokers or
dealers who provide brokerage and research services. These services include
advice, either directly or through publications or writings, as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing of analyses and reports concerning issuers, securities or industries;
providing information on economic factors and trends; assisting in determining
portfolio strategy; providing computer software and hardware used in security
analyses; and providing portfolio performance evaluation and technical market
analyses. Such services are used by the Manager in connection with its
investment decision-making process with respect to one or more funds and
accounts managed by it, and may not be used, or used exclusively, with respect
to the fund or account generating the brokerage.
As provided in the Securities Exchange Act of 1934 (the "1934 Act") and
the Fund's Investment Management Agreement, higher commissions are permitted to
be paid to broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, the Fund believes that the
commissions paid to such broker/dealers are not, in general, higher than
commissions that would be paid to broker/dealers not providing such services and
that such commissions are reasonable in relation to the value of the brokerage
and research services provided. In some instances, services may be provided to
the Manager which constitute in some part brokerage and research services used
by the Manager in connection with its investment decision-making process and
constitute in some part services used by the Manager in connection with
administrative or other functions not related to its investment decision-making
process. In such cases, the Manager will make a good faith allocation of
brokerage and research services and will pay out of its own resources for
services used by the Manager in connection with administrative or other
functions not related to its investment decision-making process. In addition, so
long as no fund is disadvantaged, portfolio transactions which generate
commissions or their equivalent are allocated to broker/dealers who provide
daily portfolio pricing services to the Fund and to other funds in the Delaware
Investments family. Subject to best price and execution, commissions allocated
to brokers providing such pricing services may or may not be generated by the
funds receiving the pricing service.
17
<PAGE>
The Manager may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in a
manner deemed equitable to each account or fund. When a combined order is
executed in a series of transactions at different prices, each account
participating in the order may be allocated an average price obtained from the
executing broker. It is believed that the ability of the accounts to participate
in volume transactions will generally be beneficial to the accounts and funds.
Although it is recognized that, in some cases, the joint execution of orders
could adversely affect the price or volume of the security that a particular
account or fund may obtain, it is the opinion of the Manager and the Fund's
Board of Trustees that the advantages of combined orders outweigh the
possible disadvantages of separate transactions.
Portfolio trading will be undertaken principally to accomplish the Fund's
objective and not for the purpose of realizing capital gains, although capital
gains may be realized on certain portfolio transactions. For example, capital
gains may be realized when a security is sold (i) so that, provided capital is
preserved or enhanced, another security can be purchased to obtain a higher
yield, (ii) to take advantage of what the Manager believes to be a temporary
disparity in the normal yield relationship between the two securities to
increase income or improve the quality of the portfolio, (iii) to purchase a
security which the Manager believes is of higher quality than its rating or
current market value would indicate, or (iv) when the Manager anticipates a
decline in value due to market risk or credit risk. Since portfolio assets will
consist of short-term instruments, replacement of portfolio securities will
occur frequently. However, since the Manager expects to usually transact
purchases and sales of portfolio securities on a net basis, it is not
anticipated that the Fund will pay any significant brokerage commissions. The
Manager is free to dispose of portfolio securities at any time, subject to
complying with the Internal Revenue Code of 1986, as amended (the "Code") and
the 1940 Act, when changes in circumstances or conditions make such a move
desirable in light of the investment objective.
Consistent with the Conduct Rules of the NASD Regulation, Inc. (the
"NASD"), and subject to seeking best execution, the Manager may place orders
with broker/dealers that have agreed to defray certain expenses of the funds in
the Delaware Investments family, such as custodian fees, and may, at the request
of the Distributor, give consideration to sales of shares of the funds in the
Delaware Investments family as a factor in the selection of brokers and dealers
to execute Fund portfolio transactions.
PURCHASING SHARES
The Distributor serves as the national distributor for the Fund's shares
- - Class A Shares, Consultant Class Shares, Class B Shares and Class C Shares and
has agreed to use its best efforts to sell shares of the Fund.
Shares of the Fund are offered on a continuous basis. Class A Shares can
be purchased directly from the Fund or its Distributor. Consultant Class Shares,
Class B Shares and Class C Shares are offered through brokers, financial
institutions and other entities which have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. In some states, banks and/or
other institutions effecting transactions in Consultant Class Shares, Class B
Shares or Class C Shares may be required to register as dealers pursuant to
state laws.
The minimum initial investment is generally $1,000 for each Class.
Subsequent purchases must generally be $100 or more. The initial and subsequent
investment minimums for Class A Shares will be waived for purchases by officers,
trustees and employees of any fund in the Delaware Investments family, the
Manager or any of the Manager's affiliates if the purchases are made pursuant to
a payroll deduction program. Shares purchased pursuant to the Uniform Gifts to
Minors Act or Uniform Transfers to Minors Act and shares purchased in connection
with an Automatic Investing Plan are subject to a minimum initial purchase of
$250 and a minimum subsequent purchase of $25. Accounts opened under the Asset
Planner service are subject to a minimum initial investment of $2,000 per Asset
Planner strategy selected. There is a maximum purchase limitation of $250,000 on
each purchase of Class B Shares; for Class C Shares, each purchase must be in an
amount that is less than $1,000,000. The Fund will reject any order for purchase
of more than $250,000 of Class B Shares and $1,000,000 or more for Class C
Shares. An investor may exceed these limitations by making cumulative purchases
over a period of time.
18
<PAGE>
Selling dealers are responsible for transmitting orders promptly. The
Fund reserves the right to reject any order for the purchase of its shares if in
the opinion of management such rejection is in the Fund's best interest. If a
purchase is canceled 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 Investments family. The Fund
reserves the right to reject purchase orders paid by third-party checks or
checks that are not drawn on a domestic branch of a United States financial
institution. If a check drawn on a foreign financial institution is accepted,
you may be subject to additional bank charges for clearance and currency
conversion.
The Fund also reserves the right, following shareholder notification, to
charge a service fee on non-retirement accounts that, as a result of redemption,
have remained below the minimum stated account balance for a period of three or
more consecutive months. Holders of such accounts may be notified of their
insufficient account balance and advised that they have until the end of the
current calendar quarter to raise their balance to the stated minimum. If the
account has not reached the minimum balance requirement by that time, the Fund
will charge a $9 fee for that quarter and each subsequent calendar quarter until
the account is brought up to the minimum balance. The service fee will be
deducted from the account during the first week of each calendar quarter for the
previous quarter, and will be used to help defray the cost of maintaining
low-balance accounts. No fees will be charged without proper notice, and no CDSC
will apply to such assessments.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of a
CDSC if he or she redeems any portion of his or her account.
With respect to Class A Shares and Consultant Class Shares, certificates
representing shares purchased are not ordinarily issued unless a shareholder
submits a specific request. Certificates are not issued in the case of Class B
Shares or Class C Shares or in the case of any retirement plan account including
self-directed IRAs. However, purchases not involving the issuance of
certificates are confirmed to the investor and credited to the shareholder's
account on the books maintained by Delaware Service Company, Inc. (the "Transfer
Agent"). The investor will have the same rights of ownership with respect to
such shares as if certificates had been issued. With respect to Class A Shares
and Consultant Class Shares, an investor may receive a certificate representing
full share denominations purchased by sending a letter signed by each owner of
the account to the Transfer Agent requesting the certificate. No charge is
assessed by the Fund for any certificate issued. A shareholder may be subject to
fees for replacement of a lost or stolen certificate under certain conditions,
including the cost of obtaining a bond covering the lost or stolen certificate.
Please contact the Fund for further information. Investors who hold certificates
representing any of their shares may only redeem those shares by written
request. The investor's certificate(s) must accompany such request.
Shares of each Class are sold without a front-end sales charge at the net
asset value per share next determined after the receipt and effectiveness of a
purchase order as described below. See the Prospectuses for additional
information on how to invest. The Fund reserves the right to reject any order
for the purchase of its shares if in the opinion of management, such rejection
is in the Fund's best interest.
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<PAGE>
Class A Shares have no CDSC or annual 12b-1 Plan expenses. Consultant
Class Shares have no CDSC but such shares are subject to annual 12b-1 Plan
expenses of up to of 0.30% of the average daily net assets of such shares.
Class B Shares are purchased at net asset value and are subject to a CDSC
of: (i) 5% if shares are redeemed within one year of purchase; (ii) 4% if shares
are redeemed during the second year of purchase; (iii) 3% if shares are redeemed
during the third or fourth year following purchase; (iv) 2% if shares are
redeemed during the fifth year following purchase; and (v) 1% if shares are
redeemed during the sixth year following purchase. Class B Shares are also
subject to annual 12b-1 Plan expenses, which are higher than those to which
Consultant Class Shares are subject and are assessed against Class B Shares for
approximately eight years after purchase.
Class C Shares are purchased at net asset value and are subject to a CDSC
of 1% if shares are redeemed within 12 months following purchase. Class C Shares
are also subject to annual 12b-1 Plan expenses for the life of the investment
which are equal to those to which Class B Shares are subject.
For both Class B Shares and Class C Shares, the CDSC will be assessed on
an amount equal to the lesser of net asset value at the time of purchase of the
shares being redeemed or the net asset value of the shares at the time of
redemption. The net asset values of Class B Shares and Class C Shares at the
time of purchase and at the time of redemption are expected to be the same if
redeemed directly from the Fund. In addition, no CDSC will be assessed on
redemption of shares received upon reinvestment of dividends or capital gains.
See Redemption and Exchange for Class B Shares and Class C Shares for a list of
the instances in which the CDSC is waived. Class B Shares are subject to annual
12b-1 Plan expenses up to a maximum of 1% of the average daily net assets of
such Class for approximately eight years. During the seventh year after purchase
and, thereafter, until converted to Consultant Class Shares, Class B Shares will
continue to be subject to annual 12b-1 Plan expenses of 1% of average daily net
assets representing such shares. At the end of approximately eight years after
purchase, the investor's Class B Shares will be automatically converted into
Consultant Class Shares of the Fund. See Automatic Conversion of Class B Shares,
below. Such conversion will constitute a tax-free exchange for federal income
tax purposes.
The alternative purchase arrangements described above permit investors to
choose the method of purchasing shares that is most suitable given the amount of
their purchase, the length of time they expect to hold their shares and other
relevant circumstances. Prospective investors should consider the availability
of Class A Shares and Consultant Class Shares or whether, given their particular
circumstances, it is more advantageous to purchase Class B Shares or Class C
Shares. Shareholders purchasing Class B Shares will have the entire initial
purchase amount invested in the Fund with their investment being subject to a
CDSC if they redeem shares within six years of purchase. Shareholders purchasing
Class C Shares will have the entire initial purchase amount invested in the Fund
with their investment being subject to a CDSC if they redeem shares within 12
months of purchase. In addition, investors should consider the level of annual
12b-1 Plan expenses applicable to Class B, C and Consultant Class Shares. In
comparing Class B Shares to Class C Shares, investors should consider the
duration of the annual 12b-1 Plan expenses to which each of the Classes is
subject and the desirability of an automatic conversion feature, which is
available only for Class B Shares.
For the distribution and related services provided to, and the expenses
borne on behalf of, the Fund, the Distributor and others will be paid from the
proceeds of the 12b-1 Plan fees and, if applicable, the CDSC incurred upon
redemption. Financial advisers may receive different compensation for selling
Class B, Class C and Consultant Class Shares.
20
<PAGE>
Dividends, if any, will be calculated in the same manner, at the same
time, on the same day and will be in the same amount, except that the additional
amount of 12b-1 Plan expenses relating to Consultant Class Shares, Class B
Shares and Class C Shares will be borne exclusively by such shares.
The NASD has adopted certain rules relating to investment company sales
charges. The Fund and the Distributor intend to operate in compliance with these
rules.
Deferred Sales Charge Alternative - Class B Shares
Class B Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently compensates
dealers or brokers for selling Class B Shares at the time of purchase from its
own assets. In addition, from time to time, upon written notice to all of its
dealers, the Distributor may hold special promotions for specified period during
which the Distributor may pay additional compensation to dealers or brokers for
selling Class B Shares at the time of purchase. As discussed below, however,
Class B Shares are subject to annual 12b-1 Plan expenses of up to a maximum of
1% for approximately eight years after purchase and, if shares are redeemed
within six years of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid
to the Distributor and others for providing distribution and related services,
and bearing related expenses, in connection with the sale of Class B Shares.
These payments support the compensation paid to dealers or brokers for selling
Class B Shares. Payments to the Distributor and others under the Class B 12b-1
Plan may be in an amount equal to no more than 1% annually. The combination of
the CDSC and the proceeds of the 12b-1 Plan fees makes it possible for the Fund
to sell Class B Shares without deducting a front-end sales charge at the time of
purchase.
Holders of Class B Shares who exercise the exchange privilege described
below will continue to be subject to the CDSC schedule for Class B Shares
described in this Part B, even after the exchange. Such CDSC schedule may be
higher than the CDSC schedule for Class B Shares acquired as a result of the
exchange. See Redemption and Exchange.
Automatic Conversion of Class B Shares
Class B Shares, other than shares acquired through reinvestment of
distributions, held for eight years after purchase are eligible for automatic
conversion into Consultant Class Shares. Conversions of Class B Shares into
Consultant Class Shares will occur only four times in any calendar year, on the
18th day (or next business day of March, June, September and December (each, a
"Conversion Date"). If the eighth anniversary after a purchase of Class B Shares
falls on a Conversion Date, an investor's Class B Shares will be converted on
that date. If the eighth anniversary occurs between Conversion Dates, an
investor's Class B Shares will be converted on the next Conversion Date after
such anniversary. Consequently, if a shareholder's eighth anniversary falls on
the day after a Conversion Date, that shareholder will have to hold Class B
Shares for as long as an additional three months after the eighth anniversary of
purchase before the shares will automatically convert into Consultant Class
Shares.
Class B Shares of a fund acquired through a reinvestment of distributions
will convert to the corresponding Class A Shares of that fund (or, in the case
of the Fund, Consultant Class Shares) pro-rata with Class B Shares of that fund
not acquired through dividend reinvestment.
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<PAGE>
All such automatic conversions of Class B Shares will constitute tax-free
exchanges for federal income tax purposes.
Level Sales Charge Alternative - Class C Shares
Class C Shares may be purchased at net asset value without a front-end
sales charge and, as a result, the full amount of the investor's purchase
payment will be invested in Fund shares. The Distributor currently compensates
dealers or brokers for selling Class C Shares at the time of purchase from its
own assets. As discussed below, however, Class C Shares are subject to annual
12b-1 Plan expenses and, if redeemed within 12 months of purchase, a CDSC.
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class C
Shares. Payments to the Distributor and others under the Class C 12b-1 Plan may
be in an amount equal to no more than 1% annually.
Holders of Class C Shares exercising the exchange privilege described
below will continue to be subject to the CDSC schedule for Class C Shares as
described in this Part B. See Redemption and Exchange.
Investing by Mail
Initial Purchases--An Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be
completed, signed and sent with a check, payable to the specific Class selected,
to Delaware Investments at P.O. Box 7577, Philadelphia, PA 19101.
Subsequent Purchases--Additional purchases may be made at any time by
mailing a check or other negotiable bank draft made payable to the specific
Class desired. The account to which the subsequent purchase is to be credited
should be identified by the name(s) of the registered owner(s) and by account
number. An investment slip (similar to a deposit slip) is provided at the bottom
of statements that you will receive from the Fund. Use of this investment
slip can help to expedite processing of your check when making additional
purchases. Your investment may be delayed if you send additional purchases by
certified mail. The Fund and the Transfer Agent will not be responsible for
inadvertent processing of post-dated checks or checks more than six months old.
Direct Deposit Purchases by Mail--Shareholders of the Classes may
authorize a third party, such as a bank or employer, to make investments
directly to their Fund accounts. The Fund will accept these investments, such as
bank-by-phone, annuity payments and payroll allotments, by mail directly from
the third party. Investors should contact their employers or financial
institutions who in turn should contact the Fund for proper instructions.
Investing by Wire
Investors having an account with a bank that is a member or correspondent
of a member of the Federal Reserve System may purchase shares by requesting
their bank to transmit immediately available funds (Federal Funds) by wire to
First Union Bank, ABA #031201467, account number 2014128934013, (include the
shareholder's name and Class account number in the wire).
Initial Purchases--When making an initial investment by wire, you must
first telephone the Fund at 800-523-1918 to advise of your action and to be
assigned an account number. If you do not call first, it may not be possible to
process your order promptly, although in all cases shares purchased will be
priced at the close of business following receipt of Federal Funds. In addition,
you must promptly send your Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be promptly
forwarded to the specific Class desired, to Delaware Investments at P.O. Box
7577, Philadelphia, PA 19101.
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<PAGE>
Subsequent Purchases--Additional investments may be made at any time
through the wire procedure described above. The Fund must be immediately advised
by telephone at 800-523-1918 of each transmission of funds by wire.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware
Investments family, you may write and authorize an exchange of part or all of
your investment into shares of a Fund. If you wish to open an account by
exchange, call the Shareholder Service Center for more information. All
exchanges are subject to the eligibility and minimum purchase requirements set
forth in each fund's prospectus. See Redemption and Exchange for more complete
information concerning your exchange privileges.
Class B Shares and Class C Shares of the Fund and Class B Shares and
Class C Shares of any other fund in the Delaware Investments family which offers
such classes of shares may not be exchanged into Class A Shares or Consultant
Class Shares. Holders of Class B Shares of the Fund are permitted to exchange
all or a part of their Class B Shares only into Class B Shares of other funds in
the Delaware Investments family. Similarly, holders of Class C Shares of the
Fund are permitted to exchange all or a part of their Class C Shares only into
Class C Shares of other funds in the Delaware Investments family. Class B Shares
of the Fund and Class C Shares of the Fund acquired by exchange will continue to
carry the CDSC and, in the case of Class B Shares, the automatic conversion
schedule of the fund from which the exchange is made. The holding period of
Class B Shares of the Fund acquired by exchange will be added to that of the
shares that were exchanged for purposes of determining the time of the automatic
conversion into Consultant Class Shares of the Fund.
Permissible exchanges into Class B Shares or Class C Shares of the Fund
will be made without the imposition of a CDSC by the fund from which the
exchange is being made at the time of the exchange.
Investing by Electronic Fund Transfer
Direct Deposit Purchase Plan--Investors may arrange for the Fund to
accept for investment, through an agent bank, preauthorized government or
private recurring payments. This method of investment assures the timely credit
to the shareholder's account of payments such as social security, veterans'
pension or compensation benefits, federal salaries, Railroad Retirement
benefits, private payroll checks, dividends, and disability or pension fund
benefits. It also eliminates lost, stolen and delayed checks.
Automatic Investing Plan--Shareholders may make regular automatic
investments by authorizing, in advance, monthly or quarterly payments directly
from their checking account for deposit into their Fund account. This type of
investment will be handled in either of the following ways. (1) If the
shareholder's bank is member of the National Automated Clearing House
Association ("NACHA"), the amount of the investment will be electronically
deducted from the shareholder's account by Electronic Fund Transfer ("EFT"). The
shareholder's checking account will reflect a debit each month at a specified
date although no check is required to initiate the transaction. (2) If the
shareholder's bank is not a member of NACHA, deductions will be made by
preauthorized checks, known as Depository Transfer Checks. Should the
shareholder's bank become a member of NACHA in the future, his or her
investments would be handled electronically through EFT.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans.
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<PAGE>
* * *
Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
under such Plans must be for $25 or more. An investor wishing to take advantage
of either service must complete an authorization form. Either service can be
discontinued by the shareholder at any time without penalty by giving written
notice.
Payments to the Fund from the federal government or agencies on behalf of
a shareholder may be credited to the shareholder's account after such payments
should have been terminated by reason of death or otherwise. Any such payments
are subject to reclamation by the federal government or its agencies. Similarly,
under certain circumstances, investments from private sources may be subject to
reclamation by the transmitting bank. In the event of a reclamation, the Fund
may liquidate sufficient shares from a shareholder's account to reimburse the
government or the private source. In the event there are insufficient shares in
the shareholder's account, the shareholder is expected to reimburse the Fund.
Direct Deposit Purchases by Mail
Shareholders may authorize a third party, such as a bank or employer, to
make investments directly to their Fund account. The Fund will accept these
investments, such as bank-by-phone, annuity payments and payroll allotments, by
mail directly from the third party. Investors should contact their employers or
financial institutions who in turn should contact the Fund for proper
instructions.
12-Month Reinvestment Privilege for Class B Shares
Holders of Class B Shares of the Fund who redeem such shares have one
year from the date of redemption to reinvest all or part of their redemption
proceeds in the Class B Shares of the Fund or Class B Shares of any of the other
funds in the Delaware Investments family. The amount of the CDSC previously
charged on the redemption will be reimbursed by the Fund. The reinvestment will
be subject to applicable eligibility and minimum purchase requirements and must
be in states where shares of such other funds may be sold. The reinvestment
privilege does not extend to a redemption of Class C Shares.
Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at the
net asset value next determined after receipt of remittance. The time that the
previous investment was held will be included in determining any applicable CDSC
due upon redemptions as well as the automatic conversion into Consultant Class
Shares.
A redemption and reinvestment of Class B Shares could have income tax
consequences. Shareholders will receive from the Fund the amount of the CDSC
paid at the time of redemption as part of the reinvested shares, which may be
treated as a capital gain to the shareholder for tax purposes. It is recommended
that a tax adviser be consulted with respect to such transactions.
Any reinvestment directed to a fund in which the investor does not then
have an account will be treated like all other initial purchases of the fund's
shares. Consequently, an investor should obtain and read carefully the
prospectus for the fund in which the investment is intended to be made before
investing or sending money. The prospectus contains more complete information
about the fund, including charges and expenses.
When Orders are Effective
Transactions in money market instruments in which the Fund invests
normally require same day settlement in Federal Funds. The Fund intends at all
times to be as fully invested as possible in order to maximize its earnings.
Thus, purchase orders will be executed at the net asset value next determined
after their receipt by the Fund or certain other authorized persons (see
Distribution and Service under Investment Management Agreement) only if the Fund
has received payment in Federal Funds by wire. Dividends begin to accrue on the
next business day. Thus, investments effective the day before a weekend or
holiday will not accrue dividends for that period but will earn dividends on the
next business day. If, however, 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.
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<PAGE>
If remitted in other than the foregoing manner, such as by money order or
personal check, purchase orders will be executed as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open, on the day on which the payment is converted
into Federal Funds and is available for investment, normally one business day
after receipt of payment. Conversion into Federal Funds may be delayed when the
Fund receives (1) a check drawn on a nonmember bank of the Federal Reserve, (2)
a check drawn on a foreign bank, (3) a check payable in a foreign currency, or
(4) a check requiring special handling. With respect to investments made other
than by wire, the investor becomes a shareholder after declaration of the
dividend on the day on which the order is effective.
Information on how to procure a negotiable bank draft or to transmit
Federal Funds by wire is available at any national bank or any state bank which
is a member of the Federal Reserve System. Any commercial bank can transmit
Federal Funds by wire. The bank may charge the shareholder for these services.
If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Fund will automatically redeem from the shareholder's account the amount
credited by the check plus any dividends earned thereon.
Plans Under Rule 12b-1 for Consultant Class Shares, Class B Shares and Class C
Shares
Pursuant to Rule 12b-1 under the 1940 Act, the Fund has adopted a
separate distribution plan under Rule 12b-1 for each of the Consultant Class
Shares, Class B Shares and Class C Shares (the "Plans"). Each Plan permits the
Fund to pay for certain distribution and promotional expenses related to
marketing shares of only the Class to which the Plan applies.
The Plans do not apply to the Fund's Class A Shares. Such shares are not
included in calculating the Plans' fees, and the Plans are not used to assist in
the distribution and marketing of Class A Shares. Holders of Class A Shares may
not vote on matters affecting the Plans.
The Plans permit the Fund, pursuant to the Distribution Agreement, to pay
out of the assets of Consultant Class Shares, Class B Shares and Class C Shares,
a monthly fee to the Distributor for its services and expenses in distributing
and promoting sales of the shares of such Class. These expenses include, among
other things, preparing and distributing advertisements, sales literature and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, and paying distribution and maintenance fees to securities
brokers and dealers who enter into agreements with the Distributor. Registered
representatives of brokers, dealers or other entities, who have sold a specified
level of funds in the Delaware Investments family having a 12b-1 Plan, are paid
a continuing trail fee of 0.25% of the average daily net assets of Consultant
Class Shares by the Distributor from 12b-1 payments of Consultant Class Shares
for assets maintained in that Class. The 12b-1 Plan fees relating to Class B
Shares and Class C Shares are also used to pay the Distributor for advancing
commission costs to dealers with respect to the initial sales of such shares.
In addition, the Fund may make payments out of the assets of Consultant
Class Shares, Class B Shares and Class C Shares directly to other unaffiliated
parties, such as banks, who either aid in the distribution of its shares of, or
provide services to, such Classes.
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<PAGE>
The maximum aggregate fee payable by the Fund under each respective Plan,
and the Fund's Distribution Agreement, is on an annual basis up to 0.30% of the
Consultant Class Shares' average daily net assets for the year, and up to 1%
(0.25% of which are service fees to be paid by the Fund to the Distributor,
dealers or others, for providing personal service and/or maintaining shareholder
accounts) of each of the Class B Shares' and the Class C Shares' average daily
net assets for the year. The Fund's Board of Trustees may reduce these amounts
at any time. The Fund's Board of Trustees has set the current fee for Consultant
Class Shares at 0.25% of average daily net assets. The Distributor has agreed to
waive these fees to the extent the fee for any day exceeds the net investment
income realized by Consultant Class Shares, Class B Shares or Class C Shares for
such day.
All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid on behalf of Consultant
Class Shares, Class B Shares or Class C Shares would be borne by such persons
without any reimbursement from that Class. Subject to seeking best price and
execution, the Fund may, from time to time, buy or sell portfolio securities
from or to firms which receive payments under the Plans.
From time to time, the Distributor may pay additional amounts from its
own resources to dealers for aid in distribution or for aid in providing
administrative services to shareholders.
The Plans and the Distribution Agreement, as amended, have been approved
by the Board of Trustees of the Fund, including a majority of the trustees who
are not "interested persons" (as defined in the 1940 Act) of the Fund and who
have no direct or indirect financial interest in the Plans, by vote cast in
person at a meeting duly called for the purpose of voting on the Plans and the
Distribution Agreement. Continuation of the Plans and the Distribution
Agreement, as amended, must be approved annually by the Board of Trustees in the
same manner as specified above.
Each year, the trustees must determine whether continuation of the Plans
is in the best interest of the shareholders of Consultant Class Shares, Class B
Shares and Class C Shares, respectively, and that there is a reasonable
likelihood of the Plan relating to a Class providing a benefit to that Class.
The Plans and the Distribution Agreement, as amended, may be terminated at any
time without penalty by a majority of those trustees who are not "interested
persons" or by a majority vote of the outstanding voting securities of the
relevant Class. Any amendment materially increasing the maximum percentage
payable under the Plans must likewise be approved by a majority vote of the
outstanding voting securities of the relevant Class, as well as a majority vote
of those trustees who are not "interested persons." Class B Shares may vote on
any proposal to increase materially the fees to be paid by the Fund under the
Plan relating to Consultant Class Shares. Also, any other material amendment to
the Plans must be approved by a majority vote of the trustees including a
majority of the noninterested trustees of the Fund having no interest in the
Plans. In addition, in order for the Plans to remain effective, the selection
and nomination of trustees who are not "interested persons" of the Fund must be
effected by the trustees who themselves are not "interested persons" and who
have no direct or indirect financial interest in the Plans. Persons authorized
to make payments under the Plans must provide written reports at least quarterly
to the Board of Trustees for their review.
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For the fiscal year ended March 31, 2000, payments from Class B Shares,
Class C Shares and Consultant Class Shares amounted to $254,974, $96,647 and
$90,275, respectively. Such amounts were used for the following purposes:
- --------------------------------------------------------------------------------
Class B Class C Consultant Class
------- ------- ----------------
- ------------------------------------- ----------- ------------ -----------------
Advertising $0 $0 $0
- ------------------------------------- ----------- ------------ -----------------
Annual/Semi-Annual Reports 0 0 558
- ------------------------------------- ----------- ------------ -----------------
Broker Trails 64,403 41,282 88,369
- ------------------------------------- ----------- ------------ -----------------
Broker Sales Charges 160,316 39,820 0
- ------------------------------------- ----------- ------------ -----------------
Dealer Service Expenses 0 0 0
- ------------------------------------- ----------- ------------ -----------------
Interest on Broker Sales Charges 18,167 349 0
- ------------------------------------- ----------- ------------ -----------------
Commissions to Wholesalers 11,385 6,942 0
- ------------------------------------- ----------- ------------ -----------------
Promotional-Broker Meetings 0 78 650
- ------------------------------------- ----------- ------------ -----------------
Promotional-Other 0 0 452
- ------------------------------------- ----------- ------------ -----------------
Prospectus Printing 0 0 0
- ------------------------------------- ----------- ------------ -----------------
Telephone 0 0 0
- ------------------------------------- ----------- ------------ -----------------
Wholesaler Expenses 703 8,176 246
- ------------------------------------- ----------- ------------ -----------------
Other 0 0 0
- --------------------------------------------------------------------------------
Reinvestment of Dividends in Other Delaware Investments Funds
Subject to applicable eligibility and minimum initial purchase
requirements and the limitations set forth below, shareholders may automatically
reinvest dividends and/or distributions in any of the mutual funds in the
Delaware Investments family, including the Fund, in states where its shares may
be sold. Such investments will be at net asset value at the close of business on
the reinvestment date without any front-end sales charge or service fee. The
shareholder must notify the Transfer Agent in writing and must have established
an account in the fund into which the dividends and/or distributions are to be
invested. Any reinvestment directed to a fund in which the investor does not
then have an account, will be treated like all other initial purchases of a
fund's shares. Consequently, an investor should obtain and read carefully the
prospectus for the fund in which the investment is intended to be made before
investing or sending money. The prospectus contains more complete information
about the fund, including charges and expenses.
Dividends on Class A Shares and Consultant Class Shares may be
reinvested in shares of any other mutual fund in the Delaware Investments
family, other than Class B Shares and Class C Shares of the funds in the
Delaware Investments family that offer such classes of shares. Dividends on
Class B Shares may only be invested in Class B Shares of another fund in the
Delaware Investments family that offers such a class of shares. Dividends on
Class C Shares may only be invested in Class C Shares of another fund in the
Delaware Investments family that offers such a class of shares.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans.
MoneyLine(SM) On Demand
You or your investment dealer may request purchases of Fund shares by
phone using MoneyLine(SM) On Demand. When you authorize the Fund to accept such
requests from you or your investment dealer, funds will be withdrawn from (for
share purchases) your predesignated bank account. Your request will be processed
the same day if you call prior to 4 p.m., Eastern time. There is a $25 minimum
and $50,000 maximum limit for MoneyLine(SM) On Demand transactions.
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It may take up to four business days for the transactions to be
completed. You can initiate this service by completing an Account Services form.
If your name and address are not identical to the name and address on your Fund
account, you must have your signature guaranteed. The Fund does not charge a fee
for this service; however, your bank may charge a fee.
Wealth Builder Option
Shareholders can use the Wealth Builder Option to invest in the Classes
through regular liquidations of shares in their accounts in other mutual funds
available from the Delaware Investments family. Shareholders of the Fund may
elect to invest in one or more of the other mutual funds available from the
Delaware Investments family through the Wealth Builder Option.
Under this automatic exchange program, shareholders can authorize
regular monthly investments (minimum of $100 per fund) to be liquidated from
their account and invested automatically into other mutual funds available from
the Delaware Investments family, subject to the conditions and limitations set
forth in the Prospectuses and this Part B. The investment will be made on the
20th day of each month (or, if the fund selected is not open that day, the next
business day) at the public offering price or net asset value, as applicable, of
the fund selected on the date of investment. No investment will be made for any
month if the value of the shareholder's account is less than the amount
specified for investment.
Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors selecting
this option should consider their financial ability to continue to participate
in the program through periods of low fund share prices. This program involves
automatic exchanges between two or more fund accounts and is treated as a
purchase of shares of the fund into which investments are made through the
program. Shareholders can terminate their participation in Wealth Builder at
any time by giving written notice to the fund from which exchanges are made.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, or 403(b)(7) or 457 Deferred
Compensation Plans.
Account Statements
You will receive quarterly statements of your account summarizing all
transactions during that period and will include the regular dividend
information. However, in the case of Class A Shares and Consultant Class Shares,
accounts in which there has been activity, other than a reinvestment of
dividends, will receive a monthly statement confirming transactions for that
period. In the case of Class B Shares and Class C Shares, accounts in which
there has been activity will receive a confirmation after each transaction.
Simple IRA participants will receive quarterly conformations of all
such transactions that have taken place in the previous three-month period on
their quarterly participant statement. Participants will still receive immediate
confirmation when they invest in a fund for the first time or when they
establish a new account. Participants may request confirmations of specific
transactions prior to the end of the quarter by calling 800-523-1918.
Asset Planner
To invest in the funds in the Delaware Investments family using the
Asset Planner asset allocation service, you should complete a Asset Planner
Account Registration Form, which is available only from a financial adviser or
investment dealer. Effective September 1, 1997, the Asset Planner Service is
only available to financial advisers or investment dealers who have previously
used this service. The Asset Planner service offers a choice of four predesigned
asset allocation strategies (each with a different risk/reward profile) in
predetermined percentages in Delaware Investments funds. With the help of a
financial adviser, you may also design a customized asset allocation strategy.
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The sales charge on an investment through the Asset Planner service is
determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. Exchanges from existing Delaware
Investments accounts into the Asset Planner service may be made at net asset
value under the circumstances described under Investing by Exchange in the
Prospectus and this Part B and the prospectus of each fund in the Delaware
Investments family. The minimum initial investment per Strategy is $2,000;
subsequent investments must be at least $100. Individual fund minimums do not
apply to investments made using the Asset Planner service. Class A Shares, Class
B Shares, Class C Shares and Consultant Class Shares are available through the
Asset Planner service. Generally, only shares within the same class may be used
within the same Strategy. However, Class A Shares of the Fund and of other funds
available from Delaware Investments may be used in the same Strategy with the
Fund's Consultant Class Shares and consultant class shares that are offered by
certain other funds in the Delaware Investments family.
An annual maintenance fee, currently $35 per Strategy, is due at the
time of initial investment and by September 30 of each subsequent year. The fee,
payable to Delaware Service Company, Inc. to defray extra costs associated with
administering the Asset Planner service, will be deducted automatically from one
of the funds within your Asset Planner account if not paid by September 30.
However, effective November 1, 1996, the annual maintenance fee is waived until
further notice. Investors who utilize the Asset Planner for an IRA will continue
to pay an annual IRA fee of $15 per Social Security number. Investors will
receive a customized quarterly Strategy Report summarizing all Asset Planner
investment performance and account activity during the prior period.
Confirmation statements will be sent following all transactions other than those
involving a reinvestment of distributions.
Certain shareholder services are not available to investors using the
Asset Planner service, due to its special design. These include Delaphone,
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.
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RETIREMENT PLANS
An investment in the Fund may be suitable for tax-deferred retirement
plans. Delaware Investments offers a full spectrum of retirement plans,
including the 401(k) Defined Contribution Plan, Individual Retirement Account
("IRA") and the new Roth IRA and Education IRA.
Among the retirement plans that Delaware Investments offers, Class B
Shares are available only by Individual Retirement Accounts, SIMPLE IRAs, Roth
IRAs, Education IRAs, Simplified Employee Pension Plans, Salary Reduction
Simplified Employee Pension Plans, and 403(b)(7) and 457 Deferred Compensation
Plans. The CDSC may be waived on certain redemptions of Class B Shares and Class
C Shares. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Redemption and Exchange for a list of the instances in
which the CDSC is waived.
Purchases of Class B Shares are subject to a maximum purchase
limitation of $250,000 for retirement plans. Purchases of Class C Shares must be
in an amount that is less than $1,000,000 for such plans. The maximum purchase
limitations apply only to the initial purchase of shares by the retirement plan.
Minimum investment limitations generally applicable to other investors
do not apply to retirement plans other than Individual Retirement Accounts, for
which there is a minimum initial purchase of $250 and a minimum subsequent
purchase of $25, regardless of which Class is selected. Retirement plans may be
subject to plan establishment fees, annual maintenance fees and/or other
administrative or trustee fees. Fees are based upon the number of participants
in the plan as well as the services selected. Additional information about fees
is included in retirement plan materials. Fees are quoted upon request. Annual
maintenance fees may be shared by Delaware Management Trust Company, the
Transfer Agent, other affiliates of the Manager and others that provide services
to such Plans.
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 telephone number.
It is advisable for an investor considering any one of the retirement
plans described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for any
of these plans, contact your investment dealer or the Distributor.
Taxable distributions from the retirement plans described below may be
subject to withholding.
Please contact your investment dealer or the Distributor for the
special application forms required for the Plans described below.
Prototype Profit Sharing or Money Purchase Pension Plans
Prototype Plans are available for self-employed individuals,
partnerships, corporations and other eligible forms of organizations. These
plans can be maintained as Section 401(k), profit sharing or money purchase
pension plans. Contributions may be invested only in Class A Shares, Consultant
Class Shares and Class C Shares.
Individual Retirement Account ("IRA")
A document is available for an individual who wants to establish an IRA
and make contributions which may be tax-deductible, even if the individual is
already participating in an employer-sponsored retirement plan. Even if
contributions are not deductible for tax purposes, as indicated below, earnings
will be tax-deferred. In addition, an individual may make contributions on
behalf of a spouse who has no compensation for the year; however, participation
may be restricted based on certain income limits.
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IRA Disclosures
The Taxpayer Relief Act of 1997 provides new opportunities for
investors. Individuals have five types of tax-favored IRA accounts that can be
utilized depending on the individual's circumstances. A new Roth IRA and
Education IRA are available in addition to the existing deductible IRA and
non-deductible IRA.
Deductible and Non-deductible IRAs
An individual can contribute up to $2,000 in his or her IRA each year.
Contributions may or may not be deductible depending upon the taxpayer's
adjusted gross income ("AGI") and whether the taxpayer is an active participant
in an employer sponsored retirement plan. Even if a taxpayer is an active
participant in an employer sponsored retirement plan, the full $2,000 is still
available if the taxpayer's AGI is below $32,000 ($52,000 for taxpayers filing
joint returns) for years beginning after December 31, 1997. A partial deduction
is allowed for married couples with income between $52,000 and $62,000, and for
single individuals with incomes between $32,000 and $42,000. These income
phase-out limits reach $80,000-$100,000 in 2007 for joint filers and
$50,000-$60,000 in 2005 for single filers. No deductions are available for
contributions to IRAs by taxpayers whose AGI after IRA deductions exceeds the
maximum income limit established for each year and who are active participants
in an employer sponsored retirement plan.
Taxpayers who are not allowed deductions on IRA contributions still can
make non-deductible IRA contributions of as much as $2,000 for each working
spouse and defer taxes on interest or other earnings from the IRAs.
Under the new law, a married individual is not considered an active
participant in an employer sponsored retirement plan merely because the
individual's spouse is an active participant if the couple's combined AGI is
below $150,000. The maximum deductible IRA contribution for a married individual
who is not an active participant, but whose spouse is, is phased out for
combined AGI between $150,000 and $160,000.
Conduit (Rollover) IRAs
Certain individuals who have received or are about to receive eligible
rollover distributions from an employer-sponsored retirement plan or another IRA
may rollover the distribution tax-free to a Conduit IRA. The rollover of the
eligible distribution must be completed by the 60th day after receipt of the
distribution; however, if the rollover is in the form of a direct
trustee-to-trustee transfer without going through the distributee's hand, the
60-day limit does not apply.
A distribution qualifies as an "eligible rollover distribution" if it
is made from a qualified retirement plan, a 403(b) plan or another IRA and does
not constitute one of the following:
(1) Substantially equal periodic payments over the employee's life or
life expectancy or the joint lives or life expectancies of the employee and
his/her designated beneficiary;
(2) Substantially equal installment payments for a period certain of 10
or more years;
(3) A distribution, all of which represents a required minimum
distribution after attaining age 70 1/2;
(4) A distribution due to a Qualified Domestic Relations Order to an
alternate payee who is not the spouse (or former spouse) of the employee; and
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(5) A distribution of after-tax contributions which is not includable
in income.
Roth IRAs
For taxable years beginning after December 31, 1997, non-deductible
contributions of up to $2,000 per year can be made to a new Roth IRA. As a
result of the Internal Revenue Service Restructuring and Reform Act of 1998 (the
"1998 Act"), the $2,000 annual limit will not be reduced by any contributions to
a deductible or nondeductible IRA for the same year. The maximum contribution
that can be made to a Roth IRA is phased out for single filers with AGI between
$95,000 and $110,000, and for couples filing jointly with AGI between $150,000
and $160,000. Qualified distributions from a Roth IRA would be exempt from
federal taxes. Qualified distributions are distributions (1) made after the
five-taxable year period beginning with the first taxable year for which a
contribution was made to a Roth IRA and (2) that are (a) made on or after the
date on which the individual attains age 59 1/2, (b) made to a beneficiary on or
after the death of the individual, (c) attributed to the individual being
disabled, or (d) for a qualified special purpose (e.g., first time homebuyer
expenses).
Distributions that are not qualified distributions would always be
tax-free if the taxpayer is withdrawing contributions, not accumulated earnings.
Taxpayers with AGI of $100,000 or less are eligible to convert an
existing IRA (deductible, nondeductible and conduit) to a Roth IRA. Earnings and
contributions from a deductible IRA are subject to a tax upon conversion;
however, no 10% excise tax for early withdrawal would apply. If the conversion
is done prior to January 1, 1999, then the income from the conversion can be
included in income ratably over a four-year period beginning with the year of
conversion.
Education IRAs
For taxable years beginning after December 31, 1997, an Education IRA
has been created exclusively for the purpose of paying qualified higher
education expenses. Taxpayers can make non-deductible contributions up to $500
per year per beneficiary. The $500 annual limit is in addition to the $2,000
annual contribution limit applicable to IRAs and Roth IRAs. Eligible
contributions must be in cash and made prior to the date the beneficiary reaches
age 18. Similar to the Roth IRA, earnings would accumulate tax-free. There is no
requirement that the contributor be related to the beneficiary, and there is no
limit on the number of beneficiaries for whom one contributor can establish
Education IRAs. In addition, multiple Education IRAs can be created for the same
beneficiaries, however, the contribution limit of all contributions for a single
beneficiary cannot exceed $500 annually.
This $500 annual contribution limit for Education IRAs is phased out
ratably for single contributors with modified AGI between $95,000 and $110,000,
and for couples filing jointly with modified AGI of between $150,000 and
$160,000. Individuals with modified AGI above the phase-out range are not
allowed to make contributions to an Education IRA established on behalf of any
other individual.
Distributions from an Education IRA are excludable from gross income to
the extent that the distribution does not exceed qualified higher education
expenses incurred by the beneficiary during the year the distribution is made
regardless of whether the beneficiary is enrolled at an eligible educational
institution on a full-time, half-time, or less than half-time basis.
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Any balance remaining in an Education IRA at the time a beneficiary
becomes 30 years old must be distributed, and the earnings portion of such a
distribution will be includable in gross income of the beneficiary and subject
to an additional 10% penalty tax if the distribution is not for qualified higher
education expenses. Tax-free (and penalty-free) transfers and rollovers of
account balances from one Education IRA benefiting one beneficiary to another
Education IRA benefiting a different beneficiary (as well as redesignations of
the named beneficiary) is permitted, provided that the new beneficiary is a
member of the family of the old beneficiary and that the transfer or rollover is
made before the time the old beneficiary reaches age 30 and the new beneficiary
reaches age 18.
A company or association may establish a Group IRA or Group Roth IRA
for employees or members who want to purchase shares of the Fund.
Investments generally must be held in the IRA until age 59 1/2 in order
to avoid premature distribution penalties, but distributions generally must
commence no later than April 1 of the calendar year following the year in which
the participant reaches age 70 1/2. Individuals are entitled to revoke the
account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within seven days after the
receipt of the IRA Disclosure Statement or within seven days after the
establishment of the IRA, except, if the IRA is established more than seven days
after receipt of the IRA Disclosure Statement, the account may not be revoked.
Distributions from the account (except for the pro-rata portion of any
nondeductible contributions) are fully taxable as ordinary income in the year
received. Excess contributions removed after the tax filing deadline, plus
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and certain
other limited circumstances) will be subject to a 10% excise tax on the amount
prematurely distributed, in addition to the income tax resulting from the
distribution. For information concerning the applicability of a CDSC upon
redemption of Class B Shares and Class C Shares, see Contingent Deferred Sales
Charge - Class B Shares and Class C Shares.
Effective January 1, 1997, the 10% premature distribution penalty will
not apply to distributions from an IRA that are used to pay medical expenses in
excess of 7.5% of adjusted gross income or to pay health insurance premiums by
an individual who has received unemployment compensation for 12 consecutive
weeks. In addition, effective January 1, 1998, the new law allows for premature
distribution without a 10% penalty if (i) the amounts are used to pay qualified
higher education expenses (including graduate level courses) of the taxpayer,
the taxpayer's spouse or any child or grandchild of the taxpayer or the
taxpayer's spouse, or (ii) used to pay acquisition costs of a principle
residence for the purchase of a first-time home by the taxpayer, taxpayer's
spouse or any child or grandchild of the taxpayer or the taxpayer's spouse. A
qualified first-time homebuyer is someone who has had no ownership interest in a
residence during the past two years. The aggregate amount of distribution for
first-time home purchases cannot exceed a lifetime cap of $10,000.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all
eligible employees. Each of the Classes is available for investment by a
SEP/IRA.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Although new SAR/SEP plans may not be established after December 31,
1996, existing plans may continue to be maintained by employers having 25 or
fewer employees. An employer may elect to make additional contributions to such
existing plans.
Prototype 401(k) Defined Contribution Plan
Section 401(k) of the Code permits employers to establish qualified
plans based on salary deferral contributions. Effective January 1, 1997,
non-governmental tax-exempt organizations may establish 401(k) plans. Plan
documents are available to enable employers to establish a plan. An employer may
also elect to make profit sharing contributions and/or matching contributions
with investments in only Class A Shares, Consultant Class Shares and Class C
Shares or certain other funds in the Delaware Investments family.
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Deferred Compensation Plan for Public Schools and Non-Profit Organizations
("403(b)(7)")
Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account
to fund deferred compensation arrangements for their employees. A custodial
account agreement is available for those employers who wish to purchase shares
of any of the Classes in conjunction with such an arrangement.
Deferred Compensation Plan for State and Local Government Employees ("457")
Section 457 of the Code permits state and local governments, their
agencies and certain other entities to establish a deferred compensation plan
for their employees who wish to participate. This enables employees to defer a
portion of their salaries and any federal (and possibly state) taxes thereon.
Such plans may invest in shares of the Fund. Although investors may use their
own plan, there is available a Delaware Investments 457 Deferred Compensation
Plan. Interested investors should contact the Distributor or their investment
dealers to obtain further information.
SIMPLE IRA
A SIMPLE IRA combines many of the features of an IRA and a 401(k) Plan
but is easier to administer than a typical 401(k) Plan. It requires employers to
make contributions on behalf of their employees and also has a salary deferral
feature that permits employees to defer a portion of their salary into the plan
on a pre-tax basis. A SIMPLE IRA is available only to plan sponsors with 100 or
fewer employees.
SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that it is available
only to plan sponsors 100 or fewer employees and, in exchange for mandatory plan
sponsor contributions, discrimination testing is no longer required. Class B
Shares are not available for purchase by such plans.
OFFERING PRICE
The offering price of shares is the net asset value per share next to
be determined after an order is received and becomes effective. There is no
front-end sales charge.
The purchase will be effected at the net asset value next computed
after the receipt of Federal Funds provided they are received by the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m. Eastern
time) on days when the Exchange is open. The New York Stock Exchange is
scheduled to be open Monday through Friday throughout the year except for New
Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Good Friday,
Memorial Day, Independence Day, Labor Day, Thanksgiving and Christmas. When the
New York Stock Exchange is closed, the Fund will generally be closed, pricing
calculations will not be made and purchase and redemption orders will not be
processed.
An example showing how to calculate the net asset value per share is
included in the Fund's financial statements which are incorporated by reference
into this Part B.
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The investor becomes a shareholder at the close of and after
declaration of the dividend on the day on which the order is effective. See
Purchasing Shares. Dividends begin to accrue on the next business day. In the
event of changes in SEC requirements or the Fund's change in time of closing,
the Fund reserves the right to price at a different time, to price more often
than once daily or to make the offering price effective at a different time.
The Fund's net asset value per share is computed by adding the value of
all securities and other assets in the portfolio, deducting any liabilities and
dividing by the number of shares outstanding. Expenses and fees are accrued
daily. In determining the Fund's total net assets, portfolio securities are
valued at amortized cost.
The Board of Trustees has adopted certain procedures to monitor and
stabilize the price per share. Calculations are made each day to compare part of
the Fund's value with the market value of instruments of similar character. At
regular intervals all issues in the portfolio are valued at market value.
Securities maturing in more than 60 days are valued more frequently by obtaining
market quotations from market makers. The portfolio will also be valued by
market makers at such other times as is felt appropriate. In the event that a
deviation of more than 1/2 of 1% exists between the Fund's $1.00 per share
offering and redemption prices and the net asset value calculated by reference
to market quotations, or if there is any other deviation which the Board of
Trustees believes would result in a material dilution to shareholders or
purchasers, the Board of Trustees will promptly consider what action, if any,
should be initiated, such as changing the price to more or less than $1.00 per
share.
Each Class of the Fund 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, Class C 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
net asset value per share of each Class is expected to be equivalent.
REDEMPTION AND EXCHANGE
Any shareholder may require the Fund to redeem shares by sending a
written request, signed by the record owner or owners exactly as the shares are
registered, to the Fund at 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. If stock certificates have been
issued for shares being redeemed, they must accompany the written request. For
redemptions of $50,000 or less paid to the shareholder at the address of record,
the request must be signed by all owners of the shares or the investment dealer
of record, but a signature guarantee is not required. When the redemption is for
more than $50,000, or if payment is made to someone else or to another address,
signatures of all record owners and a signature guarantee are required. 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 request further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians. The redemption price is the net asset value next
calculated after receipt of the redemption request in good order. See Offering
Price for time of calculation of net asset value.
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Your shares will be redeemed or exchanged at a price based on the net
asset value next determined after the Fund receives your request in good order,
subject, in the case of a redemption, to any applicable CDSC. For example,
redemption or exchange requests received in good order after the time the
offering price of shares are determined will be processed on the next business
day. A shareholder submitting a redemption request may indicate that he or she
wishes to receive redemption proceeds of a specific dollar amount. In the case
of such a request, and in the case of certain redemptions from retirement plan
accounts, the Fund will redeem the number of shares necessary to deduct the
applicable CDSC in the case of Class B Shares and Class C Shares, and tender to
the shareholder the requested amount, assuming the shareholder holds enough
shares in his or her account for the redemption to be processed in this manner.
Otherwise, the amount tendered to the shareholder upon redemption will be
reduced by the amount of the applicable CDSC. Redemption proceeds will be
distributed promptly, as described below, but not later than seven days after
receipt of a redemption request.
Except as noted below, for a redemption request to be in "good order,"
you must provide your account number, account registration, and the total number
of shares or dollar amount of the transaction. For exchange requests, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Shareholder Service Center at 800-523-1918. The Fund
may suspend, terminate, or amend the terms of the exchange privilege upon 60
days' written notice to shareholders.
In addition to redemption of Fund shares, the Distributor, acting as
agent of the Fund, offers to repurchase Fund shares from broker/dealers acting
on behalf of shareholders. The redemption or repurchase price, which may be more
or less than the shareholder's cost, is the net asset value per share next
determined after receipt of the request in good order by the Fund, its agent, or
certain authorized persons, subject to applicable CDSC. This is computed and
effective at the time the offering price and net asset value are determined. See
Determining Offering Price and Net Asset Value. The Fund and the Distributor end
their business days at 5 p.m., Eastern time. This offer is discretionary and may
be completely withdrawn without further notice by the Distributor.
Orders for the repurchase of Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to the applicable CDSC), if the
repurchase order was received by the broker/dealer from the shareholder prior to
the time the offering price and net asset value are determined on such day. The
selling dealer has the responsibility of transmitting orders to the Distributor
promptly. Such repurchase is then settled as an ordinary transaction with the
broker/dealer (who may make a charge to the shareholder for this service)
delivering the shares repurchased.
Payment for shares redeemed will ordinarily be mailed the next business
day, but in no case later than seven days, after receipt of a redemption request
in good order by the Fund or certain other authorized persons (see Distribution
and Service under Investment Management Agreement); provided, however, that each
commitment to mail or wire redemption proceeds by a certain time, as described
below, is modified by the qualifications described in the next paragraph.
The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the purchase check has cleared, which may take
up to 15 days from the purchase date. You can avoid this potential delay if you
purchase shares by wiring Federal Funds. 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.
Dividends will continue to be earned until the redemption is processed. This
potential delay can be avoided by making investments by wiring Federal Funds. If
a shareholder redeems an entire account, all dividends accrued to the time of
the withdrawal will be paid by separate check at the end of that particular
monthly dividend period. Except for the applicable CDSC, and with respect to the
expedited payment by wire for which there may be a bank wiring cost, there is no
fee charged for redemptions or repurchases, but such fees could be charged at
any time in the future.
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If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Fund will automatically redeem from the shareholder's account the shares
purchased by the check plus any dividends earned thereon. Shareholders may be
responsible for any losses to the Fund or to the Distributor.
In case of a suspension of the determination of the net asset value
because the New York Stock Exchange is closed for other than weekends or
holidays, or trading thereon is restricted or an emergency exists as a result of
which disposal by the Fund of securities owned by it is not reasonably
practical, or it is not reasonably practical for the Fund fairly to value its
assets, or in the event that the SEC has provided for such suspension for the
protection of shareholders, the Fund may postpone payment or suspend the right
of redemption or repurchase. In such case, the shareholder may withdraw the
request for redemption or leave it standing as a request for redemption at the
net asset value next determined after the suspension has been terminated.
Class B Shares are subject to a CDSC of: (i) 5% if shares are redeemed
within one year after purchase; (ii) 4% if shares are redeemed during the second
year of purchase; (iii) 3% if shares are redeemed during the third or fourth
year following purchase; (iv) 2% if shares are redeemed during the fifth year
following purchase; and (v) 1% if shares are redeemed during the sixth year
following purchase. Class C Shares are subject to a CDSC of 1% if shares are
redeemed within 12 months following purchase. See Contingent Deferred Sales
Charge - Class B Shares and Class C Shares under Purchasing Shares.
Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for shares of other funds in the Delaware Investments (in
each case, "New Shares") in a permitted exchange, will not be subject to a CDSC
that might otherwise be due upon redemption of the Original Shares. However,
such shareholders will continue to be subject to the CDSC and, in the case of
Class B Shares, the automatic conversion schedule of the Original Shares as
described in this Part B and any CDSC assessed upon redemption will be charged
by the fund from which the Original Shares were exchanged. In an exchange of
Class B Shares from the Fund, the Fund's CDSC schedule may be higher than the
CDSC schedule relating to the New Shares acquired as a result of the exchange.
For purposes of computing the CDSC that may be payable upon a disposition of the
New Shares, the period of time that an investor held the Original Shares is
added to the period of time that an investor held the New Shares. With respect
to Class B Shares, the automatic conversion schedule of the Original Shares may
be longer than that of the New Shares. Consequently, an investment in New Shares
by exchange may subject an investor to the higher 12b-1 fees applicable to Class
B Shares of the Fund for a longer period of time than if the investment in New
Shares were made directly.
Small Accounts
Before the Fund involuntarily redeems shares from an account that has
remained below the minimum amounts required by the Prospectuses and this Part B,
the shareholder will be notified in writing that the value of the shares in the
account is less than the required minimum amounts and will be allowed 60 days
from the date of notice to make an additional investment to meet the required
minimum. If no such action is taken by the shareholder, the proceeds will be
sent to the shareholder. Any redemption in an inactive account established with
a minimum investment may trigger mandatory redemption. No CDSC will apply to
redemptions described in this paragraph of Class B Shares and Class C Shares
described above.
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Checkwriting Feature
Holders of Class A Shares and Consultant Class Shares holding shares
for which certificates have not been issued may request on the investment
application that they be provided with special forms of checks which may be
issued to redeem their shares by drawing on the Delaware Group Cash Reserve
account with the Fund's bank. Normally, it takes two weeks from the date the
shareholder's initial purchase check clears to receive the first order of
checks. The use of any form of check other than the Fund's check will not be
permitted unless approved by the Fund. The Checkwriting Feature is not available
for Class B Shares or Class C Shares of the Fund.
(1) These redemption checks must be made payable in an amount of $500
or more.
(2) Checks must be signed by the shareholder(s) of record or, in the
case of an organization, by the authorized person(s). If registration is in more
than one name, unless otherwise indicated on the investment application or your
checkwriting authorization form, these checks must be signed by all owners
before the Fund will honor them. Shareholders using redemption checks will
continue to be entitled to distributions paid on those shares up to the time the
checks are presented for payment.
(3) If a shareholder who recently purchased shares by check seeks to
redeem all or a portion of those shares through the Checkwriting Feature, the
Fund will not honor the redemption request unless it is reasonably satisfied of
the collection of the investment check. A hold period against a recent purchase
may be up to but not in excess of 15 days, depending upon the origin of the
investment check.
(4) If the amount of the check is greater than the value of the shares
held in the shareholder's account, the check will be returned and the
shareholder's bank may charge a fee.
(5) Checks may not be used to close accounts.
The Fund reserves the right to revoke the Checkwriting Feature of
shareholders who overdraw their accounts or if, in the opinion of management,
such revocation is in the Fund's best interest.
Shareholders will be subject to bank rules and regulations governing
similar accounts. This service may be terminated or suspended at any time by the
bank, the Fund or the Fund's Transfer Agent. The Fund and the Transfer Agent
will not be responsible for the inadvertent processing of post-dated checks or
checks more than six months old. Shareholders needing a copy of a redemption
check can contact the Transfer Agent at 800-523-1918.
Stop-Payment Requests--Investors may request a stop payment on checks
by providing the Fund with a written authorization to do so. Oral requests will
be accepted provided that the Fund promptly receives a written authorization.
Such requests will remain in effect for six months unless renewed or canceled.
The Fund will use its best efforts to effect stop-payment instructions, but does
not promise or guarantee that such instructions will be effective.
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* * *
The Fund has made available certain redemption privileges, as described
below. The Fund reserves the right to suspend or terminate these expedited
payment procedures upon 60 days' written notice to shareholders.
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103
to redeem some or all of your 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. A signature guarantee can be obtained from a
commercial bank, a trust company or a member of a Securities Transfer
Association Medallion Program ("STAMP"). 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.
Payment is normally mailed the next business day after receipt of your
redemption request. If your Class A Shares or Consultant Class Shares are in
certificate form, the certificate(s) must accompany your request and also be in
good order. Certificates are issued for Class A Shares and Consultant Class
Shares only if a shareholder submits a specific request. Certificates are not
issued for Class B Shares or Class C Shares.
Written Exchange
You may also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your shares into another mutual
fund in Delaware Investments, 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 Class A Shares in certificate form, you may
redeem or exchange only by written request and you must return your
certificates.
The Telephone Redemption - Check to Your Address of Record service and
the Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in which you have your account
in writing that you do not wish to have such services available with respect to
your account. 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 its 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. Telephone instructions 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, you are acknowledging prior receipt of a prospectus for the
fund into which your 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 address of record. Checks will be payable
to the shareholder(s) of record. Payment is normally mailed the next business
day after receipt of the redemption request. This service is only available to
individual, joint and individual fiduciary-type accounts.
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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, you must complete an Authorization Form and have 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. If the
proceeds are wired to the shareholder's account at a bank which is not a member
of the Federal Reserve System, there could be a delay in the crediting of the
funds to the shareholder's bank account. A bank wire fee may be deducted from
redemption proceeds. If you ask for a check, it will normally be mailed the next
business day after receipt of your redemption request to your predesignated bank
account. There are no separate fees for this redemption method, but the mail
time may delay getting funds into your bank account. Simply call the Shareholder
Service Center prior to the time the offering price and net asset value are
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 your
shares into other funds in Delaware Investments under the same registration,
subject to the same conditions and limitations as other exchanges noted above.
As with the written exchange service, telephone exchanges are subject to the
requirements of the Fund as described above. Telephone exchanges may be subject
to limitations as to amounts or frequency.
The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of the
funds in the Delaware Investments family. Telephone exchanges may be subject to
limitations as to amounts or frequency. The Transfer Agent and the Fund reserve
the right to record exchange instructions received by telephone and to reject
exchange requests at any time in the future.
MoneyLine(SM) On Demand
You or your investment dealer may request redemptions of Fund shares by
phone using MoneyLine(SM) On Demand. When you authorize the Fund to accept such
requests from you or your investment dealer, funds will be deposited to (for
share redemptions) your predesignated bank account. Your request will be
processed the same day if you call prior to 4 p.m., Eastern time. There is a $25
minimum and $50,000 maximum limit for MoneyLine(SM) On Demand transactions.
It may take up to four business days for the transactions to be
completed. You can initiate this service by completing an Account Services form.
If your name and address are not identical to the name and address on your Fund
account, you must have your signature guaranteed. The Fund does not charge a fee
for this service; however, your bank may charge a fee.
Right to Refuse Timing Accounts
With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Fund will refuse any new timing
arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Investments funds from Timing Firms. The Fund reserves the right to temporarily
or permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Fund within two weeks of an earlier
exchange request out of the Fund, or (ii) makes more than two exchanges out of
the Fund per calendar quarter, or (iii) exchanges shares equal in value to at
least $5 million, or more than 1/4 of 1% of the Fund's net assets. Accounts
under common ownership or control, including accounts administered so as to
redeem or purchase shares based upon certain predetermined market indicators,
will be aggregated for purposes of the exchange limits.
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Restrictions on Timed Exchanges
Timing Accounts operating under existing timing agreements may only
execute exchanges between the following eight Delaware Investments funds: (1)
Delaware Decatur Equity Income Fund, (2) Delaware Growth and Income Fund, (3)
Delaware Balanced Fund, (4) Delaware Limited-Term Government Fund, (5) Delaware
Tax-Free USA Fund, (6) Delaware Cash Reserve Fund, (7) Delaware Delchester Fund
and (8) Delaware Tax-Free Pennsylvania Fund. No other Delaware Investments funds
are available for timed exchanges. Assets redeemed or exchanged out of Timing
Accounts in Delaware Investments funds not listed above may not be reinvested
back into that Timing Account. The Fund reserves the right to apply these same
restrictions to the account(s) of any person whose transactions seem to follow a
time pattern (as described above).
The Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Fund would be unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if the
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with a
"market timing" strategy may be disruptive to the Fund and therefore may be
refused.
Except as noted above, only shareholders and their authorized brokers
of record will be permitted to make exchanges or redemptions.
Redemptions of Timing Accounts
Redemption Requests made from Timing Accounts will be made only by
check. Redemption proceeds from these accounts will not be wired to shareholder
bank accounts. Such checks will be sent no later than seven days after a receipt
of a redemption request in good order.
Systematic Withdrawal Plans
Shareholders of Class A Shares, Class B Shares and Class C Shares and
Consultant Class Shares who own or purchase $5,000 or more of shares for which
certificates have not been issued may establish a Systematic Withdrawal Plan for
monthly withdrawals of $25 or more, or quarterly withdrawals of $75 or more,
although the Fund does not recommend any specific amount of withdrawal. This
$5,000 minimum does not apply for the Fund's prototype retirement plans. Shares
purchased with the initial investment and through reinvestment of cash dividends
and realized securities profits distributions will be credited to the
shareholder's account and sufficient full and fractional shares will be redeemed
at the net asset value calculated on the third business day preceding the
mailing date.
Checks are dated either the 1st or the 15th of the month, as selected
by the shareholder (unless such date falls on a holiday or a weekend), and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of the Class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital, and the share
balance may in time be depleted, particularly in a declining market.
The sale of shares for withdrawal payments constitutes a taxable event
and a shareholder may incur a capital gain or loss for federal income tax
purposes, although the Fund expects to maintain a fixed net asset value. If
there were a gain or loss, it would be long-term or short-term depending on the
holding period for the specific shares liquidated. Premature withdrawals from
retirement plans may have adverse tax consequences.
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The CDSC for Class B Shares and Class C Shares redeemed via a
Systematic Withdrawal Plan will be waived if the annual amount withdrawn in each
year is less than 12% of the account balance on the date that the Plan is
established. If the annual amount withdrawn in any year exceeds 12% of the
account balance on the date that the Systematic Withdrawal Plan is established,
all redemptions under the Plan will be subject to the applicable CDSC, including
an assessment for previosly redeemed amounts under the Plan. Whether a waiver of
the CDSC is available or not, the first shares to be redeemed for each
Systematic Withdrawal Plan payment will be those not subject to a contingent
deferred sales charge because they have either satisfied the required holding
period or were acquired through the reinvestment of distributions. See Waiver of
Contingent Deferred Sales Charge - Class B Shares and Class C Shares, below.
An investor wishing to start a Systematic Withdrawal Plan must complete
an authorization form. If the recipient of Systematic Withdrawal Plan payments
is other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. 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. This plan may be terminated by the shareholder or the Transfer
Agent at any time by giving written notice.
Systematic Withdrawal Plan payments are normally made by check. In the
alternative, you may elect to have your payments transferred from your Fund
account to your predesignated bank account through the MoneyLine(SM) Direct
Deposit Service. Your funds will normally be credited to your bank account up to
four business days after the payment date. There are no separate fees for this
redemption method. It may take up to four business days for the transactions to
be completed. You can initiate this service by completing an Account Services
form. If your name and address are not identical to the name and address on your
Fund account, you must have your signature guaranteed. The Fund does not charge
a fee for any this service; however, your bank may charge a fee. This service is
not available for retirement plans.
Shareholders should consult with their financial advisers to determine
whether a Systematic Withdrawal Plan would be suitable for them.
Waiver of Contingent Deferred Sales Charge - Class B Shares and Class C Shares
The CDSC is waived on certain redemptions of Class B Shares in
connection with the following redemptions: (i) redemptions that result from the
Fund's right to liquidate a shareholder's account if the aggregate net asset
value of the shares held in the account is less than the then-effective minimum
account size; (ii) returns of excess contributions to an IRA, SIMPLE IRA,
SEP/IRA or 403(b)(7) or 457 Deferred Compensation Plans; (iii) periodic
distributions from an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, 403(b)(7) or 457
Deferred Compensation Plans due to death, disability and attainment of age 59
1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code of 1986, as amended (the "Code"); and (iv) distributions from an
account if the redemption results from the death of the registered owner, or a
registered joint owner, of the account (in the case of accounts established
under the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.
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The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in the
account is less than the then-effective minimum account size; (ii) returns of
excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution Plan; (iii) periodic distributions from a 403(b)(7) or 457
Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing Plan,
Money Purchase Pension Plan, 401(k) Defined Contribution Plans upon attainment
of age 70 1/2, and IRA distributions qualifying under Section 72(t) of the Code;
(iv) distributions from a 403(b)(7) or 457 Deferred Compensation Plan, Profit
Sharing Plan or 401(k) Defined Contribution Plan under hardship provisions of
the plan; (v) distributions from a 403(b)(7) or 457 Deferred Compensation Plan,
Profit Sharing Plan, Money Purchase Pension Plan or a 401(k) Defined
Contribution Plan upon attainment of normal retirement age under the plan or
upon separation from service; (vi) periodic distributions from an IRA or SIMPLE
IRA on or after attainment of age 59 1/2; and (vii) distributions from an
account if the redemption results from the death of the registered owner, or a
registered joint owner, of the account (in the case of accounts established
under the Uniform Gifts to Minors or Uniform Transfers to Minors Acts or trust
accounts, the waiver applies upon the death of all beneficial owners) or a total
and permanent disability (as defined in Section 72 of the Code) of all
registered owners occurring after the purchase of the shares being redeemed.
In addition, the CDSC will be waived on Class B Shares and Class C
Shares redeemed in accordance with a Systematic Withdrawal Plan if the annual
amount selected to be withdrawn in each year under the Plan is less than 12% of
the account balance on the date that the Systematic Withdrawal Plan was
established.
DIVIDENDS AND REALIZED SECURITIES PROFITS DISTRIBUTIONS
The Fund declares a dividend of its net investment income on a daily
basis to shareholders of record of each Class of Fund shares at the time of the
previous calculation of the Fund's net asset value each day that the Fund is
open for business. The amount of net investment income will be determined at the
time the offering price and net asset value are determined and shall include
investment income accrued, less the estimated expenses of the Fund incurred
since the last determination of net asset value. Gross investment income
consists principally of interest accrued and, where applicable, net pro-rata
amortization of premiums and discounts since the last determination. The
dividend declared, as noted above, will be deducted immediately before the net
asset value calculation is made. See Offering Price. Net investment income
earned on days when the Fund is not open will be declared as a dividend on the
next business day.
Each Class of shares of the Fund will share proportionately in the
investment income and expenses of the Fund, except that Consultant Class Shares,
Class B Shares and Class C Shares alone will incur distribution fees under their
respective 12b-1 Plans. See Plans Under Rule 12b-1 for Consultant Class Shares,
Class B Shares and Class C Shares under Purchasing Shares.
Purchases of Fund 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. Investors desiring to guarantee wire payments
must have an acceptable financial condition and credit history in the sole
discretion of the Fund. The Fund reserves the right to terminate this option at
any time. Purchases by check earn dividends upon conversion to Federal Funds,
normally one business day after receipt.
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Payment of dividends will be made monthly. Dividends are automatically
reinvested in additional shares of the same Class of the Fund at the net asset
value in effect on the payable date, which provides the effect of compounding
dividends, unless the election to receive dividends in cash has been made.
Payment by check of cash dividends will ordinarily be mailed within three
business days after the payable date. Dividend payments of $1.00 or less will be
automatically reinvested, notwithstanding a shareholder's election to receive
dividends in cash. If such a shareholder's dividends increase to greater than
$1.00, the shareholder would have to file a new election in order to begin
receiving dividends in cash again. If a shareholder redeems an entire account,
all dividends accrued to the time of the withdrawal will be paid by separate
check at the end of that particular monthly dividend period, consistent with the
payment and mailing schedule described above. Any check in payment of dividends
or other distributions which cannot be delivered by the United States 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. The Fund may deduct
from a shareholder's account the costs of the Fund's effort to locate a
shareholder if a shareholder's mail is returned by the United States Post Office
or the Fund is otherwise unable to locate the shareholder or verify the
shareholder's mailing address. These costs may include a percentage of the
account when a search company charges a percentage fee in exchange for their
location services. To the extent necessary to maintain a $1.00 per share net
asset value, the Fund's Board of Trustees will consider temporarily reducing or
suspending payment of daily dividends, or making a distribution of realized
securities profits or other distributions at the time the net asset value per
share has changed.
Short-term realized securities profits or losses, if any, may be paid
with the daily dividend. Any such profits not so paid will be distributed
annually during the first quarter following the close of the fiscal year. See
Account Statements under Purchasing Shares for the statement mailing of dividend
information. Information as to the tax status of dividends will be provided
annually.
If you elect to take your dividends and distributions in cash
and such dividends and distributions are in an amount of $25 or more, you may
choose the MoneyLine(SM) Direct Deposit Service and have such payments
transferred from your Fund account to your predesignated bank account. This
service is not available for certain retirement plans. It may take up to four
business days for the transactions to be completed. You can initiate this
service by completing an Account Services form. If your name and address are not
identical to the name and address on your Fund account, you must have your
signature guaranteed. The Fund does not charge a fee for this service; however,
your bank may charge a fee.
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TAXES
The Fund has qualified, and intends to continue to qualify, as a
regulated investment company under Subchapter M of 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.
Under the 1997 Act, as revised by the 1998 Act and the Omnibus
Consolidated and Emergency Supplemental Appropriations Act, the Fund is required
to track its sales of portfolio securities and to report any capital gain
distributions to you according to the following categories of holding periods:
"Long-term capital gains": gains on securities sold after December 31,
1997 and held for more than 12 months as capital assets in the hands of
the holders are taxed at the 20% rate when distributed to shareholders
(10% for individual investors in the 15% bracket).
"Short-term capital gains": gains on securities sold by a Fund that do
not meet the long-term holding period are considered short-term capital
gains and are taxed as ordinary income.
"Qualified 5-year gains": For individuals in the 15% bracket, qualified
five-year gains are net gains on securities held for more than 5 years
which are sold after December 31, 2000. For individual who are subject
to tax at higher rate brackets, qualified five-year gains are net gains
on securities which are purchased after December 31, 2000 and are held
for more than five years. Taxpayers subject to tax at a higher rate
bracket may also make an election for shares held on January 1, 2001 to
recognize gain on their shares in order to qualify such shares as
qualified five-year property. These gains will be taxable to individual
investors at a maximum rate of 18% for investors in the 28% or higher
federal income tax brackets, and at a maximum rate of 8% for investors
in the 15% federal income tax bracket when sold after the five-year
holding period.
The automatic conversion of Class B Shares into Consultant Class Shares of the
Fund at the end of approximately eight years after purchase will be tax-free for
federal income tax purposes.
INVESTMENT MANAGEMENT AGREEMENT
The Manager, located at One Commerce Square, Philadelphia, PA 19103,
furnishes investment management services to the Fund, subject to the supervision
and direction of the Fund's Board of Trustees.
The Manager and its predecessors have been managing the funds in the
Delaware Investments family since 1938. On March 31, 2000, the Manager and its
affiliates within Delaware Investments, including Delaware International
Advisers Ltd., were managing in the aggregate more than $46 billion in assets in
the various institutional or separately managed (approximately $25,832,270,000)
and investment company (approximately $20,274,960,000) accounts.
Subject to the supervision and direction of the Board of Trustees, the
Manager manages the Fund's portfolio in accordance with the Fund's stated
investment objective and policy and makes and implements all investment
decisions on behalf of the Fund.
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The Fund's Investment Management Agreement is dated December 15, 1999
and was approved by the initial shareholder on that date. The Agreement has an
initial term of two years and may be renewed each year so long as such renewal
and continuance are specifically approved at least annually by the Board of
Trustees or by vote of a majority of the outstanding voting securities of the
Fund, and only if the terms of and the renewal thereof have been approved by the
vote of a majority of the trustees of the Fund, who are not parties thereto or
interested persons of any such party, cast in person at a meeting called for the
purpose of voting on such approval. The Agreement is terminable without penalty
on 60 days' notice by the trustees of the Fund or by the Manager. The Agreement
will terminate automatically in the event of its assignment.
The annual compensation paid by the Fund for investment management
services is equal to 0.45% on the first $500 million of average daily net assets
of the Fund, 0.40% on the next $500 million, 0.35% on the next $1,500 million,
0.30% on assets in excess of $2.5 billion. The Manager pays the Fund's rent and
the salaries of all trustees, officers and employees of the Fund who are
affiliated with the Manager.
On March 31, 2000, the total net assets of the Fund were $629,951,323.
Investment management fees paid by the Fund were $2,904,636 for the fiscal year
ended March 31, 1998, $3,028,442 for the fiscal year ended March 31, 1999 and
$2,860,175 for the fiscal year ended March 31, 2000.
Except for those expenses borne by the Manager under the Investment
Management Agreement and the Distributor under the Distribution Agreement, the
Fund is responsible for all of its own expenses. Among others, these include the
investment management fees; shareholder servicing, dividend disbursing,
accounting services and transfer agent fees and costs; custodian expenses;
federal and state securities registration fees; proxy costs; and the costs of
preparing prospectuses and reports sent to shareholders
Distribution and Service
The Distributor, Delaware Distributors, L.P., located at 1818 Market
Street, Philadelphia, PA 19103, serves as the national distributor of Fund
shares under a Distribution Agreement dated December 15, 1999. The Distributor
is an affiliate of the Manager and bears all of the costs of promotion and
distribution, except for payments by the Fund on behalf of Consultant Class
Shares, Class B Shares and Class C Shares under their respective 12b-1 Plans.
Delaware Distributors, L.P. is an indirect, wholly owned subsidiary of Delaware
Management Holdings, Inc.
The Transfer Agent, Delaware Service Company, Inc., another affiliate
of the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves as
the Fund's shareholder servicing, dividend disbursing and transfer agent
pursuant to a Shareholders Services Agreement dated December 15, 1999. The
Transfer Agent also provides accounting services to the Fund pursuant to the
terms of a separate Fund Accounting Agreement. The Transfer Agent is also an
indirect, wholly owned subsidiary of Delaware Management Holdings, Inc.
The Fund has authorized one or more brokers to accept on its behalf
purchase and redemption orders in addition to the Transfer Agent. Such brokers
are authorized to designate other intermediaries to accept purchase and
redemption orders on the behalf of the Fund. For purposes of pricing, the Fund
will be deemed to have received a purchase or redemption order when an
authorized broker or, if applicable, a broker's authorized designee, accepts the
order. Investors may be charged a fee when effecting transactions through a
broker or agent.
46
<PAGE>
OFFICERS AND TRUSTEES
The business and affairs of the Fund are managed under the direction of
its Board of Trustees.
Certain officers and trustees of the Fund hold identical positions in
each of the other funds in the Delaware Investments family. On April 30, 2000,
the Fund's officers and trustees owned less than 1% of the outstanding shares of
each Class.
As of April 30, 2000, the Fund believes the following accounts held 5%
or more of record of a Class. The Fund has no knowledge of beneficial ownership.
- --------------------------------------------------------------------------------
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
- --------------------------------------------------------------------------------
Class C Shares NFSC FEBO #BJT-100668 338,156.620 5.44%
Thomas G. Flesch
George Gerdes TTEE
G&F Const. Inc. Pen Pl
3181 Highridge Dr.
Taylor Mill, KY 41015-4487
- --------------------------------------------------------------------------------
DMH Corp., Delvoy, Inc., Delaware Management Business Trust, Delaware
Management Company (a series of Delaware Management Business Trust), Delaware
Management Company, Inc., Delaware Investment Advisers (a series of Delaware
Management Business Trust), Delaware Distributors, L.P., Delaware Distributors,
Inc., Delaware Service Company, Inc., Delaware Management Trust Company,
Delaware International Holdings Ltd., Founders Holdings, Inc., Delaware
International Advisers Ltd., Delaware Capital Management, Inc., Delaware General
Management, Inc. and Retirement Financial Services, Inc. are direct or indirect,
wholly owned subsidiaries of Delaware Management Holdings, Inc. ("DMH"). On
April 3, 1995, a merger between DMH and a wholly owned subsidiary of Lincoln
National Corporation ("Lincoln National") was completed. DMH and the Manager are
now indirect, wholly owned subsidiaries, and subject to the ultimate control, 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.
47
<PAGE>
Certain officers and trustees of Cash Reserve hold identical positions
in each of the other funds in the Delaware Investments family. Trustees and
principal officers of Cash Reserve are noted below along with their ages and
their business experience for the past five years. Unless otherwise noted, the
address of each officer and trustee is One Commerce Square, Philadelphia, PA
19103.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Trustee/Officer Business Experience
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
*Wayne A. Stork (62) Chairman, Trustee/Director of Cash Reserve and each of the other 32 investment companies
in the Delaware Investments family. Prior to January 1, 1999, Mr. Stork was Director of
Delaware Capital Management, Inc.; Chairman, President and Chief Executive Officer and
Director of DMH Corp., Delaware Distributors, Inc. and Founders Holdings, Inc.;
Chairman, President, Chief Executive Officer, Chief Investment Officer and
Director/Trustee of Delaware Management Company, Inc. and Delaware Management Business
Trust; Chairman, President, Chief Executive Officer and Chief Investment Officer of
Delaware Management Company (a series of Delaware Management Business Trust); Chairman,
Chief Executive Officer and Chief Investment Officer of Delaware Investment Advisers (a
series of Delaware Management Business Trust); Chairman and Chief Executive Officer of
Delaware International Advisers Ltd.; Chairman, Chief Executive Officer and Director of
Delaware International Holdings Ltd.; Chief Executive Officer of Delaware Management
Holdings, Inc.; President and Chief Executive Officer of Delvoy, Inc.; Chairman of
Delaware Distributors, L.P.; Director of Delaware Service Company, Inc. and Retirement
Financial Services, Inc. Prior to January 1, 2000, Mr. Stork was Chairman and Director
of Delaware Management Holdings, Inc. and Director of Delaware International Advisers
Ltd.
In addition, during the five years prior to January 1, 2000, Mr. Stork has served in
various executive capacities at different times within the Delaware organization.
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------
*Trustee affiliated with Cash Reserve's investment manager and considered an "interested person" as defined in the 1940 Act.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
48
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Trustee/Officer Business Experience
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
*David K. Downes (60) President, Chief Executive Officer, Chief Financial Officer and Trustee/Director of Cash
Reserve and each of the other 32 investment companies in the Delaware Investments
family.
President and Director of Delaware Management Company, Inc.
President of Delaware Management Company (a series of Delaware Management Business
Trust)
President, Chief Executive Officer and Director of Delaware Capital Management, Inc.
President, Chief Operating Officer and Director of Delaware General Management, Inc.
Chairman, President, Chief Executive Officer and Director of Delaware Service Company,
Inc.
President, Chief Operating Officer, Chief Financial Officer and Director of Delaware
International Holdings Ltd.
Chairman and Director of Delaware Management Trust Company and Retirement Financial
Services, Inc.
Executive Vice President, Chief Operating Officer, Chief Financial Officer of Delaware
Management Holdings, Inc., Founders CBO Corporation, Delaware Investment Advisers (a
series of Delaware Management Business Trust) and Delaware Distributors, L.P.
Executive Vice President, Chief Financial Officer, Chief Administrative Officer and
Trustee of Delaware Management Business Trust
Executive Vice President, Chief Operating Officer, Chief Financial Officer and Director
of DMH Corp., Delaware Distributors, Inc., Founders Holdings, Inc. and Delvoy, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Downes has served in various executive capacities at
different times within the Delaware organization.
- ------------------------------------------------------------------------------------------------------------------------------------
- ----------------------
*Trustee affiliated with Cash Reserve's investment manager and considered an "interested person" as defined in the 1940 Act.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
49
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Trustee Business Experience
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Walter P. Babich (72) Trustee/Director Cash Reserve and each of the other 32 investment companies in the
Delaware Investments family
460 North Gulph Road, King of Prussia, PA 19406
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and from 1988 to 1991,
he was a partner of I&L Investors.
- ------------------------------------------------------------------------------------------------------------------------------------
John H. Durham (62) Trustee/Director of Cash Reserve and each of the other 32 investment companies in the
Delaware Investments family
Private Investor.
P.O. Box 819, Gwynedd Valley, PA 19437
Mr. Durham served as Chairman of the Board of each fund in the Delaware Investments
family from 1986 to 1991; President of each fund from 1977 to 1990; and Chief Executive
Officer of each fund from 1984 to 1990. Prior to 1992, with respect to Delaware
Management Holdings, Inc., Delaware Management Company, Delaware Distributors, Inc. and
Delaware Service Company, Inc., Mr. Durham served as a director and in various executive
capacities at different times. He was also a Partner of Complete Care Services from 1995
to 1999.
- ------------------------------------------------------------------------------------------------------------------------------------
Anthony D. Knerr (61) Trustee/Director of Cash Reserve and each of the 32 other investment companies in the
Delaware Investments family.
500 Fifth Avenue, New York, NY 10110
Founder and Managing Director, Anthony Knerr & Associates
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and Treasurer of
Columbia University, New York. From 1987 to 1989, he was also a lecturer in English at
the University. In addition, Mr. Knerr was Chairman of The Publishing Group, Inc., New
York, from 1988 to 1990. Mr. Knerr founded The Publishing Group, Inc. in 1988.
- ------------------------------------------------------------------------------------------------------------------------------------
Ann R. Leven (59) Trustee/Director of Cash Reserve and each of the other 32 other investment companies in
the Delaware Investments family
785 Park Avenue, New York, NY 10021
Retired Treasurer, National Gallery of Art
From 1994 to 1999, Ms. Leven was the Treasurer of the National Gallery of Art and from
1990 to 1994, Ms. Leven was Deputy Treasurer of the National Gallery of Art. In
addition, from 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of the
Smithsonian Institution, Washington, DC, and from 1975 to 1992, she was Adjunct
Professor of Columbia Business School.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
50
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Trustee Business Experience
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Thomas F. Madison (64) Trustee/Director of Cash Reserve and each of the other 32 investment companies in the
Delaware Investments family
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402
President and Chief Executive Officer, MLM Partners, Inc.
Mr. Madison has also been Chairman of the Board of Communications Holdings, Inc. since
1996. From February to September 1994, Mr. Madison served as Vice Chairman--Office of
the CEO of The Minnesota Mutual Life Insurance Company and from 1988 to 1993, he was
President of U.S. WEST Communications--Markets.
- ------------------------------------------------------------------------------------------------------------------------------------
Charles E. Peck (74) Trustee/Director of Cash Reserve and each of the other 32 investment companies in the
Delaware Investments family
P.O. Box 1102, Columbia, MD 21044
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer of The Ryland
Group, Inc., Columbia, MD.
- ------------------------------------------------------------------------------------------------------------------------------------
Janet L. Yeomans (51) Trustee/Director of Cash Reserve and 32 other investment companies in the Delaware
Investments family.
Building 220-13W-37, St. Paul, MN 55144
Vice President and Treasurer, 3M Corporation.
From 1987-1994, Ms. Yeomans was Director of Benefit Funds and Financial Markets for the
3M Corporation; Manager of Benefit Fund Investments for the 3M Corporation, 1985-1987;
Manager of Pension Funds for the 3M Corporation, 1983-1985; Consultant--Investment
Technology Group of Chase Econometrics, 1982-1983; Consultant for Data Resources,
1980-1982; Programmer for the Federal Reserve Bank of Chicago, 1970-1974.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
51
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Officer Business Experience
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Richard G. Unruh, Jr. (60) Executive Vice President and Chief Investment Officer, Equities of Cash Reserve, each of
the other 32 investment companies in the Delaware Investments family Delaware Management
Holdings, Inc., Delaware Management Company (a series of Delaware Management Business
Trust)^ and Delaware Capital Management, Inc.
Chief Executive Officer/Chief Investment Officer/DIA Equity of Delaware Investment
Advisers (a series of Delaware Management Business Trust)
Executive Vice President and Director/Trustee of Delaware Management Company, Inc. and
Delaware Management Business Trust
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive capacities at
different times within the Delaware organization.
- ------------------------------------------------------------------------------------------------------------------------------------
H. Thomas McMeekin (46) Executive Vice President and Chief Investment Officer, Fixed Income of Cash Reserve and
each of the other 32 investment companies in the Delaware Investments family.
Director of Delaware Management Holdings, Inc. and Founders CBO Corporation.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Management Business Trust, Delaware Management
Company (a series of Delaware Management Business Trust) and Delaware Capital
Management, Inc.
Mr. McMeekin joined Delaware Investments in 1999. During the past five years, he has
also served in various executive capacities for Lincoln National Corporation.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard J. Flannery (42) Executive Vice President/General Counsel of Cash Reserve and each of the other 32
investment companies in the Delaware Investments family, Delaware Management Holdings,
Inc., Delaware Distributors, L.P., Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of Delaware
Management Business Trust) and Founders CBO Corporation.
Executive Vice President/General Counsel and Director of Delaware International Holdings
Ltd., Founders Holdings, Inc., Delvoy, Inc., DMH Corp., Delaware Management Company,
Inc., Delaware Service Company, Inc., Delaware Capital Management, Inc., Retirement
Financial Services, Inc., Delaware Distributors, Inc., Delaware General Management, Inc.
and Delaware Management Business Trust.
Executive Vice President and Trustee of Delaware Management Business Trust.
Director of Delaware International Advisers Ltd.
Director of HYPPCO Finance Company Ltd.
During the past five years, Mr. Flannery has served in various executive capacities at
different times within the Delaware organization.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
52
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Officer Business Experience
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Eric E. Miller (46) Senior Vice President/Deputy General Counsel and Secretary of Cash Reserve and each of
the other 32 investment companies in Delaware Investments.
Senior Vice President/Deputy General Counsel and Assistant Secretary of Delaware
Management Holdings, Inc., DMH Corp., Delvoy, Inc., Delaware Management Company, Inc.,
Delaware Management Business Trust, Delaware Management Company (a series of Delaware
Management Business Trust), Delaware Investment Advisers (a series of Delaware
Management Business Trust), Delaware Service Company, Inc., Delaware Capital Management,
Inc., Retirement Financial Services, Inc., Delaware Distributors, Inc., Delaware
Distributors, L.P., Delaware General Management, Inc. and Founders Holdings, Inc.
During the past five years, Mr. Miller has served in various executive capacities at
different times within Delaware Investments.
- ------------------------------------------------------------------------------------------------------------------------------------
Joseph H. Hastings Senior Vice President/Corporate Controller of Cash Reserve and each of the other 32
investment companies in the Delaware Investments family.
Senior Vice President/Corporate Controller and Treasurer of Delaware Management
Holdings, Inc., DMH Corp., Delaware Management Company, Inc., Delaware Management
Company (a series of Delaware Management Business Trust), Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware Capital
Management, Inc., Delaware International Holdings Ltd., Delvoy, Inc., Retirement
Financial Services, Inc., Founders Holdings, Inc., Delaware General Management, Inc. and
Delaware Management Business Trust
Executive Vice President/Chief Financial Officer/Treasurer of Delaware Management Trust
Company
Senior Vice President/Assistant Treasurer of Founders CBO Corporation
During the past five years, Mr. Hastings has served in various executive capacities at
different times within the Delaware organization.
- ------------------------------------------------------------------------------------------------------------------------------------
Michael P. Bishof (37) Senior Vice President and Treasurer of Cash Reserve and each of the other 32 investment
companies in the Delaware Investments family.
Senior Vice President/Investment Accounting of Delaware Service Company, Inc. and
Delaware Capital Management, Inc.
Senior Vice President and Treasurer/ Investment Accounting of Delaware Distributors,
L.P. , Delaware Management Company (a series of Delaware Management Business Trust),
Delaware Investment Advisers (a series of Delaware Management Business Trust) Delaware
International Holdings, Inc. and Founders Holdings, Inc.
Senior Vice President and Assistant Treasurer of Founders CBO Corporation
Before joining Delaware Investments in 1995, Mr. Bishof was a Vice President for Bankers
Trust, New York, NY from 1994 to 1995, a Vice President for CS First Boston Investment
Management, New York, NY from 1993 to 1994 and an Assistant Vice President for Equitable
Capital Management Corporation, New York, NY from 1987 to 1993.
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia Isom (46) Vice President/Portfolio Manager of Cash Reserve and each of the other 32 investment
companies in the Delaware Investments family, Delaware Management Company (a series of
Delaware Management Business Trust), Delaware Investment Advisors (a series of
Delaware Management Business Trust).
During the past five years, Ms. Isom has served in various executive capacities at
different times within the Delaware organization.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
53
<PAGE>
The following is a compensation table listing for each trustee entitled
to receive compensation, the aggregate compensation received from Cash Reserve
during its fiscal year and the total compensation received from all investment
companies in the Delaware Investments family for which he or she serves as a
trustee or trustee during Cash Reserve's fiscal year and an estimate of annual
benefits to be received upon retirement under the Delaware Group Retirement Plan
for Trustees/Directors as of March 31, 2000. Only the independent trustees of
Cash Reserve receive compensation from Cash Reserve.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------
Pension Total Compensation
Retirement Benefits from the Delaware
Aggregate Accrued as Part of Estimated Annual Investments
Compensation for Cash Cash Reserve Benefits Upon Investment
Name Reserve Expenses Retirement(1) Companies(2)
- ------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Walter B. Babich $1,759 none $38,000 $56,441
- ------------------------------------------------------------------------------------------------------------------------
John H. Durham $1,868 none $32,180 $52,226
- ------------------------------------------------------------------------------------------------------------------------
Anthony D. Knerr $2,026 none $38,000 $65,001
- ------------------------------------------------------------------------------------------------------------------------
Ann R. Leven $2,057 none $38,000 $66,001
- ------------------------------------------------------------------------------------------------------------------------
Thomas F. Madison $2,026 none $38,000 $65,001
- ------------------------------------------------------------------------------------------------------------------------
Charles E. Peck $2,039 none $38,000 $65,418
- ------------------------------------------------------------------------------------------------------------------------
Janet L. Yeomans $1,868 none $38,000 $60,001
- ------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) Under the terms of the Delaware Group Retirement Plan for
Trustees/Directors, each disinterested trustee/director who, at the time of
his or her retirement from the Board, has attained the age of 70 and served
on the Board for at least five continuous years, is entitled to receive
payments from each investment company in the Delaware Investments family
for which he or she serves as a trustee or director for a period equal to
the lesser of the number of years that such person served as a trustee or
director or the remainder of such person's life. The amount of such
payments will be equal, on an annual basis, to the amount of the annual
retainer that is paid to trustees/directors of each investment company at
the time of such person's retirement. If an eligible trustee/director
retired as of March 31, 2000, he or she would be entitled to annual
payments totaling the amounts noted above, in the aggregate, from all of
the investment companies in the Delaware Investments family for which he or
she serves as a trustee or director, based on the number of investment
companies in the Delaware Investments family as of that date.
(2) Each independent trustee/director currently receives a total annual
retainer fee of $38,000 for serving as a trustee/director for all 33
investment companies in Delaware Investments, plus $3,143 for each Board
Meeting attended. Prior to May 1, 2000, John H. Durham served as a
trustee/director for 19 investment companies in Delaware Investments and
received a total annual retainer fee of $32,180, plus $1,810 for each Board
Meeting attended. Ann R. Leven, Charles E. Peck, Anthony D. Knerr and
Thomas F. Madison serve on the Cash Reserve audit committee; Ms. Leven is
the chairperson. Members of the audit committee currently receive
additional annual compensation of $5,000 from all investment companies, in
the aggregate, with the exception of the chairperson, who receives $6,000.
54
<PAGE>
GENERAL INFORMATION
The Fund is an open-end management investment company. The Fund's
portfolio of assets is diversified as defined by the Investment Company Act of
1940 (the "1940 Act") and Rule 2a-7 under the 1940 Act. The Fund was created in
1977, organized as a Pennsylvania business trust in 1983, and reorganized as a
Maryland corporation in 1990 and as a Delaware business trust in 1999.
The Manager is the investment manager of the Fund. The Manager also
provides investment management services to certain of the other funds available
from the Delaware Investments family. The Manager, through a separate division,
also manages private investment accounts. While investment decisions of the Fund
are made independently from those of the other funds and accounts, investment
decisions for such other funds and accounts may be made at the same time as
investment decisions of the Fund.
The Manager and its affiliate Delaware International Advisers Ltd. also
manage the investment options for Delaware-Lincoln Choice Plus and Delaware
Medallion (SM) III Variable Annuities. Choice Plus is issued and distributed by
Lincoln National Life Insurance Company. choice Plus offers a variety of
different investment styles managed by leading money managers. Medallion is
issued by Allmerica Financial Life Insurance and Annuity Company (First
Allmerica Financial Life Insurance Company in New York and Hawaii). Delaware
Medallion offers various investment series ranging from domestic equity funds,
international equity and bond funds and domestic fixed income funds. Each
investment series available through Choice Plus and Medallion utilizes an
investment strategy and discipline the same as or similar to one of the Delaware
Investments mutual funds available outside the annuity. See Delaware Group
Premium Fund, in Appendix B.
Access persons and advisory persons of the funds in the Delaware
Investments family, as those terms are defined in SEC Rule 17j-1 under the 1940
Act, who provide services to the Manager, Delaware International Advisers Ltd.
or their affiliates, are permitted to engage in personal securities transactions
subject to the exceptions set forth in Rule 17j-1 and the following general
restrictions and procedures: (1) certain blackout periods apply to personal
securities transactions of those persons; (2) transactions must receive advance
clearance and must be completed on the same day as the clearance is received;
(3) certain persons are prohibited from investing in initial public offerings of
securities and other restrictions apply to investments in private placements of
securities; (4) opening positions by certain covered persons in certain
securities may only be closed-out at a profit after a 60-day holding period has
elapsed; and (5) the Compliance Officer must be informed periodically of all
securities transactions and duplicate copies of brokerage confirmations and
account statements must be supplied to the Compliance Officer.
The Distributor acts as national distributor for the Fund and for the
other mutual funds in the Delaware Investments family.
For the fiscal years ended March 31, 1998, 1999 and 2000, the
Distributor received CDSC payments in the amount of $61,531, $86,668 and
$351,986, respectively, with respect to Class B Shares.
For the fiscal years ended March 31, 1998, 1999 and 2000, the
Distributor received CDSC payments in the amount of $1,187, $5,426 and
$24,825, respectively, with respect to Class C Shares.
The Transfer Agent, an affiliate of the Manager, acts as shareholder
servicing, dividend disbursing and transfer agent for the Fund and for the other
mutual funds in the Delaware Investments family. The Transfer Agent is paid a
fee by the Fund for providing these services consisting of an annual per account
charge of $11.00 plus transaction charges for particular services according to a
schedule. Compensation is fixed each year and approved by the Board of
Trustees, including a majority of the disinterested trustees. The Transfer
Agent also provides accounting services to the Fund. Those services include
performing all functions related to calculating the Fund's net asset value and
providing all financial reporting services, regulatory compliance testing and
the related accounting services. For its services, the Transfer Agent is paid a
fee based on total assets of all funds in the Delaware Investments family for
which it provides such accounting services. Such fee is equal to 0.25%
multiplied by the total amount of assets in the complex for which the Transfer
Agent furnishes accounting services, where such aggregate complex assets are $10
billion or less, and 0.20% of assets if such aggregate complex assets exceed $10
billion. The fees are charged to each fund, including the Fund, on an aggregate
pro-rata basis. The asset-based fee payable to the Transfer Agent is subject to
a minimum fee calculated by determining the total number of investment
portfolios and associated classes.
55
<PAGE>
The Manager and its affiliates own the name "Delaware Group." Under
certain circumstances, including the termination of the Fund's advisory
relationship with the Manager or its distribution relationship with the
Distributor, the Manager and its affiliates could cause the Fund to delete the
words "Delaware Group" from the Fund's name.
The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech Center, Brooklyn, NY
11245 is custodian of the Fund's securities and cash. As custodian for the Fund,
Chase maintains a separate account or accounts for the Fund; receives, holds and
releases portfolio securities on account of the Fund; receives and disburses
money on behalf of the Fund; and collects and receives income and other payments
and distributions on account of the Fund's portfolio securities.
Capitalization
The Fund has a present unlimited authorized number of shares of beneficial
interest with no par value allocated to each Class. The trustees are authorized
to issue different series and classes of shares. At present, only one series has
been issued which offers shares of four classes--Delaware Cash Reserve Fund A
Class, Delaware Cash Reserve Consultant Class, Delaware Cash Reserve B Class and
Delaware Cash Reserve C Class.
Shares have no preemptive rights, are fully transferable and, when issued,
are fully paid and nonassessable.
General expenses of the Fund will be allocated on a pro-rata basis to the
Classes according to asset size, except that expenses of the 12b-1 Plans of
Consultant Class Shares, Class B Shares and Class C Shares will be allocated
solely to those respective Classes. Each Class represents a proportionate
interest in the assets of the Fund, and each has the same voting and other
rights and preferences as the other Class, except that Class A Shares may not
vote on any matter affecting the Consultant Class Shares', Class B Shares' or
Class C Shares' 12b-1 Plans. As a general matter, shareholders of Consultant
Class Shares, Class B Shares and Class C Shares may only vote on matters
affecting the 12b-1 Plan that relates to the Class of shares that they hold.
However, Class B Shares may vote on any proposal to increase materially the fees
to be paid by the Fund under the 12b-1 Plan relating to Consultant Class Shares.
56
<PAGE>
On August 16, 1999, Cash Reserve A Class (which was known as Delaware Cash
Reserve A Class, and known as the Delaware Cash Reserve class from May 1992 to
May 1994 and the original class prior to May 1992) changed its name to Delaware
Cash Reserve Fund A Class; Cash Reserve Consultant Class (which was known as
Delaware Cash Reserve Consultant Class, and known as Delaware Cash Reserve
Consultant class from November 1992 to May 1994, Delaware Cash Reserve
(Institutional) class from May 1992 to November 1992 and the consultant class
prior to May 1992) changed its name to Delaware Cash Reserve Fund Consultant
Class; Cash Reserve Fund B Class (which was known as Delaware Cash Reserve B
Class) changed its name to Delaware Cash Reserve Fund B Class and Cash Reserve C
Class (which was known as Delaware cash Reserve C Class) changed its name to
Delaware Cash Reserve Fund C Class.
On December 15, 1999, the name of Delaware Group Cash Reserve, Inc. was
changed to Delaware Group Cash Reserve.
Noncumulative Voting
Fund shares have noncumulative voting rights which means that the holders
of more than 50% of the shares of the Fund voting for the election of
trustees can elect all the trustees if they choose to do so, and, in such
event, the holders of the remaining shares will not be able to elect any
trustees.
This Part B does not include all of the information contained in the
Registration Statement which is on file with the SEC.
FINANCIAL STATEMENTS
Ernst & Young LLP serves as the independent auditors for Delaware Group
Cash Reserve and, in its capacity as such, audits the annual financial
statements of the Fund. The Fund's Statement of Net Assets, Statement of
Operations, Statement of Changes in Net Assets, Financial Highlights and
Notes to Financial Statements, as well as the report of Ernst & Young LLP,
independent auditors, for the fiscal year ended March 31, 2000, are included
in the Fund's Annual Report to shareholders. The financial statements and
financial highlights, the notes relating thereto and the report of Ernst & Young
LLP listed above are incorporated by reference from the Annual Report into this
Part B.
57
<PAGE>
APPENDIX A--DESCRIPTION OF RATINGS
Bonds
Excerpts from Moody's description of its bond ratings: Aaa--judged
to be the best quality. They carry the smallest degree of investment risk;
Aa--judged to be of high quality by all standards; A--possess favorable
attributes and are considered "upper medium" grade obligations; Baa--considered
as medium grade obligations. Interest payments and principal security appear
adequate for the present but certain protective elements may be lacking or may
be characteristically unreliable over any great length of time; Ba--judged to
have speculative elements; their future cannot be considered as well assured.
Often the protection of interest and principal payments may be moderate and
thereby not well safeguarded during both good and bad times over the future.
Uncertainty of position characterizes bonds in this class; B--generally lack
characteristics of the desirable investment. Assurance of interest and principal
payments or of maintenance of other terms of the contract over any long period
of time may be small; Caa--are of poor standing. Such issues may be in default
or there may be present elements of danger with respect to principal or
interest; Ca--represent obligations which are speculative in a high degree. Such
issues are often in default or have other marked shortcomings; C--the lowest
rated class of bonds, and issues so rated can be regarded as having extremely
poor prospects of ever attaining any real investment standing.
For rating categories Aa to Caa, Moody's includes a 1, 2 or 3
following the rating to designate a high, medium or low rating, respectively
Excerpts from S&P's description of its bond ratings: AAA--highest
grade obligations; extremely strong capacity to pay principal and interest;
AA--also qualify as high grade obligations, and in the majority of instances
differ from AAA issues only in a small degree; very strong capacity to pay
principal and interest; A--strong ability to pay interest and repay principal;
somewhat more susceptible to the adverse effects of changing circumstances and
economic conditions although more susceptible to changes in circumstances;
BBB--regarded as having an adequate capacity to pay interest and repay
principal; normally exhibit adequate protection parameters, but adverse economic
conditions or changing circumstances more likely to lead to weakened capacity
to pay principal and interest than for higher-rated bonds. BB, B, CCC, CC,
C--regarded, on balance, as having significant speculative characteristics. BB
indicates the least degree of speculation and C the highest degree of
speculation. While such debt will likely have some quality and protective
characteristics, these are outweighed by large uncertainties or major risk
exposures to adverse conditions; D--in default.
Plus (+) or minus (-) may be added to ratings from AA to CCC to show
relative standing within the major rating categories.
Commercial Paper
Excerpts from S&P's description of its two highest commercial paper
ratings: A-1--degree of safety regarding timely payment is strong; a plus (+)
sign denotes extremely strong safety characteristics; A-2--capacity for timely
payment is satisfactory; the relative degree of safety is not as high as for
issuers designated A-1.
Excerpts from Moody's description of its two highest commercial paper
ratings: P-1--superior quality; P-2--strong quality.
58
<PAGE>
Excerpts from Duff and Phelps' description of its two highest ratings:
Category 1--High Grade: D-1+ -- Highest certainty of timely payment. Short-term
liquidity, including internal operating factors and/or ready access to
alternative sources of funds, is outstanding, and safety is just below risk-free
U.S. Treasury short-term obligations. D-1--Very high certainty of timely
payment. Liquidity factors are excellent and supported by good fundamental
protection factors. Risk factors are minor. D-1- -- High certainty of timely
payment. Liquidity factors are strong and supported by good fundamental
protection factors. Risk factors are very small. Category 2--Good Grade:
D-2--Good certainty of timely payment. Liquidity factors and company
fundamentals are sound. Although ongoing funding needs may enlarge total
financing requirements, access to capital markets is good. Risk factors are
small.
Excerpts from Fitch IBCA, Inc.'s description of its highest ratings:
F-1+ -- Exceptionally strong quality; F-1 -- Very strong quality; F-2 -- Good
credit quality^.
59
<PAGE>
APPENDIX B--INVESTMENT OBJECTIVES OF THE FUNDS IN THE DELAWARE INVESTMENTS
FAMILY
Following is a summary of the investment objectives of the funds in the
Delaware Investments family:
Delaware Balanced Fund seeks long-term growth by a balance of capital
appreciation, income and preservation of capital. As a balanced fund, the fund
invests at least 25% of its assets in fixed-income securities and the remaining
in equity securities. Delaware Devon Fund seeks current income and capital
appreciation by investing primarily in income-producing common stocks, with a
focus on common stocks the manager believes have the potential for above average
dividend increases over time.
Delaware Trend Fund seeks long-term growth by investing in common
stocks issued by emerging growth companies exhibiting strong capital
appreciation potential. Delaware Technology and Innovation Fund seeks to provide
long-term capital growth by investing primarily in stocks the investment adviser
believes will benefit from technological advances and improvements.
Delaware Small Cap Value Fund seeks capital appreciation by investing
primarily in common stocks whose market values appear low relative to their
underlying value or future potential.
Delaware Growth Opportunities Fund seeks long-term capital growth by
investing in common stocks and securities convertible into common stocks of
companies that have a demonstrated history of growth and have the potential to
support continued growth.
Delaware Decatur Equity Income Fund seeks the highest possible current
income by investing primarily in common stocks that provide the potential for
income and capital appreciation without undue risk to principal. Delaware Growth
and Income Fund seeks long-term growth by investing primarily in securities that
provide the potential for income and capital appreciation without undue risk to
principal. Delaware Blue Chip Fund seeks to achieve long-term capital
appreciation. Current income is a secondary objective. It seeks to achieve these
objectives by investing primarily in equity securities and any securities that
are convertible into equity securities. Delaware Social Awareness Fund seeks to
achieve long-term capital appreciation. It seeks to achieve this objective by
investing primarily in equity securities of medium- to large-sized companies
expected to grow over time that meet the Fund's "Social Criteria" strategy.
Delaware Delchester Fund seeks as high a current income as possible by
investing principally in high yield, high risk corporate bonds, and also in U.S.
government securities and commercial paper. Delaware Strategic Income Fund seeks
to provide investors with high current income and total return by using a
multi-sector investment approach, investing principally in three sectors of the
fixed-income securities markets: high yield, higher risk securities, investment
grade fixed-income securities and foreign government and other foreign
fixed-income securities. Delaware High-Yield Opportunities Fund seeks to provide
investors with total return and, as a secondary objective, high current income.
Delaware Corporate Bond Fund seeks to provide investors with total return by
investing primarily in corporate bonds. Delaware Extended Duration Bond Fund
seeks to provide investors with total return by investing primarily in corporate
bonds
Delaware American Government Bond Fund seeks high current income by
investing primarily in long-term debt obligations issued or guaranteed by the
U.S. government, its agencies or instrumentalities.
Delaware Limited-Term Government Fund seeks high, stable income by
investing primarily in a portfolio of short- and intermediate-term securities
issued or guaranteed by the U.S. government, its agencies or instrumentalities
and instruments secured by such securities.
60
<PAGE>
Delaware Cash Reserve Fund seeks the highest level of income consistent
with the preservation of capital and liquidity through investments in short-term
money market instruments, while maintaining a stable net asset value.
REIT Fund seeks to achieve maximum long-term total return with capital
appreciation as a secondary objective. It seeks to achieve its objectives by
investing in securities of companies primarily engaged in the real estate
industry.
Delaware Tax-Free Money Fund seeks high current income, exempt
from federal income tax, by investing in short-term municipal obligations, while
maintaining a stable net asset value.
Delaware Tax-Free USA Fund seeks high current income exempt from
federal income tax by investing in municipal bonds of geographically-diverse
issuers. Delaware Tax-Free Insured Fund invests in these same types of
securities but with an emphasis on municipal bonds protected by insurance
guaranteeing principal and interest are paid when due. Delaware Tax-Free USA
Intermediate Fund seeks a high level of current interest income exempt from
federal income tax, consistent with the preservation of capital by investing
primarily in municipal bonds.
Delaware Tax-Free Pennsylvania Fund seeks a high level of current
interest income exempt from federal and, to the extent possible, certain
Pennsylvania state and local taxes, consistent with the preservation of capital.
Delaware Tax-Free New Jersey Fund seeks a high level of current interest income
exempt from federal income tax and New Jersey state and local taxes, consistent
with preservation of capital. Delaware Tax-Free Ohio Fund seeks a high level of
current interest income exempt from federal income tax and Ohio state and local
taxes, consistent with preservation of capital.
Foundation Funds are "fund of funds" which invest in other funds in the
Delaware Investments family (referred to as "Underlying Funds"). Foundation
Funds Delaware Income Portfolio seeks a combination of current income and
preservation of capital with capital appreciation by investing primarily in a
mix of fixed income and domestic equity securities, including fixed income and
domestic equity Underlying Funds. Foundation Funds Delaware Balanced Portfolio
seeks capital appreciation with current income as a secondary objective by
investing primarily in domestic equity and fixed income securities, including
domestic equity and fixed income Underlying Funds. Foundation Funds Delaware
Growth Portfolio seeks long-term capital growth by investing primarily in equity
securities, including equity Underlying Funds, and, to a lesser extent, in fixed
income securities, including fixed-income Underlying Funds.
Delaware International Equity Fund seeks to achieve long-term growth
without undue risk to principal by investing primarily in international
securities that provide the potential for capital appreciation and income.
Delaware Global Bond Fund seeks to achieve current income consistent with the
preservation of principal by investing primarily in global fixed-income
securities that may also provide the potential for capital appreciation.
Delaware Global Equity Fund seeks to achieve long-term total return by investing
in global securities that provide the potential for capital appreciation and
income. Delaware Emerging Markets Fund seeks long-term capital appreciation by
investing primarily in equity securities of issuers located or operating in
emerging countries.
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<PAGE>
Delaware U.S. Growth Fund seeks to maximize capital appreciation by
investing in companies of all sizes which have low dividend yields, strong
balance sheets and high expected earnings growth rates relative to their
industry. Delaware Overseas Equity Fund seeks to maximize total return (capital
appreciation and income), principally through investments in an internationally
diversified portfolio of equity securities. Delaware New Pacific Fund seeks
long-term capital appreciation by investing primarily in companies which are
domiciled in or have their principal business activities in the Pacific Basin.
Delaware Group Premium Fund offers various funds available exclusively
as funding vehicles for certain insurance company separate accounts. Balanced
Series seeks a balance of capital appreciation, income and preservation of
capital. As a "balanced" fund, the Series invests at least 25% of its assets in
fixed-income securities and the remainder primarily in equity securities.
Capital Reserves Series seeks a high stable level of current income while
minimizing fluctuations in principal by investing in a diversified portfolio of
short- and intermediate-term securities. Cash Reserve Series is a money market
fund which seeks the highest level of income consistent with preservation of
capital and liquidity through investments in short-term money market
instruments. Convertible Securities Series--seeks a high level of total return
on its assets through a combination of capital appreciation and current income.
The Series intends to pursue its investment objective by investing primarily in
convertible securities. Devon Series seeks current income and capital
appreciation. The Series will seek to achieve its objective by investing
primarily in income-producing common stocks, with a focus on common stocks that
the investment manager believes have the potential for above-average dividend
increases over time. Emerging Markets Series seeks to achieve long-term capital
appreciation. The Series seeks to achieve its objective by investing primarily
in equity securities of issuers located or operating in emerging countries.
Global Bond Series seeks current income consistent with preservation of
principal by investing primarily in fixed-income securities that may also
provide the potential for capital appreciation. The Series will invest in
fixed-income securities of issuers from at least three different countries, one
of which may be the United States. Growth and Income Series seeks the highest
possible total rate of return by selecting issues that exhibit the potential for
capital appreciation while providing higher than average dividend income. Growth
Opportunities Series seeks long-term capital appreciation by investing its
assets in a diversified portfolio of securities exhibiting the potential for
significant growth. High Yield Series seeks total return and, as a secondary
objective, high current income. It seeks to achieve its objective by investing
primarily in high-yield corporate bonds. These are commonly known as junk bonds.
An investment in this Series may involve greater risks than an investment in a
portfolio comprised primarily of investment grade bonds. International Equity
Series seeks long-term growth without undue risk to principal by investing
primarily in equity securities of foreign issuers providing the potential for
capital appreciation and income. REIT Series seeks to achieve maximum long-term
total return. Capital appreciation is a secondary objective. It seeks to achieve
its objectives by investing in securities of companies primarily engaged in the
real estate industry. Select Growth Series seeks long-term capital appreciation.
The Series attempts to achieve its investment objective by investing primarily
in equity securities of companies of all sizes which the manager believes have
the potential for high earnings growth. Small Cap Value Series seeks capital
appreciation by investing primarily in small cap common stocks whose market
value appears low relative to their underlying value or future earnings and
growth potential. Social Awareness Series seeks to achieve long-term capital
appreciation. The Series seeks to achieve its objective by investing primarily
in equity securities of medium- to large-sized companies expected to grow over
time that meet the Series' "Social Criteria" strategy. Strategic Income Series
seeks high current income and total return. The Series seeks to achieve its
objective by using a multi-sector investment approach, investing primarily in
three sectors of the fixed-income securities markets: high-yield, higher risk
securities; investment grade fixed-income securities; and foreign government and
other foreign fixed-income securities. Trend Series seeks long-term capital
appreciation by investing primarily in small cap common stocks and convertible
securities of emerging and other growth-oriented companies. U.S. Growth Series
seeks to maximize capital appreciation. The Series seeks to achieve its
objective by investing primarily in stocks of companies of all sizes. We look
for stocks with low dividend yields, strong balance sheets and high expected
earnings growth rates as compared to other companies in the same industry.
Delaware U.S. Government Securities Fund seeks to provide a high
level of current income consistent with the prudent investment risk by investing
in U.S. Treasury bills, notes, bonds, and other obligations issued or
unconditionally guaranteed by the full faith and credit of the U.S. Treasury,
and repurchase agreements fully secured by such obligations.
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<PAGE>
Delaware Tax-Free Arizona Insured Fund seeks to provide a high level of
current income exempt from federal income tax and the Arizona personal income
tax, consistent with the preservation of capital. Delaware Minnesota Insured
Fund seeks to provide a high level of current income exempt from federal income
tax and the Minnesota personal income tax, consistent with the preservation of
capital.
Delaware Tax-Free Minnesota Intermediate Fund seeks to provide a high
level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with preservation of capital. The Fund seeks to
reduce market risk by maintaining an average weighted maturity from five to ten
years.
Delaware Tax-Free California Insured Fund seeks to provide a high level
of current income exempt from federal income tax and the California personal
income tax, consistent with the preservation of capital. Delaware Tax-Free
Florida Insured Fund seeks to provide a high level of current income exempt from
federal income tax, consistent with the preservation of capital. The Fund will
seek to select investments that will enable its shares to be exempt from the
Florida intangible personal property tax. Delaware Tax-Free Florida Fund seeks
to provide a high level of current income exempt from federal income tax,
consistent with the preservation of capital. The Fund will seek to select
investments that will enable its shares to be exempt from the Florida intangible
personal property tax. Delaware Tax-Free Kansas Fund seeks to provide a high
level of current income exempt from federal income tax, the Kansas personal
income tax and the Kansas intangible personal property tax, consistent with the
preservation of capital. Delaware Tax-Free Missouri Insured Fund seeks to
provide a high level of current income exempt from federal income tax and the
Missouri personal income tax, consistent with the preservation of capital.
Delaware Tax-Free New Mexico Fund seeks to provide a high level of current
income exempt from federal income tax and the New Mexico personal income tax,
consistent with the preservation of capital. Delaware Tax-Free Oregon Insured
Fund seeks to provide a high level of current income exempt from federal income
tax and the Oregon personal income tax, consistent with the preservation of
capital.
Delaware Tax-Free Arizona Fund seeks to provide a high level of current
income exempt from federal income tax and the Arizona personal income tax,
consistent with the preservation of capital. Delaware Tax-Free California Fund
seeks to provide a high level of current income exempt from federal income tax
and the California personal income tax, consistent with the preservation of
capital. Delaware Tax-Free Iowa Fund seeks to provide a high level of current
income exempt from federal income tax and the Iowa personal income tax,
consistent with the preservation of capital. Delaware Tax-Free Idaho Fund seeks
to provide a high level of current income exempt from federal income tax and the
Idaho personal income tax, consistent with the preservation of capital. Delaware
Minnesota High-Yield Municipal Bond Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal income
tax primarily through investment in medium and lower grade municipal
obligations. Delaware National High-Yield Municipal Fund seeks to provide a high
level of income exempt from federal income tax, primarily through investment in
medium and lower grade municipal obligations. Delaware Tax-Free New York Fund
seeks to provide a high level of current income exempt from federal income tax
and the personal income tax of the state of New York and the city of New York,
consistent with the preservation of capital. Delaware Tax-Free Wisconsin Fund
seeks to provide a high level of current income exempt from federal income tax
and the Wisconsin personal income tax, consistent with the preservation of
capital. Delaware Montana Municipal Bond Fund seeks as high a level of current
income exempt from federal income tax and from the Montana personal income tax,
as is consistent with preservation of capital.
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<PAGE>
Delaware Tax-Free Colorado Fund seeks to provide a high level of
current income exempt from federal income tax and the Colorado personal income
tax, consistent with the preservation of capital.
Delaware Select Growth Fund seeks long-term capital appreciation, which
the Fund attempts to achieve by investing primarily in equity securities
believed to have the potential for high earnings growth. Although the Fund, in
seeking its objective, may receive current income from dividends and interest,
income is only an incidental consideration in the selection of the Fund's
investments. Delaware Growth Stock Fund has an objective of long-term capital
appreciation. The Fund seeks to achieve its objective from equity securities
diversified among individual companies and industries. Delaware Tax-Efficient
Equity Fund seeks to obtain for taxable investors a high total return on an
after-tax basis. The Fund will attempt to achieve this objective by seeking to
provide a high long-term after-tax total return through managing its portfolio
in a manner that will defer the realization of accrued capital gains and
minimize dividend income.
Delaware Tax-Free Minnesota Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal income
tax, consistent with the preservation of capital. Delaware Tax-Free North Dakota
Fund seeks to provide a high level of current income exempt from federal income
tax and the North Dakota personal income tax, consistent with the preservation
of capital.
For more complete information about any of the funds in the Delaware
Investments family, including charges and expenses, you can obtain a prospectus
from the Distributor. Read it carefully before you invest or forward funds.
Each of the summaries above is qualified in its entirety by the
information contained in the funds' prospectus(es).
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<PAGE>
PART C - Other Information
(Continued)
PART C
Other Information
Item 23. Exhibits
(a) Agreement and Declaration of Trust
(1) Agreement and Declaration of Trust (December
17, 1998) incorporated into this filing by
reference to Post-Effective Amendment No. 45
filed December 14, 1999.
(2) Certificate of Trust (December 17, 1998)
incorporated into this filing by reference
to Post-Effective Amendment No. 45 filed
December 14, 1999.
(b) By-Laws. By-Laws (December 17, 1998) incorporated
into this filing by reference to Post-Effective
Amendment No. 45 filed December 14, 1999.
(c) Copies of All Instruments Defining the Rights of
Holders
(1) Agreement and Declaration of Trust.
Articles III, V and VI of Agreement and
Declaration of Trust which is incorporated
into this filing by reference to
Post-Effective Amendment No. 45 filed
December 14, 1999.
(2) By-Laws. Article II of the By-Laws which is
incorporated into this filing by reference
to Post-Effective Amendment No. 45 filed
December 14, 1999.
(d) Investment Management Agreement. Form of Investment
Management Agreement (December 1999) between Delaware
Management Company, (a series of Delaware Management
Business Trust) and the Registrant incorporated into
this filing by reference to Post-Effective Amendment
No. 45 filed December 14, 1999.
(e) (1) Distribution Agreement
(i) Form of Distribution Agreement
between Delaware Distributors, L.P.
and the Registrant dated April 3,
1995 incorporated into this filing
by reference to Post-Effective
Amendment No. 44 filed May 28, 1999.
(ii) Form of Amendment No. 1 to
Distribution Agreement between
Delaware Distributors, L.P.
and the Registrant dated November
29, 1995 incorporated into this
filing by reference to
Post-Effective Amendment No. 44
filed May 28, 1999.
<PAGE>
PART C - Other Information
(Continued)
(2) Administration and Service Agreement. Form
of Administration and Service Agreement (as
amended November 1995) incorporated into
this filing by reference to Post-Effective
Amendment No. 39 filed November 20, 1995.
(3) Dealer's Agreement. Form of Dealer's
Agreement (as amended November 1995)
incorporated into this filing by reference
to Post-Effective Amendment No. 39 filed
November 20, 1995.
(4) Mutual Fund Agreement. Mutual Fund Agreement
for the Delaware Group of Funds (as amended
November 1995) (Module) incorporated into
this filing by reference to Post-Effective
Amendment No. 40 filed May 30, 1996.
(f) Bonus, Profit Sharing, Pension Contracts.
Inapplicable
(g) Custodian Agreements
(1) Form of Custodian Agreement (Module) between
The Chase Manhattan Bank and the Registrant
incorporated into this filing by reference
to Post-Effective Amendment No. 44 filed May
28, 1999.
(2) Form of Amendment to Custodian Agreement
between The Chase Manhattan Bank and the
Registrant incorporated into this filing by
reference to Post-Effective Amendment No. 44
filed May 28, 1999.
(3) Form of Letter adding Registrant to the
Custodian Agreement incorporated into this
filing by reference to Post-Effective
Amendment No. 44 filed May 28, 1999.
(h) Other Material Contracts
(1) Form of Shareholders Services Agreement
between Delaware Service Company and the
Registrant on behalf of the Fund
incorporated into this filing by reference
to Post-Effective Amendment No. 33 filed May
30, 1991.
(2) Form of Fund Accounting Agreement (August
19, 1996) between Delaware Service Company,
Inc. and the Registrant on behalf of the
Fund incorporated into this filing by
reference to Post-Effective Amendment No. 41
filed May 29, 1997, Post-Effective Amendment
No. 42 filed May 29, 1998 and Post-Effective
Amendment No. 43 filed March 26, 1999.
<PAGE>
PART C - Other Information
(Continued)
(i) Opinion of Counsel. Incorporated into this filing by
reference to Post-Effective Amendment No. 45 filed
December 14, 1999.
(j) Consent of Auditors. Attached as Exhibit.
(k) Inapplicable.
(l) Initial Capital. Incorporated into this filing by
reference to Post-Effective Amendment No. 15 filed
May 16, 1983.
(m)** Plans under Rule 12b-1
(1) Form of Plan under Rule 12b-1 for Class B
(November 29, 1995) incorporated into this
filing by reference to Post-Effective
Amendment No. 44 filed May 28, 1999.
(2) Form of Plan under Rule 12b-1 for Class C
(November 29, 1995) incorporated into this
filing by reference to Post-Effective
Amendment No. 44 filed May 28, 1999.
(3) Form of Plan under Rule 12b-1 for Consultant
Class (November 29, 1995) incorporated into
this filing by reference to Post-Effective
Amendment No. 44 filed May 28, 1999.
(n-o) Inapplicable.
(p) Code of Ethics. Attached as Exhibit
(q) Other: Trustees' Power of Attorney. Incorporated
into this filing by reference to Post-Effective No.
22 to the Registration Statement for Delaware Group
Global & International Funds filed November 22, 1999.
Item 24. Persons Controlled by or under Common Control with Registrant.
None.
Item 25. Indemnification. Article VI of the Bylaws which is
incorporated into this filing by reference to Post-Effective
Amendment No. 45 filed December 14, 1999.
** Relates to Registrant's Delaware Cash Reserve B Class, Delaware Cash
Reserve C Class and Delaware Cash Reserve Consultant Class only.
<PAGE>
Item 26. Business and Other Connections of Investment Adviser.
Delaware Management Company (the "Manager"), a series of
Delaware Management Business Trust, serves as investment manager to the
Registrant and also serves as investment manager or sub-adviser to certain of
the other funds in the Delaware Investments family (Delaware Group Equity Funds
I, Delaware Group Equity Funds II, Delaware Group Equity Funds III, Delaware
Group Equity Funds IV, Delaware Group Equity Funds V, Delaware Group Government
Fund, Delaware Group Income Funds, Delaware Group Limited-Term Government Funds,
Delaware Group Tax-Free Fund, Delaware Group State Tax-Free Fund, Delaware Group
Tax-Free Money Fund, Delaware Group Premium Fund, Delaware Group Global &
International Funds, Delaware Group Adviser Funds, Delaware Group Dividend and
Income Fund, Inc., Delaware Group Global Dividend and Income Fund, Inc.,
Delaware Group Foundation Funds, Voyageur Intermediate Tax-Free Funds, Voyageur
Tax-Free Funds, Voyageur Funds, Voyageur Insured Funds, Voyageur Investment
Trust, Voyageur Mutual Funds, Voyageur Mutual Funds II, Voyageur Mutual Funds
III, Voyageur Arizona Municipal Income Fund, Inc., Voyageur Colorado Insured
Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income Fund,
Voyageur Minnesota Municipal Fund, Voyageur Minnesota Municipal Fund II, Inc.
and Voyageur Minnesota Municipal Fund III, Inc.). In addition, certain officers
of the Manager also serve as trustees of the other funds in the Delaware
Investments family, and certain officers are also officers of these other funds.
A company indirectly owned by the Manager's indirect parent company acts as
principal underwriter to the mutual funds in the Delaware Investments family
(see Item 27 below) and another such company acts as the shareholder services,
dividend disbursing, accounting servicing and transfer agent for all of the
mutual funds in the Delaware Investments family.
<PAGE>
The following persons serving as officers of the Manager have held
the following positions during the past two years. The business address of
each is 1818 Market Street, Philadelphia, PA 19103.
<TABLE>
<CAPTION>
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Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Charles E. Haldeman, Jr.(1) Chief Executive Officer of Delaware Management Company (a series of Delaware Management
Business Trust); President, Chief Executive Officer and Director of Delaware Management
Holdings, Inc.; Chief Executive Officer and Director of DMH Corp.; Chief Executive Officer
and Director of Delvoy, Inc.; Chief Executive Officer and Director of Delaware Management
Company, Inc.; Chief Executive Officer and Trustee of Delaware Management Business Trust,
Director of Delaware Service Company, Inc.; Director of Delaware Capital Management, Inc.;
Director of Retirement Financial Services, Inc.; Director of Delaware Distributors, Inc.;
Chairman and Director of Delaware International Advisers Ltd.; Chief Executive Officer of
Delaware General Management, Inc.
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David K. Downes President of Delaware Management Company (a series of Delaware Management Business Trust);
President and Director of Delaware Management Company, Inc.; President, Chief Executive
Officer and Director of Delaware Capital Management, Inc.; Chairman, President, Chief
Executive Officer and Director of Delaware Service Company, Inc.; President, Chief
Operating Officer, Chief Financial Officer and Director of Delaware International Holdings
Ltd.; President, Chief Operating Officer and Director of Delaware General Management, Inc.;
Chairman and Director of Delaware Management Trust Company; Chairman and Director of
Retirement Financial Services, Inc.; Executive Vice President, Chief Operating Officer,
Chief Financial Officer of Delaware Management Holdings, Inc.; Executive Vice President,
Chief Operating Officer, Chief Financial Officer of Founders CBO Corporation; Executive
Vice President, Chief Operating Officer, Chief Financial Officer of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Executive Vice President, Chief
Operating Officer, Chief Financial Officer and Director of DMH Corp.; Executive Vice
President, Chief Operating Officer, Chief Financial Officer and Director of Delaware
Distributors, Inc.; Executive Vice President, Chief Operating Officer and Chief Financial
Officer of Delaware Distributors, L.P.; Executive Vice President, Chief Operating Officer,
Chief Financial Officer and Director of Founders Holdings, Inc.; Executive Vice President,
Chief Operating Officer, Chief Financial Officer and Director of Delvoy, Inc.; Executive
Vice President, Chief Operating Officer, Chief Financial Officer and Trustee of Delaware
Management Business Trust; Director of Delaware International Advisers Ltd.; President,
Chief Executive Officer, Chief Financial Officer and Trustee/Director of each fund in the
Delaware Investments family
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton Place, Newtown
Square, PA
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John C. E. Campbell Executive Vice President/Global Marketing & Client Services of Delaware Management Company
(a series of Delaware Management Business Trust); Executive Vice President/Global
Marketing & Client Services of Delaware Investment Advisers (a series of Delaware
Management Business Trust); Director of Delaware International Advisers Ltd.
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William E. Dodge (2) Executive Vice President and Chief Investment Officer, DMC - Equity of Delaware Management
Company (a series of Delaware Management Business Trust); Executive Vice President of
Delaware Management Business Trust; President and Chief Investment Officer, DIA - Equity of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Executive
Vice President of Delaware Capital Management, Inc.
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</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Richard J. Flannery Executive Vice President and General Counsel of Delaware Management Company (a series of
Delaware Management Business Trust); Executive Vice President and General Counsel of
Delaware Management Holdings, Inc.; Executive Vice President and General Counsel of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Executive
Vice President and General Counsel of Founders CBO Corporation; Executive Vice
President/General Counsel and Director of Delaware International Holdings Ltd.; Executive
Vice President/General Counsel and Director of Founders Holdings, Inc.; Executive Vice
President/General Counsel and Director of Delvoy, Inc.; Executive Vice President/General
Counsel and Director of DMH Corp.; Executive Vice President/General Counsel and Director of
Delaware Management Company, Inc.; Executive Vice President/General Counsel and Trustee of
Delaware Management Business Trust; Executive Vice President/General Counsel and Director
of Delaware Service Company, Inc.; Executive Vice President/General Counsel and Director of
Delaware Capital Management, Inc.; Executive Vice President/General Counsel and Director of
Retirement Financial Services, Inc.; Executive Vice President/General Counsel and Director
of Delaware Distributors, Inc.; Executive Vice President/General Counsel of Delaware
Distributors, L.P.; Executive Vice President/General Counsel and Director of Delaware
Management Trust Company; Executive Vice President/General Counsel and Director of Delaware
General Management, Inc.; Director of Delaware International Advisers Ltd.; Director of
HYPPCO Finance Company Ltd.; Executive Vice President and General Counsel of each fund in
the Delaware Investments family
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverson, PA; Director
and Member of Executive Committee of Stonewall Links, Inc. since 1991, Bulltown Rd.,
Elverson, PA
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Richard G. Unruh Executive Vice President/Chief Investment Officer of Delaware Management Company (a series
of Delaware Management Business Trust); Chief Executive Officer/Chief Investment Officer of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Executive
Vice President and Trustee of Delaware Management Business Trust; Executive Vice President
of Delaware Management Holdings, Inc.; Executive Vice President of Delaware Capital
Management, Inc.; Director of Delaware International Advisers Ltd.; Executive Vice
President and Chief Investment Officer, Equity for each fund in the Delaware Investments
family.
Board of Directors, Chairman of Finance Committee, Keystone Insurance Company since 1989,
2040 Market Street, Philadelphia, PA; Board of Directors, Chairman of Finance Committee,
AAA Mid Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia, PA; Board of
Directors, Metron, Inc. since 1995, 11911 Freedom Drive, Reston, VA
- -----------------------------------------------------------------------------------------------------------------------------------
Douglas L. Anderson Senior Vice President/Operations of Delaware Management Company (a series of Delaware
Management Business Trust); Senior Vice President/Operations of Delaware Service Company,
Inc.; Senior Vice President/Operations of Retirement Financial Services, Inc.; Senior Vice
President/Operations and Director of Delaware Management Trust Company.
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Michael P. Bishof Senior Vice President/Investment Accounting of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Investment Accounting of
Delaware Service Company, Inc.; Senior Vice President/Investment Accounting of Delaware
Capital Management, Inc.; Senior Vice President/Investment Accounting of Delaware
Distributors, L.P.; Senior Vice President/Investment Accounting of Founders Holdings, Inc.;
Senior Vice President and Treasurer/ Investment Accounting of Delaware Investment Advisers
(a series of Delaware Management Business Trust); Senior Vice President/Manager of
Investment Accounting of Delaware International Holdings, Inc.; Senior Vice President and
Assistant Treasurer of Founders CBO Corporation; Senior Vice President and Treasurer of
each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley Senior Vice President/Compliance Director of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Compliance Director of Delaware
Management Holdings, Inc.; Senior Vice President/Compliance Director of DMH Corp.; Senior
Vice President/Compliance Director of Delvoy, Inc.; Senior Vice President/Compliance
Director of Delaware Management Company, Inc.; Senior Vice President/Compliance Director of
Delaware Management Business Trust; Senior Vice President/Compliance Director of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Senior Vice
President/Compliance Director of Delaware Service Company, Inc.; Senior Vice
President/Compliance Director of Delaware Capital Management, Inc.; Senior Vice
President/Compliance Director of Retirement Financial Services, Inc.; Senior Vice
President/Compliance Director and Assistant Secretary of Delaware Management Trust Company;
Senior Vice President/Compliance Director of Delaware Distributors, Inc.; Senior Vice
President/Compliance Director of Delaware Distributors, L.P.; Senior Vice
President/Compliance Director of Delaware General Management, Inc.; Senior Vice
President/Compliance Director of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Robert J. DiBraccio Senior Vice President/Head of Equity Trading of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Head of Equity Trading of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Senior Vice
President/Head of Equity Trading of Delaware Capital Management, Inc.
- -----------------------------------------------------------------------------------------------------------------------------------
John B. Fields Senior Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Trustee of Delaware Management Business Trust; Senior
Vice President/Senior Portfolio Manager of Delaware Investment Advisers (a series of
Delaware Management Business Trust); Senior Vice President/Senior Portfolio Manager of
Delaware Capital Management, Inc.; Senior Vice President/Senior Portfolio Manager of each
fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Gerald S. Frey Senior Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Senior Portfolio Manager of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Senior Vice
President/Senior Portfolio Manager of Delaware Capital Management, Inc.; Senior Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Susan L. Hanson Senior Vice President/Global Marketing & Client Services of Delaware Management Company (a
series of Delaware Management Business Trust); Senior Vice President/Global Marketing &
Client Services of Delaware Investment Advisers (a series of Delaware Management Business
Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Joseph H. Hastings Senior Vice President/Corporate Controller and Treasurer of Delaware Management Company (a
series of Delaware Management Business Trust); Senior Vice President/Corporate Controller
and Treasurer of Delaware Management Holdings, Inc.; Senior Vice President/Corporate
Controller and Treasurer of DMH Corp.; Senior Vice President/Corporate Controller and
Treasurer of Delaware Management Company, Inc.; Senior Vice President/Corporate Controller
and Treasurer of Delaware Distributors, L.P.; Senior Vice President/Corporate Controller
and Treasurer of Delaware Distributors, Inc.; Senior Vice President/Corporate Controller
and Treasurer of Delaware Service Company, Inc.; Senior Vice President/Corporate Controller
and Treasurer of Delaware Capital Management, Inc.; Senior Vice President/Corporate
Controller and Treasurer of Delaware International Holdings Ltd.; Senior Vice
President/Corporate Controller and Treasurer of Delvoy, Inc.; Senior Vice
President/Corporate Controller and Treasurer of Founders Holdings, Inc.; Senior Vice
President/Corporate Controller and Treasurer of Delaware Management Business Trust; Senior
Vice President/Corporate Controller and Treasurer of Delaware General Management, Inc.;
Executive Vice President/Chief Financial Officer/Treasurer of Delaware Management Trust
Company; Chief Financial Officer of Retirement Financial Services, Inc.; Senior Vice
President/Assistant Treasurer of Founders CBO Corporation; Senior Vice President/Corporate
Controller of Delaware Investment Advisers (a series of Delaware Management Business
Trust); Senior Vice President/Corporate Controller of each fund in the Delaware Investments
family
- -----------------------------------------------------------------------------------------------------------------------------------
Joanne O. Hutcheson Senior Vice President/Human Resources of Delaware Management Company (a series of Delaware
Management Business Trust); Senior Vice President/Human Resources of Delaware Management
Holdings, Inc.; Senior Vice President/Human Resources of DMH Corp.; Senior Vice
President/Human Resources of Delvoy, Inc.; Senior Vice President/Human Resources of
Delaware Management Company, Inc.; Senior Vice President/Human Resources of Delaware
Management Business Trust; Senior Vice President/Human Resources of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Senior Vice President/Human
Resources of Delaware Service Company, Inc.; Senior Vice President/Human Resources of
Delaware Capital Management, Inc.; Senior Vice President/Human Resources of Retirement
Financial Services, Inc.; Senior Vice President/Human Resources of Delaware Management
Trust Company; Senior Vice President/Human Resources of Delaware Distributors, Inc.; Senior
Vice President/Human Resources of Delaware Distributors, L.P.; Senior Vice President/Human
Resources of Delaware General Management, Inc.; Senior Vice President/Human Resources of
each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Karina J. Istvan Senior Vice President/Strategic Planning of Delaware Management Company (a series of
Delaware Management Business Trust); Senior Vice President/Strategic Planning of Delaware
Management Holdings, Inc.; Senior Vice President/Strategic Planning of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Senior Vice President/Strategic
Planning of Delaware Service Company, Inc.; Senior Vice President/Strategic Planning of
Delaware Capital Management, Inc.; Senior Vice President/Strategic Planning of Retirement
Financial Services, Inc.; Senior Vice President/Strategic Planning of Delaware Management
Trust Company; Senior Vice President/Strategic Planning of Delaware Distributors, L.P.;
Senior Vice President/Strategic Planning of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Richelle S. Maestro Senior Vice President, Secretary and Deputy General Counsel of Delaware Management Company
(a series of Delaware Management Business Trust); Senior Vice President, Secretary and
Deputy General Counsel of Delaware Management Holdings, Inc.; Senior Vice President,
Secretary and Deputy General Counsel of DMH Corp.; Senior Vice President, Secretary and
Deputy General Counsel of Delvoy, Inc.; Senior Vice President, Secretary and Deputy General
Counsel of Delaware Management Company, Inc.; Senior Vice President, Secretary and Deputy
General Counsel of Delaware Management Business Trust; Senior Vice President, Secretary and
Deputy General Counsel of Delaware Investment Advisers (a series of Delaware Management
Business Trust); Senior Vice President, Secretary and Deputy General Counsel of Delaware
Service Company, Inc.; Senior Vice President, Secretary and Deputy General Counsel of
Delaware Capital Management, Inc.; Senior Vice President, Secretary and Deputy General
Counsel of Retirement Financial Services, Inc.; Senior Vice President, Secretary and Deputy
General Counsel of Delaware Distributors, Inc.; Senior Vice President, Secretary and Deputy
General Counsel of Delaware Distributors, L.P.; Senior Vice President and Secretary of
Delaware International Holdings Ltd.; Senior Vice President, Secretary and Deputy General
Counsel of Founders Holdings, Inc.; Secretary of Founders CBO Corporation; Senior Vice
President, Secretary and Deputy General Counsel of Delaware Management Trust Company;
Senior Vice President, Secretary and Deputy General Counsel of Delaware General Management,
Inc.; Senior Vice President, Assistant Secretary and Deputy General Counsel of each fund in
the Delaware Investments family
General Partner of Tri-R Associates since 1989, 10001 Sandmeyer Lane, Philadelphia, PA.
- -----------------------------------------------------------------------------------------------------------------------------------
Eric E. Miller Senior Vice President/Deputy General Counsel and Assistant Secretary of Delaware Management
Company (a series of Delaware Management Business Trust); Senior Vice President/Deputy
General Counsel and Assistant Secretary of Delaware Management Holdings, Inc.; Senior Vice
President/Deputy General Counsel and Assistant Secretary of DMH Corp.; Senior Vice
President/Deputy General Counsel and Assistant Secretary of Delvoy, Inc.; Senior Vice
President/Deputy General Counsel and Assistant Secretary of Delaware Management Company,
Inc.; Senior Vice President/Deputy General Counsel and Assistant Secretary of Delaware
Management Business Trust; Senior Vice President/Deputy General Counsel and Assistant
Secretary of Delaware Investment Advisers (a series of Delaware Management Business Trust);
Senior Vice President/Deputy General Counsel and Assistant Secretary of Delaware Service
Company, Inc.; Senior Vice President/Deputy General Counsel and Assistant Secretary of
Delaware Capital Management, Inc.; Senior Vice President/Deputy General Counsel and
Assistant Secretary of Retirement Financial Services, Inc.; Senior Vice President/Deputy
General Counsel and Assistant Secretary of Delaware Distributors, Inc.; Senior Vice
President/Deputy General Counsel and Assistant Secretary of Delaware Distributors, L.P.;
Senior Vice President/Deputy General Counsel and Assistant Secretary of Founders Holdings,
Inc.; Senior Vice President/Deputy General Counsel and Assistant Secretary of Delaware
General Management, Inc.; Senior Vice President/Deputy General Counsel and Secretary of
each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Paul M. Ross Senior Vice President/Global Marketing & Client Services of Delaware Management Company (a
series of Delaware Management Business Trust); Senior Vice President/Global Marketing &
Client Services of Delaware Investment Advisers (a series of Delaware Management Business
Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
James L. Shields Senior Vice President, Chief Information Officer of Delaware Management Company (a series
of Delaware Management Business Trust); Senior Vice President, Chief Information Officer of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Senior Vice
President, Chief Information Officer of Delaware Service Company, Inc.; Senior Vice
President, Chief Information Officer of Delaware Capital Management Company, Inc.; Senior
Vice President, Chief Information Officer of Retirement Financial Services, Inc.; Senior
Vice President, Chief Information Officer of Delaware Distributors, L.P.
- -----------------------------------------------------------------------------------------------------------------------------------
Gary T. Abrams Vice President/Equity Trader of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Equity Trader of Delaware Investment Advisers (a
series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Christopher S. Adams Vice President/Equity Analyst of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Equity Analyst of Delaware Investment Advisers
(a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Damon J. Andres Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio
Manager of Delaware Capital Management, Inc.; Vice President/Portfolio Manager of each
fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Robert L. Arnold Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of Delaware Capital Management, Inc., Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Marshall T. Bassett
Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio
Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Christopher S. Beck Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
Trustee of New Castle County Pension Board since October 1992, Wilmington, DE
- -----------------------------------------------------------------------------------------------------------------------------------
Richard E. Biester
Vice President/Trading Operations of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Trading Operations of Delaware Investment
Advisers (a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Vice President/Senior Equity Trader of Delaware Management Company (a series of Delaware
Vincent A. Brancaccio Management Business Trust); Vice President/Senior Equity Trader of Delaware Investment
Advisers (a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Michael P. Buckley Vice President/Portfolio Manager and Senior Municipal Bond Analyst of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
and Senior Municipal Bond Analyst of Delaware Investment Advisers (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager and Senior Municipal Bond
Analyst of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
MaryEllen M. Carrozza Vice President/Client Services of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Client Services of Delaware Investment Advisers
(a series of Delaware Management Business Trust); Vice President/Client Services of
Delaware Distributors, Inc.; Vice President/Client Services of Delaware General
Management, Inc.; Vice President/Client Services of each fund in the Delaware Investments
family
- -----------------------------------------------------------------------------------------------------------------------------------
Stephen R. Cianci Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio
Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Mitchell L. Conery Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Timothy G. Connors Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager for each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of Delaware Capital Management, Inc.; Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
George E. Deming Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Director of Delaware
International Advisers Ltd.; Vice President/Senior Portfolio Manager of each fund in the
Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
James Paul Dokas Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Michael J. Dugan Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Roger A. Early Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Senior Portfolio Manager of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Joel A. Ettinger Vice President/Taxation of Delaware Management Company (a series of Delaware Management
Business Trust);Vice President/Taxation of Delaware Management Holdings, Inc.; Vice
President/Taxation of DMH Corp.; Vice President/Taxation of Delvoy, Inc.; Vice
President/Taxation of Delaware Management Company, Inc.; Vice President/Taxation of
Delaware Management Business Trust; Vice President/Taxation of Delaware Investment Advisers
(a series of Delaware Management Business Trust);Vice President/Taxation of Delaware
Service Company, Inc.; Vice President/Taxation of Delaware Capital Management, Inc.; Vice
President/Taxation of Retirement Financial Services, Inc.; Vice President/Taxation of
Delaware Distributors, Inc.; Vice President/Taxation of Delaware Distributors, L.P.; Vice
President/Taxation of Founders Holdings, Inc.; Vice President/Taxation of Founders CBO
Corporation; Vice President/Taxation of Delaware General Management, Inc.; Vice
President/Taxation of each fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Joseph Fiorilla Vice President/Senior Business Analyst of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Business Analyst of Delaware Investment
Advisers (a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Charles E. Fish Vice President/Senior Equity Trader of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Equity Trader of Delaware Investment
Advisers (a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
James A. Furgele Vice President/Investment Accounting of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Investment Accounting of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Investment
Accounting of Delaware Service Company, Inc.; Vice President/Investment Accounting of each
fund in the Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------------
Thomas C. Gariepy(3) Vice President/Director of Corporate Communications of Delaware Management Company (a
series of Delaware Management Business Trust); Vice President/Director of Corporate
Communications of Delaware Investment Advisers (a series of Delaware Management Business
Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Stuart M. George Vice President/Equity Trader of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Equity Trader of Delaware Investment Advisers (a
series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Andrea Giles Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio
Manager of Delaware Capital Management, Inc.; Vice President/Portfolio Manager of each
fund in the Delaware Investments family
- -----------------------------------------------------------------------------------------------------------------------------------
Barry Gladstein Vice President/Business Manager, Equity of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Business Manager, Equity of Delaware
Investment Advisers (a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
Paul Grillo Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
of Delaware Capital Management, Inc.; Vice President/Portfolio Manager of each fund in the
Delaware Investments family.
- -----------------------------------------------------------------------------------------------------------------------------------
Brian T. Hannon Vice President/Equity Analyst of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Equity Analyst of Delaware Investment Advisers
(a series of Delaware Management Business Trust)
- -----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
John A. Heffern Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Stuart N. Hosansky Vice President/Senior Credit Analyst of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Credit Analyst of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Credit
Analyst of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Frances J. Houghton, Jr.(4) Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice President/Senior
Portfolio Manager of each fund in the Delaware Investments family; Executive Vice President
of Delaware General Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Elizabeth H. Howell Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice President/Senior
Portfolio Manager of each fund in the Delaware Investments family.
- ------------------------------------------------------------------------------------------------------------------------------------
Jeffrey Hynoski Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Cynthia Isom Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
John B. Jares(5) Vice President/Senio Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio
Manager of each fund in the Delaware Investments family.
- ------------------------------------------------------------------------------------------------------------------------------------
Audrey E. Kohart Vice President/Assistant Controller, Corporate Accounting of Delaware Management Company (a
series of Delaware Management Business Trust); Vice President/Assistant Controller, Corporate
Accounting of Delaware Investment Advisers (a series of Delaware Management Business Trust)
- ------------------------------------------------------------------------------------------------------------------------------------
Steven T. Lampe Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
of Delaware Capital Management, Inc.; Vice President/Portfolio Manager of each fund in the
Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Philip Y. Lin Vice President, Assistant Secretary and Associate General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President, Assistant Secretary
and Associate General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust);Vice President, Assistant Secretary and Associate General Counsel
of Delaware Service Company, Inc.; Vice President, Assistant Secretary and Associate General
Counsel of Delaware Capital Management, Inc.; Vice President, Assistant Secretary and
Associate General Counsel of Retirement Financial Services, Inc.; Vice President, Assistant
Secretary and Associate General Counsel of Delaware Management Trust Company; Vice President,
Assistant Secretary and Associate General Counsel of Delaware Distributors, L.P.; Vice
President, Assistant Secretary and Associate General Counsel of each fund in the Delaware
Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Michael D. Mabry Vice President, Assistant Secretary and Associate General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President, Assistant Secretary
and Associate General Counsel of Delaware Management Holdings, Inc.; Vice President,
Assistant Secretary and Associate General Counsel of Delvoy, Inc.; Vice President, Assistant
Secretary and Associate General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust);Vice President, Assistant Secretary and Associate General Counsel
of Delaware Service Company, Inc.; Vice President, Assistant Secretary and Associate General
Counsel of Delaware Capital Management, Inc.; Vice President, Assistant Secretary and
Associate General Counsel of Retirement Financial Services, Inc.; Vice President, Assistant
Secretary and Associate General Counsel of Delaware Distributors, L.P.; Vice President,
Assistant Secretary and Associate General Counsel of each fund in the Delaware Investments
family
- ------------------------------------------------------------------------------------------------------------------------------------
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice President/Senior
Portfolio Manager of Founders Holdings, Inc., President and Director of Founders CBO
Corporation; Vice President/Senior Portfolio Manager of each fund in the Delaware
Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Andrew M. McCullagh, Jr. Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice President/Senior
Portfolio Manager of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Francis X. Morris Vice President/Senior Portfolio Manager of Delaware Management Company (a series of
Delaware Management Business Trust); Vice President/Senior Portfolio Manager of Delaware
Investment Advisers (a series of Delaware Management Business Trust); Vice President/Senior
Portfolio Manager of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Senior Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Senior Portfolio
Manager of Founders Holdings, Inc., Treasurer, Assistant Secretary and Director of Founders
CBO Corporation; Vice President/Senior Portfolio Manager of each fund in the Delaware
Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- -----------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Robert A. Norton, Jr. Vice President/Equity Analyst of Delaware Management Company (a series of Delaware Management
Business Trust); Vice President/Equity Analyst of Delaware Investment Advisers (a series of
Delaware Management Business Trust)
- ------------------------------------------------------------------------------------------------------------------------------------
David P. O'Connor Vice President, Assistant Secretary and Associate General Counsel of Delaware Management
Company (a series of Delaware Management Business Trust); Vice President, Assistant Secretary
and Associate General Counsel of Delaware Management Holdings, Inc.; Vice President,
Assistant Secretary and Associate General Counsel of Delvoy, Inc.; Vice President, Assistant
Secretary and Associate General Counsel of Delaware Investment Advisers (a series of Delaware
Management Business Trust);Vice President, Assistant Secretary and Associate General Counsel
of Delaware Service Company, Inc.; Vice President, Assistant Secretary and Associate General
Counsel of Delaware Capital Management, Inc.; Vice President, Assistant Secretary and
Associate General Counsel of Retirement Financial Services, Inc.; Vice President, Assistant
Secretary and Associate General Counsel of Delaware Distributors, L.P.; Vice President,
Assistant Secretary and Associate General Counsel of each fund in the Delaware Investments
family
- ------------------------------------------------------------------------------------------------------------------------------------
John J. O'Connor Vice President/Investment Accounting of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Investment Accounting/Assistant Treasurer of
Delaware Investment Advisers (a series of Delaware Management Business Trust); Vice
President/Investment Accounting of Delaware Service Company, Inc.; Vice President/Assistant
Treasurer of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Donald G. Padilla Vice President/Assistant Controller/Assistant Treasurer of Delaware Management Company (a
series of Delaware Management Business Trust); Vice President/Assistant Controller/Assistant
Treasurer of DMH Corp.; Vice President/Assistant Controller/Assistant Treasurer of Delvoy,
Inc.; Vice President/Assistant Controller/Assistant Treasurer of Delaware Management Company,
Inc.; Vice President/Assistant Controller/Assistant Treasurer of Delaware Management Business
Trust; Vice President/Assistant Controller/Assistant Treasurer of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Assistant
Controller/Assistant Treasurer of Delaware Service Company, Inc.; Vice President/Assistant
Controller/Assistant Treasurer of Delaware Capital Management, Inc.; Vice President/Assistant
Controller/Assistant Treasurer of Retirement Financial Services, Inc.; Vice
President/Assistant Controller/Assistant Treasurer of Delaware Management Trust Company; Vice
President/Assistant Controller/Assistant Treasurer of Delaware Distributors, L.P.; Assistant
Vice President/Assistant Controller of Founders Holdings, Inc.; Vice President/Assistant
Controller/Assistant Treasurer of Delaware General Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard Salus Vice President/Assistant Controller of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Assistant Controller of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Assistant
Controller of Delaware Management Trust Company; Vice President/Assistant Controller of
Delaware Management Business Trust; Vice President/Assistant Controller of Delaware Service
Company, Inc.; Vice President/Assistant Controller of Delaware Capital Management, Inc.; Vice
President/Assistant Controller of Retirement Financial Services, Inc.; Vice
President/Assistant Controller of Delaware Distributors, L.P.; Vice President/Assistant
Controller of Delaware Management Trust Company; Vice President/Assistant Controller of
Delaware Distributors, Inc.; Vice President/Assistant Controller of Delaware International
Holdings Ltd.; Vice President/Assistant Controller of Delaware General Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Name and Principal Business Address* Positions and Offices with Delaware Management Company and its affiliates and other
Positions and Offices Held
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Robert D. Schwartz(6) Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/ Portfolio
Manager of each fund in the Delaware Investments family; Vice President/Assistant Secretary
of Delaware General Management, Inc.
- ------------------------------------------------------------------------------------------------------------------------------------
Richard D. Seidel Vice President/Assistant Controller/Manager, Payroll of Delaware Management Company (a series
of Delaware Management Business Trust); Vice President/Assistant Controller/Manager, Payroll
of Delaware Investment Advisers (a series of Delaware Management Business Trust)
- ------------------------------------------------------------------------------------------------------------------------------------
Michael T. Taggart Vice President/Facilities and Administrative Services of Delaware Management Company (a
series of Delaware Management Business Trust);Vice President/Facilities and Administrative
Services of Delaware Investment Advisers (a series of Delaware Management Business Trust);
Vice President/Facilities and Administrative Services of Delaware Service Company, Inc.;
Vice President/Facilities and Administrative Services of Delaware Distributors, L.P.
- ------------------------------------------------------------------------------------------------------------------------------------
Thomas J. Trotman Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust); Vice President/Portfolio Manager of Delaware Investment
Advisers (a series of Delaware Management Business Trust); Vice President/Portfolio Manager
of each fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
Lori P. Wachs Vice President/Portfolio Manager of Delaware Management Company (a series of Delaware
Management Business Trust);Vice President/Portfolio Manager of Delaware Investment Advisers
(a series of Delaware Management Business Trust);Vice President/Portfolio Manager of each
fund in the Delaware Investments family
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>
(1) PRESIDENT, CHIEF OPERATING OFFICER AND DIRECTOR, United Asset Management,
Boston, MA March 1998-January 2000.
(2) PRESIDENT AND DIRECTOR, Lincoln Investment Management, Inc. 1987 to
present. EXECUTIVE VICE PRESIDENT/CHIEF INVESTMENT OFFICER of Lincoln
National Corporation 1992 to present.
(3) VICE PRESIDENT/DIRECTOR OF PUBLIC RELATIONS, Liberty Funds Distributor,
Inc. Boston, MA, 1996-1998.
(4) PRESIDENT AND PORTFOLIO MANAGER, Lynch & Mayer, Inc., New York, NY January
1990-February 2000.
(5) VICE PRESIDENT AND PORTFOLIO MANAGER, Berger Funds, LLC, Denver, CO May
1997-February 2000.
(6) VICE PRESIDENT, Lynch & Mayer, Inc., New York, NY February 1993-February
2000.
- --------------------------------------------------------------------------------
<PAGE>
Item 27. Principal Underwriters.
----------------------
(a) Delaware Distributors, L.P. serves as principal underwriter for all the
mutual funds in the Delaware Investments family.
(b) Information with respect to each director, officer or partner of principal
underwriter:
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name and Principal Business Address* Positions and Offices with Underwriter Positions and Offices with Registrant
- ------------------------------------ -------------------------------------- -------------------------------------
Delaware Distributors, Inc. General Partner None
- ----------------------------------------------------------------------------------------------------------------------------------
Delaware Investment Advisers Limited Partner None
- ----------------------------------------------------------------------------------------------------------------------------------
Mary R. Barneby Vice Chairman None
- ----------------------------------------------------------------------------------------------------------------------------------
Westley V. Thompson Vice Chairman None
- ----------------------------------------------------------------------------------------------------------------------------------
David K. Downes Executive Vice President/Chief Operating President/Chief Executive Officer/Chief
Officer/Chief Financial Officer Financial Officer
- ----------------------------------------------------------------------------------------------------------------------------------
Richard J. Flannery Executive Vice President/General Counsel Executive Vice President/General Counsel
- ----------------------------------------------------------------------------------------------------------------------------------
Diane M. Anderson Senior Vice President/Retirement None
Operations
- ----------------------------------------------------------------------------------------------------------------------------------
Michael P. Bishof Senior Vice President/Investment Senior Vice President/Treasurer
Accounting
- ----------------------------------------------------------------------------------------------------------------------------------
Lisa O. Brinkley Senior Vice President/Compliance Director Senior Vice President/Compliance
Director
- ----------------------------------------------------------------------------------------------------------------------------------
Daniel J. Brooks III Senior Vice President/Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Larry Carr Senior Vice President/Variable Annuity None
Sales Director
- ----------------------------------------------------------------------------------------------------------------------------------
Terrence P. Cunningham Senior Vice President/National Sales None
Director, Financial Institutions
- ----------------------------------------------------------------------------------------------------------------------------------
Darryl S. Grayson Senior Vice President/Director, Internal None
Sales
- ----------------------------------------------------------------------------------------------------------------------------------
Joseph H. Hastings Senior Vice President/Treasurer/ Senior Vice President/Corporate
Corporate Controller Controller
- ----------------------------------------------------------------------------------------------------------------------------------
Joanne O. Hutcheson Senior Vice President/Human Resources Senior Vice President/Human Resources
- ----------------------------------------------------------------------------------------------------------------------------------
Karina J. Istvan Senior Vice President/Strategic Planning Senior Vice President/Strategic Planning
- ----------------------------------------------------------------------------------------------------------------------------------
Stephen W. Long Senior Vice President/National Sales None
Director, Wirehouse/Regional Channel
- ----------------------------------------------------------------------------------------------------------------------------------
Richelle S. Maestro Senior Vice President/Deputy General Senior Vice President/Deputy General
Counsel/Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------------
Mac McAulliffe Senior Vice President/Divisional Sales None
Manager
- ----------------------------------------------------------------------------------------------------------------------------------
J. Chris Meyer Senior Vice President/Director, Product
Management None
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name and Principal Business Address* Positions and Offices with Underwriter Positions and Offices with Registrant
- ------------------------------------ -------------------------------------- -------------------------------------
Eric E. Miller Senior Vice President/Deputy General Senior Vice President/Deputy General
Counsel/Assistant Secretary Counsel/Secretary
- ----------------------------------------------------------------------------------------------------------------------------------
Stephen C. Nell Senior Vice President/National Retirement None
Sales
- ----------------------------------------------------------------------------------------------------------------------------------
Henry W. Orvin Senior Vice President/Eastern Divisional None
Sales Manager
- ----------------------------------------------------------------------------------------------------------------------------------
Christopher H. Price Senior Vice President/Insurance Products None
- ----------------------------------------------------------------------------------------------------------------------------------
Philip G. Rickards Senior Vice President/Regional Consultant None
Director
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas E. Sawyer Senior Vice President/ Regional None
Consultant Director
- ----------------------------------------------------------------------------------------------------------------------------------
James L. Shields Senior Vice President/Chief Information None
Officer
- ----------------------------------------------------------------------------------------------------------------------------------
Steven Sorenson Senior Vice President/Director of None
Independent Planner & Insurance and
Registered Investment Adviser Channels
- ----------------------------------------------------------------------------------------------------------------------------------
Richard P. Allen Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
David P. Anderson, Jr. Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Jeffrey H. Arcy Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Patrick A. Bearss Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Larry Bridwell Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Daniel H. Carlson Vice President/Marketing Services None
- ----------------------------------------------------------------------------------------------------------------------------------
William S. Carroll Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Patrick A. Connelly Vice President/Registered Investment None
Adviser Sales
- ----------------------------------------------------------------------------------------------------------------------------------
Joel A. Ettinger Vice President/Taxation Vice President/Taxation
- ----------------------------------------------------------------------------------------------------------------------------------
Edward A. Foley Vice President/Marketing Communications None
- ----------------------------------------------------------------------------------------------------------------------------------
Susan T. Friestedt Vice President/Retirement Services None
- ----------------------------------------------------------------------------------------------------------------------------------
Rhonda J. Guido Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Ronald A. Haimowitz Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name and Principal Business Address* Positions and Offices with Underwriter Positions and Offices with Registrant
- ------------------------------------ -------------------------------------- -------------------------------------
Edward J. Hecker Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
John R. Herron Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Steven N. Horton Vice President/ Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Dinah J. Huntoon Vice President/Product Manager, Equities None
- ----------------------------------------------------------------------------------------------------------------------------------
Thomas Intoccia Vice President/Independent Planner & None
Insurance Key Accounts
- ----------------------------------------------------------------------------------------------------------------------------------
Chirstopher L. Johnston Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Michael J. Jordan Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Carolyn Kelly Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Richard M. Koerner Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Ellen M. Krott Vice President/Marketing None
- ----------------------------------------------------------------------------------------------------------------------------------
John LeBoeuf Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
SooHee Lee Vice President/Fixed Income & None
International Product Manager
- ----------------------------------------------------------------------------------------------------------------------------------
Philip Y. Lin Vice President/Associate General Vice President/Associate General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------------
John R. Logan Vice President/ Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Michael D. Mabry Vice President/Associate General Vice President/Associate General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------------
Theodore T. Malone Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Raymond G. McCarthy Vice President/National Accounts, None
Independent Planner & Insurance Channels
- ----------------------------------------------------------------------------------------------------------------------------------
Joanne C. McCranie Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Nathan W. Medin Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Scott L. Metzger Vice President/Business Development None
- ----------------------------------------------------------------------------------------------------------------------------------
Jamie L. Meyer Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name and Principal Business Address* Positions and Offices with Underwriter Positions and Offices with Registrant
- ------------------------------------ -------------------------------------- -------------------------------------
Christopher W. Moore Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Andrew F. Morris Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Scott E. Naughton Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Nancy Nawn Vice President/Senior Wrap Product Manager None
- ----------------------------------------------------------------------------------------------------------------------------------
Julie A. Nye Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Daniel J. O'Brien Vice President/Insurance Products None
- ----------------------------------------------------------------------------------------------------------------------------------
David P. O'Connor Vice President/Associate General Vice President/Associate General
Counsel/Assistant Secretary Counsel/Assistant Secretary
- ----------------------------------------------------------------------------------------------------------------------------------
Joseph T. Owczarek Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Donald G. Padilla Vice President/Assistant None
Controller/Assistant Treasurer
- ----------------------------------------------------------------------------------------------------------------------------------
Otis S. Page Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Scott P. Passias Vice President/Associate Senior Regional None
Consultant
- ----------------------------------------------------------------------------------------------------------------------------------
Mary Ellen Pernice-Fadden Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Eric Preus Vice President/Wrap Senior Regional None
Consultant
- ----------------------------------------------------------------------------------------------------------------------------------
Laura E. Roman Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Robert A. Rosso Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Terri Lynn Sabby Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Richard Salus Vice President/Assistant Controller None
- ----------------------------------------------------------------------------------------------------------------------------------
Linda D. Shulz Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Gordon E. Searles Vice President/Client Services None
- ----------------------------------------------------------------------------------------------------------------------------------
Catherine A. Seklecki Vice President/Retirement Sales None
- ----------------------------------------------------------------------------------------------------------------------------------
John C. Shalloe Vice President/Wrap Fee Senior Regional None
Consultant
- ----------------------------------------------------------------------------------------------------------------------------------
Darren Smith Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Name and Principal Business Address* Positions and Offices with Underwriter Positions and Offices with Registrant
- ------------------------------------ -------------------------------------- -------------------------------------
Kimberly M. Spangler Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Robert E. Stansbury Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Michael T. Taggart Vice President/Facilities & None
Administrative Services
- ----------------------------------------------------------------------------------------------------------------------------------
Bryon Townsend Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Julia R. Vander Els Vice President/Retirement Plan None
Communications
- ----------------------------------------------------------------------------------------------------------------------------------
John A. Wells Vice President/Marketing Technology None
- ----------------------------------------------------------------------------------------------------------------------------------
Courtney S. West Vice President/Institutional Sales None
- ----------------------------------------------------------------------------------------------------------------------------------
Andrew J. Whitaker Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Scott Whitehouse Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Wesley Williams Vice President/Senior Regional Consultant None
- ----------------------------------------------------------------------------------------------------------------------------------
Theodore V. Wood Vice President/Technical Systems Officer None
- ----------------------------------------------------------------------------------------------------------------------------------
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
(c) Not Applicable.
Item 28. Location of Accounts and Records
All accounts and records are maintained in Philadelphia at 1818 Market
Street, Philadelphia, PA 19103 or One Commerce Square, Philadelphia, PA
19103.
Item 29. Management Services. None.
-------------------
Item 30. Undertakings. Not Applicable.
------------
<PAGE>
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 24th day of May, 2000.
DELAWARE GROUP CASH RESERVE
By /s/ David K. Downes
-------------------------------------
David K. Downes
President and Chief Executive Officer
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
<S> <C> <C>
Signature Title Date
- --------------------------- -------------------------------------------- -------------
President/Chief Executive Officer/
Chief Financial Officer (Principal
Executive Officer, Principal Financial
Officer and Principal Accounting Officer)
/s/ David K. Downes and Trustee May 24, 2000
- -----------------------------
David K. Downes
/s/Wayne A. Stork * Trustee May 24, 2000
- -------------------------------
Wayne A. Stork
/s/Walter P. Babich * Trustee May 24, 2000
- -------------------------------
Walter P. Babich
/s/John H. Durham * Trustee May 24, 2000
- -------------------------------
John H. Durham
/s/Anthony D. Knerr * Trustee May 24, 2000
- -------------------------------
Anthony D. Knerr
/s/Ann R. Leven * Trustee May 24, 2000
- -------------------------------
Ann R. Leven
/s/Thomas F. Madison * Trustee May 24, 2000
- -------------------------------
Thomas F. Madison
/s/Charles E. Peck * Trustee May 24, 2000
- -------------------------------
Charles E. Peck
/s/Janet L. Yeomans * Trustee May 24, 2000
- -------------------------------
Janet L. Yeomans
</TABLE>
* By: /s/David K. Downes
-----------------------------
David K. Downes
as Attorney-in-Fact for
each of the persons indicated
<PAGE>
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE>
INDEX TO EXHIBITS
Exhibit No. Exhibit
- ----------- -------
EX-99.J Consent of Auditors
EX-99.P Code of Ethics
<PAGE>
Consent of Ernst & Young LLP, Independent Auditors
We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this
Post-Effective Amendment No. 46 to the Registration Statement (Form N-1A) (No.
2-60770) of Delaware Group Cash Reserve of our report dated May 5, 2000,
included in the 2000 Annual Report to shareholders.
/s/Ernst & Young LLP
-----------------
Ernst & Young LLP
Philadelphia, Pennsylvania
May 26, 2000
<PAGE>
Report of Independent Auditors
To the Shareholders and Board of Trustees
Delaware Cash Reserve Fund
We have audited the accompanying statement of net assets of Delaware Cash
Reserve Fund (the "Fund") as of March 31, 2000, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with auditing standards generally accepted
in the United States. Those standards require that we plan and perform the audit
to obtain reasonable assurance about whether the financial statements and
financial highlights are free of material misstatement. An audit includes
examining, on a test basis, evidence supporting the amounts and disclosures in
the financial statements and financial highlights. Our procedures included
confirmation of securities owned as of March 31, 2000, by correspondence with
the custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Cash Reserve Fund at March 31, 2000, the results of its operations for
the year then ended, the changes in its net assets for each of the two years in
the period then ended, and its financial highlights for the periods indicated
therein, in conformity with accounting principles generally accepted in the
United States.
/s/Ernst & Young LLP
-----------------
Ernst & Young LLP
Philadelphia, Pennsylvania
May 5, 2000
<PAGE>
CODE OF ETHICS
DELAWARE INVESTMENTS FAMILY OF FUNDS
CREDO
It is the duty of all Fund employees, officers and directors to conduct
themselves with integrity, and at all times to place the interests of the
shareholders first. In the interest of this credo all personal securities
transactions will be conducted consistent with the Code of Ethics and in such a
manner as to avoid any actual or potential conflict of interest or any abuse of
an individual's position of trust and responsibility. The fundamental standard
of this Code is that personnel should not take any inappropriate advantage of
their positions.
The Securities and Exchange Commission has adopted Rule 17j-1 under the
Investment Company Act of 1940. This Rule makes it unlawful for certain persons,
including any employee, officer or director of the Fund, in connection with the
purchase or sale by such person of a security held or to be acquired(1) by the
Fund:
(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make to the Fund any untrue statement of a material fact or omit
to state to the Fund a material fact necessary in order to make the statements
made, in light of the circumstances in which they are made, not misleading;
(3) To engage in any act, practice or course of business that operates
or would operate as a fraud or deceit upon the Fund; or
(4) To engage in any manipulative practice with respect to the Fund.
- -------------------
(1) A security is deemed to be "held or to be acquired" if within the
most recent fifteen days it (i) is or has been held by the Fund or (ii) is being
or has been considered by the Fund or its investment adviser for purchase by the
Fund.
<PAGE>
The Rule also requires that the Fund and Delaware Management Business Trust
shall adopt a written code of ethics containing provisions reasonably necessary
to prevent persons from engaging in acts in violation of the above standard and
shall use reasonable diligence and institute procedures reasonably necessary to
prevent violations of the Code.
This Code of Ethics is being adopted by the Delaware Investments Family of Funds
(collectively "Delaware") in compliance with the requirement of Rule 17j-1 and
to effect its purposes, the purposes of the Credo set forth above, and the
recommendations of the Investment Company Institute's Advisory Group on Personal
Investing.
DEFINITIONS
"Affiliated person" means any employee of the Funds or any subsidiary of
Delaware Management Holdings, Inc. and any other person so designated by the
Compliance Department.
"Access person" means any director, officer, general partner or advisory person
of the Fund and shall include all Interested Directors, Portfolio Managers,
other Investment Personnel and all Advisory Persons.
"Advisory person" means (i) any employee, officer or interested director of
Delaware, who in connection with his/her regular functions or duties, normally
makes, participates in, or obtains current information regarding the purchase or
sale of a security by the Fund, or whose functions relate to the making of any
recommendations with respect to such purchases or sales and (ii) any natural
person in a control relationship to any such company who regularly obtains
current information concerning recommendations made with regard to the purchase
or sale of a security by the Fund.
"Investment personnel" means portfolio managers, securities analysts and
traders, and those personnel who provide information and advice to a portfolio
manager or who help execute the portfolio manager's decisions.
A security is being "considered for purchase or sale" or is "being purchased or
sold" when a recommendation to purchase or sell the security has been made and
communicated to the Order Room and with respect to the person making the
recommendation, when such person seriously considers making or when such person
knows or should know that another Advisory Person is seriously considering such
a recommendation.
<PAGE>
"Beneficial ownership" shall be as defined in Section 16 of the Securities
Exchange Act of 1934 and the rules and regulations thereunder. Generally
speaking, a person who, directly or indirectly, through any contract,
arrangement, understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest in a security, is a "beneficial owner" of the
security. For instance:
- A person is normally regarded as the beneficial owner of securities
held by members of his or her immediate family sharing the same
household; and
- Ownership of derivative securities such as options, warrants or
convertible securities which confer the right to acquire the underlying
security at a fixed price constitutes beneficial ownership of the
underlying security itself.
"Control" shall mean investment discretion in whole or in part of an account
regardless of beneficial ownership, such as an account for which a person has
power of attorney or authority to effect transactions.
"Security" shall have the meaning as set forth in Section 2(a)(36) of the
Investment Company Act of 1940, except that it shall not include securities
issued or guaranteed by the government of the United States or by any of its
federal agencies, bankers' acceptances, bank certificates of deposit, commercial
paper, unit investment trusts and shares of open-end registered investment
companies.
The purchase, sale or exercise of a derivative security shall constitute the
purchase or sale of the underlying security. However, the purchase or sale of
the debt instrument of an issuer which does not give the holder the right to
purchase the issuer's stock at a fixed price, does not constitute a purchase or
sale of the issuer's stock.
<PAGE>
PROHIBITED ACTIVITIES
AFFILIATED PERSONS, ACCESS PERSONS, INVESTMENT PERSONNEL AND PORTFOLIO MANAGERS
The following restrictions apply to all Portfolio Managers, Investment
Personnel, Access Persons and Affiliated Persons. Access Persons include
Interested Directors of the Fund.
(a) No Affiliated or Access Person shall engage in any act, practice or course
of conduct, which would violate the provisions of Rule 17j-1 set forth above.
(b) No Affiliated or Access Person shall purchase or sell, directly or
indirectly, any security which to his/her knowledge is being actively considered
for purchase or sale by Delaware; except that this prohibition shall not apply
to:
(A) purchases or sales that are nonvolitional on the part of either the
Person or the Fund;
(B) purchases which are part of an automatic dividend reinvestment
plan;
(C) purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extent such rights
were acquired from such issuer, and sales of such rights so acquired;
(D) other purchases and sales specifically approved by the President or
Chief Executive Officer, with the advice of the General Counsel and/or the
Compliance Officer, and deemed appropriate because of unusual or unforeseen
circumstances. A list of securities excepted will be maintained by the
Compliance Department.
(c) No Affiliated or Access Person may execute a buy or sell order for an
account in which he or she has beneficial ownership or control until the third
trading day following the execution of a Delaware buy or sell order in that same
security.
(d) Despite any fault or impropriety, any Affiliated or Access Person who
executes a buy or sell for an account in which he/she has beneficial ownership
or control either (i) before the third trading day following the execution of a
Delaware order in the same security, or (ii) when there are pending orders for a
Delaware transaction as reflected on the Trader Order Scan, shall forfeit any
profits made (in the event of purchases) or loss avoided (in the event of
sales), whether realized or unrealized, in the period from the date of the
personal transaction to the end of the proscribed trading period. Payment of the
amount forfeited shall be made by check or in cash to a charity of the person's
choice and a copy of the check or receipt must be forwarded to the Compliance
Department.
<PAGE>
(e) Each Affiliated or Access Person's personal transactions must be precleared
by using the Personal Transaction Preclearance Form. The form must be submitted
prior to entering any orders for personal transactions. Preclearance is only
valid for the day the form is submitted. If the order is not executed the same
day, the preclearance form must be resubmitted. Regardless of preclearance, all
transactions remain subject to the provisions of (d) above.
INVESTMENT PERSONNEL AND PORTFOLIO MANAGERS
The following additional restrictions apply to all Investment Personnel and
Portfolio Managers.
(a) All Investment Personnel are prohibited from purchasing any initial public
offering.
(b) All Investment Personnel are prohibited from purchasing any private
placement without express PRIOR written consent by the Compliance Department.
All private placement holdings are subject to disclosure to the Compliance
Department. Any Investment Person that holds a private placement must receive
permission from the Compliance or Legal Departments prior to any participation
by such person in Delaware's consideration of an investment in the same issuer.
(c) Short term trading resulting in a profit is prohibited. All opening
positions must be held for a period of 60 days, in the aggregate, before they
can be closed at a profit. Any short term trading profits are subject to the
disgorgement procedures outlined above and at the maximum level of profit
obtained. The closing of positions at a loss is not prohibited.
(d) All Investment Personnel are prohibited from receiving anything of more than
a de minimis value from any person or entity that does business with or on
behalf of any fund or client. Things of value may include, but not be limited
to, travel expenses, special deals or incentives.
(e) All Investment Personnel require PRIOR written approval from the Legal or
Compliance Department before they may serve on the board of directors of any
public company.
PORTFOLIO MANAGERS
The following additional restrictions apply to Portfolio Managers.
<PAGE>
(a) No Portfolio Manager may execute a buy or sell order for an account for
which he/she has beneficial ownership within seven calendar days before or after
an investment company or separate account that he/she manages trades in that
security.
(b) Despite any fault or impropriety, any Portfolio Manager who executes a
personal transaction within seven calendar days before or after an investment
company or separate account that he/she manages trades in that security, shall
forfeit any profits made (in the event of purchases) or loss avoided (in the
event of sales), whether realized or unrealized, in the period from the date of
the personal transaction to the end of the prescribed trading period. Payment of
the amount forfeited shall be made by check or in cash to a charity of the
person's choice and a copy of the check or receipt must be forwarded to the
Compliance Department.
REQUIRED REPORTS
AFFILIATED PERSONS, ACCESS PERSONS, INVESTMENT PERSONNEL, PORTFOLIO MANAGERS
AND DISINTERESTED DIRECTORS
The following reports are required to be made by all Affiliated Persons, Access
Persons, Investment Personnel and Portfolio Managers. Access Persons, Investment
Personnel and Portfolio Managers are Affiliated Persons by definition.
(a) All Affiliated Persons must disclose brokerage relationships at employment
and at the time of opening any new account.
(b) All Affiliated Persons will direct their brokers to supply to the Compliance
Department, on a timely basis, duplicate copies of all confirmations and
statements for all securities accounts. (In the U.K., all contract notes and
periodic statements)
(c) Each quarter, no later than the tenth day after the end of the calendar
quarter, each Affiliated Person will submit to the Compliance Department a
personal transaction summary showing all transactions in securities in accounts
which such person has or acquires any direct or indirect beneficial ownership.
Each Director who is not an interested person shall submit the quarterly reports
only for transactions where at the time of the transaction the director knew, or
in the ordinary course of fulfilling his official duties as a director should
have known, that during the fifteen day period immediately preceding the date of
the transaction by the director, such security was purchased or sold by the Fund
or was being considered for purchase or sale by the Fund.
<PAGE>
Every report will contain the following information:
(i) the date of the transaction, the name and the number of shares
and the principal amount of each security involved;
(ii) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii) the price at which the transaction was effected;
(iv) the name of the broker, dealer or bank effecting the transaction.
(d) If any security involved in a personal transaction is purchased or sold by a
Fund within fifteen days of the personal transaction, the Compliance Department
will request and the Affiliated Person will provide additional information
relating to the circumstances surrounding the personal transaction.
(e) All Affiliated Persons will certify annually that they have read and
complied with this Code of Ethics and all disclosure and reporting requirements
contained therein.
<PAGE>
INVESTMENT PERSONNEL AND PORTFOLIO MANAGERS
In addition to the above reporting requirements, all Investment Personnel, which
includes Portfolio Managers by definition, must disclose all personal securities
holdings on commencement of employment and thereafter on an annual basis.
ADMINISTRATIVE PROCEDURES
(a) The Legal Department of Delaware will identify all Affiliated Persons,
Access Persons, Investment Personnel and Portfolio Managers.
(b) The Legal Department shall promptly report to the President or Chief
Executive Officer of Delaware Management Business Trust any apparent violations
of the prohibitions or reporting requirements contained in this Code of Ethics.
Such Chief Executive Officer or President, or both in conjunction, will review
the reports made and determine whether or not the Code of Ethics has been
violated and shall determine what sanctions, if any, should be imposed. At the
next regular meeting the Board of Directors or a Committee of Directors created
by the Board for that purpose will review a description of any Code violation
and significant actions taken in response and consider whether the appropriate
sanctions were imposed.
When the Legal Department finds that a transaction otherwise reportable above
could not reasonably be found to have resulted in a fraud, deceit or
manipulative practice in violation of Rule 17j-1(a), it may, in its discretion,
lodge a written memorandum of such finding in lieu of reporting the transaction.
(c) All purchases and sales specifically approved by the President or Chief
Executive Officer of Delaware Management Business Trust in accordance with
Section (b)D of Prohibited Activities, as described herein, shall be reported to
the Board at its next regular meeting.
<PAGE>
Delaware Investments
Code Of Ethics
- -------------------------------------------------------------------------------
Graphic Omitted: [People writing with pens]
<PAGE>
CODE OF ETHICS
DELAWARE MANAGEMENT BUSINESS TRUST
DELAWARE DISTRIBUTORS, L.P.
DELAWARE SERVICE COMPANY, INC.
DELAWARE MANAGEMENT TRUST COMPANY
DELAWARE INTERNATIONAL ADVISERS LTD.
DELAWARE CAPITAL MANAGEMENT, INC.
RETIREMENT FINANCIAL SERVICES, INC.
CREDO
It is the duty of all employees, officers and directors to conduct themselves
with integrity, and at all times to place the interests of the shareholders
first. In the interest of this credo all personal securities transactions will
be conducted consistent with the Code of Ethics and in such a manner as to avoid
any actual or potential conflict of interest or any abuse of an individual's
position of trust and responsibility. The fundamental standard of this Code is
that personnel should not take any inappropriate advantage of their positions.
The Securities and Exchange Commission has adopted Rule 17j-1 under the
Investment Company Act of 1940. This Rule makes it unlawful for certain persons,
including any employee, officer or director of the Fund, in connection with the
purchase or sale by such person of a security held or to be acquired1 by the
Fund:
(1) To employ any device, scheme or artifice to defraud the Fund;
(2) To make to the Fund any untrue statement of a material fact or omit
to state to the Fund a material fact necessary in order to make the statements
made, in light of the circumstances in which they are made, not misleading;
(3) To engage in any act, practice or course of business that operates
or would operate as a fraud or deceit upon the Fund; or
(4) To engage in any manipulative practice with respect to the Fund.
The Rule also requires that the Fund and Delaware Management Business Trust
shall adopt a written code of ethics containing provisions reasonably necessary
to prevent persons from engaging in acts in violation of the above standard and
shall use reasonable diligence and institution procedures reasonably necessary
to prevent violations of the Code.
This Code of Ethics is being adopted by Delaware Management Business Trust
("DMBT") Delaware Management Business Trust ("DMST"), Delaware Distributors,
L.P., Delaware Service Company, Inc., Delaware management Trust Company,
Delaware International Advisers Ltd. ("International") and Delaware Capital
Management, Inc. ("DCM"), Retirement Financial Services, Inc. ("RFS"),
(collectively "Delaware") in compliance with the requirement of Rule 17j-1 and
to effect its purposes, the purposes of the Credo set forth above, and the
recommendations of the Investment Company Institute's Advisory Group on Personal
Investing.
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(1) A security is deemed to be "held or to be acquired" if within the most
recent fifteen days it (i) is or had been held by the Fund or (ii) is being or
had been considered by the Fund or its investment adviser for purchase by the
Fund.
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DEFINITIONS
"Affiliated Person" means any employee of the Funds or any subsidiary of
Delaware Management Holdings, Inc. and any other person so designated by the
Compliance Department.
"Access person" means any director, officer, general partner or advisory person
of the Fund and shall include all Interested Directors, Portfolio Mangers, other
Investment Personnel and all Advisory Persons.
"Advisory person" mean (i) any employee, officer or interested director of
Delaware, who in connection with his/her regular functions or duties, normally
makes, participates in, or obtains current information regarding the purchase or
sale of a security by the Fund, or whose functions relate to the making of any
recommendations with respect to such purchases or sales and (ii) any natural
person in a control relationship to any such company who regularly obtains
current information concerning recommendations made with regard to the purchase
or sale of a security by the Fund.
"Investment personnel" means portfolio managers, securities analysts and
traders, and those personnel who provide information and advice to a portfolio
manager or who help execute the portfolio manager's decisions.
A security is being "considered for purchase or sale" or is "being purchased or
sold" when a recommendation to purchase or sell the security has been made and
communicated to the Order Room and with respect to the person making the
recommendation, when such person seriously considers making or when such person
knows or should know that another Advisory Person is seriously considering such
a recommendation.
"Beneficial ownership" shall be as defined in Section 16 or the Securities
Exchange Act of 1934 and the rules and regulations thereunder. Generally
speaking, a person who, directly or indirectly, through any contract,
arrangement understanding, relationship or otherwise, has or shares a direct or
indirect pecuniary interest in a security, is a "beneficial owner" of the
security. For instance:
- A person is normally regarded as the beneficial owner of securities
held by members of his or her immediate family sharing the same
household; and
- Ownership of derivative securities such as options, warrants or
convertible securities which confer the right to acquire the
underlying security at a fixed price constitutes beneficial ownership
of the underlying security itself.
"Control" shall mean investment discretion in whole or in part of an account
regardless of beneficial ownership. Such as an account for which a person has
power of attorney or authority to effect transactions.
"Security" shall have the meaning as set forth in Section 2(a)(36) of the
Investment Company Act of 1940, except that it shall not include securities
issued or guaranteed by the government of the United States or by any of it's
federal agencies, bankers' acceptances, bank certificates of deposit, commercial
paper and shares of open-end registered investment companies.
The purchase, sale or exercise of a derivative security shall constitute the
purchase or sale of the underlying security. However, the purchase or sale of
the debt instrument of an issuer which does not give the holder the right to
purchase the issuer's stock at a fixed price, does not constitute a purchase or
sale of the issuer's stock.
<PAGE>
PROHIBITED ACTIVITIES
AFFILIATED PERSONS, ACCESS PERSONS, INVESTMENT PERSONNEL AND PORTFOLIO MANAGERS
The following restrictions apply to all Portfolio Managers, Investment
Personnel, Access Persons and Affiliated Persons. Access Persons include
Interested Directors of the Funds.
(a) No Affiliated or Access Person shall engage in any act, practice or course
of conduct, which would violate the provision of Rule 17j-1 set forth
above.
(b) No Affiliated or Access Person shall purchase or sell, directly or
indirectly, any security which to his/her knowledge is being actively
considered for purchase or sale by Delaware; except that this prohibition
shall not apply to:
(A) purchases or sales that are nonvolitional on the part of either the
Person or the Fund;
(B) purchases which are part of an automatic dividend reinvestment
plan;
(C) purchases effected upon the exercise of rights issued by an issuer
pro rata to all holders of a class of its securities, to the extend
such rights were acquired from such issuer, and sales or such
rights so acquired;
(D) other purchases and sales specifically approved by the President or
Chief Executive Officer, with the advice of the General Counsel and
the Compliance officer and deemed appropriate because of unusual or
unforeseen circumstances. A list of securities excepted will be
maintained by the Compliance Department.
(c) No Affiliated or Access Person may execute a buy or sell order for an
account in which he or she has beneficial ownership or control until the
third trading day following the execution of a Delaware buy or sell order
in that same security.
(d) Despite any fault or impropriety, any Affiliated or Access Person who
executes a buy or sell for an account in which he/she has beneficial
ownership or control either (i) before the third trading day following the
execution of a Delaware order in the same security, or (ii) when there are
pending orders for a Delaware transaction as reflected on the Trader Order
Scan, shall forfeit any profits made (in the event of purchases) or loss
avoided (in the event of sales), whether realized or unrealized, in the
period from the date of the personal transaction to the end of the
proscribed trading period. Payment of the amount forfeited shall be made by
check or in cash to a charity of the person's choice and a copy of the
check or receipt must be forwarded to the Compliance Department.
(e) Each Affiliated or Access Person's personal transactions must be precleared
by using the Personal Transaction Preclearance Form. The form must be
submitted prior to entering any orders for personal transactions.
Preclearance is only valid for the day the form is submitted. If the order
is not executed the same day, the preclearance form must be resubmitted.
Regardless of preclearance, all transactions remain subject to the
provisions of (d) above.
INVESTMENT PERSONNEL AND PORTFOLIO MANAGERS
The following additional restrictions apply to all Investment Personnel and
Portfolio Managers.
(a) All Investment Personnel are prohibited from purchasing any initial public
offering.
(b) All Investment Personnel are prohibited from purchasing any private
placement without express PRIOR written consent by the Compliance
Department. All private placement holdings are subject to disclosure to the
Compliance Department. Any Investment Person that holds a private placement
must receive permission from the Compliance or Legal Departments prior to
any participation by such person in Delaware's consideration of an
investment in the same issuer.
(c) Short term trading resulting in a profit is prohibited. All opening
positions must be held for a period of 60 days, in the aggregate, before
they can be closed at a profit. Any short term trading profits are subject
to the disgorgement procedures outlined above and at the maximum level of
profit obtained. The closing of positions at a loss is not prohibited.
<PAGE>
(d) All Investment Personnel are prohibited from receiving anything of more
than ade minimis value from any person or entity that does business with or
on behalf of any fund or client. Things of value may include, but not be
limited to, travel expenses, special deals or incentives.
(e) All Investment Personnel require PRIOR written approval from the Legal or
Compliance Department before they may serve on the board of directors of
any public company.
PORTFOLIO MANAGERS
The following additional restrictions apply to Portfolio Managers
(a) No Portfolio Manager may execute a buy or sell order for an account for
which he/she has beneficial ownership within seven calendar days before or
after an investment company or separate account that he/she manages trades
in that security.
(b) Despite any fault or impropriety, any Portfolio Manager who executes a
personal transaction within seven calendar days before or after an
investment company or separate account that he/she manages trades in that
security, shall forfeit any profits made (in the event or purchases) or
loss avoided (in the event of sales), whether realized or unrealized, in
the period from the date of the personal transaction to the end of the
prescribed trading period. Payment of the amount forfeited shall be made by
check or in cash to a charity of the person's choice and a copy of the
check or receipt must be forwarded to the Compliance Department.
<PAGE>
REQUIRED REPORTS
AFFILIATED PERSONS, ACCESS PERSONS, INVESTMENT PERSONNEL, PORTFOLIO
MANAGERS AND DISINTERESTED DIRECTORS
The following reports are required to be made by all Affiliated Persons, Access
Persons, Investment Personnel and Portfolio Managers. Access Persons, Investment
Personnel and Portfolio Managers are Affiliated Persons by definition.
(a) All Affiliated Persons must disclose brokerage relationships at employment
and at the time of opening any new account.
(b) All Affiliated Persons will direct their brokers to supply to the
Compliance Department, on a timely basis, duplicate copies of all
confirmation and statements for all securities accounts. (In the U.K., all
contract notes and periodic statements)
(c) Each quarter, no later than the tenth day after the end of the calendar
quarter, each Affiliated Person will submit to the Compliance Department a
personal transaction summary showing all transactions in securities in
accounts which such person has or acquires any direct or indirect
beneficial ownership. Each Director who is not an interested person shall
submit the quarterly reports only for transactions where at the time of the
transaction the director knew, or in the ordinary course of fulfilling his
official duties as a director should have known, that during the fifteen
day period immediately preceding the date of the transaction by the
director, such security was purchased or sold by the Fund or was being
considered for purchase or sale by the Fund.
Every report will contain the following information:
(i) the date of the transaction, the name and the number of shares
and the principal amount of each security involved;
(ii) the nature of the transaction (i.e., purchase, sale or any other
type of acquisition or disposition);
(iii) the price at which the transaction was effected;
(iv) the name of the broker, dealer or bank effecting the transaction.
(d) If any security involved in a personal transaction is purchased or sold by
a Fund within fifteen days of the personal transaction, the Compliance
Department will request and the Affiliated person will provide additional
information relating to the circumstances surrounding the personal
transaction.
(e) All Affiliated Persons will certify annually that they have read and
complied with this Code of Ethics and all disclosure and reporting
requirements contained therein.
<PAGE>
INVESTMENT PERSONNEL AND PROTFOLIO MANAGERS
In addition to the above reporting requirements, all Investment Personnel, which
includes Portfolio Managers by definition, must disclose all personal securities
holdings on commencement of employment and thereafter on an annual basis.
ADMINISTRATIVE PROCEDURES
(a) The Legal Department of Delaware will identify all Affiliated Persons,
Access Persons, Investment Personnel and Portfolio Managers.
(b) The Legal Department shall promptly report to the President or Chief
Executive Officer of Delaware Management Business Trust any apparent
violations of the prohibitions or reporting requirements contained in this
Code of Ethics. Such chief Executive Officer or President, or both in
conjunction, will review the reports made and determine whether or not the
Code of Ethics has been violated and shall determine what sanctions, if
any, should be imposed.
When the Legal Department finds that a transaction otherwise reportable above
could not reasonably be found to have resulted in a fraud, deceit or
manipulative practice in violation of Rule 17j-1(a), it may, in it's discretion,
lodge a written memorandum of such finding in lieu of reporting the transaction.
