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DELAWARE
INVESTMENTS
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Philadelphia o London
Social Awareness Fund
Class A o Class B o Class C
Prospectus January 29, 1999
[Photo of illustration from
Growth of Capital Brochure]
Growth of Capital Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
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Table of contents
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Fund profile page 1
Social Awareness Fund 2
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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
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Who manages the Fund page 7
Investment manager and sub-adviser 7
Portfolio managers 7
Fund administration (Who's who) 8
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Certain management considerations page 9
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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
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Financial information page 20
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
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Take a look at the fund profile for an overview of the Fund.
Step 2
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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
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Determine which fund features and services you would like to take advantage of.
Step 4
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Use the glossary that begins on page 4 to find definitions of words printed in
bold type in the text throughout the prospectus.
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Fund Profiles:
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
Social Awareness 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 growth of capital with Social Awareness Fund
Social Awareness Fund is a growth of capital fund. Investors with long-term
goals often choose mutual funds designed to provide growth of capital. Growth of
capital funds have the potential to increase the value of your investment
through increases in stock prices. These funds may experience a relatively high
level of volatility, but generally offer greater return opportunities than total
return equity funds or bond funds. Like all mutual funds, funds seeking growth
of capital allow you to invest conveniently in a diversified portfolio without
having to select and monitor individual securities on your own.
Building Blocks of Asset Allocation
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International Asset
Aggressive Growth Equity Funds and Global Funds Allocation Funds
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Growth Equity Funds...
Growth of Capital
These stock funds provide long-term growth potential with relatively high
volatility.
Total Return Taxable Bond Funds Tax-Exempt Bond Funds
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Money Market Funds (Taxable and Tax-Exempt)
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1
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Profile: Social Awareness Fund
What is the Fund's goal?
Social Awareness Fund seeks long-term capital appreciation. Although the Fund
will strive to achieve its goal, there is no assurance that it will.
What are the Fund's main investment strategies? We invest primarily in stocks of
medium to large-sized companies that meet certain socially responsible criteria
and which we expect to grow over time. Our socially responsible criteria
excludes companies that:
[] engage in activities likely to result in damage to the natural environment
[] produce nuclear power, design or construct nuclear power plants or
manufacture equipment for the production of nuclear power
[] manufacture or contract for military weapons w are in the liquor, tobacco or
gambling industries
[] conduct animal testing for cosmetic or personal care products.
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 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. Because the Fund avoids certain
companies not considered socially responsible, it could miss out on strong
performance from those 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
[] Investors with long-term financial goals.
[] Investors looking for capital growth potential.
[] Investors who would like an investment that incorporates social
responsibility into its security selection process.
Who should not invest in the Fund
[] Investors with short-term financial goals.
[] Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over theshort term.
[] Investors whose primary goal is to receive current income.
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How has Social Awareness Fund performed?
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This bar chart and table can help you evaluate the potential risks of investing
in the Fund. We show 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 reflect
the actual costs of operating a mutual fund, such as the costs of buying,
selling, and holding securities. The Fund's past performance does not
necessarily indicate h ow it will perform in the future. The returns reflect
voluntary expense caps. The returns would be lower without the voluntary caps.
[] Social Awareness Fund
[] S&P 500
Total return (Class A)
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40%
S&P 500
30 28.74%
20 Social Awareness Fund
15.75%
10
0
- -10
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1998
As of December 31, 1998, the Fund's Class A shares had a year-to-date return of
15.75%. During the period illustrated in this bar chart, Class A's highest
return was 19.10% for the quarter ended December 31, 1998 and its lowest return
was -15.61% 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.
2
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How has Social Awareness Fund performed? (continued)
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Average annual returns for periods ending 12/31/98
CLASS A B C S&P 500
(if redeemed)* (if redeemed)*
1 year 9.12% 9.90% 13.90% 28.74%
Since inception (2/24/97) 17.96% 19.03% 20.88% 29.29%
* If redeemed at end of period shown. If shares were not redeemed, the returns
for Class B would be 14.90% and 20.88%, respectively, for the one-year and
lifetime periods. Returns for Class C would be 14.90% and 20.88%,
respectively, for the one-year and lifetime periods.
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.
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.
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.(6) This is
an example only, and does not represent future expenses, which may be greater or
less than those shown here.
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CLASS A B C
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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
Management fees 0.75% 0.75% 0.75%
Distribution and service (12b-1) fees 0.25%(4) 1.00% 1.00%
Other expenses 0.51% 0.51% 0.51%
Total operating expenses(5) 1.51% 2.26% 2.26%
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CLASS(7) A B B C C
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(if redeemed) (if redeemed)
1 year $720 $229 $729 $229 $329
3 years $1,025 $706 $1,006 $706 $706
5 years $1,351 $1,210 $1,410 $1,210 $1,210
10 years $2,273 $2,407 $2,407 $2,595 $2,595
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(1) A purchase of Class A shares at $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) Class A shares are subject to a 12b-1 fee of 0.30% of average daily net
assets. The distributor has agreed to waive a portion of 12b-1 fees through
July 31, 1999 in order to prevent these fees from exceeding 0.25% of average
daily net assets.
(5) 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.
(6) 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 in
this example. In addition, this example does not reflect the voluntary
expense cap described in footnote 5.
(7) 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.
3
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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.
Social Awareness Fund is a socially responsible fund that invests primarily in
stocks that meet certain socially responsible criteria. It strives to provide
long-term capital appreciation to its shareholders.
We invest primarily in the common stocks of medium and large-sized companies
(generally $1.0 billion or more in market capitalization at the time of
purchase) that have met the established socially responsible criteria. We use
the Social Investment Database published by Kinder, Lyndberg, Domini & Company,
Inc. to determine which companies to exclude from our selection process. The
approved stocks are then evaluated using the computer selection process
described above.
Our goal is to seek 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 investors.
We take a disciplined approach to investing, combining
investment strategies and risk management techniques
that can help shareholders meet their goals.
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.
4
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The securities we typically invest in
Stocks offer investors the potential for capital appreciation, and may pay
dividends as well.
<TABLE>
<S> <C>
Securities How we use them
Social Awareness Fund
Common stocks: Securities that represent shares of Generally, we invest 90% to 100% of net assets in common
ownership in a corporation. Stockholders participate in stock of medium- to large-size companies.
the corporation's profits and losses, proportionate to
the number of shares they own.
Repurchase agreements: An agreement between a buyer and Typically, we use repurchase agreements as a short-term
seller of securities in which the seller agrees to buy investment for the Fund's cash position. In order to
the securities back within a specified time at the same enter into these repurchase agreements, the Fund must
price the buyer paid for them, plus an amount equal to have collateral of at least 102% of the repurchase
an agreed upon interest rate. Repurchase agreements are price. The Fund may have no more than 10% of its total
often viewed as equivalent to cash. assets in repurchase agreements with maturities of over
seven days.
Restricted securities: Privately placed securities whose We may invest without limitation in privately placed
resale is restricted under securities law. securities that are eligible for resale among certain
institutional buyers. These are commonly known as "Rule
144A Securities."
Illiquid Securities: Securities that do not have a ready We may invest up to 15% of the Fund's net assets in
market, and cannot be easily sold, if at all, at illiquid securities.
approximately the price that the Fund has valued them.
</TABLE>
Social Awareness Fund is permitted to invest in all available types of equity
securities, including preferred stock, warrants and convertible securities. The
Fund may also invest in foreign securities directly (although we have no present
intention to do so) or through depositary receipts. It may hold cash; 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 or semi-annual shareholder
report.
Lending securities Social Awareness 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 Social Awareness
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.
5
<PAGE>
How we manage the Fund (continued)
The risks of investing in the Fund
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in the Fund you should
carefully evaluate the risks. An investment in the Fund typically provides the
best results when held for a number of years. The following are the chief risks
you assume when investing in Social Awareness Fund. Please see the Statement of
Additional Information for further discussion of these risks and the other risks
not discussed here.
<TABLE>
<S> <C>
Risks How we strive to manage them
Social Awareness Fund
Market risk is the risk that all or a majority of the We maintain a long-term investment approach and focus on
securities in a certain market -- like the stock or bond stocks we believe can appreciate over an extended time
market -- will decline in value because of factors such frame regardless of interim market fluctuations. We do
as economic conditions, future expectations or investor not try to predict overall stock market movements and do
confidence. not trade for short-term purposes.
We may hold a substantial part of the Fund's assets in
cash or cash equivalents as a temporary, defensive
strategy.
Industry and security risk is the risk that the value of We limit the amount of Social Awareness Fund's assets
securities in a particular industry or the value of an invested in any one industry and in any individual
individual stock or bond will decline because of security.
changing expectations for the performance of that
industry or for the individual company issuing the stock Because Social Awareness Fund avoids investing in
or bond. companies that don't meet socially responsible criteria,
its exposure to certain industry sectors may be greater
or less than similar funds or market indexes. This could
affect its performance positive ly or negatively,
depending on the performance of those sectors.
Liquidity risk is the possibility that securities cannot We limit exposure to illiquid securities.
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.
6
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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
Social Awareness Fund
As a percentage of average daily net assets 0.68%
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, Senior Vice President and Chief Investment Officer 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, Mr. Harvey 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.
7
<PAGE>
Who's who?
This diagram shows the various organizations involved with managing,
administering,and servicing the Delaware Investments funds.
Board of Directors
<TABLE>
<S> <C> <C>
Investment manager Custodian
Delaware Management Company The Fund The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Sub-adviser Distributor Service agent
Vantage Investment Advisors Delaware Distributors, L.P. Delaware Service Company, Inc.
630 Fifth Avenue 1818 Market Street 1818 Market Street
New York, NY 10111 Philadelphia, PA 19103 Philadelphia, PA 19103
Portfolio managers Financial advisers
(see page 7 for details)
Shareholders
</TABLE>
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.
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.
Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.
8
<PAGE>
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.
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.
9
<PAGE>
About your account
Investing in
the Fund
You can choose from a number of share classes for the Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.
Choosing a share class
Class
A
[] 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.
[] If you invest $50,000 or more, your front-end sales charge will be reduced.
[] 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.
[] Class A shares are also subject to an annual 12b-1 fee no greater than 0.30%
(currently 0.25%) of average daily net assets, which is lower than the 12b-1
fee for Class B and Class C shares.
[] Class A shares generally are not subject to a contingent deferred sales
charge.
Class A Sales Charges
<TABLE>
<CAPTION>
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- ------------------ ----------------- -------------------- ------------------------
<S> <C> <C> <C> <C>
Less than $50,000 5.75% 6.13% 5.00%
$50,000 but under $100,000 4.75% 4.97% 4.00%
$100,000 but under $250,000 3.75% 3.91% 3.00%
$250,000 but under $500,000 2.50% 2.58% 2.00%
$500,000 but under $1 million 2.00% 2.04% 1.60%
</TABLE>
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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.
<TABLE>
<CAPTION>
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- ------------------ ----------------- -------------------- ------------------------
<S> <C> <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>
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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 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
netassets.
10
<PAGE>
Class
B
[] 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.
[] 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.
[] Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.
[] 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.
[] 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.
[] 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.
[] You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.
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.
11
<PAGE>
About your account (continued)
Class
C
[] 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.
[] Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.
[] 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.
[] Because of the higher 12b-1 fees, Class C shares have higher expenses and
pay lower dividends than Class A shares.
[] Unlike Class B shares, Class C shares do not automatically convert into
another class.
[] You may purchase any amount less than $1,000,000 of Class C shares at any
one time. The limitation onmaximum purchases varies for retirement plans.
Each share class of the Fund has adopted a separate 12b-1 plan that allows it to
pay distribution fees for the sales and distribution of its shares. Because
these fees are paid out of the Fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.
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 thedebt 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.
12
<PAGE>
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>
Share class
Program How it works A B C
- ------- ------------ --- ----------------
<S> <C> <C> <C>
Letter of Intent Through a Letter of Intent you X Although the Letter of Intent
agree to invest a certain and Rights of Accumulation do
amount in Delaware Investment not apply to the purchase of
Funds (except money market Class B and C shares, you can
funds with no sales charge) combine your purchase of Class
over a 13-month period to A shares with your purchase of
qualify for reduced front-end B and C shares to fulfill your
sales charges. 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 Up to 12 months after you X Not available.
Redeemed 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 qualify for reduced sales
Profit Sharing, charges by combining the
Pension, 401(k), purchases of all members of
SIMPLE 401(k), the group. Members of these
403(b)(7), and 457 groups may also qualify to
Retirement Plans 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.
Prospectus
- ----------
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.
13
<PAGE>
About your account (continued)
How to buy shares
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.
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.
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.
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 cl asses of shares. To open an account by exchange, call the
Shareholder Service Center at 800.523.1918.
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.
R-S
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.
Sales charge
- ------------
Charge on the purchase or redemption of fund shares soldthrough financial
advisers. Mayvary with the amount invested. Typically used to compensate
advisers for advice and service provided.
14
<PAGE>
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 valu e. 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 partici pant 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.
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.
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.
15
<PAGE>
About your account (continued)
How to redeem shares
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.
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.
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.
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.
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-V
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."
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.
16
<PAGE>
How to redeem shares
(continued)
If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.
When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will 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 equity funds
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.
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.
Volatility
The tendency of an investment to go up or down in value by different magnitudes.
Investments that generally go up or down in value in relatively small amounts
are considered "low volatility" investments, whereas those investments that
generally go up or down in value in relatively large amounts are considered
"high volatility" investments.
17
<PAGE>
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.
18
<PAGE>
Special services
(continued)
MoneyLine(SM) On Demand Service
Through our MoneyLine(SM) On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. This service is not available for retirement plans, except
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000.
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 i s 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 $7 5 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.
19
<PAGE>
Financial information
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>
Financial highlights Class A Class B Class C
- ------------------------------------------------------------------------------------------------------------------------------------
Period 2/24/97(1) Period 2/24/97(1) Period 2/24/97(1)
Year Ended through Year Ended through Year Ended through
Social Awareness Fund 11/30/98 11/30/97 11/30/98 11/30/97 11/30/98 11/30/97
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $10.330 $8.500 $10.280 $8.500 $10.280 $8.500
Income from investment operations
Net investment income (loss)(2) 0.015 0.007 (0.066) (0.044) (0.068) (0.044)
Net realized and unrealized gain on investments 0.955 1.823 0.946 1.824 0.948 1.824
------- ------ ------- ------ ------- ------
Total from investment operations 0.970 1.830 0.880 1.780 0.880 1.780
------- ------ ------- ------ ------- ------
Less distributions
Distributions from realized gain on investments (0.040) none (0.040) none (0.040) none
------- ------ ------- ------ ------- ------
Total distributions (0.040) none (0.040) none (0.040) none
------- ------ ------- ------ ------- ------
Net asset value, end of period $11.260 $10.330 $11.120 $10.280 $11.120 $10.280
======= ====== ======= ====== ======= ======
Total return(3) 9.52% 21.53% 8.60% 20.94% 8.60% 20.94%
Ratios and supplemental data
Net assets, end of period (000 omitted) $38,858 $9,115 $30,172 $6,919 $8,683 $1,290
Ratio of expenses to average net assets 1.45% 1.50% 2.20% 2.20% 2.20% 2.20%
Ratio of expenses to average net assets prior to
expense limitation 1.56% 1.96% 2.26% 2.66% 2.26% 2.66%
Ratio of net investment income (loss) to average
net assets 0.14% 0.38% (0.61%) (0.32%) (0.61%) (0.32%)
Ratio of net investment income (loss) to average net
assets prior to expense limitation 0.03% (0.08%) (0.67%) (0.78%) (0.67%) (0.78%)
Portfolio turnover 22% 29% 22% 29% 22% 29%
</TABLE>
Volatility
- --------------------------------------------------------------------------------
Period 2/24/97(7)
Year Ended through
11/30/98 11/30/97
- --------------------------------------------------------------------------------
21.53%
9.52%
- --------------------------------------------------------------------------------
Volatility, as indicated by year-by-year total return(3)
Volatility chart is not part ofthe Financial highlights and has not been audited
by Ernst & Young LLP.
(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 and waiver of a portion of Class A 12b-1
expenses referenced in the Fund's profile on page 3.
20
<PAGE>
How to read the Financia 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 distributions-Distributions from 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.
21
<PAGE>
Social Awareness 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
19103-3682, 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]
Shareholder Service Center
800.523.1918
Call the Shareholder Service Center Monday to Friday, 8 a.m. to 8 p.m. Eastern
time:
o For fund information; literature; price, yield and performance figures.
o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions
and telephone exchanges.
Delaphone Service
800.362.FUND (800.362.3863)
o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this -Tone (R)service.
Registrant's Investment Company Act file number: 811-750
DELAWARE(SM)
INVESTMENTS
- ------------
Philadelphia [] London
P-147 [--] PP 1/99
<PAGE>
DELAWARE
INVESTMENTS
===========
Philadelphia o London
Social Awareness Fund
Institutional Class
Prospectus January 29, 1999
Growth of Capital Fund
The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
<PAGE>
Table of contents
.................................................................
Fund profile page 1
Social Awareness 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 12
Account minimum 13
Exchanges 13
Dividends, distributions and taxes 13
.................................................................
Financial information page 14
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.
<PAGE>
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
Social Awareness 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 growth of capital with Social Awareness Fund
Social Awareness Fund is a growth of capital fund. Investors with long-term
goals often choose mutual funds designed to provide growth of capital. Growth of
capital funds have the potential to increase the value of your investment
through increases in stock prices. These funds may experience a relatively high
level of volatility, but generally offer greater return opportunities than total
return equity funds or bond funds. Like all mutual funds, funds seeking growth
of capital allow you to invest conveniently in a diversified portfolio without
having to select and monitor individual securities on your own.
Building Blocks of Asset Allocation
Aggressive Growth Equity Funds
International
and Global
Funds
Asset
Allocation
Funds
Growth Equity Funds...
Growth of Capital
These stock funds provide long-term growth potential with relatively high
volatility.
Total Return
Taxable Bond
Funds
Tax-Exempt
Bond Funds
Money Market Funds (Taxable and Tax-Exempt)
1
<PAGE>
Profile: Social Awareness Fund
What is the Fund's goal?
Social Awareness Fund seeks long-term capital appreciation. Although the Fund
will strive to achieve its goal, there is no assurance that it will.
What are the Fund's main investment strategies? We invest primarily in stocks of
medium to large-sized companies that meet certain socially responsible criteria
and which we expect to grow over time. Our socially responsible criteria
excludes companies that:
/ / engage in activities likely to result in damage to the natural environment
/ / produce nuclear power, design or construct nuclear power plants or
manufacture equipment for the production of nuclear power
/ / manufacture or contract for military weapons
/ / are in the liquor, tobacco or gambling industries
/ / conduct animal testing for cosmetic or personal care products.
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 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. Because the Fund avoids certain
companies not considered socially responsible, it could miss out on strong
performance from those 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
/ / Investors with long-term financial goals.
/ / Investors looking for capital growth potential.
/ / Investors who would like an investment that incorporates social
responsibility into its security selection process.
Who should not invest in the Fund
/ / Investors with short-term financial goals.
/ / Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.
/ / Investors whose primary goal is to receive current income.
<PAGE>
How has Social Awareness 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.
Total return (Institutional Class)
40%
S&P 500 30
28.74%
Social Awareness Fund 20
16.00%
10
- -------------------------------------------------------------------------- 0
-10
1998
Social Awareness Fund
S&P 500
As of December 31, 1998, the Institutional Class had a year-to-date return of
16.00%. During the period illustrated in this bar chart, the Institutional
Class' highest return was 19.12% for the quarter ended December 31, 1998 and its
lowest return was -15.55% for the quarter ended September 30, 1998.
2
<PAGE>
How has Social Awareness Fund performed? (continued)
Average annual returns as of 12/31/98
Institutional Class S&P 500
1 year 16.00% 28.74%
Since inception (2/24/97) 22.07% 29.29%
What are the Fund's 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 0.75%
Distribution and service (12b-1) fees none
Other expenses 0.51%
Total operating expenses(2) 1.26%
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 $128
3 years $400
5 years $692
10 years $1,523
(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.
3
<PAGE>
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.
Social Awareness Fund is a socially responsible fund that invests primarily in
stocks that meet certain socially responsible criteria. It strives to provide
long-term capital appreciation to its shareholders.
We invest primarily in the common stocks of medium and large-sized companies
(generally $1.0 billion or more in market capitalization at the time of
purchase) that have met the established socially responsible criteria. We use
the Social Investment Database published by Kinder, Lyndberg, Domini & Company,
Inc. to determine which companies to exclude from our selection process. The
approved stocks are then evaluated using the computer selection process
described above.
Our goal is to seek 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 investors.
We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.
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.
4
<PAGE>
The securities we typically invest in
Stocks offer investors the potential for capital appreciation and may pay
dividends as well.
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
Social Awareness Fund
---------------------------------------------------------------
<S> <C>
Common stocks: Securities that represent shares of Generally, we invest 90% to 100% of net assets in
ownership in a corporation. Stockholders common stock of medium- to large-size companies.
participate in the corporation's profits and
losses, proportionate to the number of shares they
own.
Repurchase agreements: An agreement between a Typically, we use repurchase agreements as a
buyer and seller of securities in which the seller short-term investment for the Fund's cash
agrees to buy the securities back within a position. In order to enter into these repurchase
specified time at the same price the buyer paid agreements, the Fund must have collateral of at
for them, plus an amount equal to an agreed upon least 102% of the repurchase price. The Fund may
interest rate. Repurchase agreements are often have no more than 10% of its total assets in
viewed as equivalent to cash. repurchase agreements with maturities of over
seven days.
Restricted securities: Privately placed securities We may invest without limitation in privately
whose resale is restricted under securities law. placed securities that are eligible for resale
among certain institutional buyers. These are
commonly known as "Rule 144A Securities."
Illiquid Securities: Securities that do not have a We may invest up to 15% of the Fund's net assets
ready market, and cannot be easily sold, if at in illiquid securities.
all, at approximately the price that the Fund has
valued them.
</TABLE>
Social Awareness Fund is permitted to invest in all available types of equity
securities, including preferred stock, warrants and convertible securities. The
Fund may also invest in foreign securities directly (although we have no present
intention to do so) or through depositary receipts. It may hold cash; 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 or semi-annual shareholder
report.
Lending securities Social Awareness 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 Social Awareness 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.
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.
5
<PAGE>
How we manage the Fund (continued)
The risks of investing in the Fund
Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in the Fund you should
carefully evaluate the risks. An investment in the Fund typically provides the
best results when held for a number of years. The following are the chief risks
you assume when investing in Social Awareness 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 use them
- ------------------------------------------------------------------------------------------------------------------------------------
Social Awareness Fund
---------------------------------------------------------------
<S> <C>
Market risk is the risk that all or a majority of We maintain a long-term investment approach and
the securities in a certain market -- like the focus on stocks we believe can appreciate over an
stock or bond market -- will decline in value extended time frame regardless of interim market
because of factors such as economic conditions, fluctuations. We do not try to predict overall
future expectations or investor confidence. stock market movements and do not trade for
short-term purposes.
We may hold a substantial part of the Fund's
assets in cash or cash equivalents as a temporary,
defensive strategy.
Industry and security risk is the risk that the We limit the amount of Social Awareness Fund's
value of securities in a particular industry or assets invested in any one industry and in any
the value of an individual stock or bond will individual security.
decline because of changing expectations for the
performance of that industry or for the individual Because Social Awareness Fund avoids investing in
company issuing the stock or bond. companies that don't meet socially responsible
criteria, its exposure to certain industry sectors
may be greater or less than similar funds or
market indexes. This could affect its performance
positively or negatively, depending on the
performance of those sectors.
Liquidity risk is the possibility that securities We limit exposure to illiquid securities.
cannot be readily sold, or can only be sold at
approximately the price that the Fund has valued
them.
</TABLE>
C-E
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.
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.
6
<PAGE>
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
Social Awareness Fund
As a percentage of average daily net assets 0.68%
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, Senior Vice President and Chief Investment Officer 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, Mr. Harvey was a financial analyst with Merrill Lynch.
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.
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.
7
<PAGE>
Who manages the Fund (continued)
Who's who?
This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.
<TABLE>
<CAPTION>
<S> <C> <C>
Board of Directors
Investment manager Custodian
Delaware Management Company The Fund The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245
Sub-Adviser Distributor Service agent
Vantage Investment Advisors Delaware Distributors, L.P. Delaware Service Company, Inc.
630 Fifth Avenue 1818 Market Street 1818 Market Street
New York, NY 10111 Philadelphia, PA 19103 Philadelphia, PA 19103
Shareholders
Portfolio managers
(see page 7 for details)
</TABLE>
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.
<PAGE>
F-N
Financial adviser
- --------------------------------------------------------------------------------
Financial professional (e.g., broker, banker, accountant, planner or insurance
agent) who analyzes clients' finances and prepares personalized programs to meet
objectives.
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).
8
<PAGE>
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.
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.
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.
9
<PAGE>
About your account
Investing in the Fund
Institutional Class shares are available for purchase only by the following:
/ / 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
/ / tax-exempt employee benefit plans of the man or its affiliates and
securities dealer firms with a selling agreement with the distributor
/ / 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
/ / 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
/ / 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
N-S
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.
Principal
- --------------------------------------------------------------------------------
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.
10
<PAGE>
How to buy shares
[ENVELOPE LOGO]
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.
[WIRE LOGO]
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.
[EXCHANGE LOGO]
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.
[FINANCIAL ADVISER LOGO]
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.
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.
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.
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.
11
<PAGE>
About your account (continued)
How to buy shares (continued)
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.
How to redeem shares
[ENVELOPE LOGO]
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.
[TELEPHONE LOGO]
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.
[WIRE LOGO]
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.
[FINANCIAL ADVISER LOGO]
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-V
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.
Standard Deviation
- --------------------------------------------------------------------------------
A measure of an investment's volatility; for mutual fund's, measures how much a
fund's total return has typically varied from its historical average.
12
<PAGE>
How to redeem shares
(continued)
If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.
When you send us a properly completed request to redeem or exchange shares, you
will receive the net asset value as determined on the business day we receive
your request. We will send you a check, normally the next business day, but no
later than seven days after we receive your request to sell your shares. If you
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.
Account minimum
If you redeem shares and your account balance falls below $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 applic-able 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.
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.
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."
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.
Total return equity funds
- --------------------------------------------------------------------------------
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.
Volatility
- --------------------------------------------------------------------------------
The tendency of an investment to go up or down in value by different magnitudes.
Investments that generally go up or down in value in relatively small amounts
are considered "low volatility" investments, whereas those investments that
generally go up or down in value in relatively large amounts are considered
"high volatility" investments.
13
<PAGE>
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.
Social Awareness Fund
<TABLE>
<CAPTION>
Institutional Class
Period 2/24/97(1)
Year Ended through
11/30/98 11/30/97
- -----------------------------------------------------------------------------------------------
<S> <C> <C>
Net asset value, beginning of period $10.350 $ 8.500
Income from investment operations
Net investment income(2) 0.043 0.029
Net realized and unrealized gain on investments 0.957 1.821
------- -------
Total from investment operations 1.000 1.850
------- -------
Less distributions
Distributions from net realized gain on investments (0.040) None
------- -------
Total distributions (0.040) None
------- -------
Net asset value, end of period $11.310 $10.350
======= =======
Total return(3) 9.70% 21.77%
Ratios and supplemental data
Net assets, end of period (000 omitted) $379 $107
Ratio of expenses to average net assets 1.20% 1.20%
Ratio of expenses to average net assets prior to expense
limitation 1.26% 1.66%
Ratio of expenses to average net assets 0.39% 0.68%
Ratio of expenses to average net assets prior to expense
limitation 0.33% 0.22%
Portfolio turnover 22% 29%
Volatility
- ----------------------------------------------------------------------------------------------
Volatility, as indicated Period 2/24/97(1)
by year-by-year Year Ended through
total return(3) 11/30/98 11/30/97
--------------------------------------------------------
Volatility chart is not part of the 9.70% 21.77%
Financial highlights and has
not been audited
by Ernst & Young LLP.
</TABLE>
(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 Social Awareness
Fund's Profile on page 3.
14
<PAGE>
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 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 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
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.
15
<PAGE>
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<PAGE>
Social Awareness 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 Funds 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)
o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.
DELAWARE(SM)
INVESTMENTS
===========
Philadelphia o London
Registrant's Investment Company Act file number: 811-750
P-150 [--] PP 1/99
