May 23, 1997
Delaware Group of Funds
Supplement to Prospectuses Dated as Noted Below
Trend Fund
A Class/B Class/C Class
(August 29, 1996)
Enterprise Fund
U.S. Growth Fund
World Growth Fund
New Pacific Fund
Federal Bond Fund
Corporate Income Fund
A Class/B Class/C Class
(February 28, 1997)
DelCap Fund
A Class/B Class/C Class
(November 29, 1996)
Value Fund
A Class/B Class/C Class
(January 29, 1997)
Delaware Fund
Devon Fund
(December 30, 1997)
International Equity Fund
Global Bond Fund
Global Assets Fund
Emerging Markets Fund
A Class/B Class/C Class
(March 21, 1997)
Decatur Income Fund
Decatur Total Return Fund
A Class/B Class/C Class
(February 24, 1997)
Blue Chip Fund
Quantum Fund
A Class/B Class/C Class
(February 24, 1997)
Delchester Fund
A Class/B Class/C Class
(September 30, 1996)
Strategic Income Fund
A Class/B Class/C Class
(September 30, 1996 as
revised October 4, 1996)
U.S. Government Fund
A Class/B Class/C Class
(September 30, 1996)
Limited-Term Government Fund
A Class/B Class/C Class
(February 28, 1997)
The following replaces information on page 1 of the Prospectus:
Representatives of Financial Institutions:
Nationwide 800-659-2265
The following supplements the section of the Prospectus
for each of the above listed funds (except Quantum Fund)
entitled Buying Class A Shares at Net Asset Value under Classes
of Shares:
Purchases of Class A Shares at net asset value may
also be made by the following: financial institutions
investing for the account of their trust customers when
they are not eligible to purchase shares of the
institutional class of the fund; and any group
retirement plan (excluding defined benefit pension
plans), or such plans of the same employer, for which
plan participant records are maintained on the Delaware
Investment & Retirement Services, Inc. ("DIRSI")
proprietary record keeping system that (i) has in
excess of $500,000 of plan assets invested in Class A
Shares of Delaware Group funds and in any stable value
product available through the Delaware Group, or (ii)
is sponsored by an employer that has at any point after
May 1, 1997 more than 100 employees while such plan has
held Class A Shares of a Delaware Group fund and such
employer has properly represented to DIRSI in writing
that it has the requisite number of employees and has
received written confirmation back from DIRSI.
The following supplements the section of the Prospectus for
Quantum Fund entitled Buying Class A Shares at Net Asset Value
under Classes of Shares:
Purchases of Class A Shares at net asset value may
also be made by the following: financial institutions
investing for the account of their trust customers when
they are not eligible to purchase shares of the
institutional class of the fund; and any group
retirement plan (excluding defined benefit pension
plans), or such plans of the same employer, that (i)
has in excess of $500,000 of plan assets invested in
Class A Shares of Delaware Group funds and in any
stable value product available through the Delaware
Group, or (ii) is sponsored by an employer that has at
any point after May 1, 1997 more than 100 employees
while such plan has held Class A Shares of a Delaware
Group fund and such employer has properly represented
to DIRSI in writing that it has the requisite number of
employees and has received written confirmation back
from DIRSI.
The following supplements the section of the Prospectus for
Trend Fund, DelCap Fund, International Equity Fund, Decatur Total
Return Fund, Delchester Fund and Limited-Term Government Fund
entitled Buying Class A Shares at Net Asset Value under Classes
of Shares:
Purchases of Class A Shares at net asset value
may also be made by bank sponsored retirement plans
that are no longer eligible to purchase Institutional
Class Shares as a result of a change in the
distribution arrangements.
The following supplements the section of the Prospectus
for each Fund entitled Buying Class A Shares at Net Asset Value
under Classes of Shares:
Investors in Delaware-Voyageur Unit Investment
Trusts may reinvest monthly dividend checks and/or
repayment of invested capital into Class A Shares of
any of the funds in the Delaware Group at net asset
value.
The following replaces the first paragraph in the section of
the Prospectus entitled Retirement Planning:
An investment in the Fund may be suitable for tax-
deferred retirement plans. Among the retirement plans
noted below, Class B Shares are available for
investment only by Individual Retirement Accounts,
Simplified Employee Pension Plans, Salary Reduction
Simplified Employee Pension Plans, 457 Deferred
Compensation Plans and 403(b)(7) Deferred Compensation
Plans.
The following replaces the section of the Prospectus
entitled Salary Reduction Simplified Employee Pension Plan
("SAR/SEP") under Retirement Planning:
Although new SAR/SEP plans may not be established after
December 31, 1996, existing plans may be maintained by
employers having 25 or fewer employees. An employer
may elect to make additional contributions to such
existing plans.
The following supplements the section of the Prospectus under
Retirement Planning:
SIMPLE IRA
A SIMPLE IRA combines many of the features of an
Individual Retirement Account (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.
SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that
plan sponsors are limited to 100 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.
The Limited CDSC is applicable to any redemptions of
net asset value purchases made on behalf of any group
retirement plan on which a dealer's commission has been
paid if such redemption is made pursuant to a
withdrawal of the entire plan from Delaware Group
funds.
The following is included after the second sentence in the
section of the Prospectus entitled Combined Purchases Privilege
under Classes of Shares:
Assets held in any stable value product available
through the Delaware Group may be combined with other
Delaware Group fund holdings.
The following replaces the first and second sentence in the
section of the Prospectus entitled Group Investment Plans under
Classes of Shares:
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE
IRA, SIMPLE 401(k), Profit Sharing, Money Purchase
Pension, 401(k) Defined Contribution Plans, and
403(b)(7) and 457 Deferred Compensation Plans) may
benefit from the reduced front-end sales charges
available on Class A Shares based on total plan assets.
The following replaces the last paragraph of the discussion of
Automatic Investing Plan and Wealth Builder Option in the section
of the Prospectus entitled Additional Methods of Adding to Your
Investment under How to Buy 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.
The following supplements the discussion of Dividend Reinvestment
Plan in the section of the Prospectus entitled Additional Methods
of Adding to Your Investment under How to Buy Shares:
Capital gains and/or dividend distributions for
participants in the following retirement plans are
automatically reinvested into the same Delaware Group
fund: 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.
The following replaces the last sentence in the first paragraph
of the discussion of Retirement Plans in the section of the
Prospectus entitled Systematic Withdrawal Plans under Redemption
and Exchange:
The MoneyLine service described above is not available
for certain retirement plans.
The following replaces item (iv) in the first paragraph in the
section of the Prospectus entitled Waiver of Limited Contingent
Deferred Sales Charge - Class A Shares under Redemption and
Exchange:
(iv) periodic distributions from an IRA, SIMPLE IRA, or
403(b)(7) or 457 Deferred Compensation Plan due to
death, disability, or attainment of age 59 1/2, and IRA
distributions qualifying under Section 72(t) of the
Internal Revenue Code;
The following replaces items (ii) and (iii) in the first
paragraph in the section of the Prospectus entitled Waiver of
Contingent Deferred Sales Charge - Class B and Class C Shares
under Redemption and Exchange:
(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 Plan, and IRA distributions qualifying
under Section 72(t) of the Internal Revenue Code;
The following replaces items (ii), (iii) and (vi) in the second
paragraph in the section of the Prospectus entitled Waiver of
Contingent Deferred Sales Charge - Class B and Class C Shares
under Redemption and Exchange:
(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 Internal Revenue Code; . . . (vi) periodic
distributions from an IRA or SIMPLE IRA on or after
attainment of age 59;
May 23, 1997
U.S. Government Money Fund
A Class/Consultant Class
Supplement to Prospectus dated February 28, 1997
The following supplements information on page 1 of the
Prospectus:
Representatives of Financial Institutions:
Nationwide 800-659-2265
The following replaces the section of the Prospectus entitled
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP") under
Retirement Planning:
Although new SAR/SEP plans may not be established after
December 31, 1996, existing plans may be maintained by
employers having 25 or fewer employees. An employer
may elect to make additional contributions to such
existing plans.
The following supplements the section of the Prospectus under
Retirement Planning:
SIMPLE IRA
A SIMPLE IRA combines many of the features of an
Individual Retirement Account (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.
SIMPLE 401(k)
A SIMPLE 401(k) is like a regular 401(k) except that
plan sponsors are limited to 100 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.
The following replaces the last paragraph of the discussion of
Automatic Investing Plan and Wealth Builder Option in the section of
the Prospectus entitled Additional Methods of Adding to Your Investment
under Buying 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.
The following supplements the discussion of Dividend Reinvestment
Plan in the section of the Prospectus entitled Additional Methods of
Adding to Your Investment under Buying Shares:
Distributions and/or dividends for participants in the
following retirement plans are automatically reinvested
into the same Delaware Group fund: 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.
The following replaces the last sentence in the first paragraph
of the discussion of Retirement Plans in the section of the
Prospectus entitled Systematic Withdrawal Plans under Redemption and
Exchange:
The MoneyLine service described above is not available
for certain retirement plans.
May 23, 1997
Tax-Free USA Fund
Tax-Free USA Intermediate Fund
Tax-Free Insured Fund
A Class/B Class/C Class
Supplement to Prospectus dated October 30, 1996
The following replaces information on page 1:
Representatives of Financial Institutions:
Nationwide 800-659-2265
The following replaces information under Summary of Expenses for
Tax-Free USA Intermediate Fund:
Tax-Free
Annual Operating Expenses USA Intermediate Fund
(as a percentage of Class A Class B Class C
average daily net assets) Shares Shares Shares
Management Fees
(after voluntary
waivers) . . . . . . . . 0.00%* 0.00%** 0.00%**
12b-1 Plan Expenses
(including
service fees). . . . . . 0.15%+ 1.00%+ 1.00%+
Other Operating Expenses
(after expense
limitations) . . . . . 0.35%* 0.35%* 0.35%**
------- ------- ------
Total Operating Expenses
(after voluntary
waivers and
expense
limitations) . . . . . 0.50%* 1.35%* 1.35%**
==== ==== ====
* Beginning January 1, 1997, the Manager has elected
voluntarily to waive that portion, if any, of the annual
management fees payable by the Fund and to pay certain of
the Fund's expenses to the extent necessary to ensure that
the Total Operating Expenses of the Fund do not exceed
0.35% (excluding the 12b-1 plan expenses). This waiver
and expense limitation will extend through June 30, 1997.
From the commencement of the Fund's operations through
June 30, 1993, the Manager voluntarily waived that
portion, if any, of the annual management fees payable by
the Fund and reimbursed the Fund's expenses to the extent
necessary to ensure that the Total Operating Expenses of
the Fund, including the 12b-1 expenses, did not exceed
0.25%. This waiver and expense limitation was extended to
June 30, 1994, but modified, effective May 2, 1994 through
December 31, 1996, to provide that annual operating
expenses would not exceed 0.10% (excluding 12b-1 fees).
Because 12b-1 Plan fees have been set at 0.15% by Delaware
Group Tax-Free Fund, Inc.'s Board of Directors for the
Tax-Free USA Intermediate Fund A Class, the amount of the
voluntary waiver with respect to such Class, as modified,
was equivalent to the waiver operative through May 1,
1994. If the voluntary expense waivers were not in
effect, the Total Operating Expenses of Tax-Free USA
Intermediate Fund A Class and Tax-Free USA Intermediate
Fund B Class, as a percentage of average daily net assets,
would have been 0.95% and 1.80%, respectively, reflecting
Management Fees of 0.47% for the fiscal year ended August
31, 1996.
** Other Operating Expenses for Tax-Free USA Intermediate
Fund C Class are based upon the actual expenses incurred
by Class A Shares and Class B Shares for the fiscal year
ended August 31, 1996 and the voluntary waiver of fees by
the Manager. If the voluntary expense waivers described
in the previous note were not in effect, it is estimated
that Total Operating Expenses of Tax-Free USA Intermediate
Fund C Class would be 1.80%, reflecting Management Fees of
0.47%.
+ Class A Shares, Class B Shares and Class C Shares are
subject to separate 12b-1 Plans. Long-term shareholders
of the Classes may pay more than the economic equivalent
of the maximum front-end sales charges permitted by rules
of the National Association of Securities Dealers, Inc.
See Distribution (12b-1) and Service under Management of the
Funds in the Prospectus.
The following example illustrates the expenses that an investor
would pay on a $1,000 investment over various time periods,
assuming (1) a 5% annual rate of return, (2) redemption and no
redemption at the end of each time period and (3) for Class B
Shares and Class C Shares, payment of a CDSC at the time of
redemption, if applicable. The following example assumes the
voluntary waiver of the management fee by the Manager as
discussed above.
Tax-Free USA Intermediate Fund
<TABLE>
<CAPTION>
Assuming Redemption Assuming No Redemption
<S> <C> <C> <C> <C> <C> <C> <C> <C>
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
Class A
Shares $35(1) $46 $57 $91 $35 $46 $57 $91
Class B
Shares $34 $53 $74(2) $107(2) $14 $43 $74(2) $107(2)
Class C
Shares $24 $43 $74 $162 $14 $43 $74 $162
</TABLE>
(1) Generally, the Fund does not assess a redemption charge
upon redemption of Class A Shares. Under certain
circumstances, however, a Limited CDSC, which has not been
reflected in this calculation, may be imposed on certain
redemptions within 12 months of purchase. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at
Net Asset Value under Redemption and Exchange in the Prospectus.
(2) At the end of approximately five years after purchase,
Tax-Free USA Intermediate Fund B Class shares will be
automatically converted into Tax-Free USA Intermediate Fund A
Class shares. The example above assumes conversion of Class B
Shares at the end of the fifth year. However, the conversion
may occur as late as three months after the fifth anniversary
of purchase, during which time the higher 12b-1 Plan fees
payable by Class B Shares will continue to be assessed.
Information for the sixth through tenth years reflects expenses
of the Class A Shares. See Automatic Conversion of Class B Shares
under Classes of Shares in the Prospectus for a description of the
automatic conversion feature.
The purpose of the above tables is to assist the investor in
understanding the various costs and expenses that an investor
in any of the Classes will bear directly or indirectly.
The following supplements the section of the Prospectus
entitled Buying Class A Shares at Net Asset Value under Classes of
Shares:
Investors in Delaware-Voyageur Unit Investment Trusts may
reinvest monthly dividend checks and/or repayment of invested
capital into Class A Shares of any of the funds in the Delaware
Group at net asset value.
The following revises the portfolio manager information under
Management of the Funds:
Patrick P. Coyne and Mitchell L. Conery, each a Vice
President/Senior Portfolio Manager of Delaware Group Tax-Free
Fund, Inc., have primary responsibility for making day-to-day
investment decisions for each Fund. Mr. Coyne has been manager
of Tax-Free USA Fund and Tax-Free Insured Fund since July 1,
1994 and manager of Tax-Free USA Intermediate Fund since its
inception in 1993. A graduate of Harvard University with an
MBA from the University of Pennsylvania s Wharton School, Mr.
Coyne joined the Delaware Group s fixed-income department in
1990. Prior to joining the Delaware Group, he was a manager of
Kidder, Peabody & Co. Inc. s trading desk, and specialized in
trading high grade municipal bonds and municipal futures
contracts. Mr. Coyne is a member of the Municipal Bond Club of
Philadelphia. Mr. Conery joined the Delaware Group in January
1997 at which time he became co-manager of the Tax-Free USA
Fund, Tax-Free Insured Fund and Tax-Free USA Intermediate Fund.
Mr. Conery holds a bachelor s degree from Boston University and
an MBA in Finance from the State University of New York at
Albany. He has served as an investment officer with Travelers
Insurance and as a research analyst with CS First Boston and
MBIA Corporation.
In making investment decisions for the Funds, Mr. Coyne and Mr.
Conery regularly consult with Paul E. Suckow and other members
of Delaware's fixed-income department. Mr. Suckow is Executive
Vice President/Chief Investment Officer, Fixed Income of
Delaware Group Tax-Free Fund, Inc. He is a CFA charterholder
and a graduate of Bradley University with an MBA from Western
Illinois University. Mr. Suckow was a fixed-income portfolio
manager at the Delaware Group from 1981 to 1985. He returned
to the Delaware Group in 1993 after eight years with
Oppenheimer Management Corporation where he served as Executive
Vice President and Director of Fixed Income.
May 23, 1997
Tax-Free Money Fund
A Class/Consultant Class
Supplement to Prospectus dated June 28, 1996
The following replaces information on page 1:
Representatives of Financial Institutions:
Nationwide 800-659-2265
The following supplements information in the section entitled
Delaware Group Asset Planner under Buying Shares:
Effective November 1, 1996, the annual $35 Asset
Planner fee is waived until further notice.
May 23, 1997
Delaware Group of Funds
Supplement to Prospectuses Dated as Noted Below
Trend Fund
Institutional Class
(August 29, 1996)
Delchester Fund
Institutional Class
(September 30, 1996)
Strategic Income Fund
Institutional Class
(September 30, 1996)
U.S.Government Fund
Institutional Class
(September 30, 1996)
The following replaces the categories of eligible purchasers of
Institutional Class shares in the section of the Prospectus
entitled Classes of Shares:
Shares of the Class are available for purchase only by:
(a) retirement plans introduced by persons not
associated with brokers or dealers that are primarily
engaged in the retail securities business and rollover
individual retirement accounts from such plans; (b)
tax-exempt employee benefit plans of the Manager, or
its affiliates and securities dealer firms with a
selling agreement with the Distributor; (c)
institutional advisory accounts of the Manager, or its
affiliates and those having client relationships with
Delaware Investment Advisers, a division of the
Manager, or its affiliates and their corporate
sponsors, as well as subsidiaries and related employee
benefit plans and rollover individual retirement
accounts from such institutional advisory accounts; (d)
a bank, trust company and similar financial institution
investing for its own account or for the account of its
trust customers for whom such financial institution is
exercising investment discretion in purchasing shares
of the Class, except where the investment is part of a
program that requires payment to the financial
institution of a Rule 12b-1 Plan fee; and (e)
registered investment advisers investing on behalf of
clients that consist solely of institutions and high
net-worth individuals having at least $1,000,000
entrusted to the adviser for investment purposes, but
only if the adviser is not affiliated or associated
with a broker or dealer and derives compensation for
its services exclusively from its clients for such
advisory services.
