July 18, 1996
DELAWARE GROUP DELAWARE FUND, INC.
DELAWARE FUND
DEVON FUND
Supplement to Prospectus dated December 29, 1995
The following amends and supplements the information in the
last paragraph of the section of the Prospectus entitled
Mortgage-Backed Securities under Investment Strategy.
CMOs and REMICs issued by private entities are not
government securities and are not directly guaranteed by any
government agency. They are secured by the underlying collateral
of the private issuer. Certain of these private-backed
securities are 100% collateralized at the time of issuance by
securities issued or guaranteed by the U.S. Government, its
agencies, or instrumentalities. The Devon Fund currently may
invest in privately-issued CMOs and REMICs only if they are so
collateralized and rated at the time of purchase in the four
highest grades by a nationally-recognized rating agency (e.g.,
BBB or better by Standard & Poor's Ratings Group or Baa or better
by Moody's Investors Service, Inc.).
The Delaware Fund may invest its assets in CMOs and REMICs
issued by private entities whether or not the securities are 100%
collateralized at the time of issuance by securities issued or
guaranteed by the U.S. Government, its agencies or
instrumentalities (securities that are not so collateralized are
called "non-agency mortgage-backed securities"). Non-agency
mortgage-backed securities may comprise up to 20% of the Delaware
Fund's asset, but all of these securities must (i) be rated at
the time of purchase in the four top rating categories by a
nationally-recognized statistical rating organization and (ii)
represent interests in whole-loan mortgages, multi-family
mortgages, commercial mortgages or other mortgage collateral
supported by a first mortgage lien on real estate. Non-agency
mortgage-backed securities are subject to the interest rate and
prepayment risks to which other CMOs and REMICs issued by private
issuers are subject. Non-agency mortgage-backed securities may
also be subject to a greater risk of loss of interest and
principal because they are not collateralized by securities
issued or guaranteed by the U.S. Government. In addition, timely
information concerning the loans underlying these securities may
not be as readily available and the market for these securities
may be less liquid than the market for other CMOs and REMICs.
