[GRAPHIC OMITTED: LOGO OF DELAWARE INVESTMENTS
----------------------------
Philadelphia * London]
Blue Chip Fund
Class A (bullet) Class B (bullet) Class C
Prospectus
January 29, 1999
[GRAPHIC OMITTED: ILLUSTRATION OF A MAN FISHING IN A STREAM]
Total Return 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.
[inside front cover]
Table of contents
Fund profile page 1
Blue Chip Fund 2
How we manage the Fund page 4
Our investment strategies 4
The securities we typically
invest in 5
The risks of investing in
the Fund 6
Who manages the Fund page 7
Investment manager and
sub-adviser 7
Portfolio managers 7
Fund administration (Who's
who) 8
Certain management
considerations page 9
About your account page 10
Investing in the Fund 10
Choosing a share class 10
How to reduce your sales
charge 13
How to buy shares 14
Retirement plans 15
How to redeem shares 16
Account minimum 17
Special services 18
Dividends, distributions and
taxes 19
Financial information page 20
[sidebar copy at bottom of page]
How to use this prospectus
Here are guidelines to help you use this prospectus to make well-informed
investment decisions about our funds. If you're looking for a specific
piece of information, the table of contents can guide you directly to the
appropriate section.
Step 1
Take a look at the fund profile for an overview of the Fund.
Step 2
Learn in-depth information about how the Fund invests, the risks involved
and the people and organizations responsible for the Fund's day-to-day
operations.
Step 3
Determine which fund features and services you would like to take
advantage of.
Step 4
Use the glossary that begins on page 4 to find definitions of words
printed in bold type in the text throughout the prospectus.
Fund Profile:
An investment overview
When choosing a mutual fund to invest in, you have a variety of options
and important information to consider. This prospectus provides
information about Blue Chip Fund, a mutual fund from the Delaware
Investments Family of Funds.
Before evaluating individual funds, however, your first step is to define
your personal financial goals. Knowing your goals and determining your
investment time horizon in advance can help you make a more appropriate
fund selection. It is also important to select a fund in the context of
your entire investment program. Diversification, or spreading your money
among different types of investments, is usually a sound investment
strategy. This is commonly called "asset allocation." The way you choose
to allocate your money depends on a number of factors. A professional
financial adviser can help you build an investment portfolio that fits
your financial situation, your investment objectives and your risk
tolerance.
Investing for total return with Blue Chip Fund
Blue Chip Fund is a total return fund. Investors with long-term goals
often choose mutual funds designed to provide total return. Total return
funds typically provide moderate growth potential as well as some current
income. They generally involve less risk than aggressive stock funds but
more risk than bond funds. Like all mutual funds, total return funds allow
you to invest conveniently in a diversified portfolio without having to
select and monitor individual securities on your own.
["HOUSE" GRAPHIC, WITH TOTAL RETURN "ROOM" HIGHLIGHTED]
Building Blocks of Asset Allocation
Aggressive Growth Equity Funds
Growth Equity Funds
International and Global Funds
Asset Allocation Funds
[TABLE HIGHLIGHTED] Moderate Growth Equity Funds for...
Total Return
These stock-oriented funds provide moderate growth potential as well as
some current income, generally with less risk than aggressive stock funds
but more risk than bond funds.
Taxable Bond Funds
Tax-Exempt Bond Funds
Money Market Funds (Taxable and Tax-Exempt)
Profile: Blue Chip Fund
What are the Fund's goals?
Blue Chip Fund seeks long-term capital appreciation. Current income is a
secondary objective. Although the Fund will strive to meet its goals,
there is no assurance that it will.
What are the Fund's main investment strategies?
We invest primarily in stocks of large companies that we expect to grow
significantly faster than the average stock in the unmanaged S&P 500
Composite Stock Price Index. We use a computer-driven selection process
that evaluates stocks on a variety of characteristics including dividend
yield, earnings growth and price to earnings ratio.
What are the main risks of investing in the Fund?
Investing in any mutual fund involves risk, including the risk that you
may lose part or all of the money you invest. The price of Fund shares
will increase and decrease according to changes in the value of the Fund's
investments. This Fund will be particularly affected by declines in stock
prices, which can be caused by a drop in the stock market or poor
performance in specific industries or companies. 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.
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
(bullet) Investors with long-term financial goals.
(bullet) Investors seeking long-term capital appreciation.
(bullet) Investors seeking an investment primarily in common stocks.
Who should not invest in the Fund
(bullet) Investors with short-term financial goals.
(bullet) Investors whose primary goal is current income.
(bullet) Investors who are unwilling to accept share prices that may
fluctuate, sometimes significantly over the short term.
How has Blue Chip Fund performed?
This bar chart and table can help you evaluate the potential risks of
investing in the Fund. We show the returns for the Fund's Class A shares
for the past calendar year, as well as the average annual returns of all
shares for the past year and since inception - all compared to the
performance of the S&P 500 Index. You should remember that unlike the
Fund, the index is unmanaged and doesn't include the costs of operating a
mutual fund, such as the costs of buying, selling, and holding the
securities. The Fund's past performance is not necessarily an indication
of how it will perform in the future. The returns reflect voluntary
expense caps. The returns would be lower without the voluntary caps.
[GRAPHIC OMITTED: BAR CHART SHOWING YEAR-BY-YEAR TOTAL RETURN (CLASS A)]
*Blue Chip Fund
*S&P 500
[bar chart]
Total return (Class A)
Blue Chip Fund S&P 500
1998 18.21% 28.74%
As of December 31, 1998, the Fund's Class A shares had a year-to-date
return of 18.21%. During the period illustrated in this bar chart, Class
A's highest return was 20.24% for the quarter ended December 31, 1998 and
its lowest return was -13.31% for the quarter ended September 30, 1998.
The maximum Class A sales charge of 5.75%, which is normally deducted when
you purchase shares, is not reflected in the total returns above. 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.
How has Blue Chip Fund performed? (continued)
<TABLE>
<CAPTION>
Average annual returns for periods ending 12/31/98
CLASS A B C S&P 500
(if redeemed)* (if redeemed)*
<S> <C> <C> <C> <C>
1 year 11.40% 12.37% 16.37% 28.74%
Since inception 2/24/97 15.86% 16.96% 18.84% 29.29%
* If redeemed at end of period shown. If shares were not redeemed, the
returns for Class B would be 17.37% and 18.84% for the one-year and
lifetime periods, respectively. Returns for Class C would be 17.37% and
18.84% for the one-year and lifetime periods, respectively.
What are the Fund's fees and expenses?
Sales charges are fees paid directly from your investments when you buy or
sell shares of the Fund. The Fund may waive or reduce sales charges;
please see the Statement of Additional Information for details.
<CAPTION>
CLASS A B C
<S> <C> <C> <C>
Maximum sales charge (load) imposed on purchases
as a percentage of offering price 5.75% none none
Maximum contingent deferred sales
charge (load)as a percentage of
original purchase price or redemption
price, whichever is lower none(1) 5%(2) 1%(3)
Maximum sales charge (load) imposed on
reinvested dividends none none none
Redemption fees none none none
Annual fund operating expenses are deducted from the Fund's assets before
it pays dividends and before its net asset value and total return are
calculated. We will not charge you separately for these expenses. These
expenses are based on amounts incurred during the Fund's most recent
fiscal year.
<S> <C> <C> <C>
Management fees 0.65% 0.65% 0.65%
Distribution and service
(12b-1) fees 0.30% 1.00% 1.00%
Other expenses 1.08% 1.08% 1.08%
Total operating expenses(4) 2.03% 2.73% 2.73%
This example is intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds with similar
investment 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.(5) This is an example only, and does not represent future expenses,
which may be greater or less than those shown here.
<CAPTION>
CLASS(6) A B B C C
(if redeemed) (if redeemed)
<S> <C> <C> <C> <C> <C>
1 year $ 769 $ 276 $ 776 $ 276 $ 376
3 years $1,175 $ 847 $1,147 $ 847 $ 847
5 years $1,605 $1,445 $1,645 $1,445 $1,445
10 years $2,798 $2,893 $2,893 $3,061 $3,061
1 A purchase of Class A shares of $1 million or more may be made at net
asset value. However, if you buy the shares through a financial adviser
who is paid a commission, a contingent deferred sales charge will apply
to certain redemptions. Additional Class A purchase options that involve
a contingent deferred sales charge may be permitted from time to time and
will be disclosed in the prospectus if they are available.
2 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.
3 Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
4 From February 1, 1999 through July 31, 1999, the investment manager has
agreed to waive fees and pay expenses in order to prevent total operating
expenses (excluding any taxes, interest, brokerage fees, extraordinary
expenses and 12b-1 fees) from exceeding 1.25% of average daily net assets.
From the Fund's inception through January 31, 1999, the investment manager
had agreed to waive fees and pay expenses in order to prevent total
operating expenses (excluding any taxes, interest, brokerage fees,
extraordinary expenses and 12b-1 fees) from exceeding 1.20% of average daily
net assets.
5 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. In addition, this example does not reflect the
voluntary expense cap described in footnote 4.
6 The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and
tenth years reflects expenses of the Class A shares.
</TABLE>
How we manage the Fund
Our investment strategies
We use a computer-driven selection process designed to identify stocks of
companies that are likely to grow faster than the average of the companies
in the S&P 500. Aided by this technology, we evaluate and rank hundreds of
stocks daily, using a variety of factors such as dividend yield, earnings
growth and price to earnings ratios. Decisions to buy and sell stocks are
determined by this objective evaluation process.
We take a disciplined approach to investing, combining investment
strategies and risk management techniques that can help shareholders meet
their goals.
The Blue Chip Fund is a total return fund. Under normal conditions, at
least 65% of the Fund's net assets will be invested in stocks we consider
"blue chip" stocks. "Blue chip" stocks are those whose market
capitalization is greater than $2.5 billion and which generally exhibit
positive characteristics like a lengthy history of profit growth and
dividend payments, a reputation for quality products and services, and a
sound management structure. They are generally easy to buy and sell.
Our goal is to select stocks of companies that have the potential to grow
significantly faster than the average of the companies in the S&P 500. We
believe this growth, if achieved, will result in a rising share price that
will provide long-term appreciation to our investors.
How to use this glossary
Words found in the glossary are printed in boldface only the first time
they appear in the prospectus. So if you would like to know the meaning of
a word that isn't in boldface, you might still find it in the glossary.
Glossary A-B
Amortized cost
Amortized cost is a method used to value a fixed-income security that
starts with the face value of the security and then 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.
Average maturity
An average of when the individual bonds and other debt securities held in
a portfolio will mature.
The securities we typically invest in
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------
<S> <C>
Blue Chip Fund
----------------------------------------------
Common stocks: Securities that Generally, we invest 90% to 100% of net assets
represent shares of ownership in a in common stock of medium- to large-size
corporation. Stockholders companies.
participate in the corporation's
profits and losses, proportionate
to the number of shares they own.
- ------------------------------------------------------------------------------------
American Depositary Receipts: We generally invest only in those ADRs
Certificates issued by a U.S. included in the S&P 500 Index. Although Blue
bank which represent a stated number Chip Fund may invest up to 20% of its net
of shares of a foreign corporation assets in depositary receipts, ADRs normally
that the bank holds in its vault. make up less than 10% of the Fund's net
An ADR entitles the holder to all assets.
dividends and capital gains earned
by the underlying foreign shares,
and an ADR is bought and sold the
same as U.S. securities.
- ------------------------------------------------------------------------------------
Repurchase agreements: An agreement Typically, we use repurchase agreements as a
between a buyer and seller of short-term investment for a Fund's cash
securities in which the seller position. In order to enter into these
agrees to buy the securities back repurchase agreements, the Fund must have
within a specified time at the collateral of at least 102% of the repurchase
same price the buyer paid for them, price. Blue Chip Fund may have no more than
plus an amount equal to an agreed 10% of its total assets in repurchase
upon interest rate. Repurchase agreements with maturities of over seven
agreements are often viewed as days.
equivalent to cash.
- ------------------------------------------------------------------------------------
Restricted securities: Privately We may invest without limitation in privately
placed securities whose resale is placed securities that are eligible for resale
restricted under securities law. among certain institutional buyers without
registration. These are commonly known as
"Rule 144A Securities."
- ------------------------------------------------------------------------------------
Illiquid Securities: Securities We may invest up to 15% of the Fund's net
that do not have a ready market, assets in illiquid securities.
and cannot be easily sold, if at
all, at a reasonable price.
- ------------------------------------------------------------------------------------
</TABLE>
Blue Chip Fund is permitted to invest in all available types of equity
securities, including preferred stocks, warrants and convertible
securities. The Fund may invest in foreign securities directly (although
we have no present intent to do so) and through global and European
depositary receipts. It may hold cash, invest in short-term debt
securities and money market instruments; and engage in futures and options
transactions for defensive purposes. Please see the Statement of
Additional Information for additional descriptions about these securities
as well as those listed in the table above. You can find additional
information about the investments in the Fund's portfolio in the annual
and semi-annual shareholder reports.
Lending securities
Blue Chip Fund may lend up to 25% of its assets to qualified brokers,
dealers and institutional investors for their use in security
transactions.
Portfolio turnover
We anticipate that Blue Chip Fund's annual portfolio turnover will be less
than 100%. A turnover rate of 100% would occur if the Fund sold and
replaced securities valued at 100% of its net assets within one year.
Borrowing from Banks
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions.
Bond
A debt security, like an IOU, issued by a company, municipality or
government agency. In return for lending money to the issuer, a bond buyer
generally receives fixed periodic interest payments and repayment of the
loan amount on a specified maturity date. A bond's price changes prior to
maturity and is inversely related to current interest rates. When interest
rates rise, bond prices fall, and when interest rates fall, bond prices
rise.
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 part or all of the money you invest. Before you invest in the
Fund you should carefully evaluate the risks. Because of the nature of the
Fund, you should consider an investment to be a long-term investment that
typically provides the best results when held for a number of years. The
following are the chief risks you assume when investing in Blue Chip Fund.
Please see the Statement of Additional Information for further discussion
of these risks and the other risks not discussed here.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------
<S> <C>
Blue Chip Fund
----------------------------------------------
Market risk is the risk that all We maintain a long-term investment approach
or a majority of the securities in and focus on stocks we believe can appreciate
a certain market -- like the stock over an extended time frame regardless of
or bond market -- will decline in interim market fluctuations. We do not try to
value because of factors such as predict overall stock market movements and do
economic conditions, future not trade for short-term purposes.
expectations or investor confidence.
We may hold a substantial part of Blue Chip
Fund's assets in cash or cash equivalents as
a temporary, defensive strategy.
- ------------------------------------------------------------------------------------
Industry and security risk is the We limit the amount of Blue Chip Fund's assets
risk that the value of securities invested in any one industry and in any
in a particular industry or the individual security. We generally allocate
value of an individual stock or bond assets to various sectors in roughly the same
will decline because of changing proportions as the S&P 500 sector allocation.
expectations for the performance of
that industry or for the individual
company issuing the stock or bond.
- ------------------------------------------------------------------------------------
Foreign risk is the risk that We typically invest only a small portion of
foreign securities may be Blue Chip Fund's portfolio in foreign
adversely affected by political companies, usually through American Depositary
instability, changes in currency Receipts. These are generally denominated in
exchange rates, foreign economic U.S. dollars and traded on a U.S. stock
conditions or inadequate regulatory exchange.
and accounting standards.
- ------------------------------------------------------------------------------------
Liquidity risk is the possibility We limit exposure to illiquid securities.
that securities cannot be readily
sold, if at all, at approximately
the price that the Fund has valued
them.
- ------------------------------------------------------------------------------------
</TABLE>
C-C
Capital
The amount of money you invest.
Capital appreciation
An increase in the value of an investment.
Capital gains distributions
Payments to mutual fund shareholders of profits (realized gains) from the
sale of a fund's portfolio securities. Usually paid once a year; may be
either short-term gains or long-term gains.
Commission
The fee an investor pays to a financial adviser for investment advice and
help in buying or selling mutual funds, stocks, bonds or other securities.
Who manages the Fund
Investment manager and sub-adviser
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. Vantage Investment Advisors is the
Fund's sub-adviser. As sub-adviser, Vantage is responsible for day-to-day
management of the Fund's assets. Delaware Management Company administers
the Fund's affairs and has ultimate responsibility for all investment
advisory services for the Fund. Delaware Management Company also
supervises the sub-adviser's performance. For their services to the Fund,
the manager and sub-adviser were paid an aggregate fee for the last fiscal
year as follows:
Investment Management Fees
Blue Chip Fund
As a percentage of average daily net assets 0.12%
Portfolio managers
T. Scott Wittman, Enrique Chang and Christopher P. Harvey have primary
responsibility for making day-to-day investment decisions for the Fund.
T. Scott Wittman, President of Vantage Investment Advisors, has had
primary responsibility for making day-to-day investment decisions for the
Fund since its inception. His responsibilities with Vantage Investment
Advisors include both business administration and equity portfolio
management. Mr. Wittman is a Certified Financial Analyst (CFA). He has
spent his entire professional career in quantitative investment firms,
including TSA Capital Management, where he was a managing director, and
Mellon Bank, where he was Vice President and Manager of Quantitative
Analysis and Systems.
Enrique Chang, Chief Investment Officer, Senior Vice President of Vantage
Investment Advisors, became co-manager of the Fund in January 1999. Mr.
Chang oversees the management of all equity portfolios and directs
Vantage's quantitative research efforts. He received a BA in mathematics
from Fairleigh Dickinson University in May of 1985, an MBA in finance and
quantitative analysis from New York University in May of 1988, and an MS
in statistics and operations research from New York University in May of
1996. He was previously an actuary with Prudential, Director of
Quantitative Analysis and Strategy with General Reinsurance Corporation,
and Senior Vice President and Director of Quantitative Analysis with J&W
Seligman.
Christopher P. Harvey, Vice President of Vantage Investment Advisors,
became co-manager of the Fund in January 1999. Mr. Harvey manages
portfolios, conducts investment research and assists in equity trading. He
graduated Bucknell University with a BS degree in accounting. He received
an MBA from the Stern School of Business at New York University. Prior to
joining Vantage Investment Advisors, Chris was a financial analyst with
Merrill Lynch.
Compounding
Earnings on an investment's previous earnings.
Consumer Price Index (CPI)
Measurement of U.S. inflation; represents the price of a basket of
commonly purchased goods.
Contingent deferred sales charge (CDSC)
Fee charged by some mutual funds when shares are redeemed (sold back to
the fund) within a set number of years; an alternative method for
investors to compensate a financial adviser for advice and service, rather
than an up-front commission.
[sidebar]
Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.
[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED
WITH MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS
FUNDS]
Board of Directors
Investment Manager The Fund Custodian
Delaware Management Company The Chase Manhattan Bank
One Commerce Square Center 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Sub-Adviser
Vantage Investment Advisors
630 Fifth Avenue
New York, NY 10111
Portfolio Distributor Service agent
managers Delaware Distributors, L.P. Delaware Service Company, Inc.
(see page 7 1818 Market Street 1818 Market Street
for details) Philadelphia, PA 19103 Philadelphia, PA 19103
Financial advisers
Shareholders
Board of directors A mutual fund is governed by a board of directors which
has oversight responsibility for the management of the fund's business
affairs. Directors 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 directors must
be independent of the fund's investment manager or distributor. These
independent fund directors, 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.
Sub-adviser A sub-adviser is a company generally responsible for the
management of the fund's assets. They are selected and supervised by the
investment manager.
Portfolio managers Portfolio managers are employed by the investment
manager or sub-adviser 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 typically 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 National Association of Securities Dealers, 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
directors. 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.
C-F
Corporate bond
A debt security issued by a corporation. See bond.
Currency exchange rates
The price at which one country's currency can be converted into another's.
This exchange rate varies almost daily according to a wide range of
political, economic and other factors.
Depreciation
A decline in an investment's value.
Diversification
The process of spreading investments among a number of different
securities, asset classes or investment styles to reduce the risks of
investing.
Certain management considerations
Year 2000
As with other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Fund is taking steps to
obtain satisfactory assurances that its major service providers are taking
steps reasonably designed to address the Year 2000 Problem on the computer
systems that the service providers use. However, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the
business of the Fund.
Investments by Fund of Funds
Blue Chip Fund accepts investments from the series 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 Blue Chip Fund and
Foundation Funds as a result of these transactions.
Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the
fund's portfolio of securities.
Duration
A measurement of a fixed-income investment's price volatility. The larger
the number, the greater the likely price change for a given change in
interest rates.
Expense ratio
A mutual fund's total operating expenses, expressed as a percentage of its
total net assets. Operating 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.
Financial adviser
Financial professional (e.g., broker, banker, accountant, planner or
insurance agent) who analyzes clients' finances and prepares personalized
programs to meet objectives.
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.
Choosing a share class
Class A
(bullet) Class A shares have an up-front sales charge of up to 5.75% that
you pay when you buy the shares. The offering price for Class A shares
includes the front-end sales charge.
(bullet) If you invest $50,000 or more, your front-end sales charge will
be reduced.
(bullet) You may qualify for other reduced sales charges, as described in
"How to reduce your sales charge," and under certain circumstances the
sales charge may be waived; please see the Statement of Additional
Information.
(bullet) Class A shares are also subject to an annual 12b-1 fee no greater
than 0.30% of average daily net assets, which is lower than the 12b-1 fee
for Class B and Class C shares.
(bullet) Class A shares generally are not subject to a contingent deferred
sales charge.
<TABLE>
<CAPTION>
Class A Sales Charges
Amount of purchase Sales charge as % Sales charge as % of Dealer's commission as %
of offering price amount invested of offering price
<S> <C> <C> <C>
Less than $50,000 5.75% 6.11% 5.00%
$50,000 but 4.75% 5.01% 4.00%
under $100,000
$100,000 but 3.75% 3.92% 3.00%
under $250,000
$250,000 but 2.50% 2.55% 2.00%
under $500,000
$500,000 but 2.00% 2.01% 1.60%
under $1 million
As shown below, there is no front-end sales charge when you purchase $1
million or more of Class A shares. However, if your financial adviser is
paid a commission on your purchase, you may have to pay a limited
contingent deferred sales charge of 1% if you redeem these shares within
the first year and 0.50% if you redeem them within the second year.
<CAPTION>
Amount of purchase Sales charge as % Sales charge as % of Dealer's commission as %
of offering price amount invested of offering price
<S> <C> <C> <C>
$1 million up to
$5 million none none 1.00%
Next $20 million
up to $25 million none none 0.50%
Amount over $25 million none none 0.25%
</TABLE>
F-N
Fixed-income securities
With fixed-income securities, the money you originally invested is paid
back at a pre-specified maturity date. These securities, which include
government, corporate or municipal bonds, as well as money market
securities, typically pay a fixed rate of return (often referred to as
interest). See Bond.
Inflation
The increase in the cost of goods and services over time. U.S. inflation
is frequently measured by changes in the Consumer Price Index (CPI).
Investment goal
The objective, such as long-term capital growth or high current income,
that a mutual fund pursues.
About your account (continued)
Class B
(bullet) 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.
(bullet) 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.
(bullet) Under certain circumstances the contingent deferred sales charge
may be waived; please see the Statement of Additional Information.
(bullet) 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.
(bullet) 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.
(bullet) Approximately eight years after you buy them, Class B shares
automatically convert into Class A shares with a 12b-1 fee of no more than
0.30%. 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.
(bullet) You may purchase up to $250,000 of Class B shares at any one
time. The limitation on maximum purchases varies for retirement plans.
Management fee
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily
net assets.
Market capitalization
The value of a corporation determined by multiplying the current market
price of a share of common stock by the number of shares held by
shareholders. A corporation with one million shares outstanding and the
market price per share of $10 has a market capitalization of $10 million.
Maturity
The length of time until a bond issuer must repay the underlying loan
principal to bondholders.
National Association of Securities Dealers (NASD)
A self-regulating organization, consisting of brokerage firms (including
distributors of mutual funds), that is responsible for overseeing the
actions of its members.
About your account (continued)
Class C
(bullet) 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 if you redeem your shares within 12
months after you buy them.
(bullet) Under certain circumstances the contingent deferred sales charge
may be waived; please see the Statement of Additional Information.
(bullet) 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.
(bullet) Because of the higher 12b-1 fees, Class C shares have higher
expenses and pay lower dividends than Class A shares.
(bullet) Unlike Class B shares, Class C shares do not automatically
convert into another class.
(bullet) 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 share class of the Funds 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 chages.
N-P
Nationally recognized statistical rating organization (NRSRO)
A company that assesses the credit quality of bonds, commercial paper,
preferred and common stocks and municipal short-term issues, rating the
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 (Moody's), Standard & Poor's Corporation
(S&P), Duff & Phelps, Inc. (Duff), and Fitch Investor Services, Inc.
(Fitch).
Net asset value (NAV)
The daily dollar value of one mutual fund share. Equal to a fund's net
assets divided by the number of shares outstanding.
How to reduce your sales charge
We offer a number of ways to reduce or eliminate the sales charge on
shares. Please refer to the Statement of Additional Information for
detailed information and eligibility requirements. You can also get
additional information from your financial adviser. You or your financial
adviser must notify us at the time you purchase shares if you are eligible
for any of these programs.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Share class
Program How it works A B C
- ------------------------------------------------------------------------------------
Letter of Intent Through a Letter of Intent X Although the
you agree to invest a Letter of Intent
certain amount in Delaware and Rights of
Investment Funds (except Accumulation do
money market funds with no not apply to the
sales charge) over a 13-month purchase of Class
period to qualify for reduced B and C shares,
front-end sales charges. you can combine
your purchase of
Class B and C
shares to fulfill
your Letter of
Intent or qualify
for Rights of
Accumulation.
- ------------------------------------------------------------------------------------
Rights of Accumulation You can combine your holdings X
or purchases of all funds in
the Delaware Investments
family (except money market
funds with no sales charge)
as well as the holdings and
purchases of your spouse and
children under 21 to qualify
for reduced front-end sales
charges.
- ------------------------------------------------------------------------------------
Reinvestment of redeemed Up to 12 months after you X Not available.
shares redeem shares, you can reinvest
the proceeds without paying a
front-end sales charge.
- ------------------------------------------------------------------------------------
SIMPLE IRA, SEP IRA, These investment plans may X Not available.
SARSEP, Prototype Profit qualify for reduced sales
Sharing, Pension, 401(k), charges by combining the
SIMPLE 401(k), 403(b)(7), purchases of all members
and 457 Retirement Plans of the group. Members of
these groups may also qualify
to purchase shares without a
front-end sales charge and a
waiver of any contingent
deferred sales charges.
- ------------------------------------------------------------------------------------
</TABLE>
Preferred stock
Preferred stock has preference over common stock in the payment of
dividends and liquidation of assets. Preferred stocks also often pays
dividends at a fixed rate and is sometimes convertible into common stock.
Price to earnings ratio
A measure of a stock's value calculated by dividing the current market
price of a share of stock by its annual earnings per share. A stock
selling for $100 per share with annual earnings per share of $5 has a P/E
of 20.
Principal
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.
About your account (continued)
How to buy shares
[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]
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: ILLUSTRATION OF AN ENVELOPE]
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, 1818 Market Street, Philadelphia, PA 19103-3682. 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: ILLUSTRATION OF A JAGGED LINE]
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: ILLUSTRATION OF AN EXCHANGE SYMBOL]
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: ILLUSTRATION OF A KEYPAD]
Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated
telephone service, or through our web site, www.delawarefunds.com.
For more information about how to sign up for these services, call our
Shareholder Service Center at 800.523.1918.
P-S
Prospectus
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.
Redeem
To cash in your shares by selling them back to the mutual fund.
Risk
Generally defined as variability of value; also credit risk, inflation
risk, currency and interest rate risk. Different investments involve
different types and degrees of risk.
S&P 500 Index
The Standard & Poor's 500 Composite Stock Index; an unmanaged index of 500
widely held common stocks that is often used to represent performance of
the U.S. stock market.
How to buy shares (continued)
Once you have completed an application, you can 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.
The price you pay for shares will depend on when we receive your purchase
order. If we or an authorized agent receives your order before the close
of 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 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.
Currently the Exchange is closed when the following holidays are observed:
New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents' Day, Good
Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. We reserve the right to reject any purchase order.
We determine the Fund's net asset value (NAV) per share at the close of
trading of the New York Stock Exchange each business day that the Exchange
is open. We calculate this 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 price securities and other
assets for which market quotations are available at their market value. We
price fixed-income securities on the basis of valuations provided to us by
an independent pricing service that uses methods approved by the board of
directors. Any fixed-income securities that have a maturity of less than
60 days we price at amortized cost. We price all other securities at their
fair market value using a method approved by the board of directors.
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.
Sales charge
Charge on the purchase or redemption of fund shares sold through financial
advisers. May vary with the amount invested. Typically used to compensate
advisers for advice and service provided.
SEC (Securities and Exchange Commission)
Federal agency established by Congress to administer the laws governing
the securities industry, including mutual fund companies.
Share classes
Different classifications of shares; mutual fund share classes offer a
variety of sales charge choices.
Signature guarantee
Certification by a bank, brokerage firm or otherfinancial institution that
a customer's signature is valid; signature guarantees can be provided by
members of the STAMP program.
About your account (continued)
How to redeem shares
[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]
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: ILLUSTRATION OF AN ENVELOPE]
By mail
You can redeem your 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
$50,000 or more, 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: ILLUSTRATION OF A TELEPHONE]
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: ILLUSTRATION OF A JAGGED LINE]
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, the First Union Bank
fee (currently $7.50) will be deducted from your proceeds. Bank
information must be on file before you request a wire redemption.
[GRAPHIC OMITTED: ILLUSTRATION OF A KEYPAD]
Through automated shareholder services
You can redeem shares through Delaphone, our automated telephone service,
or through our web site, www.delawarefunds.com. For more information about
how to sign up for these services, call our Shareholder Service Center at
800.523.1918.
S-U
Standard deviation
A measure of an investment's volatility; for mutual funds, measures how
much a fund's total return has typically varied from its historical
average.
Statement of Additional Information (SAI)
The document serving as "Part B" of a fund's prospectus that provides more
detailed information about the fund's organization, investments, policies
and risks.
Stock
An investment that represents a share of ownership (equity) in a
corporation. Stocks are often referred to as "equities."
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 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
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.
Total return
An investment performance measurement, expressed as a percentage, based on
the combined earnings from dividends, capital gains and change in price
over a given period.
Uniform Gift to Minors Act and Uniform Transfers to Minors Act
Federal and state laws that provide a simple way to transfer property to a
minor with special tax advantages.
About your account (continued)
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
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. 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 sales charge and
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 CDSC 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.
V
Volatility
The tendency of an investment to go up or down in value by different
magnitudes. There are investments which are more likely to be "low
volatility" and investments which are more likely to be "high volatility"
investments.
Special services (continued)
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.
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 and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any 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.
Financial information
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
Period
2/24/97(1)
Year Ended through Year Ended
Blue Chip Fund 11/30/98 11/30/97 11/30/98
<S> <C> <C> <C>
Net asset value, beginning
of period $9.850 $8.500 $9.800
Income (loss) from investment operations
Net investment income
(loss)(2) 0.048 0.041 (0.025)
Net realized and unrealized
gain on investments 1.122 1.309 1.115
Total from investment
operations 1.170 1.350 1.090
Less dividends and distributions
Dividends from net
investment income (0.040) none none
Distributions from net
realized gain on
investments (0.010) none (0.010)
Total dividends and
distributions (0.050) none (0.010)
Net asset value, end of
period $10.970 $9.850 $10.880
Total return(3) 11.94% 15.88% 11.14%
Ratios and supplemental data
Net assets, end of period
(000 omitted) $7,480 $2,272 $5,375
Ratio of expenses to average
net assets 1.50% 1.50% 2.20%
Ratio of expenses to average
net assets prior to expense
limitation 2.03% 2.95% 2.73%
Ratio of net investment
income (loss) to average
net assets 0.45% 0.69% (0.25%)
Ratio of net investment
income (loss) to average
net assets prior to expense
limitation (0.08%) (0.76%) (0.78%)
Portfolio turnover 27% 25% 27%
Volatility Period
2/24/97(1)
Year ended through Year Ended
Volatility, as indicated by year-by-year
total return(3)
Volatility chart is not part
of the Financial highlights
and has not been audited by
Ernst & Young LLP. 11.94% 15.88% 11.14%
Financial Highlights (Continued)
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.
<CAPTION>
Class B Class C
Period Period
2/24/97(1) 2/24/97(1)
through Year Ended through
Blue Chip Fund 11/30/97 11/30/98 11/30/97
<S> <C> <C> <C>
Net asset value, beginning
of period $8.500 $9.800 $8.500
Income (loss) from investment operations
Net investment income
(loss)2 (0.009) (0.025) (0.011)
Net realized and unrealized
gain on investments 1.309 1.115 1.311
Total from investment
operations 1.300 1.090 1.300
Less dividends and distributions
Dividends from net
investment income none none none
Distributions from net
realized gain on
investments none (0.010) none
Total dividends and
distributions none (0.010) none
Net asset value, end of
period $9.800 $10.880 $9.800
Total return(3) 15.29% 11.14% 15.29%
Ratios and supplemental data
Net assets, end of period
(000 omitted) $1,144 $1,217 $239
Ratio of expenses to average
net assets 2.20% 2.20% 2.20%
Ratio of expenses to average
net assets prior to expense
limitation 3.65% 2.73% 3.65%
Ratio of net investment
income (loss) to average
net assets (0.01%) (0.25%) (0.01%)
Ratio of net investment
income (loss) to average
net assets prior to expense
limitation (1.46%) (0.78%) (1.46%)
Portfolio turnover 25% 27% 25%
Volatility Period
2/24/97(1)
Year ended through Year Ended
Volatility, as indicated by year-by-year
total return(3)
Volatility chart is not part
of the Financial Highlights
and has not been audited by
Ernst & Young LLP. 15.29% 11.14% 15.29%
1 Date of initial public offering; ratios have been annualized but total return
has not been annualized. Total return for this short of a time period may not
be representative of longer term results.
2 The average shares outstanding method has been applied for net investment
income per share information.
3 Total investment return is based on the change in 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. Total return reflects the
expense limitations referenced in the Fund's profile on page 3.
</TABLE>
How to read the Financial highlights
Net investment income
Net investment income includes dividend and interest income earned from
the Fund's securities; it is after expenses have been deducted.
Net realized and unrealized gainon investments
A realized gain occurs when we sell an investment at a profit, while a
realized loss occurs when we sell an investment at a loss. When an
investment increases or decreases in value but we do not sell it, we
record an unrealized gain or loss. The amount of realized gain per share
that we pay to shareholders is listed under "Less dividends and
distributions-Distributions from net realized gain on investments."
Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net
assets by the number of shares outstanding.
Total return
This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial
highlights table, we include fee waivers, exclude front-end and contingent
deferred sales charges, and assume the shareholder has reinvested all
dividends and realized gains.
Net assets
Net assets represent the total value of all the assets in the Fund's
portfolio, less any liabilities, that are attributable to that class of
the Fund.
Ratio of expenses to average net assets
The expense ratio is the percentage of net assets that a fund pays
annually for operating expenses and management fees. These expenses
include accounting and administration expenses, services for shareholders,
and similar expenses.
Ratio of net investment income to average net assets
We determine this ratio by dividing net investment income by average net
assets.
Portfolio turnover rate
This figure tells you the amount of trading activity in a fund's
portfolio. For example, a fund with a 50% turnover has bought and sold
half of the value of its total investment portfolio during the stated
period.
Blue Chip Fund
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 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 SEC web
site (http://www.sec.gov), or you can get copies of this information,
after payment of a duplicating fee, by writing to the Public Reference
Section of the SEC, Washington, D.C. 20549-6009. 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 1.800.SEC.0330.
Web site
www.delawarefunds.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:
(bullet) For fund information; literature; price, yield and performance
figures.
(bullet) 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)
(bullet) 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 [REGISTRATION MARK] service.
Investment Company Act file number: 811-750
[GRAPHIC OMITTED: LOGO OF DELAWARE INVESTMENTS
----------------------------
Philadelphia * London]
P-143 [--] PP 2/99
[GRAPHIC OMITTED: LOGO OF DELAWARE INVESTMENTS
----------------------------
Philadelphia * London]
Blue Chip Fund
Institutional Class
Prospectus
January 29, 1999
[GRAPHIC OMITTED: ILLUSTRATION OF A MAN FISHING IN A STREAM]
Total Return 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.
[inside front cover]
Table of contents
Fund profile page 1
Blue Chip Fund 2
How we manage the Fund page 4
Our investment strategies 4
The securities we typically
invest in 5
The risks of investing in
the Fund 6
Who manages the Fund page 7
Investment manager and
sub-adviser 7
Portfolio managers 7
Fund administration (Who's
who) 8
Certain management
considerations page 9
About your account page 10
Investing in the Fund 10
How to buy shares 11
How to redeem shares 13
Account minimum 14
Exchanges 14
Dividends, distributions and
taxes 15
Financial information page 16
How to use this prospectus
Here are guidelines to help you use this prospectus to make well-informed
investment decisions about our funds. If you're looking for a specific
piece of information, the table of contents can guide you directly to the
appropriate section.
Step 1
Take a look at the fund profiles for an overview of the Fund.
Step 2
Learn in-depth information about how the Fund invests, the risks involved
and the people and organizations responsible for the Fund's day-to-day
operations.
Step 3
Determine which fund features and services you would like to take
advantage of.
Step 4
Use the glossary that begins on page 4 to find definitions of words
printed in bold type in the text throughout the prospectus.
Fund Profile:
An investment overview
When choosing a mutual fund to invest in, you have a variety of options
and important information to consider. This prospectus provides
information about Blue Chip Fund, a mutual fund from the Delaware
Investments Family of Funds.
Before evaluating individual funds, however, your first step is to define
your personal financial goals. Knowing your goals and determining your
investment time horizon in advance can help you make a more appropriate
fund selection. It is also important to select a fund in the context of
your entire investment program. Diversification, or spreading your money
among different types of investments, is usually a sound investment
strategy. This is commonly called "asset allocation." The way you choose
to allocate your money depends on a number of factors. A professional
financial adviser can help you build an investment portfolio that fits
your financial situation, your investment objectives and your risk
tolerance.
Investing for total return with Blue Chip Fund
Blue Chip Fund is a total return fund. Investors with long-term goals
often choose mutual funds designed to provide total return. Total return
funds typically provide moderate growth potential as well as some current
income. They generally involve less risk than aggressive stock funds but
more risk than bond funds. Like all mutual funds, total return funds allow
you to invest conveniently in a diversified portfolio without having to
select and monitor individual securities on your own.
["HOUSE" GRAPHIC, WITH TOTAL RETURN "ROOM" HIGHLIGHTED]
Building Blocks of Asset Allocation
Aggressive Growth Equity Funds
Growth Equity Funds
International and Global Funds
Asset Allocation Funds
[TABLE HIGHLIGHTED] Moderate Growth Equity Funds for...
Total Return
These stock funds provide moderate growth potential as well as some
current income, generally with less risk than aggressive stock funds but
more risk than bond funds.
Taxable Bond Funds
Tax-Exempt Bond Funds
Money Market Funds (Taxable and Tax-Exempt)
Profile: Blue Chip Fund
What are the Fund's goals?
Blue Chip Fund seeks long-term capital appreciation. Current income is a
secondary objective. Although the Fund will strive to meet its goals,
there is no assurance that it will.
What are the Fund's main investment strategies?
We invest primarily in stocks of large companies that we expect to grow
significantly faster than the average stock in the unmanaged S&P 500
Composite Stock Price Index. We use a computer-driven selection process
that evaluates stocks on a variety of characteristics including dividend
yield, earnings growth and price to earnings ratio.
What are the main risks of investing in the Fund?
Investing in any mutual fund involves risk, including the risk that you
may lose part or all of the money you invest. The price of Fund shares
will increase and decrease according to changes in the value of the Fund's
investments. This Fund will be particularly affected by declines in stock
prices, which can be caused by a drop in the stock market or poor
performance in specific industries or companies. 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.
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
(bullet) Investors with long-term financial goals.
(bullet) Investors seeking long-term capital appreciation.
(bullet) Investors seeking an investment primarily in common stocks.
Who should not invest in the Fund
(bullet) Investors with short-term financial goals.
(bullet) Investors whose primary goal is current income.
(bullet) Investors who are unwilling to accept share prices that may
fluctuate, sometimes significantly over the short term.
How has Blue Chip Fund performed?
This bar chart and table can help you evaluate the risks of investing in
the Fund. We show the returns for the Fund's Institutional Class shares
for the past calendar year, as well as the average annual returns of these
shares for the past year and since inception - all compared to the
performance of the S&P 500 Index. You should remember that unlike the
Fund, the index is unmanaged and doesn't include the costs of operating a
mutual fund, such as the costs of buying, selling, and holding the
securities. The Fund's past performance is not necessarily an indication
of how it will perform in the future. The returns reflect voluntary
expense caps. The returns would be lower without the voluntary caps.
[GRAPHIC OMITTED: BAR CHART SHOWING YEAR-BY-YEAR TOTAL RETURN
(INSTITUTIONAL CLASS)]
[bar chart]
Total return (Institutional Class)
*Blue Chip Fund
*S&P 500
Blue Chip Fund S&P 500
1998 18.58% 28.74%
As of December 31, 1998, the Institutional Class had a year-to-date return
of 18.58%. During the periods illustrated in this bar chart, the
Institutional Class' highest return was 20.35% for the quarter ended
December 31, 1998 and its lowest return was -13.20% for the quarter ended
September 30, 1998.
How has Blue Chip Fund performed? (continued)
<TABLE>
<CAPTION>
Average annual return as of 12/31/98 Institutional Class S&P 500
<S> <C> <C>
1 year 18.58% 28.74%
Since inception (2/24/97) 19.99% 29.29%
What are the Blue Chip Fund Institutional Class' fees and expenses?
You do not pay sales charges directly from your investments when you buy
or sell shares of the Institutional Class.
Maximum sales charge (load) imposed on
purchases as a percentage of
offering price none
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever
is lower none
Maximum sales charge (load) imposed on
reinvested dividends none
Redemption fees none
Exchange Fees(1) none
Annual fund operating expenses are deducted from the Fund's assets before
it pays dividends and before its net asset value and total return are
calculated. We will not charge you separately for these expenses. These
expenses are based on amounts incurred during the Fund's most recent
fiscal year.
Management fees 0.65%
Distribution and service
(12b-1) fees none
Other expenses 1.08%
Total operating expenses(2) 1.73%
This example is intended to help you compare the cost of investing in the
Fund to the cost of investing in other mutual funds with similar
investment 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.
1 year $176
3 years $545
5 years $939
10 years $2,041
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 From February 1, 1999 through July 31, 1999, the investment manager has
agreed to waive fees and pay expenses in order to prevent total operating
expenses (excluding any taxes, interest, brokerage fees and extraordinary
expenses) from exceeding 1.25% of average daily net assets. From the Fund's
inception through January 31, 1999, the investment manager had agreed to
waive fees and pay expenses, in order to prevent total operating expenses
(excluding any taxes, interest, brokerage fees and extraordinary expenses)
from exceeding 1.20% 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. In
addition, this example does not reflect the voluntary expense caps described
in footnote 2.
</TABLE>
How we manage the Fund
Our investment strategies
We use a computer-driven selection process designed to identify stocks of
companies that are likely to grow faster than the average of the companies
in the S&P 500. Aided by this technology, we evaluate and rank hundreds of
stocks daily, using a variety of factors such as dividend yield, earnings
growth and price to earnings ratios. Decisions to buy and sell stocks are
determined by this objective evaluation process.
We take a disciplined approach to investing, combining investment
strategies and risk management techniques that can help shareholders meet
their goals.
The Blue Chip Fund is a total return fund. Under normal conditions, at
least 65% of the Fund's net assets will be invested in stocks we consider
"blue chip" stocks. "Blue chip" stocks are those whose market
capitalization is greater than $2.5 billion and which generally exhibit
positive characteristics like a lengthy history of profit growth and
dividend payments, a reputation for quality products and services, and a
sound management structure. They are generally easy to buy and sell.
Our goal is to select stocks of companies that have the potential to grow
significantly faster than the average of the companies in the S&P 500. We
believe this growth, if achieved, will result in a rising share price that
will provide long-term appreciation to our investors.
How to use this glossary
Words found in the glossary are printed in boldface only the first time
they appear in the prospectus. So if you would like to know the meaning of
a word that isn't in boldface, you might still find it in the glossary.
Glossary A-C
Amortized cost
Amortized cost is a method used to value a fixed-income security that
starts with the face value of the security and then 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.
The securities we typically invest in
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------
<S> <C>
Blue Chip Fund
----------------------------------------------
Common stocks: Securities that Generally, we invest 90% to 100% of net assets
represent shares of ownership in a in common stock of medium- to large-size
corporation. Stockholders companies.
participate in the corporation's
profits and losses, proportionate
to the number of shares they own.
- ------------------------------------------------------------------------------------
American Depositary Receipts: We generally invest only in those ADRs
Certificates issued by a U.S. included in the S&P 500 Index. Although Blue
bank which represent a stated number Chip Fund may invest up to 20% of its net
of shares of a foreign corporation assets in depositary receipts, ADRs normally
that the bank holds in its vault. make up less than 10% of the Fund's net
An ADR entitles the holder to all assets.
dividends and capital gains earned
by the underlying foreign shares,
and an ADR is bought and sold the
same as U.S. securities.
- ------------------------------------------------------------------------------------
Repurchase agreements: An agreement Typically, we use repurchase agreements as a
between a buyer and seller of short-term investment for a Fund's cash
securities in which the seller position. In order to enter into these
agrees to buy the securities back repurchase agreements, the Fund must have
within a specified time at the collateral of at least 102% of the repurchase
same price the buyer paid for them, price. Blue Chip Fund may have no more than
plus an amount equal to an agreed 10% of its total assets in repurchase
upon interest rate. Repurchase agreements with maturities of over seven
agreements are often viewed as days.
equivalent to cash.
- ------------------------------------------------------------------------------------
Restricted securities: Privately We may invest without limitation in privately
placed securities whose resale is placed securities that are eligible for resale
restricted under securities law. among certain institutional buyers without
registration. These are commonly known as
"Rule 144A Securities."
- ------------------------------------------------------------------------------------
Illiquid Securities: Securities We may invest up to 15% of the Fund's net
that do not have a ready market, assets in illiquid securities.
and cannot be easily sold, if at
all, at a reasonable price.
- ------------------------------------------------------------------------------------
</TABLE>
Blue Chip Fund is permitted to invest in all available types of equity
securities, including preferred stocks, warrants and convertible
securities. The Fund may invest in foreign securities directly (although
we have no present intent to do so) and through global and European
depositary receipts. It may hold cash, invest in short-term debt
securities and money market instruments; and engage in futures and options
transactions for defensive purposes. Please see the Statement of
Additional Information for additional descriptions and risk information
about these securities as well as those listed in the table above. You can
find additional information about the investments in the Fund's portfolio
in the annual and semi-annual shareholder reports.
Lending securities
Each Fund may lend up to 25% of its assets to qualified brokers, dealers
and investors for their use in security transactions.
Portfolio turnover
We anticipate that Blue Chip Fund's annual portfolio turnover will be less
than 100%. A turnover rate of 100% would occur if the Fund sold and
replaced securities valued at 100% of its net assets within one year.
Borrowing from Banks
The Fund may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions.
Bond
A debt security, like an IOU, issued by a company, municipality or
government agency. In return for lending money to the issuer, a bond buyer
generally receives fixed periodic interest payments and repayment of the
loan amount on a specified maturity date. A bond's price changes prior to
maturity and is inversely related to current interest rates. When interest
rates rise, bond prices fall, and when interest rates fall, bond prices
rise.
Capital
The amount of money you invest.
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 part or all of the money you invest. Before you invest in the
Fund you should carefully evaluate the risks. Because of the nature of the
Fund, you should consider an investment to be a long-term investment that
typically provides the best results when held for a number of years. The
following are the chief risks you assume when investing in Blue Chip Fund.
Please see the Statement of Additional Information for further discussion
of these risks and the other risks not discussed here.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------
Risks How we strive to manage them
- ------------------------------------------------------------------------------------
<S> <C>
Blue Chip Fund
----------------------------------------------
Market risk is the risk that all We maintain a long-term investment approach
or a majority of the securities in and focus on stocks we believe can appreciate
a certain market -- like the stock over an extended time frame regardless of
or bond market -- will decline in interim market fluctuations. We do not try to
value because of factors such as predict overall stock market movements and do
economic conditions, future not trade for short-term purposes.
expectations or investor confidence.
We may hold a substantial part of Blue Chip
Fund's assets in cash or cash equivalents as
a temporary, defensive strategy.
- ------------------------------------------------------------------------------------
Industry and security risk is the We limit the amount of Blue Chip Fund's assets
risk that the value of securities invested in any one industry and in any
in a particular industry or the individual security. We generally allocate
value of an individual stock or bond assets to various sectors in roughly the same
will decline because of changing proportions as the S&P 500 sector allocation.
expectations for the performance of
that industry or for the individual
company issuing the stock or bond.
- ------------------------------------------------------------------------------------
Foreign risk is the risk that We typically invest only a small portion of
foreign securities may be Blue Chip Fund's portfolio in foreign
adversely affected by political companies, usually through American Depository
instability, changes in currency Receipts. These are generally denominated in
exchange rates, foreign economic U.S. dollars and traded on a U.S. stock
conditions or inadequate regulatory exchange.
and accounting standards.
- ------------------------------------------------------------------------------------
Liquidity risk is the possibility We limit exposure to illiquid securities.
that securities cannot be readily
sold, if at all, at approximately
the price that a Fund values
them.
- ------------------------------------------------------------------------------------
</TABLE>
C-D
Capital appreciation
An increase in the value of an investment.
Capital gains distributions
Payments to mutual fund shareholders of profits (realized gains) from the
sale of a fund's portfolio securities. Usually paid once a year; may be
either short-term gains or long-term gains.
Compounding
Earnings on an investment's previous earnings.
Consumer Price Index (CPI)
Measurement of U.S. inflation; represents the price of a basket of
commonly purchased goods.
Who manages the Fund
Investment manager and sub-adviser
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. Vantage Investment Advisors is the
Fund's sub-adviser. As sub-adviser, Vantage is responsible for day-to-day
management of the Fund's assets. Delaware Management Company administers
the Fund's affairs and has ultimate responsibility for all investment
advisory services for the Fund. Delaware Management Company also
supervises the sub-adviser's performance. For their services to the Fund,
the manager and sub-adviser were paid an aggregate fee for the last fiscal
year as follows:
Investment Management Fees
Blue Chip Fund
As a percentage of average daily net assets 0.12%
Portfolio managers
T. Scott Wittman, Enrique Chang and Christopher P. Harvey have primary
responsibility for making day-to-day investment decisions for the Fund.
T. Scott Wittman, President of Vantage Investment Advisors, has had
primary responsibility for making day-to-day investment decisions for the
Fund since its inception. His responsibilities with Vantage Investment
Advisors include both business administration and equity portfolio
management. Mr. Wittman is a Certified Financial Analyst (CFA). He has
spent his entire professional career in quantitative investment firms,
including TSA Capital Management, where he was a managing director, and
Mellon Bank, where he was Vice President and Manager of Quantitative
Analysis and Systems.
Enrique Chang, Chief Investment Officer, Senior Vice President of Vantage
Investment Advisors, became co-manager of the Fund in January 1999. Mr.
Chang oversees the management of all equity portfolios and directs
Vantage's quantitative research efforts. He received a BA in mathematics
from Fairleigh Dickinson University in May of 1985, an MBA in finance and
quantitative analysis from New York University in May of 1988, and an MS
in statistics and operations research from New York University in May of
1996. He was previously an actuary with Prudential, Director of
Quantitative Analysis and Strategy with General Reinsurance Corporation,
and Senior Vice President and Director of Quantitative Analysis with J&W
Seligman.
Christopher P. Harvey, Vice President of Vantage Investment Advisors,
became co-manager of the Fund in January 1999. Mr. Harvey manages
portfolios, conducts investment research and assists in equity trading. He
graduated Bucknell University with a BS degree in accounting. He received
an MBA from the Stern School of Business at New York University. Prior to
joining Vantage Investment Advisors, Chris was a financial analyst with
Merrill Lynch.
Corporate bond
A debt security issued by a corporation. See "bond."
Cost basis
The original purchase price of an investment, used in determining capital
gains and losses.
Currency exchange rates
The price at which one country's currency can be converted into another's.
This exchange rate varies almost daily according to a wide range of
political, economic and other factors.
Depreciation
A decline in an investment's value.
Diversification
The process of spreading investments among a number of different
securities, asset classes or investment styles to reduce the risks of
investing.
Who manages the Fund (continued)
Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.
[GRAPHIC OMITTED: DIAGRAM SHOWING THE VARIOUS ORGANIZATIONS INVOLVED
WITH MANAGING, ADMINISTERING, AND SERVICING THE DELAWARE INVESTMENTS
FUNDS]
Board of Directors
Investment Manager The Fund Custodian
Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Sub-Adviser
Vantage Investment Advisors
630 Fifth Avenue
New York, NY 10111
Portfolio Distributor Service agent
managers Delaware Distributors, L.P. Delaware Service Company, Inc.
(see page 7 1818 Market Street 1818 Market Street
for details) Philadelphia, PA 19103 Philadelphia, PA 19103
Shareholders
Board of directors A mutual fund is governed by a board of directors which
has oversight responsibility for the management of the fund's business
affairs. Directors 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 directors must
be independent of the fund's investment manager or distributor. These
independent fund directors, 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.
Sub-adviser A sub-adviser is a company generally responsible for the
management of the fund's assets. They are selected and supervised by the
investment manager.
Portfolio managers Portfolio managers are employed by the investment
manager or sub-adviser 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 typically 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 National Association of Securities Dealers, 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.
Shareholders Like shareholders of other companies, mutual fund
shareholders have specific voting rights, including the right to elect
directors. 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.
D-M
Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the
fund's portfolio of securities.
Expense ratio
A mutual fund's total operating expenses, expressed as a percentage of its
total net assets. Operating 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.
Financial adviser
Financial professional (e.g., broker, banker, accountant, planner or
insurance agent) who analyzes clients' finances and prepares personalized
programs to meet objectives.
Certain management considerations
Year 2000
As with other mutual funds, financial and business organizations and
individuals around the world, the Fund could be adversely affected if the
computer systems used by its service providers do not properly process and
calculate date-related information from and after January 1, 2000. This is
commonly known as the "Year 2000 Problem." The Fund is taking steps to
obtain satisfactory assurances that its major service providers are taking
steps reasonably designed to address the Year 2000 Problem on the computer
systems that the service providers use. However, there can be no assurance
that these steps will be sufficient to avoid any adverse impact on the
business of the Fund.
Investments by Fund of Funds
Blue Chip Fund accepts investments from the series 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 Blue Chip Fund and
Foundation Funds as a result of these transactions.
Fixed-income securities
With fixed-income securities, the money you originally invested is paid
back at a pre-specified maturity date. These securities, which include
government, corporate or municipal bonds, as well as money market
securities, typically pay a fixed rate of return (often referred to as
interest). See Bonds.
Inflation
The increase in the cost of goods and services over time. U.S. inflation
is frequently measured by changes in the Consumer Price Index (CPI).
Investment goal
The objective, such as long-term capital growth or high current income,
that a mutual fund pursues.
Management fee
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily
net assets.
About your account
Investing in the Fund
Institutional Class shares are available for purchase only by the
following:
(bullet) 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
(bullet) tax-exempt employee benefit plans of the manager or its
affiliates and securities dealer firms with a selling agreement with the
distributor
(bullet) institutional advisory accounts of the manager, or its affiliates
and those having client relationships with Delaware Investment Advisers,
an affiliate 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
(bullet) 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
(bullet) 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
M-P
Market capitalization
The value of a corporation determined by multiplying the current market
price of a share of common stock by the number of shares held by
shareholders. A corporation with one million shares outstanding and the
market price per share of $10 has a market capitalization of $10 million.
National Association of Securities Dealers (NASD)
A self-regulating organization, consisting of brokerage firms (including
distributors of mutual funds), that is responsible for overseeing the
actions of its members.
How to buy shares
[GRAPHIC OMITTED: ILLUSTRATION OF AN ENVELOPE]
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, 1818 Market Street, Philadelphia, PA 19103-3682. 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: ILLUSTRATION OF A JAGGED LINE]
By wire
Ask your bank to wire the amount you want to invest to First Union Bank,
ABA #031201467, Bank Account number 2014128934013. 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 at
800.510.4015 so we can assign you an account number.
[GRAPHIC OMITTED: ILLUSTRATION OF AN EXCHANGE SYMBOL]
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 you may not exchange your shares for
Class B or Class C shares. To open an account by exchange, call your
Client Services Representative at 800.510.4015.
[GRAPHIC OMITTED: ILLUSTRATION OF A PERSON]
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.
Net asset value (NAV)
The daily dollar value of one mutual fund share. Equal to a fund's net
assets divided by the number of shares outstanding.
Preferred stock
Preferred stock has preference over common stock in the payment of
dividends and liquidation of assets. Preferred stocks also often pays
dividends at a fixed rate and is sometimes convertible into common stock.
Price to earnings ratio
A measure of a stock's value calculated by dividing the current market
price of a share of stock by its annual earnings per share. A stock
selling for $100 per share with annual earnings per share of $5 has a P/E
of 20.
About your account (continued)
How to buy shares (continued)
The price you pay for shares will depend on when we receive your purchase
order. If we or an authorized agent receives your order before the close
of 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 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.
Currently, the Exchange is closed when the following holidays are
observed: New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving
and Christmas. We reserve the right to reject any purchase order.
We determine the Fund's net asset value (NAV) per share at the close of
trading of the New York Stock Exchange each business day that the Exchange
is open. We calculate this 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 price securities and other
assets for which market quotations are available at their market value. We
price fixed-income securities on the basis of valuations provided to us by
an independent pricing service that uses methods approved by the board of
directors. Any fixed-income securities that have a maturity of less than
60 days we price at amortized cost. We price all other securities at their
fair market value using a method approved by the board of directors.
P-S
Principal
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.
Prospectus
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.
Redeem
To cash in your shares by selling them back to the mutual fund.
Risk
Generally defined as variability of value; also credit risk, inflation
risk, currency and interest rate risk. Different investments involve
different types and degrees of risk.
How to redeem shares
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By mail
You can redeem your 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
$50,000 or more, you must include a signature guarantee for each owner.
You can also fax your written request to 215.255.8864. Signature
guarantees are also required when redemption proceeds are going to an
address other than the address of record on an account.
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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.
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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. Bank information must be on file before you request
a wire redemption.
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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.
S&P 500 Index
The Standard & Poor's 500 Composite Stock Index; an unmanaged index of 500
widely held common stocks that is often used to represent performance of
the U.S. stock market.
Sales charge
Charge on the purchase or redemption of fund shares sold through financial
advisers. May vary with the amount invested. Typically used to compensate
advisers for advice and service provided.
SEC (Securities and Exchange Commission)
Federal agency established by Congress to administer the laws governing
the securities industry, including mutual fund companies.
Share classes
Different classifications of shares; mutual fund share classes offer a
variety of sales charge choices.
Signature guarantee
Certification by a bank, brokerage firm or other financial institution
that a customer's signature is valid; signature guarantees can be provided
by members of the STAMP program.
About your account (continued)
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 $250, the Fund
may redeem your account after 60 days' written notice to you.
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. You may not
exchange your shares for Class B and Class C shares of the funds in the
Delaware Investments family.
S-V
Standard deviation
A measure of an investment's volatility; for mutual funds, measures how
much a fund's total return has typically varied from its historical
average.
Statement of Additional Information (SAI)
The document serving as "Part B" of a fund's prospectus that provides more
detailed information about the fund's organization, investments, policies
and risks.
Stock
An investment that represents a share of ownership (equity) in a
corporation. Stocks are often referred to as "equities."
Dividends, distributions and taxes
Dividends and capital gains, if any, are paid annually. We automatically
reinvest all dividends and any capital gains.
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 this 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.
Total return
An investment performance measurement, expressed as a percentage, based on
the combined earnings from dividends, capital gains and change in price
over a given period.
Volatility
The tendency of an investment to go up or down in value by different
magnitudes. There are investments which are more likely to be "low
volatility" and investments which are more likely to be "high volatility"
investments.
Financial information
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>
Institutional Class
Period
2/24/97(1)
Year Ended Through
Blue Chip Fund 11/30/98 11/30/97
<S> <C> <C>
Net asset value, beginning
of period $9.870 $8.500
Income from investment operations
Net investment income(2) 0.079 0.062
Net realized and unrealized
gain on investments 1.116 1.308
------------ ------------
Total from investment
operations 1.195 1.370
------------ ------------
Less Dividends and Distributions
Dividends from net
investment income (0.065) None
Distributions from net
realized gain on
investments (0.010) None
------------ ------------
Total dividends and
distributions (0.075) None
------------ ------------
Net asset value, end of
period $10.990 $9.870
============ ============
Total Return(3) 12.31% 16.12%
Ratios and Supplemental Data:
Net assets, end of period
(000 omitted) $1,042 $1,834
Ratio of expenses to average
net assets 1.20% 1.20%
Ratio of expenses to average
net assets prior to expense
limitation 1.73% 2.65%
Ratio of net investment
income to average net
assets 0.75% 0.99%
Ratio of net investment
income (loss) to average
net assets prior to expense
limitation 0.22% (0.46%)
Portfolio turnover 27% 25%
Volatility
Year Ended Period
Volatility, as indicated by year-by-year return(3) 11/30/98 2/24/97(1)
Volatility chart is not part Through
of the Financial Highlights 11/30/97
and has not been audited by
Ernst & Young LLP. 12.31% 16.12%
1 Date of commencement of trading; ratios have been annualized but total
return has not been annualized. Total return for this short of a time
period may not be representative of longer term results.
2 The average shares outstanding method has been applied for net investment
income per share information.
3 Total return reflects the expense limitations referenced in Blue Chip Fund's
Profile on page 3.
</TABLE>
How to read the Financial highlights
Net investment income
Net investment income includes dividend and interest income earned from
the Fund's securities; it is after expenses have been deducted.
Net realized and unrealized gain on investments
A realized gain occurs when we sell an investment at a profit, while a
realized loss occurs when we sell an investment at a loss. When an
investment increases or decreases in value but we do not sell it, we
record an unrealized gain or loss. The amount of realized gain per share
that we pay to shareholders is listed under "Less dividends and
distributions-Distributions from net realized gain on investments."
Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net
assets by the number of shares outstanding.
Total return
This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial
highlights table, we include fee waivers and assume the shareholder has
reinvested all dividends and realized gains.
Net assets
Net assets represent the total value of all the assets in the Fund's
portfolio, less any liabilities, that are attributable to that class of
the Fund.
Ratio of expenses to average assets
The expense ratio is the percentage of net assets that a fund pays
annually for operating expenses and management fees. These expenses
include accounting and administration expenses, services for shareholders,
and similar expenses.
Ratio of net investment income to average net assets
We determine this ratio by dividing net investment income by average net
assets.
Portfolio turnover rate
This figure tells you the amount of trading activity in a fund's
portfolio. For example, a fund with a 50% turnover has bought and sold
half of the value of its total investment portfolio during the stated
period.
[back cover]
Blue Chip Fund
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
19103-3682, 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 SEC web
site (http://www.sec.gov), or you can get copies of this information,
after payment of a duplicating fee, by writing to the Public Reference
Section of the SEC, Washington, D.C. 20549-6009. 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 1.800.SEC.0330.
Web site
www.delawarefunds.com
E-mail
[email protected]
Client Services Representative
800.510.4015
Delaphone Service
800.362.FUND (800.362.3863)
(bullet) 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 [REGISTRATION MARK] service.
[GRAPHIC OMITTED: LOGO OF DELAWARE INVESTMENTS
----------------------------
Philadelphia * London]
Registrant's Investment Company Act file number: 811-750
P-146 [--] PP 2/99
