<PAGE>
PHOTO OF
COLONIAL OBJECTS
June 30, 1995
Dear Shareholder:
Since we wrote to you in the 1994 Annual Report, we have seen several
significant developments in the economy and consequently, the financial
markets. Following a series of six short-term interest rate increases in
calendar year 1994, the Federal Reserve raised rates only once in the first
five months of 1995 amid signs of slowing economic activity. In addition,
long-term interest rates declined steadily, which prompted a return to the
stock and bond markets for many investors. Your Fund responded positively to
this more attractive investing environment.
For the six-month period ended May 31, 1995, Decatur Income Fund A
Class had a total return (capital change plus income) that significantly
outpaced the return of the Lipper Equity Income Fund Average, which includes
129 mutual funds with investment objectives similar to those of your Fund.
The Fund's results were competitive with that of the Standard & Poor's 500
Stock Index, an unmanaged index comprised of large market capitalization
stocks.
- ------------------------------------------------------------------------------
TOTAL RETURN
SIX MONTHS ENDED
MAY 31, 1995
Decatur Income Fund A Class +17.34%
Standard & Poor's 500 Stock Index +19.20%
Lipper Equity Income Fund Average +13.83%
Performance of Decatur and Lipper Equity Income Fund Average is based on net
asset value without impact of sales charge. Decatur's return reflects the
reinvestment of six monthly dividend payments from December through May.
Performance information for all classes of the Fund can be found on page 4.
- -------------------------------------------------------------------------------
During this recent fiscal period, the Fund's conservative,
yield-oriented buy and sell disciplines led us to invest in a number of
market sectors which performed exceptionally well. The Fund's large positions
and good stock selection in banks, chemicals, energy and health care stocks
contributed most to our strong performance. Furthermore, Decatur Income Fund
delivered this return despite having no holdings in technology stocks, the
top performing stock group of the past six months. We discuss our position on
technology stocks in greater detail on page 3 of this report.
As we look toward the rest of the year, we remain optimistic. Though
earnings growth rates of American companies may slow from their current high
levels -- in fact, we may see some periodic "corrections" in the stock market
- -- we believe that the overall market will continue to perform well throughout
1995. In our opinion, Decatur Income Fund is in a good position to help you
capture the long-term return potential of this market with an opportunity for
high current income in the form of monthly dividends.
This report contains an update from the senior portfolio manager of
the Fund, who explains the Fund's positioning over the past six months and
its impact on performance. As always, we thank you for your continued
confidence.
/s/ WAYNE A STORK /s/ BRIAN F. WRUBLE
- ---------------------------------- ------------------------------------
Wayne A. Stork Brian F. Wruble
Chairman, Board of Directors President and Chief Executive Officer
Delaware Group Decatur Income Fund Delaware Group Decatur Income Fund
<PAGE>
PHOTO OF
COLONIAL OBJECTS
Portfolio Manager's Market Review
Over the past six months, two key factors influenced the stock market's
performance. First, lower long-term interest rates resulted in higher
valuations for the stock market. You may recall that the yield on the 30-year
U.S. Treasury bond soared from 6.25% in January 1994 to 8.21% in early
November 1994, causing severe price setbacks in both bonds and stocks. Since
then, the 30-year Treasury's yield has moved steadily downward, reaching
6.60% on May 31, 1995, prompting a significantly brighter investing climate.
Second, and perhaps more important, world class competitive American
companies continued to generate much better than expected levels of earnings
growth. In our view, this earning growth, combined with lower interest rates,
has been the foundation supporting the stock market's strong gains thus far
in 1995.
As stock prices have risen, however, the dividend yield on the stocks
comprising the Standard & Poor's 500 Stock Index has declined to historic
lows. As of May 31, 1995, the average yield of the S&P 500 stocks was 2.58%
(Decatur Income Fund A Class yielded 3.72%, calculated according to SEC
guidelines). We disagree with market analysts who see this as an indication
of a forthcoming bear market as explained in the Market Outlook section on
the next page.
INSIDE THE DECATUR PORTFOLIO
Given the decline in the stock market's yield, it is important to
remember that even though dividends are extremely important to the total
return equation, it is the combination of capital gains and dividends that
leads to the strong long-term returns from stocks.
Decatur Income Fund has a very clear buy/sell discipline for stock
selection that not only targets above-average up-front dividend yields, but
offers the opportunity to participate in the capital gains potential the
equity market offers. To be eligible for purchase or holding by the Fund, a
stock must have a current dividend yield greater than that of the S&P 500
Index. When a stock's current yield falls below the average yield of the
S&P 500, we begin to sell that holding. Thus, stocks in the portfolio have a
current dividend yield greater than that of the overall market average.
We believe the result of this discipline is that Decatur will
typically buy stocks that are out of favor and unpopular, and whose prices
have declined to the point that their current dividend yields are above the
market average. In contrast, we expect to sell those stocks which are popular
and whose prices have increased to the point where the current dividend
yields are below average.
A PROFILE FOR STOCK SELECTION
More specifically, when it comes to the stocks we select, we look for
the following characteristics:
* Above-average dividend yields
* Potential for better-than-expected earnings growth
* Less price risk relative to the market
These might seem like difficult criteria to meet in a market yielding
only 2.58%, but we have been able to find stocks within this risk/reward
profile. Although all sectors of the portfolio contributed to your Fund's
performance over the past six months, significant positions and good stock
selection in bank, chemical, energy and selected health care stocks
contributed most to our strong performance.
<PAGE>
PHOTO OF
COLONIAL OBJECTS
Even though we were not invested in technology stocks, the market's "hottest"
performing single sector of the past six months, Decatur delivered a return that
was competitive with that of the S&P 500 Index, which does include technology
stocks. Technology companies tend to have little, or no, dividend yield. For
this reason, they have not been eligible for purchase by the Fund's portfolio
which may help mitigate the effects of a market reversal should one occur in the
future.
Recently, we have moderately increased our equity portfolio holdings
in the consumer cyclical (automobile, retailing, etc.) area of the market
where investors have reacted very negatively to near-term earnings weakness.
Overall, however, we do not see the need for any major changes in the Fund's
sector allocation or individual stock holdings. All of the Fund's investments
are under continuous review and where more attractive risk/reward situations
develop, we will strive to take advantage of them.
HIGH-YIELD STRATEGY FOCUSES ON HIGHER QUALITY TIERS
In keeping with its goal of providing high current income, Decatur
Income Fund maintained approximately 10% of net assets in high-yield
corporate bonds during the past six months. Our primary focus was on bonds
rated "BB" and "B", the top two tiers of high-yield credit ratings. Although
these bonds involve greater investment risk than U.S. Government bonds,
historically they have provided rates of return similar to common stocks,
with less volatility. They provide your Fund with the potential for high
current income and an extra measure of diversification.
We have continued to upgrade the credit quality of the high-yield
portfolio, believing that the economy may continue to slow. We believe a
portfolio of higher credit quality securities will better withstand the
financial pressures put on lesser quality credits in any economic slowdown.
MARKET OUTLOOK
While some market analysts believe that the low dividend yield on the
S&P 500 Index is indicative of a bear market, we hold a different view. In
our opinion, the current strong level of earnings growth exhibited by
American companies would have to decline significantly for a bear market to
occur, and we don't see anything on the horizon that would cause that to
happen. Unless interest rates rise significantly or corporate profit growth
falls dramatically, the stock market should continue its upward trend.
We do expect the overall stock market's performance to become
somewhat more volatile in the second half of 1995. The market's rise has been
virtually straight up since the end of January and we could see a "correction"
at any time, which we expect would have the most impact on technology
stocks.
Clearly, economic growth has slowed; however, we believe that the
stage is set for a worldwide reduction in interest rates that could lead to a
long and sustained economic growth cycle. This should continue to fuel
companies' earnings growth, which in turn should provide ongoing support to
the U.S. stock market and your Decatur Income Fund.
/s/ JOHN B. FIELDS
- -----------------------------------
John B. Fields
Vice President, Senior Portfolio Manager
<PAGE>
PHOTO OF
COLONIAL OBJECTS
Long-term Performance
DECATUR INCOME FUND
Performance through May 31, 1995
CLASS A CLASS B
Average Annual Total Returns(1) Aggregate Total Returns(2)
(Introduced on September 6, 1994)
10 Years +11.38% Lifetime +10.67%
Excluding Sales Charge
5 Years +8.01% +6.67%
Including Sales Charge
1 Year +8.80%
Performance through June 30, 1995
CLASS A CLASS B
Average Annual Total Returns(1) Aggregate Total Returns(2)
(Introduced on September 6, 1994)
10 Years +11.27% Lifetime +11.79%
Excluding Sales Charge
5 Years +8.64% +7.79%
Including Sales Charge
1 Year +11.31%
RETURN AND SHARE VALUE FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH
MORE OR LESS THAN THE ORIGINAL INVESTMENT. PAST PERFORMANCE IS NOT A
GUARANTEE OF FUTURE RESULTS.
(1) CLASS A returns reflect the reinvestment of all distributions, the 5.75%
maximum sales charge and the impact of a 12b-1 fee on performance after May
2, 1994.
(2) CLASS B returns "including sales charge" reflect the reinvestment of all
distributions, the impact of the maximum 4% contingent deferred sales charge
and a 1% annual distribution and service fee, for the period from
introduction of Class B on September 6, 1994, through May 31, 1995. Class B
six-month aggregate total returns for the period ended May 31, 1995, were
+16.84% (excluding sales charge) and +12.84% (including sales charge).
Returns "excluding sales charge" assume that the investment was not redeemed.
Performance for this short time period may not be representative of longer
term performance of this class.
The average annual total returns for Decatur Income Fund's Institutional
Class, which is available without sales or asset-based distribution charges
only to certain eligible institutional accounts, were +12.06%, +9.33% and
+15.60%, respectively, for the 10-, five- and one-year periods ended May 31,
1995. The aggregate total return for the Institutional Class for the six
months ended May 31, 1995, was +17.38%. Institutional Class returns were
+11.88%, +9.96% and +18.24% for the 10-, five- and one-year periods ended
June 30, 1995. The Institutional Class was initially made available on
January 13, 1994. Performance for the Institutional Class for periods prior
to this date are based on Class A performance, adjusted to eliminate the
impact of the sales charge, but not the Class A asset-based distribution
charge.
<PAGE>
Financial Statements
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR INCOME FUND
STATEMENT OF NET ASSETS
Six Months Ended May 31, 1995
(Unaudited)
NUMBER MARKET
OF SHARES VALUE
COMMON STOCK - 81.94%
AEROSPACE & DEFENSE - 1.77%
General Dynamics ............................. 294,800 $ 12,897,500
Lockheed Martin .............................. 224,260 13,343,470
------------
26,240,970
------------
AUTOMOTIVES & AUTOMOBILE PARTS - 3.48%
Chrysler ..................................... 282,300 12,315,338
Dana ......................................... 644,300 18,201,475
Ford Motor ................................... 724,400 21,188,700
------------
51,705,513
------------
BANKING, FINANCES & INSURANCE - 15.61%
Aetna Life & Casualty ........................ 331,600 19,771,650
Aon .......................................... 476,400 17,388,600
Beneficial ................................... 195,100 8,681,950
Chase Manhattan .............................. 399,700 18,486,125
Chemical Bank ................................ 398,700 18,390,038
CIGNA ........................................ 97,400 7,280,650
CoreStates Financial ......................... 199,700 6,640,025
First Union .................................. 500 24,500
Great Western Financial ...................... 424,200 9,279,375
Integra Financial ............................ 230,500 10,977,563
KeyCorp ...................................... 451,900 13,839,438
Marsh & McLennan ............................. 81,200 6,465,550
Mellon Bank .................................. 432,700 18,497,925
Meridian Bankcorp ............................ 495,200 15,815,450
NationsBank .................................. 147,700 8,363,513
St. Paul ..................................... 334,300 17,007,513
Shawmut National ............................. 300,700 8,720,300
UJB Financial ................................ 519,400 15,322,300
U.S. Bancorp ................................. 454,600 11,166,113
------------
232,118,578
------------
CHEMICALS - 11.13%
Dow Chemical ................................. 344,400 25,270,350
DuPont (E.I.) deNemours ...................... 588,600 39,951,225
Grace (W.R.) ................................. 112,500 7,228,125
Imperial Chemical ADR ........................ 163,400 8,292,550
Monsanto ..................................... 367,900 30,627,675
Occidental Petroleum ......................... 1,246,000 28,658,000
Witco ........................................ 924,300 25,418,250
------------
165,446,175
------------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
COMMON STOCK (CONTINUED)
COMPUTERS & ELECTRONICS - 1.93%
General Electric ........................... 494,800 $ 28,698,400
-------------
28,698,400
-------------
CONSUMER PRODUCTS - 2.76%
Avon Products .............................. 45,000 3,031,875
Eastman Kodak .............................. 196,000 11,833,500
Minnesota Mining & Manufacturing ........... 435,700 26,087,538
-------------
40,952,913
-------------
ENERGY - 15.38%
Amoco ...................................... 380,500 26,016,688
Atlantic Richfield ......................... 235,400 27,335,825
Dresser Industries ......................... 579,000 13,244,625
Exxon ...................................... 503,100 35,908,763
Imperial Oil Limited ....................... 395,900 15,390,613
Sonat ...................................... 458,900 15,086,338
Sun ........................................ 326,100 10,272,150
Tenneco .................................... 578,700 27,777,600
Texaco ..................................... 283,200 19,399,200
Ultramar ................................... 631,800 16,821,675
USX-Marathon Group ......................... 1,081,300 21,490,838
-------------
228,744,315
-------------
FOOD, BEVERAGE & TOBACCO - 4.71%
General Mills .............................. 264,000 13,695,000
Heinz (H.J.) ............................... 43,300 1,959,325
Philip Morris .............................. 436,200 31,788,075
RJR Nabisco Holdings ....................... 795,040 22,658,640
-------------
70,101,040
-------------
HEALTHCARE & PHARMACEUTICALS - 6.02%
Lilly (Eli) ................................ 159,800 11,925,075
SmithKline Beecham ADR Unit ................ 793,700 31,351,150
Upjohn ..................................... 549,100 19,973,513
Warner-Lambert ............................. 317,700 26,329,388
-------------
89,579,126
-------------
INDUSTRIAL MACHINERY - 2.36%
Cooper Industries .......................... 301,900 11,170,300
McDermott International .................... 912,600 23,955,750
-------------
35,126,050
-------------
MEDIA, LEISURE & ENTERTAINMENT - 2.79%
Dun & Bradstreet ........................... 165,400 8,766,200
McGraw-Hill ................................ 442,700 32,759,800
-------------
41,526,000
-------------
<PAGE>
NUMBER MARKET
OF SHARES VALUE
COMMON STOCK (CONTINUED)
PAPER & FOREST PRODUCTS - 2.10%
Federal Paper Board ......................... 300,000 $ 9,750,000
Kimberly-Clark .............................. 127,200 7,632,000
Union Camp .................................. 265,500 13,772,813
-------------
31,154,813
-------------
REAL ESTATE - 3.65%
DeBartolo Realty ............................ 989,300 14,221,188
Liberty Property Trust ...................... 818,300 15,854,563
Simon Property Group ........................ 973,400 24,213,325
-------------
54,289,076
-------------
RETAIL - 3.71%
*Darden Restaurants .......................... 239,000 2,629,000
Penney (J.C.) ............................... 668,700 31,512,488
Sears Roebuck ............................... 371,600 20,948,950
-------------
55,090,438
-------------
UTILITIES - 4.54%
ALLTEL ...................................... 615,000 15,144,375
Houston Industries .......................... 209,100 9,017,438
NYNEX ....................................... 668,300 27,901,525
Pacific Telesis Group ....................... 575,600 15,397,300
-------------
67,460,638
-------------
TOTAL COMMON STOCK (COST $1,092,448,632) .... 1,218,234,045
-------------
PREFERRED STOCK - 4.70%
AUTOMOBILES - 1.35%
General Motors $3.25 pfd cv "C" ............. 324,200 20,100,400
-------------
20,100,400
-------------
BANKING, FINANCE & INSURANCE - 1.56%
American Express 6.25% pfd cv ............... 467,200 23,243,200
-------------
23,243,200
-------------
COMPUTERS & ELECTRONICS - 0.75%
Westinghouse $1.30 pfd cv "C" ............... 746,000 11,096,750
-------------
11,096,750
-------------
METALS & MINING - 1.04%
Freeport McMoRan Copper & Gold
7.0% pfd cv ................................ 620,900 15,522,500
-------------
15,522,500
-------------
TOTAL PREFERRED STOCK (COST $64,819,849) .... 69,962,850
-------------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS - 10.02%
AEROSPACE & DEFENSE - 0.49%
BE Aerospace 9.75% sr notes 2003 .............. $ 960,000 $ 945,600
Fairchild 12.25% sr sec notes 1999 ............ 1,500,000 1,515,000
Interlake 12.125% sr sub deb 2002 ............. 1,365,000 1,392,300
Sequa 9.375% sr sub notes 2003 ................ 2,000,000 1,915,000
Talley Manufacturing and Technology
10.75% sr notes 2003 ......................... 1,500,000 1,477,500
-------------
7,245,400
-------------
AUTOMOBILES - 0.37%
JPS Automotive Products 11.125%
sr notes 2001 ................................ 2,000,000 2,005,000
Penda Industries 10.75% sr notes 2004 ......... 1,500,000 1,370,625
SPX 11.75% sr sub notes 2002 .................. 2,000,000 2,145,000
-------------
5,520,625
-------------
BANKING, FINANCE & INSURANCE - 0.64%
AIM Management 9.00% sr notes 2003 ............ 1,100,000 1,089,000
Keystone Group 9.75% sr notes 2003 ............ 1,500,000 1,533,750
PMI Acquisition 10.25% 2003 ................... 3,000,000 3,112,500
UCC Investors 11.00% notes 2003 ............... 2,500,000 2,625,000
U.S. Banknote 11.625% 2002 .................... 1,500,000 1,213,125
-------------
9,573,375
-------------
BUILDING & MATERIALS - 0.30%
American Standard 10.875% sr notes 1999 ....... 2,000,000 2,132,500
Anchor Glass 9.875% sr sub notes 2008 ......... 2,500,000 2,337,500
-------------
4,470,000
-------------
CHEMICALS - 0.91%
Atlantis Group 11.00% sr notes 2003 ........... 1,390,000 1,417,800
Carbide Graphite 11.50% 2003 .................. 2,000,000 2,130,000
Harris Chemical 10.75% sr sub notes 2003 ...... 2,500,000 2,437,500
Hunstman 11.00% 1st mtg notes 2004 ............ 2,500,000 2,787,500
NL Industries 11.75% sr notes 2003 ............ 1,290,000 1,373,850
OSI Specialties 9.25% sr sub notes 2003 ....... 1,300,000 1,304,875
+Polymer Group 12.25% sr notes 2002 ............ 2,000,000 2,017,500
-------------
13,469,025
-------------
COMPUTERS & ELECTRONICS - 0.53%
Essex Group 10.00% sr notes 2003 .............. 1,450,000 1,428,250
IMO Industries 12.00% sr sub notes 2001 ....... 2,000,000 2,080,000
Mark IV Industries 8.75% sub notes 2003 ....... 1,500,000 1,530,000
Unisys 13.50% floating rate notes 1997 ........ 2,500,000 2,787,500
-------------
7,825,750
-------------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
CONSUMER PRODUCTS - 0.26%
Revlon 9.50% sr notes 1999 ....................... $1,500,000 $1,488,750
Scotts 9.875% sr sub notes 2004 .................. 950,000 1,004,625
U.S. Leather 10.25% sr notes 2003 ................ 1,500,000 1,312,500
-------------
3,805,875
-------------
ENVIRONMENTAL SERVICES - 0.25%
Allied Waste Industrial 10.75% 2004 .............. 1,500,000 1,567,500
Global Marine 12.75% sr sec notes 1999 ........... 2,000,000 2,210,000
-------------
3,777,500
-------------
FARMING & AGRICULTURE - 0.16%
Chiquita Brands 11.50% sub notes 2001 ............ 2,250,000 2,317,500
-------------
2,317,500
-------------
FOOD, BEVERAGE & TOBACCO - 0.19%
Mafco 11.875% sr sub notes 2002 .................. 2,800,000 2,842,000
-------------
2,842,000
-------------
HEALTHCARE & PHARMACEUTICALS - 0.58%
HEALTHSOUTH Rehabilitation 9.50%
sr sub notes 2001 ............................... 1,500,000 1,541,250
Healthtrust 10.75% sub notes 2002 ................ 2,000,000 2,225,000
Healthtrust 10.25% sub notes 2004 ................ 1,500,000 1,717,500
National Medical 10.125% sr sub notes 2005 ....... 2,980,000 3,158,800
-------------
8,642,550
-------------
INDUSTRIAL MACHINERY - 0.06%
Calmar Spraying Systems 14.00%
sr sub disc notes 1999 .......................... 1,000,000 1,030,000
-------------
1,030,000
-------------
MEDIA, LEISURE & ENTERTAINMENT - 2.39%
ACT III Theatres 11.875%
sr sub notes 2003 ............................... 2,150,000 2,322,000
AMC Entertainment 11.875%
sr sub notes 2000 ............................... 3,000,000 3,240,000
Aztar 11.00% sr sub notes 2002 ................... 2,500,000 2,525,000
Bally's Grand 10.375% 2003 ....................... 2,000,000 1,970,000
Bally Park Place Fundings
9.25% 1st mtg notes 2004 ........................ 2,000,000 1,860,000
Cablevision Industries 10.75%
sr sub notes 2004 ............................... 1,500,000 1,582,500
Century Communications 11.875% 2003 .............. 1,500,000 1,578,750
Cinemark U.S.A. 12.00% sr notes 2002 ............. 2,000,000 2,165,000
Continental Cablevision 9.00%
sr sub deb 2008 ................................. 1,000,000 995,000
Continental Cablevision 11.00% deb 2008 .......... 2,600,000 2,879,500
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
MEDIA, LEISURE & ENTERTAINMENT (CONTINUED)
Jones Intercable 9.625% sr notes 2002 .......... $ 2,500,000 $ 2,562,500
K-III Communications 10.625%
sr sec notes 2002 ............................. 2,000,000 2,105,000
Kloster Cruise 13.00% sr notes 2003 ............ 360,000 306,000
Lamar Advertising 11.00% sr sec
notes 2003 .................................... 1,495,000 1,506,213
MGM Grand Hotel Finance 12.00%
1st mtg notes 2002 ............................ 2,000,000 2,235,000
Rogers Cablesystem 10.00% sr notes 2005 ........ 2,500,000 2,559,375
Santa Fe Hotels 11.00% 2000 .................... 1,250,000 1,175,000
Sullivan Graphics 15.00% sr sub notes 2000 ..... 1,000,000 1,062,500
Universal Outdoor 11.00% 2003 .................. 1,000,000 970,000
-------------
35,599,338
-------------
METALS & MINING - 0.44%
AK Steel 10.75% sr notes 2004 .................. 2,800,000 2,968,000
Armco 11.375% sr notes 1999 .................... 1,250,000 1,306,250
U.S. Can 13.50% sr sub notes 2002 .............. 2,000,000 2,217,500
-------------
6,491,750
-------------
PAPER & FOREST PRODUCTS - 1.19%
Container Corporation of America
11.25% sr notes 2004 .......................... 2,000,000 2,160,000
Doman Industries 11.75% sr notes 2004 .......... 1,500,000 1,472,265
Domtar 11.75% sr notes 1999 .................... 2,500,000 2,781,250
Gaylord Container 11.50% sr notes 2001 ......... 1,500,000 1,601,250
Owens-Illinois 11.00% sr debs 2003 ............. 2,000,000 2,222,500
Pacific Lumber 10.50% sr notes 2003 ............ 2,000,000 1,900,000
Repapa Wisconsin 9.25% sr notes 2002 ........... 625,000 617,188
Repapa New Brunswick 10.625%
sr notes 2005 ................................. 2,000,000 2,050,000
Stone Container 12.625% sr notes 2098 .......... 1,000,000 1,085,000
Stone Container 10.75% 1st mtg notes 2002 ...... 785,000 836,025
Sweetheart Cup 9.625% sr notes 2000 ............ 1,000,000 997,500
-------------
17,722,978
-------------
RETAIL - 0.68%
Cort Furniture 12.00% 2000 ..................... 2,375,000 2,351,250
DiGiorgio 12.00% sr notes 2003 ................. 1,600,000 1,208,000
Fleming 10.625% sr notes 2001 .................. 2,000,000 2,115,000
Food 4 Less Supermarkets 10.45%
sr unsec notes 2000 ........................... 2,000,000 2,000,000
Penn Traffic 10.25% sr notes 2002 .............. 1,500,000 1,541,250
Specialty Foods 11.25% sr notes 2003 ........... 840,000 838,950
-------------
10,054,450
-------------
<PAGE>
PRINCIPAL MARKET
AMOUNT VALUE
CORPORATE BONDS (CONTINUED)
TEXTILES & FURNITURE - 0.16%
Westpoint Stevens 9.375%
sr sub deb 2005 .............................. $ 2,500,000 $ 2,443,750
-------------
2,443,750
-------------
TRANSPORTATION - 0.04%
Trans Ocean Container 12.25%
sr sub notes 2004 ............................ 600,000 609,000
-------------
609,000
-------------
UTILITIES - 0.28%
Comcast Cellular 0.00% notes 2000 ............. 2,000,000 1,470,000
Midland Funding II 11.75% notes 2005 .......... 2,000,000 2,055,000
Rogers Cantel Mobile 11.125%
sr sub notes 2002 ............................ 550,000 576,125
-------------
4,101,125
-------------
MISCELLANEOUS - 0.10%
Ivex Packaging 12.50% sr sub notes 2002 ....... 1,330,000 1,424,763
-------------
1,424,763
-------------
TOTAL CORPORATE BONDS (COST $146,003,244) ..... 148,966,754
-------------
REPURCHASE AGREEMENTS - 2.10%
With Chase Manhattan 6.125% 6/1/95
(dated 5/31/95, collateralized by
$10,573,000 U.S. Treasury Notes
6.00% due 6/30/96, market value
$10,847,889) ................................. 10,560,000 10,560,000
With Deutsche Bank 6.10% 6/1/95
(dated 5/31/95, collateralized by
$10,238,000 U.S. Treasury Notes
6.125% due 7/31/96, market value
$10,460,658) ................................. 10,254,000 10,254,000
With PaineWebber 6.125% 6/1/95
(dated 5/31/95, collateralized by
$2,131,000 U.S. Treasury Notes
3.875% due 8/31/95, market value
$2,140,596 and $8,138,000 U.S.
Treasury Notes 8.50% due 4/15/97,
market value $8,594,677) ..................... 10,416,000 10,416,000
-------------
TOTAL REPURCHASE AGREEMENTS
(COST $31,230,000) ........................... 31,230,000
-------------
<PAGE>
MARKET
VALUE
TOTAL MARKET VALUE OF SECURITIES
OWNED - 98.76% (COST $1,334,501,725) ......................... $1,468,393,649
RECEIVABLE AND OTHER ASSETS NET
OF LIABILITIES - 1.24% ....................................... 18,422,401
-------------
NET ASSETS APPLICABLE TO 85,441,139
SHARES ($1 PAR VALUE) OUTSTANDING;
PER SHARE - 100.00% .......................................... $1,486,816,050
=============
NET ASSET VALUE - DECATUR INCOME
FUND A CLASS
($1,290,593,566 / 74,161,688 SHARES) ......................... $ 17.40
=======
NET ASSET VALUE - DECATUR INCOME
FUND B CLASS
($9,242,159 / 531,705 SHARES) ................................ $ 17.38
=======
NET ASSET VALUE - DECATUR INCOME
FUND INSTITUTIONAL CLASS
($186,980,325 / 10,747,746 SHARES) .......................... $ 17.40
=======
- ------------
* Non-income producing for the six months ended May 31, 1995.
+ This security is exempt from registration under Rule 144A of the Securities
Act of 1933. This security may be resold in transactions exempt from
registration, normally to qualified institutional buyers.
COMPONENTS OF NET ASSETS AT MAY 31, 1995:
Common stock, $1 par value, 550,000.000 shares
authorized to the Fund with 450,000,000 shares
allocated to Decatur Income Fund A Class,
50,000,000 shares allocated to Decatur Income
Fund B Class and 50,000,000 shares allocated
to Decatur Income Fund Institutional Class .............. $1,324,117,141
Accumulated undistributed income:
Net investment income ................................... 3,105,001
Net realized gain on investments ........................ 25,701,984
Net unrealized appreciation of investments .............. 133,891,924
--------------
Total net assets .......................................... $1,486,816,050
==============
See accompanying notes
<PAGE>
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR INCOME FUND
STATEMENT OF OPERATIONS
Six Months Ended May 31, 1995
(Unaudited)
INVESTMENT INCOME:
Dividends ...................................... $ 26,891,347
Interest ....................................... 8,720,620 $ 35,611,967
------------
EXPENSES:
Management fees ($3,422,111)
and directors' fees ($14,353) ................. 3,436,464
Dividend disbursing and transfer agent
fees and expenses ............................. 1,153,220
Distribution expenses .......................... 787,526
Reports to shareholders ........................ 177,420
Salaries ....................................... 168,576
Taxes, other than taxes on income .............. 78,875
Federal and state registration fees ............ 30,000
Professional fees .............................. 27,886
Custodian fees ................................. 25,443
Other .......................................... 123,386 6,008,796
------------ ------------
NET INVESTMENT INCOME .......................... 29,603,171
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS
Net realized gain from security transactions ................... 34,550,634
Net unrealized appreciation of
investments during the period ................................. 159,295,218
-------------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS ........................................... 193,845,852
-------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ..................................... $ 223,449,023
=============
See accompanying notes
<PAGE>
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR INCOME FUND
STATEMENT OF CHANGES IN NET ASSETS
Six Months
Ended 5/31/95 Year Ended
(Unaudited) 11/30/94
OPERATIONS:
Net investment income ........................ $ 29,603,171 $ 57,328,491
Net realized gain from security
transactions ................................ 34,550,634 36,051,478
Net appreciation (depreciation)
during the period ........................... 159,295,218 (97,720,373)
------------- ------------
Net increase (decrease) in net assets
resulting from operations ................... 223,449,023 (4,340,404)
------------- ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Decatur Income Fund A Class ................. (26,340,331) (66,582,316)
Decatur Income Fund B Class ................. (98,883) (15,826)
Decatur Income Fund Institutional Class ..... (4,096,376) (7,995,057)
Net realized gain from security transactions:
Decatur Income Fund A Class ................. (30,907,169) (144,029,198)
Decatur Income Fund B Class ................. (85,820) --
Decatur Income Fund Institutional Class ..... (4,868,512) --
------------- ------------
(66,397,091) (218,622,397)
------------- ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Decatur Income Fund A Class ................... 35,900,258 56,739,570
Decatur Income Fund B Class ................... 5,912,255 2,858,350
Decatur Income Fund Institutional Class ....... 16,674,529 34,055,194
Net asset value of shares issued upon
reinvestment of dividends from net investment
income and realized securities profits:
Decatur Income Fund A Class ................... 50,080,267 187,326,243
Decatur Income Fund B Class ................... 138,050 10,142
Decatur Income Fund Institutional Class ....... 8,722,689 7,137,272
------------- ------------
117,428,048 288,126,771
------------- ------------
Cost of shares repurchased:
Decatur Income Fund A Class ................... (86,815,565) (174,051,022)
Decatur Income Fund B Class ................... (283,388) (261)
Decatur Income Fund Institutional Class ....... (39,318,666) (64,552,660)
------------- ------------
(126,417,619) (238,603,943)
------------- ------------
Increase (decrease) in net assets
derived from capital share transactions ....... (8,989,571) 49,522,828
------------- ------------
NET INCREASE (DECREASE)
IN NET ASSETS ................................. 148,062,361 (173,439,973)
NET ASSETS:
Beginning of period ...................... 1,338,753,689 1,512,193,662
------------- -------------
End of period (including undistributed
net investment income of $3,105,001 and
$4,037,420, respectively) .............. $1,486,816,050 $1,338,753,689
============== =============
See accompanying notes
<PAGE>
DELAWARE GROUP DECATUR FUND, INC. -
DECATUR INCOME FUND
NOTES TO FINANCIAL STATEMENTS
May 31, 1995
(Unaudited)
Delaware Group Decatur Fund, Inc. - (the "Company"), is registered as a
diversified open-end investment company under the Investment Company Act of
1940. The Company currently offers two Series, Decatur Income Fund (the
"Fund") and Decatur Total Return Fund. The Company is organized as a Maryland
corporation and the Fund offers three classes of shares.
1. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with general accounting
principles and are consistently followed by the Fund for financial statement
preparation:
SECURITY VALUATION - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm on the valuation date. Securities not traded
are valued at the last quoted bid price. Securities not listed on an exchange
are valued at the mean of the last quoted bid and asked prices. Money market
instruments having less than 60 days to maturity are valued at amortized
cost.
FEDERAL INCOME TAXES - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes is required in the
financial statements.
REPURCHASE AGREEMENTS - The Fund may invest in a pooled cash account along
with other members of the Delaware Group Family of Funds. The aggregated
daily balance of the pooled cash account is invested in repurchase agreements
secured by obligations of the U.S. Government. The respective collateral is
held by the Fund's custodian bank until the maturity of the respective
repurchase agreements. Each repurchase agreement is 102% collateralized.
However, in the event of default or bankruptcy by the counterparty to the
agreement, realization of the collateral may be subject to legal proceedings.
CLASS ACCOUNTING - Investment income, common expenses and gain(loss) are
allocated to the various classes of the Fund on the basis of daily net assets
of each class. Distribution expenses relating to a specific class are charged
directly to that class.
OTHER - Expenses common to all Funds within the Delaware Group Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased
or sold (trade date). Costs used in calculating realized gains and losses on
the sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Original issue discounts are accreted to
interest income over the lives of the respective securities. The Fund
declares and pays dividends from net inestment income on a monthly basis. The
Fund declared distributions from net investment income in the amount of
$0.0567, $0.045, and $0.06 per share for the Decatur Income Fund A Class,
Decatur Income Fund B Class and Decatur Income Fund Institutional Class,
respectively, payable on July 10, 1995 to shareholders of record on June 29,
1995. The ex-dividend date was June 30, 1995.
<PAGE>
2. INVESTMENT MANAGEMENT AND DISTRIBUTION AGREEMENTS
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC), the Investment Manager of the
Fund, an annual fee which is calculated daily at the rate of 0.60% on the
first $100 million of average daily net assets of the Fund, 0.525% on the
next $150 million, 0.50% on the next $250 million and 0.475% on the average
daily net assets over $500 million, less fees paid to the independent
directors. At May 31, 1995, the Fund had a liability for Investment
Management fees and other expenses payable to DMC for $118,392.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of A Class and 1.00% of the
average daily net assets of the B Class. At May 31, 1995, the Fund had a
liability for distribution fees and other expenses payable to DDLP for
$33,706. For the six months ended May 31, 1995, the Fund paid DDLP $135,579
for commissions earned on sales of Decatur Income Fund A Class shares.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to serve as dividend disbursing and transfer agent for the Fund. For the
period ended May 31, 1995, the Fund has expensed $1,153,220 for these
services. At May 31, 1995, the Fund had a liability for such fees and other
expenses payable to DSC for $35,086.
Certain officers of the Investment Manager are officers, directors and/or
employees of the Fund. These officers, directors and employees are paid no
compensation by the Fund.
On April 3, 1995, Delaware Management Holdings, Inc., the indirect parent of
DMC, DDLP and DSC, through a merger transaction (the "Merger") became a
wholly-owned subsidiary of Lincoln National Corporation. Other than the
resulting change in ownership, the Merger will not materially change the
manner in which DMC, DDLP and DSC have heretofore conducted their
relationship with the Fund.
An annual meeting of shareholders was held on March 29, 1995. The matters
submitted to a vote of shareholders were the election of directors, the
approval of a new investment management agreement and the ratification of the
selection of Ernst & Young LLP as independent auditors of the Fund. The new
investment management agreement was submitted for shareholder approval in
connection with the Merger noted above because the Investment Company Act of
1940 requires shareholders to vote on a new investment management agreement
whenever there is a change in control of an investment manager.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
The names of each director elected at the meeting along with the final vote
tabulation with respect to each nominee and each matter were as follows:
NUMBER OF VOTES
----------------------------------------
FOR AGAINST/WITHHELD ABSTENTIONS
---------- ---------------- -----------
Election of Directors*:
Wayne A. Stork ...................... 70,402,214 2,124,457 --
Walter P. Babich .................... 70,396,277 2,130,394 --
Anthony D. Knerr .................... 70,394,910 2,131,761 --
Ann R. Leven ........................ 70,405,517 2,121,154 --
W.Thacher Longstreth ................ 70,381,788 2,144,883 --
Charles E. Peck ..................... 70,395,020 2,131,651 --
Approval of the New Investment
Management Agreement ................ 49,488,817 1,140,296 2,564,971
Selection of Ernst & Young LLP as
Independent Auditors* ............... 67,759,636 644,276 4,122,758
* Voted upon by all shareholders of the Company.
3. INVESTMENTS
During the six months ended May 31, 1995, the Fund made purchases of
$440,010,218 and sales of $511,422,330 of investment securities other than
U.S. Government securities and temporary cash investments.
At May 31, 1995, unrealized appreciation for financial reporting and federal
income tax purposes aggregated $127,865,265 of which $144,107,302 related to
unrealized appreciation of securities and $16,242,037 related to unrealized
depreciation of securities.
The realized gain for federal income tax purposes was $33,743,115 for the six
months ended May 31, 1995.
<PAGE>
4. CAPITAL STOCK
Transactions in capital stock shares were as follows:
SIX MONTHS YEAR
ENDED ENDED
5/31/95 11/30/94
Shares sold:
Decatur Income Fund A Class ..................... 2,229,899 3,434,662
Decatur Income Fund B Class ..................... 362,104 177,186
Decatur Income Fund Institutional Class ......... 1,024,727 15,245,137
Shares issued upon reinvestment of dividends
from net investment income and distributions
of realized gain from security transactions:
Decatur Income Fund A Class ..................... 3,194,600 11,415,889
Decatur Income Fund B Class ..................... 8,745 638
Decatur Income Fund Institutional Class ......... 556,921 445,742
--------- -----------
7,376,996 30,719,254
--------- -----------
Shares repurchased:
Decatur Income Fund A Class ..................... (5,351,536) (23,687,288)
Decatur Income Fund B Class ..................... (16,951) (16)
Decatur Income Fund Institutional Class ......... (2,518,300) (4,006,482)
--------- -----------
(7,886,787) (27,693,786)
--------- -----------
Net increase (decrease) .......................... (509,791) 3,025,468
========= ===========
5. SECURITIES LENDING
The market value of securities on loan to broker/dealers at May 31, 1995, was
$125,797,343 for which the Fund received cash collateral of $127,905,180.
6. LINES OF CREDIT
The Fund has a committed line of credit $25,000,000. No amount was
outstanding at May 31, 1995, or at any time during the fiscal period.
7. CONCENTRATION OF CREDIT RISK
The Fund invests in high yield fixed-income securities which carry ratings of
CCC or lower by S&P and/or Caa or lower by Moody's. Investments in these
higher yielding securities maybe accompanied by a greater degree of credit
risk than higher rated securities. Additionally, lower-rated securities may
be susceptible to adverse economic and competitive industry conditions more
than investment grade securities.
The Fund may invest up to 10% of its total net assets in illiquid securities
which include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The
relative illiquidity of some of these securities may adversely affect the
Fund's ability to dispose of such securities in a timely manner and at a fair
price when it is necessary to liquidate such securities. These securities
have been denoted in the Statement of Net Assets.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DECATUR INCOME FUND A CLASS
--------------------------------------------------------------------------
SIX MONTHS(2)
ENDED YEAR ENDED NOVEMBER 30,
5/31/95 1994 1993 1992 1991 1990
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............... $ 15.57 $ 18.24 $ 17.20 $ 15.76 $ 14.53 $ 19.07
Income from investment operations:
Net investment income ............................. 0.34 0.67 0.78 0.78 0.83 0.93
Net realized and unrealized gain (loss) from
security transactions ............................ 2.26 (0.73) 1.79 1.47 1.37 (2.93)
------- ------- ------- ------- ------- --------
Total from investment operations ................... 2.60 (0.06) 2.57 2.25 2.20 (2.00)
------- ------- ------- ------- ------- --------
Less distributions:
Dividends from net investment income .............. (0.35) (0.86) (0.68) (0.81) (0.97) (1.05)
Distributions from net realized gain on
security transactions ............................ (0.42) (1.75) (0.85) none none (1.49)
------- ------- ------- ------- ------- --------
Total distributions ................................ (0.77) (2.61) (1.53) (0.81) (0.97) (2.54)
------- ------- ------- ------- ------- --------
Net asset value, end of period ..................... $ 17.40 $ 15.57 $ 18.24 $ 17.20 $ 15.76 $ 14.53
======= ======= ======= ======= ======= ========
Total return(1) .................................... 17.34% (0.57%) 15.85% 14.55% 15.46% (12.04%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) ...........$1,290,594 $1,153,884 $1,512,194 $1,508,206 $1,579,521 $1,560,641
Ratio of expenses to average net assets ........... 0.88% 0.81% 0.71% 0.72% 0.70% 0.70%
Ratio of net investment income to average
net assets ....................................... 4.25% 3.92% 4.34% 4.55% 5.18% 5.78%
Portfolio turnover ................................ 65% 92% 80% 79% 78% 44%
</TABLE>
- ------------
(1) Does not include maximum sales charge of 5.75% nor the 1% limited contingent
deferred sales charge that would apply in the event of certain redemptions
within 12 months of purchase.
(2) Ratios have been annualized and total return has not been annualized.
<PAGE>
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
8. FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
DECATUR INCOME DECATUR INCOME
FUND B CLASS FUND INSTITUTIONAL CLASS
----------------------------- -------------------------
SIX MONTHS(2) 1/13/94(4) SIX MONTHS(2) 9/6/943
ENDED TO ENDED TO
5/31/95 11/30/94 5/31/95 11/30/94
<S> <C> <C> <C> <C>
Net asset value, beginning of period ........................... $ 15.55 $ 16.59 $ 15.59 $ 16.72
Income from investment operations:
Net investment income ......................................... 0.28 0.15 0.35 0.59
Net realized and unrealized gain (loss) from
security transactions ........................................ 2.25 (1.02) 2.26 (1.10)
------- ------- ------- -------
Total from investment operations ............................... 2.53 (0.87) 2.61 (0.51)
Less distributions:
Dividends from net investment income .......................... (0.28) (0.17) (0.38) (0.62)
Distributions from net realized gain on security
transactions ................................................. (0.42) none 0.42) none
------- ------- ------- -------
Total distributions ............................................ (0.70) (0.17) (0.80) (0.62)
------- ------- ------- -------
Net asset value, end of period ................................. $ 17.38 $ 15.55 $ 17.40 $ 15.59
======= ======= ======= =======
Total return(1) ................................................ 16.84% (5.27%) 17.38% (0.45%)
Ratios/supplemental data:
Net assets, end of period (000 omitted) ....................... $9,242 $2,765 $186,980 $182,105
Ratio of expenses to average net assets ....................... 1.75% 1.70% 0.75% 0.70%
Ratio of net investment income to average net assets .......... 3.38% 3.03% 4.38% 4.03%
Portfolio turnover ............................................ 65% 92% 65% 92%
</TABLE>
- ------------
(1) Does not include the contingent deferred sales charge which varies from
1%-4% depending upon the holding period for Decatur Income Fund B Class.
(2) Ratios have been annualized and total return has not been annualized.
(3) Date of initial public offering; ratios and total return have been
annualized.
(4) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
<PAGE>
Delaware Group of Funds
FOR GROWTH OF CAPITAL FOR TAX-FREE
Trend Fund CURRENT INCOME
DelCap Fund Tax-Free USA Fund
Value Fund Tax-Free Insured Fund
Tax-Free USA
FOR TOTAL RETURN Intermediate Fund
Dividend Growth Fund Tax-Free Pennsylvania Fund
Decatur Total Return Fund
Decatur Income Fund MONEY MARKET FUNDS
Delaware Fund Delaware Cash Reserve
U.S. Government Money Fund
FOR GLOBAL Tax-Free Money Fund
DIVERSIFICATION
International Equity Fund CLOSED-END EQUITY/INCOME
Global Assets Fund Dividend and Income Fund
Global Bond Fund Global Dividend and
Income Fund
FOR CURRENT INCOME
Delchester Fund
U.S. Government Fund
Treasury Reserves
Intermediate Fund
<PAGE>
Board Members
WAYNE A. STORK
Chairman
Delaware Group of Funds
Philadelphia, PA
WALTER P. BABICH
Board Chairman
Citadel Constructors, Inc.
King of Prussia, PA
ANTHONY D. KNERR
Consultant
Anthony Knerr & Associates
New York, NY
ANN R. LEVEN
Treasurer
National Gallery of Art
Washington, DC
W. THACHER LONGSTRETH
Vice Chairman
Packquisition Corp.
Philadelphia, PA
CHARLES E. PECK
Secretary of Enterprise Homes, Inc.
Fredericksburg, VA
former Chairman and CEO
The Ryland Group, Inc.
Columbia, MD
Other Affiliated Officers
BRIAN F. WRUBLE
President and CEO
Delaware Group of Funds
Philadelphia, PA
GEORGE M. CHAMBERLAIN, JR.
Secretary
Delaware Group of Funds
Philadelphia, PA
KEITH E. MITCHELL
President and CEO
Delaware Distributors, L.P.
Philadelphia, PA
DAVID K. DOWNES
Chairman
Delaware Management Trust Company
Philadelphia, PA
MINETTE VAN NOPPEN
President and CEO
Delaware Management Trust Company
Philadelphia, PA
This semi-annual report is for the information of Decatur Income Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current PROSPECTUS, which gives details about charges,
expenses, investment objectives and operating policies of the Fund. Summary
investment results are documented in the current STATEMENT OF ADDITIONAL
INFORMATION. If used with prospective investors after September 30, 1995,
this report must also be accompanied by a Decatur Income Fund Performance
Update for the most recently completed calendar quarter. The figures in this
report represent past results, which are not a guarantee of future results.
The return and principal value of an investment in the Fund will fluctuate so
that shares, when redeemed, may be worth more or less than their original cost.
<PAGE>
The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, tax-free funds, money market funds,
closed-end equity/income funds and global funds give investors the ability to
create a portfolio that fits their personal financial goals. For more
information, including a prospectus of any Delaware Group fund, contact
your financial adviser or call Delaware Group at 800-523-4640 or
215-988-1333 in Philadelphia. Read the prospectus carefully before investing.
BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL
FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE
FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY
CREDIT UNION, ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND
INVOLVE INVESTMENT RISK, INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF
THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.
- -------------------------------------------------------------------------------
INVESTMENT MANAGER SHAREHOLDER SERVICING,
Delaware Management Company, Inc. DIVIDEND DISBURSING
AND TRANSFER AGENT
INTERNATIONAL AFFILIATE Delaware Service Company, Inc.
Delaware International Advisers Ltd.
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
- -------------------------------------------------------------------------------
SA-001 [5/95] PP7/95 Printed in the U.S.A.
|-------------------|
| BULK RATE |
| U.S. POSTAGE |
| PAID |
| Permit No.145 |
| Conshohocken, PA |
|-------------------|
<PAGE>
DELAWARE GROUP
A TRADITION OF SOUND INVESTING SINCE 1929
PHOTO OF
COLONIAL OBJECTS
|
1995 |
|
SEMI- |
|
ANNUAL |
|
REPORT | DELAWARE
| GROUP
| =============
| Decatur
| Income Fund
