<PAGE>
For Growth of Capital
Social Awareness Fund
(photo of illustration from
For Growth of Capital Brochure)
service and guidance
professional management
goals
1999
Semi-Annual
Report
DELAWARE(SM)
INVESTMENTS
- --------------------
Philadelphia o London
<PAGE>
(various photos demonstrating
service and guidance, professional
management and goals)
professional management
professional management
More Than 70 Years
of investment experience has taught us that disciplined strategies and prudent
risk management are a sound approach to any market environment.
goals
goals
Whatever Your Goals,
the years ahead will be shaped by choices you make today. Delaware offers many
options that can be an appropriate part of a sound investment plan.
service and guidance
service and guidance
Delaware Believes That The Guidance
of a professional financial adviser is vital to your long-term success. We are
committed to providing you and your adviser with the highest quality information
and service.
<PAGE>
June 3, 1999 for growth
of capital
1
Dear Shareholder:
The U.S. stock market has provided considerable capital appreciation since
November. Social Awareness Fund capitalized on a fortuitous environment and
provided a total return of +8.61% (A Class shares at net asset value with
distributions reinvested) for the six months ended May 31, 1999.
An intersection of robust growth, low inflation, low interest rates and low
unemployment propelled stock prices higher.
Your Fund's subadviser, Vantage Investment Advisors of New York combines a
socially responsible selection process with computer-driven, quantitative stock
selection. Vantage's quantitative techniques are an essential part of Social
Awareness Fund's disciplined investment strategy - an approach that strives to
emphasize stocks with both growth and value characteristics. By combining growth
and value investing into one comprehensive strategy we believe your Fund can
seek attractively priced stocks with favorable long-term earnings prospects.
At the start of fiscal 1999 in December, we had concerns about inflation in
the U.S. and the effects of economic crises in Russia, Japan and Latin America.
Remarkably, consumer spending and corporate investment has remained high. Low
inflation enabled the Federal Reserve Board to keep its interest rates low
throughout the six-month period. We are optimistic about the state of the
domestic equity market in the
Cumulative Total Return
- --------------------------------------------------------------------------------
For Periods Ended May 31, 1999
Six Months One Year
- --------------------------------------------------------------------------------
Social Awareness Fund A Class +8.61% +4.79%
- --------------------------------------------------------------------------------
Standard & Poor's 500 Index +12.62% +21.04%
Domini Social 400 Index +12.78% +23.86%
Lipper Growth Fund Average (1,047 Funds) +13.66% +16.22%
- --------------------------------------------------------------------------------
Fund and Lipper performance quoted above is based on net asset value without the
effect of sales charges. The S&P 500 Index is an unmanaged composite of large
company stocks.
The Domini Social 400 Index is an unmanaged benchmark of 400 U.S. corporations
that pass multiple, broad-based social screens set by Kinder, Lyndenberg, Domini
& Co., an investment research firm in Cambridge, MA. SEC-mandated performance
and fee waiver information for all share classes can be found on page 8. Past
performance does not guarantee future results. You cannot directly invest in an
index.
<PAGE>
for growth
of capital
2
second half of fiscal 1999, as well as the positioning of your Social Awareness
Fund.
On the following pages your Fund's manager, T. Scott Wittman, President and
Chief Investment Officer at Vantage Investment Advisors, explains Social
Awareness Fund's strategy in detail and provides his outlook for the remainder
of the 1999 fiscal year.
In closing, we thank you for choosing to make our socially conscious,
technology-based investment strategy part of your investment portfolio.
Sincerely,
/s/ Wayne A. Stork
Wayne A. Stork
Chairman,
Delaware Investments Family of Funds
/s/ David K. Downes
David K. Downes
President and Chief Executive Officer,
Delaware Investments Family of Funds
We are optimistic about the state of the domestic equity market in the second
half of fiscal 1999, as well as the posistioning of your Social Awareness Fund
TOP TEN HOLDINGS
- --------------------------------------------------------------------------------
May 31, 1999
Social Awareness Fund Percentage of Net Assets Price to Earnings Ratio
- --------------------------------------------------------------------------------
Microsoft 3.8% 64.8x
Bell South Corp. 2.2% 27.8x
AT&T Corp. 2.0% 26.3x
EMC Corp. 1.9% 61.6x
Dell Computer Corp. 1.9% 60.4x
Amgen Inc. 1.7% 36.5x
Chase Manhattan Corp. 1.5% 15.5x
MCI Worldcom Inc. 1.5% 83.9x
Cisco Systems Inc. 1.4% 77.9x
Computer Associates Intl Inc. 1.4% 20.3x
Price to earnings ratios are based on trailing earnings for the six months ended
May 31, 1999.
<PAGE>
for growth
of capital
3
Portfolio Manager's Review
By T. Scott Wittman Christopher P. Harvey
President, Senior Portfolio Manager Assistant Vice President
Vantage Investment Advisors, Inc. Vantage Investment Advisors, Inc.
Enrique Chang
Senior Vice President/
Chief Investment Officer
Vantage Investment Advisors, Inc.
June 3, 1999
Overview
The Dow Jones Industrial Average closed above both the 10,000 and 11,000 marks
for the first time during the first six months of our fiscal year. While many on
Wall Street heralded these milestones, it is important to recognize that many
individual stocks did not share in the superior gains reported for the major
indexes. The Dow was up 15.59% and the S&P 500 Index was up 12.62% for the
period between November 30, 1998 and May 31, 1999. The success of these indexes
was driven by stocks of some very large, highly-successful companies while
medium size and smaller stocks have remained on the sidelines.
The Dow's record and even that of the S&P 500 are indicative only of the
success of larger stocks, not the market as a whole.
Some investors have taken record highs as a signal that the market is
overvalued and it is time to sell. Our strategy is to examine economic
fundamentals and valuations to determine whether the market is fairly valued,
overvalued or undervalued.
Investment Strategy
Social Awareness Fund's stock picking technique evaluates some 1,200 mid and
large cap U.S. stocks every business day. Companies are first examined to see
whether they meet your Fund's socially responsible parameters.
Social Awareness Fund avoids companies that:
o Pollute the environment;
o Produce nuclear power, design or construct nuclear power plants or manufacture
equipment for the production of nuclear power;
o Make military weapons;
o Conduct animal testing for cosmetics or personal care products;
o Make alcoholic beverages or tobacco products; or
o Are involved in the gambling industry.
During the first half of the 1999 fiscal year, approximately 800 companies met
Social
Awareness
Fund's stock
picking
technique
evaluates some
1,200 mid and
large cap U.S.
stocks every
business day.
<PAGE>
for growth
of capital
4
our social screens. We then employed Vantage's proprietary computer software,
which allows us to evaluate the companies on a quantitative basis every business
day.
We evaluate raw data from each company including the price/earnings ratio of
its stock, earnings estimates from many Wall Street analysts and the amount of
profit paid out as dividends each year. Each stock is then compared and ranked
against all other stocks in its industry sector. If a stock has growth and value
characteristics, it is a prime candidate for Social Awareness Fund's investment
portfolio.
This computer analysis leads to:
o Stocks with a low price/earnings - stocks whose share price is low in relation
to its earnings per share; and
o Companies whose earnings growth rates are accelerating and/or whose earnings
results have risen above previous estimates.
Strategic Positioning
The Continued Dominance of
Super Caps
We reported in this Fund's annual report in January, that our avoidance of
"supercap" stocks - very large company stocks with relatively high
price/earnings ratios - had affected the Fund's performance. In the first half
of fiscal 1999 supercaps led the stock market just as they did throughout 1998.
And, we continued to shun most supercap stocks because they failed to rate
highly, according to our growth and value investment parameters. Also, some
supercap companies, such as General Electric and Exxon, do not meet our socially
responsible investment criteria.
Our selection process led us instead to large and mid-cap stocks that
appeared to have long-term growth potential but could be bought at reasonable
share prices.
Robust Growth in the
Retail Sector
In the first half of fiscal 1999, we had a higher investment concentration in
the retail sector than the S&P 500 Index, in part because many retail companies
offer attractive growth opportunities and consistently meet our socially
responsible criteria.
We were again pleased with our holdings of the Gap. Shares of the San
Francisco based company enjoyed strong price appreciation due to robust retail
store sales. In addition, Gap opened 291 new stores during 1998 alone. Our
computer analysis ranks the company favorably compared to other retail
companies, not surprising given the retail chain's sales growth and expansion
plans.
BUILDING A LONG-TERM PORTFOLIO
- --------------------------------------------------------------------------------
The Efficiency of Quantitative Investing
Universe of 1,200 mid and large
capitalization companies
800 stocks that meet social
responsibility criteria
Computer-driven
quantitative analysis
Ranking of stocks based on
both growth and
value characteristics
129 stocks selected
for the portfolio*
*As of May 31, 1999. The number of stocks selected will fluctuate.
<PAGE>
for growth
of capital
5
Volatility in the
Financial Sector
Just over 23% of your Fund's net assets were allocated to financial stocks - the
largest sector as of May 31, 1999. Financial stocks have historically been the
Fund's largest sector because investment companies and banks are likely to pass
our social screens as well as offer strong growth prospects.
Some of our investments in the financial sector recovered after stumbling in
1998, particularly Citigroup. Citigroup, the New York based financial company,
was originally formed by a merger between Travelers and Citicorp in the spring
of 1998 - creating the world's largest financial services company.
Many investors became concerned that Citigroup's behemoth size would present
certain operational difficulties and the company's share price dropped to a low
of $19 on October 8. Citigroup stock rebounded in the second quarter of 1999,
hitting a 52-week high of $513/4 on April 29, 1999. Citigroup stock remains
attractive based on our criteria. We think that the recent recovery of the stock
price supports our conclusion that the company will eventually benefit from
economies of scale.
Opportunities in Technology
and Healthcare
Bolstering your Fund's performance during the first half of fiscal 1999 were our
holdings in technology and healthcare stocks. We were pleased with the
performance of Apple Computer through the first half of fiscal 1999, as we were
in fiscal 1998. Apple has been very successful in marketing its newest addition
to the company's line of computers - the iMac, a personal computer competitive
with other lower priced models. Apple also appears to have a number of promising
new products in the development pipeline. This could bode well for the company's
long-term profit and earnings growth potential.
We've also been pleased with performance of International Business Machines.
IBM has shown us that traditional Internet companies won't be the only ones to
benefit from the growth of the Internet. IBM is integrating the Internet into
everything it does; their E-commerce business unit is growing rapidly.
One factor included in our computer analysis is whether Wall Street analysts
have raised earnings expectations for a stock. Sometimes this leads us to
companies reported to be involved in mergers and/or acquisitions. One such
company was Cardinal Health Inc., a Fortune 100 corporation and the nation's
leading provider of services supporting health care. The market price of
Cardinal Health reached a 52-week high of $831/4 on February 1999 amid rumors of
the company taking over both the Enright Group of Richmond, VA, a pharmacy
consulting firm and Pharmacists: PRN, a pharmacist staffing company based in
Norwood, MA. Rumors were confirmed this spring when Cardinal officially
announced it had acquired these companies. The Enright Group and Pharmacists:
PRN should help Cardinal expand its service offerings for pharmacists. We view
this as a positive for the stock and think these two partners are important
long-term additions for Cardinal.
<PAGE>
for growth
of capital
6
Outlook
The positioning of Social Awareness Fund's portfolio over the past fiscal year
has helped it to benefit from U.S. economic growth while escaping the full
impact of struggling international markets. Many of the companies in the
portfolio generate the majority of their revenues from U.S. and/or European
markets.
Since no country can remain an island in the global economy we believe there
could be some stock market volatility for the second half of fiscal 1999. We are
confident that our quantitative investment strategy can endure the short-term
effects of market volatility and ultimately reward patient long-term investors.
The Dow's rise to 10,000 and then 11,000 may be a significant event in the
history of that index. However, the occasion should not be viewed as the
pinnacle of broad-based market success. Nor should it be viewed as clear
evidence that the market is overpriced. We believe economic fundamentals and
valuations are the best predictors of future success. In addition, we think that
consistent, long-term performance is produced by a bottom-up, quantitative style
of investing that systematically identifies undervalued stocks with above
average earnings prospects.
The current economic environment of low interest rates, strong, steady growth
and low inflation provides fertile ground for long-term stock market growth. At
this time we believe there is room for continued optimism for the stock market.
And, we believe your Fund is well positioned to capitalize on any market
strength for the remainder of fiscal 1999.
We are confident
that our
quantitative
investment
strategy can
endure the short
term effects of
market volatility
and ultimately
reward patient
long-term
investors.
<PAGE>
for growth
of capital
7
Performance Summary
SOCIAL AWARENESS FUND PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Returns Through May 31, 1999
Lifetime One Year
- --------------------------------------------------------------------------------
Class A (Est. 2/24/97)
Excluding Sales Charge +17.66% +4.79%
Including Sales Charge +14.62% -1.21%
- --------------------------------------------------------------------------------
Class B (Est. 2/24/97)
Excluding Sales Charge +16.77% +3.89%
Including Sales Charge +15.67% -1.11%
- --------------------------------------------------------------------------------
Class C (Est. 2/24/97)
Excluding Sales Charge +16.81% +3.97%
Including Sales Charge +16.81% +2.97%
All performance includes reinvestment of distributions and applicable sales
charges as described below. Return and share value will fluctuate so that shares
when redeemed may be worth more or less than the original cost. Past performance
is not a guarantee of future results. Performance for Class B and C shares
excluding sales charges assumes either the investment was not redeemed or
contingent sales charges did not apply.
Class A shares have a 5.75% maximum front-end sales charge and a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
Expense limitations were in effect for the periods shown. Performance would have
been lower if the limitations were not in effect.
The average annual total return for the lifetime period and cumulative returns
for the one-year and six-month periods ended May 31, 1999 for Social Awareness
Fund's Institutional Class, which is available without sales or asset-based
distribution charges only to certain eligible institutional accounts, were
+17.96%, +5.03% and +8.84% respectively.
<PAGE>
8 for growth of capital
Financial Statements
Delaware Group Equity Funds II, Inc. -
Social Awareness Fund
Statement of Net Assets
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK - 96.99%
Automobiles & Auto Parts - 0.23%
PACCAR ............................................ 3,900 $220,350
----------
220,350
----------
Banking, Finance & Insurance - 23.27%
A.G. Edwards ...................................... 20,955 704,612
Allstate .......................................... 22,230 810,006
American International Group ...................... 8,300 948,794
AmSouth Bancorporation ............................ 15,305 434,265
American Express .................................. 8,100 981,619
BB&T .............................................. 10,000 365,000
Bank One .......................................... 2,041 115,444
Bankers Trust New York ............................ 5,675 525,292
Chase Manhattan ................................... 20,000 1,450,000
Citigroup ......................................... 18,635 1,234,569
City National ..................................... 7,905 311,259
Comerica .......................................... 8,070 487,731
Conseco ........................................... 14,900 455,381
Dime Bancorp ...................................... 40,300 821,112
Fannie Mae ........................................ 18,600 1,264,800
Freddie Mac ....................................... 10,500 612,281
First American Financial .......................... 22,400 368,200
*FIRSTPLUS Financial Group ......................... 28,100 14,050
First Union ....................................... 23,690 1,091,221
Hartford Financial Services ....................... 17,800 1,125,850
Hibernia .......................................... 28,100 400,425
Marsh & McLennan .................................. 4,520 328,830
Mellon Bank ....................................... 13,440 479,640
Metris ............................................ 18,554 1,081,930
Morgan Stanley Dean Witter ........................ 14,000 1,351,000
National City ..................................... 4,712 311,876
Old Republic International ........................ 16,992 309,042
PaineWebber Group ................................. 13,905 653,535
Reliance Group Holdings ........................... 24,980 248,239
SLM Holding ....................................... 13,902 576,933
T. Rowe Price Associates .......................... 4,000 154,875
Unionbancal Corporation ........................... 27,900 1,031,428
Valley National Bancorp ........................... 32,550 913,434
Washington Mutual ................................. 16,093 614,551
----------
22,577,224
----------
Buildings & Materials - 0.49%
Kaufman & Broad Home .............................. 19,700 475,263
----------
475,263
----------
Cable, Media & Publishing - 4.97%
Dun and Bradstreet ................................ 14,690 514,150
Gannett ........................................... 8,860 640,135
McGraw-Hill ....................................... 14,800 767,750
New York Times .................................... 21,970 749,726
Omnicom Group ..................................... 6,560 459,200
<PAGE>
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK (Continued)
Cable, Media & Publishing (Continued)
R.H. Donnelley .................................... 16,938 $321,822
*Snyder Communications ............................. 12,000 293,250
Time Warner ....................................... 2,000 136,125
*Valassis Communications ........................... 16,550 576,147
*World Color Press ................................. 14,300 364,650
----------
4,822,955
----------
Computers & Technology - 17.88%
*Adaptec ........................................... 3,500 107,953
*America Online .................................... 8,400 1,002,750
*American Power Conversion ......................... 14,420 560,577
Apple Computer .................................... 22,800 1,003,912
*BMC Software ...................................... 11,800 582,994
*Cisco Systems ..................................... 12,700 1,383,903
Compaq Computer ................................... 11,200 265,300
Computer Associates International ................. 28,800 1,362,600
*Compuware ......................................... 22,800 707,512
*Dell Computer ..................................... 53,200 1,830,412
Deluxe ............................................ 21,525 776,245
*EMC ............................................... 18,800 1,872,950
*Electronics Arts .................................. 12,800 625,600
Keane ............................................. 7,800 226,200
*Lexmark International Group A ..................... 10,000 1,361,250
*Microsoft ......................................... 45,600 3,680,775
----------
17,350,933
----------
Consumer Products - 3.06%
Avon Products ..................................... 10,230 505,746
Clorox ............................................ 2,690 271,522
Gillette .......................................... 10,000 510,000
Maytag ............................................ 12,900 910,256
Premark International ............................. 10,300 368,869
United Stationers ................................. 21,400 402,588
----------
2,968,981
----------
Electronics & Electrical - 3.15%
General Cable ..................................... 27,200 413,100
*Waters ............................................ 13,300 1,311,713
*Solectron ......................................... 24,400 1,335,900
----------
3,060,713
----------
Energy - 1.89%
Enron ............................................. 12,800 913,600
Helmerich & Payne ................................. 14,800 345,025
Tidewater ......................................... 22,400 572,600
----------
1,831,225
----------
Food, Beverage & Tobacco - 4.24%
*Agribrands International .......................... 80 2,795
Flowers Industries ................................ 33,480 744,930
General Mills ..................................... 11,000 884,125
International Multifoods .......................... 1,000 22,000
<PAGE>
for growth of capital 9
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK (Continued)
Food, Beverage & Tobacco (Continued)
Interstate Bakeries ............................... 20,850 $456,094
McDonald's ........................................ 12,600 485,100
Quaker Oats ....................................... 13,690 904,396
Ralston-Purina Group .............................. 2,400 65,400
*Suiza Foods ....................................... 11,700 428,513
Universal Foods ................................... 5,440 124,780
----------
4,118,133
----------
Healthcare & Pharmaceuticals - 9.23%
*AmeriSource Health ................................ 20,000 591,250
*Amgen ............................................. 26,000 1,645,312
Bergen Brunswig ................................... 30,467 670,274
C.R.Bard .......................................... 16,400 749,275
Cardinal Health ................................... 13,448 811,923
Eli Lilly ......................................... 9,100 650,081
*Health Management Associates ...................... 42,300 549,900
*Lincare Holdings .................................. 5,970 146,638
McKesson .......................................... 21,559 734,353
Medtronic ......................................... 17,723 1,258,333
Mylan Laboratories ................................ 16,900 428,838
*Rexall Sundown .................................... 42,400 720,800
----------
8,956,977
----------
Industrial Machinery - 1.72%
Ingersoll-Rand .................................... 13,400 853,413
Milacron .......................................... 10,100 215,256
Tredegar Industries ............................... 27,800 595,963
----------
1,664,632
----------
Leisure, Lodging & Entertainment - 1.50%
*Brinker International ............................. 31,300 878,356
Walt Disney ....................................... 20,000 582,500
----------
1,460,856
----------
Metals & Mining - 0.41%
Cleveland Cliffs Iron ............................. 10,640 393,680
----------
393,680
----------
Packaging & Containers - 0.13%
*Sealed Air ........................................ 2,010 124,871
----------
124,871
----------
Retail - 8.51%
*Dollar Tree Stores ................................ 14,400 483,300
*Federated Department Stores ....................... 16,400 893,800
Gap ............................................... 12,188 762,512
Home Depot ........................................ 22,700 1,291,063
Jostens ........................................... 23,350 493,269
Ross Stores ....................................... 11,615 532,475
*Safeway ........................................... 15,840 736,560
TJX ............................................... 18,680 560,400
Wal-Mart Stores ................................... 30,400 1,295,800
*Zale's ............................................ 31,300 1,207,006
----------
8,256,185
----------
<PAGE>
- --------------------------------------------------------------------------------
Number Market
of Shares Value
---------- ----------
COMMON STOCK (Continued)
Telecommunications - 11.90%
Alltel ............................................ 16,900 $1,211,519
A T & T ........................................... 34,695 1,925,572
Ameritech ......................................... 13,500 888,469
BellSouth ......................................... 44,800 2,114,000
Centurytel ........................................ 18,750 718,359
*MCI Worldcom ...................................... 16,400 1,416,038
SBC Communications ................................ 16,250 830,781
*Tellabs ........................................... 22,340 1,307,588
US WEST Communications Group ...................... 20,980 1,134,231
----------
11,546,557
----------
Textiles, Apparel & Furniture - 2.24%
Newell Rubbermaid ................................. 9,696 392,688
*Tommy Hilfiger .................................... 12,700 953,294
Westpoint Stevens ................................. 26,200 828,575
----------
2,174,557
----------
Transportation & Shipping - 0.96%
*AMR ............................................... 9,140 594,671
*UAL ............................................... 5,040 338,940
----------
933,611
----------
Utilities - 1.21%
OGE Energy ........................................ 27,300 702,975
Utilicorp United .................................. 18,900 471,319
----------
1,174,294
----------
Total Common Stock (cost $81,060,675) ............. 94,111,997
----------
Principal
Amount
---------
REPURCHASE AGREEMENTS - 2.73%
With Chase Manhattan 4.78% 06/01/99
(dated 05/28/99, collateralized by $213,000
U.S. Treasury Notes 6.25% due 02/28/02,
market value $220,215 and $347,000
U.S. Treasury Notes 7.50% due 05/15/02,
market value $365,451 and $326,000
U.S. Treasury Notes 5.50% due 02/28/03,
market value $328,397) .......................... $896,000 896,000
With PaineWebber 4.78% 06/01/99
(dated 05/28/99, collateralized by $347,000
U.S. Treasury Notes 6.375% due 5/15/00,
market value $351,488 and $347,000
U.S. Treasury Notes 6.25% due 01/31/02,
market value $359,776 and $179,000
U.S. Treasury Notes 5.375% due 06/30/03,
market value $181,137) .......................... 874,000 874,000
With Prudential Securities 4.78% 06/01/99
(dated 05/28/99, collateralized by $722,000
U.S. Treasury Notes 15.75% due 11/15/01,
market value $892,639) .......................... 874,000 874,000
----------
Total Repurchase Agreements
(cost $2,644,000) ............................... 2,644,000
----------
<PAGE>
10 for growth of capital
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED
(cost $83,704,675) - 99.72% ................................. $96,755,997
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 0.28% .................................. 272,917
-----------
NET ASSETS APPLICABLE TO 7,995,481 SHARES
($1.00 par value) OUTSTANDING - 100.00% ..................... $97,028,914
===========
NET ASSET VALUE - SOCIAL AWARENESS FUND A CLASS
($47,245,392 / 3,859,508 shares) ............................ $12.24
NET ASSET VALUE - SOCIAL AWARENESS FUND B CLASS ======
($39,334,334 / 3,268,643 shares) ............................ $12.03
NET ASSET VALUE - SOCIAL AWARENESS FUND C CLASS ======
($9,977,224 / 828,980 shares) ............................... $12.04
NET ASSET VALUE - SOCIAL AWARENESS FUND INSTITUTIONAL CLASS ======
($471,964 / 38,350 shares) .................................. $12.31
======
- ----------------
* Non-income producing security for the period ended May 31, 1999.
COMPONENTS OF NET ASSETS AT MAY 31, 1999:
Common stock, $1.00 par value, 200,000,000 shares
authorized to the Fund with 100,000,000 shares allocated to Social
Awareness Fund A Class, 25,000,000 shares allocated to Social
Awareness Fund B Class, 25,000,000 shares allocated to Social
Awareness Fund C Class, and 50,000,000 shares allocated to Social
Awareness Fund Institutional Class .......................... $86,951,269
Accumulated net investment loss ................................ (317,006)
Accumulated net realized loss on investments ................... (2,656,671)
Net unrealized appreciation of investments ..................... 13,051,322
-----------
Total net assets ............................................... $97,028,914
===========
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
SOCIAL AWARENESS FUND A CLASS
Net asset value A Class (A) .................................... $12.24
Sales charge (5.75% of offering price, or 6.13%
of amount invested per share) (B) ........................... 0.75
------
Offering price ................................................. $12.99
======
- -----------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $50,000 or
more.
See accompanying notes
<PAGE>
Delaware Group Equity Funds II, Inc. -
Social Awareness Fund
Statement of Operations
Six Months Ended May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ............................................. $465,385
Interest .............................................. 68,767 $534,152
--------
EXPENSES:
Management fees ....................................... 343,945
Distribution expense .................................. 276,157
Dividend disbursing and transfer agent
fees and expenses .................................. 192,278
Registration fees ..................................... 47,795
Reports and statements to shareholders ................ 32,500
Accounting and administration ......................... 20,631
Professional fees ..................................... 7,800
Taxes (other than taxes on income) .................... 2,100
Directors' fees ....................................... 1,099
Custodian fees ........................................ 1,330
Other ................................................. 2,860 928,495
--------
Less expenses absorbed or waived ...................... (75,852)
Less expenses paid indirectly ......................... (1,485)
----------
Total expenses ........................................ 851,158
----------
NET INVESTMENT LOSS ................................... (317,006)
----------
NET REALIZED AND UNREALIZED GAIN
(LOSS) ON INVESTMENTS:
Net realized loss on investments ...................... (1,421,865)
Net change in unrealized appreciation/depreciation
of investments ..................................... 8,455,677
----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ..................................... 7,033,812
----------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS .................................... $6,716,806
==========
See accompanying notes
<PAGE>
for growth of capital 11
Delaware Group Equity Funds II, Inc. -
Social Awareness Fund
Statements of Changes in Net Assets
- --------------------------------------------------------------------------------
Six Months Year
Ended Ended
5/31/99 11/30/98
(Unaudited)
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment loss .............................. $ (317,006) $ (104,394)
Net realized loss on investments ................. (1,421,865) (1,234,223)
Net change in unrealized appreciation/depreciation
of investments ................................ 8,455,677 2,623,743
------------ ------------
Net increase in net assets resulting
from operations ............................... 6,716,806 1,285,126
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments:
A Class ....................................... -- (38,406)
B Class ....................................... -- (30,948)
C Class ....................................... -- (5,476)
Institutional Class ........................... -- (414)
------------ ------------
-- (75,244)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ....................................... 10,103,062 31,906,321
B Class ....................................... 9,322,547 24,847,840
C Class ....................................... 2,469,596 7,756,651
Institutional Class ........................... 262,142 516,088
Netasset value of shares issued upon
reinvestment of distributions from
net realized gain on investments:
A Class ....................................... -- 35,864
B Class ....................................... -- 29,610
C Class ....................................... -- 5,197
Institutional Class ........................... -- 414
------------ ------------
22,157,347 65,097,985
------------ ------------
Cost of shares repurchased:
A Class ....................................... (5,117,334) (3,123,666)
B Class ....................................... (2,735,540) (1,859,274)
C Class ....................................... (1,885,125) (390,664)
Institutional Class ........................... (199,369) (274,168)
------------ ------------
(9,937,368) (5,647,772)
------------ ------------
Increase in net assets derived from
capital share transactions .................... 12,219,979 59,450,213
------------ ------------
NET INCREASE IN NET ASSETS ....................... 18,936,785 60,660,095
NET ASSETS:
Beginning of period .............................. 78,092,129 17,432,034
------------ ------------
End of period .................................... $ 97,028,914 $ 78,092,129
============ ============
See accompanying notes
<PAGE>
12 for growth of capital
Delaware Group Equity Funds II, Inc. -
Social Awareness Fund
Financial Highlights
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Social Awareness Fund A Class Social Awareness Fund B Class
---------------------------------------- --------------------------------------
Six Months Year 2/25/97(2) Six Months Year 2/25/97(2)
Ended Ended To Ended Ended To
5/31/99(1) 11/30/98 11/30/97 5/31/99(1) 11/30/98 11/30/97
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...... $11.260 $10.330 $ 8.500 $11.120 $10.280 $ 8.500
Income (loss) from investment operations:
Net investment income (loss)(3) ........ (0.019) 0.015 0.007 (0.064) (0.066) (0.044)
Net realized and unrealized gain
on investments ....................... 0.999 0.955 1.823 0.974 0.946 1.824
------- ------- ------- ------- ------- -------
Total from investment operations ....... 0.980 0.970 1.830 0.910 0.880 1.780
------- ------- ------- ------- ------- -------
Less distributions:
Distributions from net realized gain
on investments ....................... -- (0.040) -- -- (0.040) --
------- ------- ------- ------- ------- -------
Total distributions .................... -- (0.040) -- -- (0.040) --
------- ------- ------- ------- ------- -------
Net asset value, end of period ............ $12.240 $11.260 $10.330 $12.030 $11.120 $10.280
======= ======= ======= ======= ======= =======
Total return(4) ........................... 8.61% 9.52% 21.53% 8.18% 8.60% 20.94%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $47,246 $38,858 $ 9,115 $39,334 $30,172 $ 6,919
Ratio of expenses to average net assets 1.48% 1.45% 1.50% 2.23% 2.20% 2.20%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly ........................ 1.65% 1.56% 1.96% 2.40% 2.26% 2.66%
Ratio of net investment income (loss)
to average net assets .................. (0.31%) 0.14% 0.38% (1.06%) (0.61%) (0.32%)
Ratio of net investment income (loss) to
average net assets prior to expense
limitation and expenses paid indirectly (0.48%) 0.03% (0.08%) (1.23%) (0.67%) (0.78%)
Portfolio turnover ..................... 25% 22% 29% 25% 22% 29%
</TABLE>
- ----------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) The average shares outstanding method has been applied for per share
information.
(4) 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.
See accompanying notes
<PAGE>
for growth of capital 13
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
Social Awareness Fund C Class Social Awareness Fund Institutional Class
----------------------------------- -----------------------------------------
Six Months Year 2/24/97(2) Six Months Year 2/25/97(2)
Ended ended To Ended ended To
5/31/99(1) 11/30/98 11/30/97 5/31/99 11/30/98 11/30/97
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ............. $11.120 $10.280 $8.500 $11.310 $10.350 $8.500
Income (loss) from investment operations:
Net investment income (loss)(3) ............... (0.063) (0.068) (0.044) (0.004) 0.043 0.029
Net realized and unrealized gain
on investments ............................... 0.983 0.948 1.824 1.004 0.957 1.821
------- ------- ------ ------- ------- -------
Total from investment operations .............. 0.920 0.880 1.780 0.930 1.000 1.850
------- ------- ------ ------- ------- -------
Less distributions:
Distributions from net realized gain
on investments ............................... - (0.040) - - (0.040) -
------- ------- ------ ------- ------- -------
Total distributions ........................... - (0.040) - - (0.040) -
------- ------- ------ ------- ------- -------
Net asset value, end of period ................... $12.040 $11.120 $10.280 $12.310 $11.310 $10.350
======= ======= ======= ======= ======= =======
Total return(4) .................................. 8.27% 8.60% 20.94% 8.84% 9.70% 21.77%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ....... $9,977 $8,683 $1,290 $472 $379 $107
Ratio of expenses to average net assets ....... 2.23% 2.20% 2.20% 1.23% 1.20% 1.20%
Ratio of expenses to average net assets
prior to expense limitation and expenses
paid indirectly .............................. 2.40% 2.26% 2.66% 1.40% 1.26% 1.66%
Ratio of net investment income (loss) to
average net assets ........................... (1.06%) (0.61%) (0.32%) (0.06%) 0.39% 0.68%
Ratio of net investment income (loss) to
average net assets prior to expense limitation
and expenses paid indirectly ................. (1.23%) (0.67%) (0.78%) (0.23%) 0.33% 0.22%
Portfolio turnover ............................ 25% 22% 29% 25% 22% 29%
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of commencement of trading; ratios have been annualized and total
return has not been annualized.
(3) The average shares outstanding method has been applied for per share
information.
(4) 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.
See accompanying notes
<PAGE>
14 for growth of capital
Delaware Group Equity Funds II, Inc. -
Social Awareness Fund
Notes to Financial Statements
May 31, 1999 (Unaudited)
- --------------------------------------------------------------------------------
Delaware Group Equity Funds II, Inc. (the "Company") is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Company is organized as a Maryland Corporation and offers
five series, the Decatur Equity Income Fund, formally known as Decatur Income
Fund, the Growth and Income Fund, formally known as the Decatur Total Return
Fund, the Blue Chip Fund, the Social Awareness Fund and the Diversified Value
Fund. These financial statements and related notes pertain to the Social
Awareness Fund (the "Fund"). The Fund offers four classes of shares. The Social
Awareness Fund A Class carries a front-end sales charge of 5.75%. The Social
Awareness Fund B Class carries a back-end sales charge. The Social Awareness
Fund C Class carries a level load deferred sales charge and the Social Awareness
Fund Institutional Class has no sales charge.
The investment objective of the Fund is to achieve long-term capital
appreciation. It seeks to achieve this objective by investing primarily in
equity securities of medium to large-sized companies expected to grow over time
that meet the Fund's "Social Criteria" strategy.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Money market instruments having less than 60
days to maturity are valued at amortized cost, which approximates market value.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Fund on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Repurchase Agreements - The Fund may invest in a pooled cash account along with
other members of the Delaware Investments Family of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. government. The respective collateral is held by the
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is at least 100% collateralized. However,
in the event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
<PAGE>
Other - Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. The Fund declares and pays dividends from net
investment income and capital gains, if any, annually.
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. These transactions are done subject to best price and execution. The
amount of these expenses was approximately $1,055 for the period ended May 31,
1999. In addition, the Fund receives earnings credits from its custodian when
positive cash balances are maintained, which are used to offset custody fees.
These credits were $430 for the period ended May 31, 1999. The expenses paid
under the above arragements are included in their respective expense captions on
the Statement of Operations with the corresponding expense offset shown as
"expenses paid indirectly."
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, effective
April 1, 1999 the Fund pays Delaware Management Company (DMC), the Investment
Manager of the Fund, an annual fee which is calculated daily at the rate of
0.75% on the first $500 million of average daily net assets, 0.70% on the next
$500 million, 0.65% on the next $1,500 million and 0.60% on the average daily
net assets in excess of $2,500 million. Prior to this, the annual fee was
calculated at the rate of 0.75% on the first $500 million of average daily net
assets, 0.725% on the next $500 million and 0.70% on the average daily net
assets in excess of $1 billion. At May 31, 1999, the Fund had a liability for
Investment Management fees and other expenses payable to DMC of $47,808.
DMC has entered into a sub-advisory agreement with Vantage Investment Advisors,
Inc., an affiliate of DMC, with respect to the management of the Fund. For the
services provided to DMC, DMC pays the sub-adviser an annual fee which is
calculated at the rate of 0.15% of average daily net assets averaging one year
old or less, 0.20% of average daily net assets averaging two years or less, but
greater than one year and 0.35% of average daily net assets averaging over two
years old. The Fund does not pay any fees to the sub-adviser.
DMC has elected to waive the portion, if any, of the management fee and
reimburse the Fund to the extent that annual operating expenses exclusive of
taxes, interest, brokerage commissions, extraordinary expenses and distribution
expenses exceed 1.25% of average daily net assets of the Fund through July 31,
1999. Prior to February 1, 1999, the expense waiver was 1.20% of average daily
net assets of the Fund.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent, accounting and administration
services. The Fund pays DSC a monthly fee based on the number of shareholder
accounts, shareholder transactions and average net assets, subject to certain
minimums. At May 31, 1999, the Fund had a liability for such fees and other
expenses payable to DSC of $34,553.
<PAGE>
for growth of capital 15
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class. For the period from February 1,
1998 through July 31, 1999, DDLP has elected to waive its fees to ensure that
annual fees received from A Class do not exceed 0.25% of the average daily net
assets of A Class.
For the period ended May 31, 1999, DDLP earned $45,889 for commissions on sales
of the Fund A Class shares.
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Fund. These officers, directors and employees are paid no compensation by
the Fund.
3. Investments
During the period ended May 31, 1999, the Fund made purchases of $22,951,857 and
sales of $10,755,478 of investment securities other than U.S. government
securities and temporary cash investments.
The cost of investments for federal income tax purposes approximates cost for
book purpose. At May 31,1999, the aggregate cost of securities was $83,704,675.
At May 31, 1999, net unrealized appreciation for federal income tax purposes
aggregated $13,051,322 of which $18,885,425 related to unrealized appreciation
of securities and $5,834,103 related to unrealized depreciation of securities.
<PAGE>
4. Capital Stock
Transactions in capital stock shares were as follows:
Six Months Year
Ended Ended
5/31/99 11/30/98
---------- --------
Shares sold:
A Class ......................................... 828,342 2,847,821
B Class ......................................... 781,930 2,213,593
C Class ......................................... 204,556 691,454
Institutional Class ............................. 20,979 48,074
Shares issued upon reinvestment of
distributions from net realized gain
on investments transactions:
A Class ......................................... - 3,485
B Class ......................................... - 2,897
C Class ......................................... - 509
Institutional Class ............................. - 40
--------- ---------
1,835,807 5,807,873
--------- ---------
Shares repurchased:
A Class ......................................... (418,828) (283,314)
B Class ......................................... (227,470) (175,560)
C Class ......................................... (156,601) (36,492)
Institutional Class ............................. (16,111) (24,987)
--------- ---------
(819,010) (520,353)
--------- ---------
Net increase .................................... 1,016,797 5,287,520
========= =========
5. Lines of Credit
The Fund has a committed line of credit for $600,000. No amount was outstanding
at May 31, 1999, or at any time during the fiscal year.
<PAGE>
16 for growth of capital
Proxy Results
(Unaudited)
- --------------------------------------------------------------------------------
For the six months ended May 31, 1999, The Delaware Group Equity Funds II, Inc.
shareholders voted on the following proposals at the annual meeting of
shareholders on March 17, 1999 or as adjourned. The description of each proposal
and number of shares voted are as follows:
1. To elect the Delaware Group Equity Funds II, Inc. Board of Directors.
Shares Shares Voted
Voted Withheld
For Authority
----------- ------------
Jeffrey J. Nick.................... 120,048,642 10,795,652
Walter P. Babich................... 120,063,759 10,780,535
John H. Durham..................... 120,200,558 10,643,736
Anthony D. Knerr................... 120,239,747 10,604,547
Ann R. Leven....................... 120,273,627 10,570,667
Thomas F. Madison.................. 120,229,855 10,614,439
Charles E. Peck.................... 120,200,223 10,644,071
Wayne A. Stork..................... 120,203,878 10,640,416
Jan L. Yeomans..................... 120,291,396 10,552,898
2. To approve the reclassification of the Social Awareness Fund investment
objective from fundamental to non-fundamental.
For Against Abstain
----------- --------- ---------
2,646,832 186,780 296,956
3. To approve standardized fundamental investment restrictions for the Social
Awareness Fund (proposal involves separate votes on seven sub-proposals
3A-3G).
3A. To adopt a new fundamental investment restriction concerning concentration
of the investments in the same industry.
For Against Abstain
----------- --------- ---------
2,752,374 108,259 269,934
3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
For Against Abstain
----------- --------- ---------
2,723,648 124,728 282,192
3C. To adopt a new fundamental investment restriction concerning underwriting.
For Against Abstain
----------- --------- ---------
2,734,091 96,185 300,292
<PAGE>
3D. To adopt a new fundamental investment restriction concerning investments in
real estate.
For Against Abstain
----------- --------- ---------
2,732,025 106,479 292,063
3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
For Against Abstain
----------- --------- ---------
2,722,723 114,664 293,180
3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
For Against Abstain
----------- --------- ---------
2,737,381 102,828 290,359
3G. To reclassify all current fundamental investment restrictions as
non-fundamental.
For Against Abstain
----------- --------- ---------
2,672,813 156,072 301,683
4. To approve a new investment management agreement with Delaware Management
Company for the Social Awareness Fund.
For Against Abstain
----------- --------- ---------
3,396,637 108,086 291,155
5. To approve a new sub-advisory agreement with Delaware Management Company for
the Social Awareness Fund.
For Against Abstain
----------- --------- ---------
3,410,300 91,771 293,808
6. To ratify the selection of Ernst & Young LLP, as the independent auditors
for Delaware Group Equity Funds II, Inc.
For Against Abstain
----------- --------- ---------
119,683,560 1,112,584 10,048,147
7. To approve the restructuring of the Delaware Group Equity Funds II, Inc.
from a Maryland Corporation into a Delaware Business Trust.
For Against Abstain
----------- --------- ---------
102,472,943 3,703,745 8,483,875
<PAGE>
Delaware investments family of funds
For Growth of Capital
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
Social Awareness Fund
For Total Return
Blue Chip Fund
Devon Fund
Decatur Equity Income Fund
Growth and Income Fund
REIT Fund
Delaware Balanced Fund
For International Diversification
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Equity Fund
Global Bond Fund
For Current Income
Delchester Fund
High-Yield Opportunities Fund
Extended Duration Bond Fund
Strategic Income Fund
Corporate Bond Fund
U.S. Government Fund
U.S. Government Securities Fund
Limited-Term Government Fund
For Tax-Exempt Income
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
Money Market Funds
Delaware Cash Reserve
Tax-Free Money Fund
Asset Allocation Funds
Foundation Funds
Growth Portfolio
Balanced Portfolio
Income Portfolio
* Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington, Wisconsin.
Insured and intermediate bond funds are available in selected states.
funds
(photo of computer keyboard)
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
<PAGE>
This Semi-Annual Report is for the information of Social Awareness Fund
shareholders, but it may be used with prospective investors when preceded or
accompanied by a current Prospectus for Social Awareness Fund and the Delaware
Investments Performance Update for the most recently completed calendar quarter.
The prospectus sets forth details about charges, expenses, investment objectives
and operating policies of the Fund. You should read the prospectus carefully
before you invest or send money. The figures in this report represent past
results which are not a guarantee of future results. The return and principal
value of an investment in the Fund will fluctuate so that shares, when redeemed,
may be worth more or less than their original cost.
- --------------------------------------------------------------------------------
Investment Manager
Delaware Management Company
Philadelphia, Pennsylvania
International Subadviser
Delaware International Advisers Ltd.
London, England
Subadviser
Vantage Investment Advisors
New York, New York
National Distributor
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
[photo of globes]
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan; however, shares of the Fund are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Fund are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London
Printed in the USA
on recycled paper
(J4917)
SA-147 [5/99] PP7/99
(1883)
