<PAGE>
For Total Return
DELAWARE GROUP
Devon Fund
1997
Semi-Annual
Report
professional management
service and guidance
goals
DELAWARE
GROUP
- --------
<PAGE>
MAY 5, 1997
Dear Shareholder:
Devon Fund achieved a solid +11.85% total return (capital
change plus income based on net asset value for A Class shares) during the
first half of fiscal 1997, a time of substantial market volatility.
We are pleased to report that Devon outpaced the average of its peers
in the highly competitive Lipper Growth and Income Fund category for the six
months ended April 30, 1997. Your Fund's short-term performance also kept
pace with the unmanaged S&P 500 Index for most of the period, as shown on
page 5.
FOOD, DRUG AND CAPITAL GOODS STOCKS WITH CONSISTENT EARNINGS AND DIVIDEND
GROWTH HELPED DEVON FUND OUTPACE THE AVERAGE OF ITS PEERS BETWEEN OCTOBER AND
APRIL.
Since October 31, investors have been challenged by the specter of
accelerating consumer prices. Inflation fears are being driven
by a U.S. unemployment rate which, as of April, was at its lowest level since
1973. Meanwhile, America's output of goods and services has been growing at
a robust annual rate of 5.8%, the latest quarterly U.S. government report shows.
In March, the Federal Reserve Board - the nation's inflation fighter
- - raised its target for short-term interest rates by 25 basis points (0.25%)
to 5.5%, precipitating the biggest short-term decline in stock prices since
the late 1980s. Within six weeks, however, the stock market recovered after
additional economic reports showed that consumer prices were tame.
Despite such volatility, many of your Fund's stock selections have
done well since October, particularly food, pharmaceutical and capital goods
stocks such as office furniture makers. A few of Devon's larger holdings were
buffeted by health care regulatory and litigation issues, which negatively
affected the Fund's short-term performance. We believe these issues will
gradually dissipate.
2 1997 semi-annual report
<PAGE>
discipline
We are encouraged by better-than-expected 1997 earnings at many U.S.
companies, which bode well for dividend growth at these businesses. Your Fund's
portfolio manager - George H. Burwell - remains confident in the Fund's strategy
of selecting stocks with both growth and value characteristics. Your Fund's net
assets have more than doubled since October amid the growing popularity of
investment strategies that utilize the market's growth and income potential.
Inside, Mr. Burwell explains what's happened since autumn, and what
trends we believe are likely to shape the market for the balance of 1997.
While all equity mutual funds are affected by short-term market fluctuations,
we believe Devon's method of selecting stocks has the potential to both
reduce exposure to market risks and provide superior long-term total return.
I thank you for the confidence you have shown in Devon Fund and look
forward to reporting to you again at year's end.
Sincerely,
/s/ Wayne A. Stork
- -----------------------------------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
TOTAL RETURN
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------
TOTAL RETURN AVERAGE ANNUAL RETURN
SIX MONTHS ENDED FROM DEC. 29, 1993
April 30, 1997 To April 30, 1997
- ------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Devon Fund A Class +11.85% +20.25%
- ------------------------------------------------------------------------------------------------------------
Lipper Growth and Income Fund Average +10.42% (605 funds) +16.23% (319 funds)
Standard & Poor's 500 Index +14.72% +20.56%
- ------------------------------------------------------------------------------------------------------------
</TABLE>
DEVON FUND PERFORMANCE AND THAT OF THE LIPPER GROWTH & INCOME FUND AVERAGE IS
BASED ON NET ASSET VALUE WITHOUT EFFECT OF SALES CHARGE AND ASSUMES
REINVESTMENT OF DIVIDENDS. SEC-MANDATED PERFORMANCE INFORMATION FOR ALL FUND
CLASSES CAN BE FOUND ON PAGE 9.
1997 semi-annual report 3
<PAGE>
Portfolio Manager's Review
The first half of fiscal 1997 was a period that demanded exceptional patience
and levelheaded stock picking. Stocks of large, high profile companies tended
to outperform the rest of the market, as investors focused on businesses with
consistent earnings and stocks offering dividend growth potential.
INVESTORS WHO RODE OUT THE MARKET'S
SHORT-LIVED WINTER FLU BY FOCUSING ON
DIVIDEND-PAYING COMPANIES EMERGED WITH
ROBUST RETUNRS.
The overall U.S. equity market itself, however, was anything but
consistent. After a burst of post-1996 federal election euphoria that lasted
through mid-winter, investors suddenly soured on stocks following the Federal
Reserve Board's March 13 decision to modestly raise the interest rate banks
charge each other on overnight loans.
Stocks of medium-size and small companies were especially hard hit
early in calendar 1997, with many aggressive growth, non-dividend paying stocks
falling 20% in value, or more than twice the decline of the Standard & Poor's
500 Index during March and early April.
Fortunately, the market's adverse reaction to the Fed's effort to
inoculate the U.S. economy against inflation proved brief. Investors who rode
out the market's short-lived winter 'flu' by concentrating on dividend-paying,
consumer and capital goods companies emerged with robust returns.
Short-term volatility will always be a facet of equity investing.
However, an investment in the S&P 500 on April 30, 1982, with dividends
reinvested, would have grown in value by more than tenfold as of April 30,
1997, illustrating stocks' long-term potential.
PORTFOLIO HIGHLIGHTS
- --------------------------------------------------------------------------------
April 30, 1997
- --------------------------------------------------------------------------------
Median Market Capitalization $3.3 billion
Number of Stocks 54
Average Stock Price-to-Earnings Ratio* 17.0x
Top Sector - Capital Goods 19.6%
Yield (before fund expenses) 1.84%
Beta** 0.96
* BASED ON ANALYSTS' EARNINGS ESTIMATES.
** A MEASURE OF RISK RELATIVE TO THE S&P 500 INDEX. A NUMBER LESS THAN
1.0 MEANS LESS HISTORICAL PRICE VOLATILITY THAN THE INDEX. A NUMBER HIGHER
THAN 1.0 MEANS MORE HISTORICAL VOLATILITY.
4 1997 semi-annual report
<PAGE>
YOUR FUND'S PERFORMANCE AMID SHORT-TERM MARKET VOLATILITY
October 31, 1996, to April 30, 1997
Total aggregate return
Devon Standard & Poor's
Fund A 500 Index
11/1/96 0 0
11/8/96 2.94% 3.7%
11/15/96 4.04% 4.72%
11/22/96 5.75% 6.33%
11/29/96 6.84% 7.56%
12/6/96 5.2 % 5.14%
12/13/96 3.97% 3.63%
12/20/96 6.26% 6.52%
12/27/96 7.36% 7.7%
1/3/97 6.85% 6.47%
1/10/97 7.81% 8.15%
1/17/97 9.42% 10.54%
1/24/97 8.76% 9.74%
1/31/97 10.45% 12.01%
2/7/97 11.18% 12.57%
2/14/97 13.9 % 15.32%
2/21/97 13.83% 14.41%
2/28/97 12.95% 12.89%
3/7/97 14.78% 14.98%
3/14/97 14.49% 13.35%
3/21/97 12.14% 12.07%
3/27/97 10.89% 10.65%
4/4/97 8.47% 8.39%
4/11/97 6.92% 5.54%
4/18/97 10.9 % 9.66%
4/25/97 8.47% 9.53%
4/30/97 11.85% 14.72%
Devon Fund's performance generally kept pace with the S&P 500 Index for most
of the period since October. We were able to achieve this by focusing on
stocks that appeared to offer lower risk and higher growth potential than the
overall market.
PAST PERFORMANCE IS NOT A GUARANTEE OF FUTURE RESULTS. PERFORMANCE OF OTHER
CLASSES WILL DIFFER DUE TO DIFFERENT CHARGES AND EXPENSES. SEE PAGE 9 FOR
SEC-MANDATED PERFORMANCE INFORMATION.
<PAGE>
Strategic Positioning
In our opinion, investors will pay more for strong companies that are likely
to increase cash dividends at an above-average rate. When we select stocks,
we also look for several other indicators of capital appreciation potential,
including:
* VALUE - attractive earnings growth at discount prices;
* CONSISTENCY - steady growth in a relatively stable industry;
* CASH FLOW - substantial resources to reinvest in the business or raise
dividends;
* CATALYSTS - improving operations by expansion or acquisition; and,
* UNDER-RESEARCHED - the company's progress hasn't yet been recognized by the
market.
Devon Fund's value orientation led us to add a few consumer growth
companies such as HERSHEY FOODS during the first half of fiscal 1997. We were
attracted to the long-term potential of the Pennsylvania chocolate maker's
acquisition this past winter of LEAF INC.'S candy business. Leaf's brands
include Jolly Rancher and Good & Plenty.
Nevertheless, we reduced our overall weighting in the consumer growth
and consumer staples sectors, selling companies such as PROCTER & GAMBLE
whose stock price (relative to earnings) exceeded the market average by more
than 20%, triggering our sell discipline.
We retained our drug stock holdings, which also did very well during
the first few months of calendar 1997, because we believe this consumer
growth industry has more potential. This fits our strategy of holding stocks
longer to achieve higher levels of capital appreciation. We believe this
helps us maximize total return with only a modest increase in risk.
1997 semi-annual report 5
<PAGE>
Compared to October 31, 1996, we've slightly increased our weighting
in midcap companies, adding capital goods makers such as HON INDUSTRIES, an
office furniture maker we believe may offer as much potential as HERMAN
MILLER, INC. a similar company whose shares we purchased last summer and
whose performance has been strong.
On any tree, not all fruit ripens at the same time, and your Fund
has had its share of disappointments since autumn. The most significant of
these was COLUMBIA/HCA HEALTHCARE, which had been a top five holding at the
start of the 1997 fiscal year. The company's share price suffered after
Columbia, the nation's largest hospital chain, became a target of federal
regulators who question the company's billing practices. We've retained our
position because we believe the company's business is fundamentally sound and
that a settlement can be reached.
HOW DEVON BLENDS VALUE AND GROWTH
April 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------
ALLOCATION
PERCENT OF CHANGE FROM 1996
BROAD SECTORS FUND'S NET ASSETS OCTOBER 31, 1996 P/E RATIO DIVIDEND GROWTH
- -----------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Capital Goods 19.6% +3% 18.9x +6.7%
Consumer Growth 19.0 -4 18.5 +17.1
Finance 16.8 +2 16.0 +15.3
Consumer Staples 8.9 -5 17.4 +16.9
Technology 5.5 -1 14.2 +15.0
Other Consumer 5.2 Unchanged 13.1 +12.6
Utilities 4.9 Unchanged 12.7 +9.0
Energy 3.6 -1 15.7 +4.0
Real Estate Investment
Trusts 3.6 +1 11.5 +10.6
- -----------------------------------------------------------------------------------------------------------
TOTAL 17.0 +12.8%
S&P 500 INDEX 18.9 +8.0%
- -----------------------------------------------------------------------------------------------------------
</TABLE>
WEIGHTED AVERAGE AMONG DEVON FUND HOLDINGS BASED ON EARNINGS ESTIMATES.
Your Fund's holdings generally have lower P/E ratios and higher dividend
growth than the S&P 500 Index, a sign of our efforts to create a portfolio
with both growth and value characteristics.
6 1997 semi-annual report
<PAGE>
OUTLOOK
The S&P 500 Index has doubled in value in the past four years, and the U.S.
economy has enjoyed a rather lengthy expansion. However, we are still finding
attractive stock values, especially among mid-size companies. Our research is
turning up overlooked industrial and service businesses that, in our opinion,
are well-positioned to expand both earnings
and dividends.
OUR RESEARCH IS TURNING UP OVERLOOKED
INDUSTRIAL AND SERVICE BUSINESSES THAT, IN OUR
OPINION, ARE WELL-POSITIONED TO EXPAND BOTH
EARNINGS AND DIVIDENDS.
outlook
We also remain guardedly optimistic about the financial sector. We
believe lingering uncertainty about whether the Federal Reserve Board will
raise short-term interest rates in the coming months will create opportunity
for value-oriented investors.
Our approach to the financial sector is to generally avoid companies
whose profits are likely to be negatively affected by consumer credit
problems such as credit card issuers and most commercial banks. Instead we
are focusing on insurance companies and consistently profitable businesses
such as the FEDERAL NATIONAL MORTGAGE ASSOCIATION (Fannie Mae).
A volatile market can be one where investors can't easily separate
the wheat from the chaff, in the financial sector as well as in other
industry groups. Your Fund's strategy of focusing on fundamental analysis
helps us harvest growth and income opportunities while providing a mechanism
that we believe can screen out companies likely to yield only minimal
capital appreciation.
George H. Burwell
VICE PRESIDENT AND
SENIOR PORTFOLIO MANAGER
May 5, 1997
Q. WITH YIELDS AT AN ALL-TIME LOW, DOES DIVIDEND GROWTH STILL MATTER?
A. Definitely yes. It can point the way to capital appreciation potential.
1997 semi-annual report 7
<PAGE>
Furnishing Opportunity
DEVON FUND'S BUY/SELL DISCIPLINE AT WORK
HERMAN MILLER INC. STOCK PRICE
high low
7/5/96 $15.4375 $14.9375
7/12/96 $17.625 $15
7/19/96 $17.3125 $15.875
7/26/96 $17.1875 $16.625
8/2/96 $17 $16
8/9/96 $17.25 $16.6875
8/16/96 $17.875 $16.5
8/23/96 $18 $17.5625 Devon begins buying
8/30/96 $19.125 $17.75
9/6/96 $19.46875 $18.5
9/13/96 $20.5625 $19.25
9/20/96 $20.1875 $19.5
9/27/96 $20.1875 $19.8125
10/4/96 $22.3125 $20
10/11/96 $22.5 $21.8125
10/18/96 $22.75 $21.75
10/25/96 $22.75 $21.875
11/1/96 $22.4375 $21.5625
11/8/96 $22.125 $21.125
11/15/96 $22.625 $20.75
11/22/96 $23.8125 $21.875
11/29/96 $23.75 $23.3125
12/6/96 $24 $22.625
12/13/96 $24.0625 $22.8125
12/20/96 $27.5 $22.5
12/27/96 $27.125 $25.375
1/3/97 $28.3125 $26.875
1/10/97 $28.125 $27.375
1/17/97 $29.25 $27.875
1/24/97 $30.4375 $28.625
1/31/97 $29.9375 $28
2/7/97 $29.75 $28.75
2/14/97 $33.75 $30
2/21/97 $34.375 $32.625
2/28/97 $34.9375 $32.125
3/7/97 $33.75 $32.25
3/14/97 $34.25 $33.375 Devon begins selling
3/21/97 $34.125 $32.5
3/28/97 $35.625 $33.25
4/4/97 $35.75 $34.125
4/11/97 $37.625 $36.3125
4/18/97 $37.375 $34.5
4/25/97 $34.75 $28
5/2/97 $33.625 $29.25
For office furniture companies such as HERMAN MILLER INC., these are heady
times. Not since the mid-1980s have so many companies added or replaced so
many desks. It's a byproduct of the fact that many corporations enjoy high
earnings and have finally been hiring after years of downsizing.
In July 1996, Devon Fund's portfolio manager recognized the trend,
and capitalized on it by purchasing Herman Miller stock. At the time, we
believed Wall Street was overlooking a company whose growth prospects were
better than most furniture makers.
You may recall that July 1996 was also a period of exceptional market
volatility. This provided Devon's portfolio with an opportunity to purchase
Herman Miller's stock at what we believed was an attractive price. Among the
factors affecting our decision to buy were:
* a record level of new orders;
* a substantial increase in earnings estimates by analysts;
* a stock price relative to earnings that was about a 30% discount to the
overall market; and,
* strong sales growth potential for a multi-year period.
In the fall of 1996, the stock represented more than 2% of Devon
Fund's net assets. By early April, 1997, Herman Miller's share price had more
than doubled. Your Fund's manager then decided to substantially reduce
Devon's position when the company's share price approached the parameters of
the Fund's sell discipline.
As of this writing, we believe the office furnishings boom is likely
to continue for two to three years. Of course, as with all the Fund's
holdings, we continually reevaluate our remaining position.
8 1997-semi-annual report
<PAGE>
Devon Fund Performance
GROWTH OF A $10,000 INVESTMENT
DECEMBER 29, 1993, TO APRIL 30, 1997
With Reinvestment of Capital Gains And Dividends
Lipper
Growth & Income
Devon Fund Average S&P500
Fund A (319 Funds) Index
Dec-93 $ 9,525 $10,000 $10,000
Jan-94 $ 9,877 $10,370 $10,348
Feb-94 $ 9,887 $10,165 $10,068
Mar-94 $ 9,554 $ 9,748 $ 9,630
Apr-94 $ 9,898 $ 9,849 $ 9,753
May-94 $10,022 $ 9,949 $ 9,912
Jun-94 $ 9,830 $ 9,729 $ 9,669
Jul-94 $10,117 $10,003 $ 99,86
Aug-94 $10,491 $10,378 $10,395
Sep-94 $10,319 $10,143 $10,141
Oct-94 $10,405 $10,255 $10,368
Nov-94 $ 9,867 $ 9,876 $ 9,991
Dec-94 $10,101 $ 9,986 $10,139
Jan-95 $10,111 $10,139 $10,401
Feb-95 $10,652 $10,526 $10,806
Mar-95 $11,023 $10,794 $11,125
Apr-95 $11,184 $11,049 $11,452
May-95 $11,486 $11,410 $11,909
Jun-95 $11,706 $11,655 $12,185
Jul-95 $12,150 $12,051 $12,588
Aug-95 $12,190 $12,134 $12,620
Sep-95 $12,724 $12,499 $13,152
Oct-95 $12,694 $12,338 $13,105
Nov-95 $13,170 $12,883 $13,679
Dec-95 $13,682 $13,094 $13,943
Jan-96 $13,960 $13,457 $14,417
Feb-96 $14,035 $13,652 $14,551
Mar-96 $14,014 $13,842 $14,691
Apr-96 $14,217 $14,081 $14,907
May-96 $14,529 $14,350 $15,290
Jun-96 $14,957 $14,300 $15,348
Jul-96 $14,269 $13,685 $14,669
Aug-96 $14,667 $14,074 $14,979
Sep-96 $15,448 $14,717 $15,821
Oct-96 $15,761 $14,998 $16,257
Nov-96 $16,839 $15,977 $17,485
Dec-96 $16,817 $15,814 $17,139
Jan-97 $17,408 $16,495 $18,208
Feb-97 $17,801 $16,582 $18,352
Mar-97 $17,048 $15,990 $17,599
Apr-97 $17,628 $15,990 $18,648
By focusing on undervalued companies with earnings and dividend growth
potential, your Fund has been able to provide higher returns than comparable
funds over its lifetime.
,
CHART ASSUMES $10,000 INVESTED ON DECEMBER 29, 1993, AND INCLUDES THE EFFECT
OF A 4.75% FRONT-END SALES CHARGE AND THE REINVESTMENT OF ALL DIVIDENDS.
PERFORMANCE OF OTHER CLASSES OF DEVON FUND WILL VARY DUE TO DIFFERING CHARGES
AND EXPENSES.
DEVON FUND PERFORMANCE
Average Annual Return Through April 30, 1997
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------
LIFETIME ONE YEAR
- -----------------------------------------------------------------------------------------
<S> <C> <C>
Class A (Est. 12/29/93)
Excluding Sales Charge +20.25% +23.99%
Including Sales Charge +18.51% +18.11%
- -----------------------------------------------------------------------------------------
Class B (Est. 9/6/94)
Excluding Sales Charge +21.03% +23.24%
Including Sales Charge +20.20% +19.24%
- -----------------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding Sales Charge +21.92% +23.18%
Including Sales Charge +21.92% +22.18%
- -----------------------------------------------------------------------------------------
</TABLE>
<PAGE>
DEVON FUND'S RETURN AND SHARE VALUE FLUCTUATE SO THAT SHARES, WHEN REDEEMED,
MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE IS NOT
A GUARANTEE OF FUTURE RESULTS. RETURNS REFLECT REINVESTMENT OF DISTRIBUTIONS
AND SALES CHARGES AS NOTED BELOW. LIFETIME PERFORMANCE "EXCLUDING SALES
CHARGE" FOR B AND C CLASSES ASSUMES THE INVESTMENT WAS NOT REDEEMED.
CLASS A RETURNS REFLECT THE EFFECT OF THE 4.75% MAXIMUM FRONT-END SALES
CHARGE AND A 12B-1 FEE.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT TO A
1% ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE SUBJECT TO A DEFERRED SALES
CHARGE IF REDEEMED BEFORE THE END OF THE SIXTH YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE AND A 1%
CONTINGENT DEFERRED SALES CHARGE IF REDEEMED WITHIN 12 MONTHS.
VOLUNTARY FEE CAPS EQUAL 1.25% OF NET ASSETS FOR A CLASS SHARES AND 1.95%
FOR B AND C CLASS SHARES WERE IN EFFECT AS OF APRIL 30, 1997. RETURNS WOULD
HAVE BEEN LOWER WITHOUT THE CAPS.
THE AVERAGE ANNUAL TOTAL RETURNS FOR THE LIFETIME AND ONE-YEAR PERIODS AND
AGGREGATE SIX-MONTH RETURN FOR THE PERIOD ENDED APRIL 30, 1997 FOR DEVON
FUND'S INSTITUTIONAL CLASS WERE +20.61%, +24.41% AND +12.03%. THESE SHARES
ARE AVAILABLE WITHOUT SALES OR ASSET-BASED DISTRIBUTION CHARGES ONLY TO
CERTAIN ELIGIBLE INSTITUTIONAL ACCOUNTS.
1997 semi-annual report 9
<PAGE>
Financial Statements
DELAWARE GROUP EQUITY FUNDS I, INC. -
DEVON FUND
STATEMENT OF NET ASSETS APRIL 30, 1997
(UNAUDITED)
- ----------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCK - 91.11%
AEROSPACE AND DEFENSE - 3.29%
GenCorp ........................................ 47,700 $ 894,375
Lockheed Martin ................................ 7,100 635,450
----------
1,529,825
----------
AUTOMOBILES & AUTO PARTS - 3.30%
Danaher ........................................ 34,000 1,534,250
----------
1,534,250
----------
BANKING, FINANCE & INSURANCE - 16.61%
American International Group ................... 15,000 1,927,500
Chubb .......................................... 13,800 796,950
Federal National Mortgage ...................... 35,400 1,455,825
Nationwide Financial Services-A ................ 18,000 477,000
Penncorp Financial Group ....................... 18,300 629,063
Southern National .............................. 8,200 321,850
State Street Bank .............................. 15,200 1,197,000
UNUM ........................................... 12,000 924,000
----------
7,729,188
----------
BUILDINGS AND MATERIALS - 2.42%
Foster Wheeler ................................. 29,200 1,127,850
----------
1,127,850
----------
CABLE, MEDIA, & PUBLISHING - 6.67%
Banta .......................................... 15,600 395,850
Reynolds & Reynolds Class A .................... 44,000 913,000
Wallace Computer Services ...................... 67,000 1,792,250
----------
3,101,100
----------
COMPUTERS & TECHNOLOGY - 2.13%
Hewlett-Packard ................................ 18,900 992,250
----------
992,250
----------
CONSUMER PRODUCTS - 3.72%
General Electric ............................... 8,000 887,000
Masco .......................................... 22,300 841,825
----------
1,728,825
----------
ELECTRONICS & ELECTRICAL - 1.54%
Raychem ........................................ 6,700 432,150
Teleflex ....................................... 4,900 282,975
----------
715,125
----------
ENERGY - 3.57%
Kerr-McGee ..................................... 14,800 893,550
Royal Dutch Petroleum ADR ...................... 2,200 396,550
TOTAL SA - ADR ................................. 8,900 370,462
----------
1,660,562
----------
FOOD, BEVERAGE & TOBACCO - 8.78%
ConAgra ........................................ 32,600 1,878,575
Hershey Foods .................................. 10,200 553,350
Philip Morris .................................. 42,000 1,653,750
----------
4,085,675
----------
- ---------------
Top 10 holdings, representing 36.14% of net assets, are in boldface
<PAGE>
- ----------------------------------------------------------------------------
NUMBER OF MARKET
SHARES VALUE
- ----------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
HEALTHCARE & PHARMACEUTICALS - 11.06%
Baxter International ........................... 7,300 $ 349,488
Columbia/HCA Healthcare ........................ 33,700 1,179,500
Johnson & Johnson .............................. 15,800 967,750
Schering-Plough ................................ 15,700 1,256,000
SmithKline Beecham ............................. 17,300 1,394,812
----------
5,147,550
----------
INDUSTRIAL MACHINERY - 0.82%
Pentair ........................................ 12,800 382,400
----------
382,400
----------
REAL ESTATE - 4.13%
Colonial Properties Trust ...................... 6,000 170,250
D.R. Horton .................................... 59,200 577,200
Health Care Property Investors ................. 8,800 291,500
Kilroy Realty .................................. 12,300 289,050
Nationwide Health Properties ................... 19,700 394,000
Sun Communities ................................ 6,200 198,400
----------
1,920,400
----------
RETAIL - 4.59%
May Department Stores .......................... 10,300 476,375
Rite Aid ....................................... 29,300 1,347,800
Developers Diversified Realty .................. 5,000 184,375
Storage USA .................................... 3,400 127,925
----------
2,136,475
----------
TELECOMMUNICATIONS - 1.97%
ALLTEL ......................................... 29,100 916,650
----------
916,650
----------
TEXTILES, APPAREL, & FURNITURE - 9.01%
Ecolab ......................................... 45,900 1,870,425
Hillenbrand Industries ......................... 11,300 485,900
HON Industries ................................. 23,000 968,875
Miller (Herman) ............................... 10,600 342,513
Valspar ........................................ 18,300 521,550
----------
4,189,263
----------
UTILITIES - 2.77%
CMS Energy ..................................... 15,900 504,825
DQE ............................................ 7,100 196,137
Edison International ........................... 13,500 283,500
Illinova ....................................... 13,500 303,750
----------
1,288,212
----------
MISCELLANEOUS - 4.73%
Tompkins plc-ADR ............................... 13,500 243,000
Tyco International ............................. 32,100 1,958,100
----------
2,201,100
----------
Total Common Stock
(cost $37,497,234) ............................ 42,386,700
----------
CONVERTIBLE PREFERRED STOCKS - 0.69%
Freeport-McMoRan Copper & Gold 5.00% pfd cv .... 11,900 321,300
----------
Total Convertible Preferred Stock
(cost $319,700) ............................... 321,300
----------
10 1997 semi-annual report
<PAGE>
Statement of Net Assets (Continued)
- ----------------------------------------------------------------------------
PRINCIPAL MARKET
AMOUNT VALUE
- ----------------------------------------------------------------------------
REPURCHASE AGREEMENTS - 8.50%
With J. P. Morgan Securities 5.40% 5/1/97
(dated 4/30/97, collateralized by $859,000
U.S. Treasury Notes 8.625% due 8/15/97,
market value $881,290, and $408,000 U.S. ........
Treasury Notes 5.125% due 4/30/98,
market value $404,644) .......................... $ 1,254,000 $ 1,254,000
With PaineWebber 5.40% 5/1/97 (dated
4/30/97, collateralized by $862,000 U.S. ........
Treasury Notes 6.875% due 3/31/00, market
value $877,279, and $392,000 U.S. Treasury
Notes 6.000% due 11/30/97, market value
$402,126) ....................................... 1,254,000 1,254,000
With Prudential Securities 5.40% 5/1/97 (dated
4/30/97, collateralized by $1,440,000 U.S. ......
Treasury Notes 6.125% due 5/31/97, market
value $1,476,885) .............................. 1,445,000 1,445,000
Total Repurchase Agreements
(cost $3,953,000) .............................. 3,953,000
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 100.30%
(cost $41,769,934) ............................. $ 46,661,000
------------
LIABILITIES NET OF RECEIVABLES - (0.30%)
AND OTHER ASSETS ................................ (1 39,957)
------------
NET ASSETS APPLICABLE TO 3,064,512 - 100.00%
SHARES ($1 PAR VALUE) OUTSTANDING ............... $ 46,521,043
------------
NET ASSET VALUE - DEVON FUND A CLASS
(27,943,859 / 1,839,435 shares) ................ $15.19
======
NET ASSET VALUE - DEVON FUND B CLASS
(12,235,014 / 807,757 shares) .................. $15.15
======
NET ASSET VALUE - DEVON FUND C CLASS
(2,084,037 / 137,724 shares) ................... $15.13
======
NET ASSET VALUE - DEVON FUND INSTITUTIONAL CLASS
(4,258,133 / 279,596 shares) ................... $15.23
======
COMPONENTS OF NET ASSETS AT APRIL 30, 1997:
Common stock, $1 par value, 125,000,000 shares
authorized to the Devon Fund .................... $ 40,465,318
Accumulated undistributed:
Net investment loss
Net realized gain on investments ................ 1,179,336
Net unrealized appreciation of investments ...... 4,891,066
------------
Total net assets ................................ $ 46,521,043
============
- ----------
ADR - American Depository Receipt
See accompanying notes
<PAGE>
Delaware Group Equity Funds I, Inc. -
Devon Fund
Statements of Operations
Six Months Ended April 30, 1997
(Unaudited)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Dividends ......................................... $ 295,262
Interest .......................................... 62,786 $ 358,048
----------
EXPENSES:
Management fees ($95,547) and
directors' fees ($3,264) ......................... 98,811
Distribution expense .............................. 70,252
Dividend disbursing and transfer agent
fees and expenses ................................. 55,673
Federal and state registration fees ............... 8,904
Taxes other than taxes on income .................. 8,600
Professional fees ................................. 7,600
Accounting fees and salaries ...................... 5,765
Reports and statements to shareholders ............ 5,530
Custodian fees .................................... 2,250
Other ............................................. 20
----------
263,405
----------
Less expenses absorbed by Delaware
Management Company, Inc. .......................... (45,443) 217,962
---------- -----------
NET INVESTMENT INCOME ............................. 140,086
-----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain from security transactions ...... 1,184,608
Net unrealized appreciation
of investments during period ...................... 1,747,501
-----------
NET REALIZED AND UNREALIZED
GAIN ON INVESTMENTS: ............................. 2,932,109
-----------
NET INCREASE IN NET
ASSETS RESULTING FROM OPERATIONS .................. $ 3,072,195
===========
See accompanying notes
1997 semi-annual report 11
<PAGE>
Delaware Group Equity Funds I, Inc. - Devon Fund
Statement of Changes in Net Assets
Six Months Ended April 30, 1997
- --------------------------------------------------------------------------------
Six Months Ended Year Ended
4/30/97 (Unaudited) 10/31/96
---------------------------------
OPERATIONS:
Net investment income ....................... $ 140,086 $ 277,292
Net realized gain from security transactions 1,184,608 1,659,549
Net unrealized appreciation during the period 1,747,501 1,747,047
------------ ------------
Net increase in net assets
resulting from operations ................... 3,072,195 3,683,888
------------ ------------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
Devon Fund A Class .......................... (162,838) (174,416)
Devon Fund B Class .......................... (17,534) (16,956)
Devon Fund C Class .......................... (4,445) (3,999)
Devon Fund Institutional Class .............. (42,042) (56,556)
Net realized gain from security transactions:
Devon Fund A Class .......................... (1,104,350) (463,434)
Devon Fund B Class .......................... (216,938) (50,076)
Devon Fund C Class .......................... (264,306) (367)
Devon Fund Institutional Class .............. (82,512) (151,603)
------------ ------------
(1,894,965) (917,407)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Devon Fund A Class .......................... 14,168,109 6,421,733
Devon Fund B Class .......................... 8,439,900 2,265,272
Devon Fund C Class .......................... 1,027,186 1,597,020
Devon Fund Institutional Class .............. 1,398,043 842,297
Six Months Ended Year Ended
4/30/97 (Unaudited) 10/31/96
---------------------------------
Net asset value of shares issued upon
reinvestment of dividends from net realized
gain on security transactions:
Devon Fund A Class .......................... $ 1,236,379 $ 621,810
Devon Fund B Class .......................... 272,894 64,045
Devon Fund C Class .......................... 83,467 4,344
Devon Fund Institutional Class .............. 258,979 208,178
------------ ------------
26,884,957 12,024,699
------------ ------------
Cost of shares repurchased:
Devon Fund A Class .......................... (3,129,807) (2,868,651)
Devon Fund B Class .......................... (116,026) (105,456)
Devon Fund C Class .......................... (123,743) (647,436)
Devon Fund Institutional Class .............. (823,410) (1,096,984)
------------ ------------
(4,192,986) (4,718,527)
------------ ------------
Increase in assets derived from
capital share transactions .................. 22,691,971 7,306,172
------------ ------------
NET INCREASE IN NET ASSETS .................. 23,869,201 10,072,653
NET ASSETS:
Beginning of period ......................... 22,651,842 12,579,189
------------ ------------
End of period ............................... $ 46,521,043 $ 22,651,842
------------ ------------
See accompanying notes
<PAGE>
Financial Highlights
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Devon Fund A Class
-------------------------------------------------------
Six Months 12/29/93(2)
Ended Year Ended to
4/30/97(1) 10/31/96 10/31/95 10/31/94
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period. . . . . . . . . . . . . . $14.610 $12.550 $10.830 $10.000
------- ------- ------- -------
Income from investment operations:
Net investment income . . . . . . . . . . . . . . . . . . . . . 0.081 0.216 0.207(3) 0.136
Net realized and unrealized gain from security transactions 1.594 2.689 2.053 0.784
------- ------- ------- -------
Total from investment operations. . . . . . . . . . . . . . . . 1.675 2.905 2.260 0.920
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income. . . . . . . . . . . . . . (0.130) (0.205) (0.220) (0.090)
Distributions from net realized gain on security transactions (0.965) (0.640) (0.320) -
------- ------- ------- -------
Total distributions . . . . . . . . . . . . . . . . . . . . . . (1.095) (0.845) (0.540) (0.090)
------- ------- ------- -------
Net asset value, end of period. . . . . . . . . . . . . . . . . $15.190 $14.610 $12.550 $10.830
======= ======= ======= =======
Total return(4) . . . . . . . . . . . . . . . . . . . . . . . . 11.85% 24.14% 21.98% 11.09%
Ratios and supplemental data:
Net assets, end of period (000 omitted) . . . . . . . . . . . . $27,944 $14,907 $8,846 $4,600
Ratio of expenses to average net assets . . . . . . . . . . . . 1.24%(5) 1.25%(5) 1.25%(5) 1.25%(5)
Ratio of net investment income to average net assets . . . . . 0.99%(6) 1.67%(6) 1.82%(6) 1.96%(6)
Portfolio turnover. . . . . . . . . . . . . . . . . . . . . . . 40% 80% 99% 180%
Average commission rate paid. . . . . . . . . . . . . . . . . . $0.0600 $0.0600 N/A N/A
</TABLE>
- ----------------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering, ratios and total return have been
annualized.
(3) 1995 per share information was based on the average shares outstanding
method.
(4) Does not include maximum sales charge nor the 1% limited contingent
deferred sales charge that would apply in the event of certain redemptions
within 12 months of purchase.
(5) Ratio of expenses to average net assets prior to expense limitation was
1.53% for the six months ended April 30,1997, 1.84% for year ended October
31, 1996, 2.29% for the year ended October 31, 1995 and 3.26% for the
period ended October 31, 1994.
(6) Ratio of net investment income (loss) to average net assets prior to
expense limitation was 0.70% for the six months ended April 30, 1997, 1.08%
for the year ended October 31, 1996, 0.78% for the year ended October 31,
1995 and (0.05%) for the period ended October 31, 1994.
12 1997 semi-annual report
<PAGE>
Financial Highlights (Continued)
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Devon Fund B Class Devon Fund C Class
----------------------------------------------------------------------
Six Months 9/06/942 Six Months 11/29/95(2)
Ended Year Ended to Ended to
4/30/97(1) 10/31/96 10/31/95 10/31/94 4/30/971 10/31/96
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period . . . . . $14.540 $12.500 $10.820 $10.900 $14.530 $13.020
------- ------- ------- ------- ------- -------
Income from investment operations:
Net investment income. . . . . . . . . . . . . 0.040 0.136 0.127(3) 0.027 0.026 0.188
Net realized and unrealized gain (loss)
from security transactions . . . . . . . . . . 1.580 2.664 2.053 (0.077) 1.584 2.157
------- ------- ------- ------- ------- -------
Total from investment operations . . . . . . . 1.620 2.800 2.180 (0.050) 1.610 2.345
------- ------- ------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income . . . . . (0.045) (0.120) (0.180) (0.030) (0.045) (0.195)
Distributions from net realized gain
on security transactions . . . . . . . . . . . (0.965) (0.640) (0.320) 0.000 (0.965) (0.640)
------- ------- ------- ------- ------- -------
Total distributions. . . . . . . . . . . . . . (1.010) (0.760) (0.500) (0.030) (1.010) (0.835)
------- ------- ------- ------- ------- -------
Net asset value, end of period . . . . . . . . $15.150 $14.540 $12.500 $10.820 $15.130 $14.530
======= ======= ======= ======= ======= =======
Total return(4). . . . . . . . . . . . . . . . 11.49% 23.38% 21.09% (0.46%) 11.42% 18.94%
Ratios and supplemental data:
Net assets, end of period (000 omitted). . . . $12,235 $3,399 $863 $115 $2,084 $1,056
Ratio of expenses to average net assets. . . . 1.94%(5) 1.95%(5) 1.95%(5) 1.95%(5) 1.94%(7) 1.95%(7)
Ratio of net investment income
to average net assets. . . . . . . . . . . . . 0.29%(6) 0.97%(6) 1.12%(6) 1.26%(6) 0.29%(8) 0.97%(8)
Portfolio turnover . . . . . . . . . . . . . . 40% 80% 99% 180% 40% 80%
Average commission rate paid . . . . . . . . . $0.0600 $0.0600 N/A N/A $0.0600 $0.0600
</TABLE>
- --------------------
(1) Ratios have been annualized and total return has not been annualized.
(2 Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) 1995 per share information was based on the average shares outstanding
method.
(4) Does not include contingent deferred sales charge which varies from 1%-4%
depending upon the holding period for Devon Fund B Class and C Class.
(5) Ratio of expenses to average net assets prior to expense limitation was
2.23% for the six months ended April 30, 1997, 2.54% for year ended October
31, 1996, 2.99% for the year ended October 31, 1995 and 3.96% for the
period ended October 31, 1994.
(6) Ratio of net investment income (loss) to average net assets prior to expense
limitation was 0.00% for the six months ended April 30, 1997, 0.38% for the
year ended October 31, 1996, 0.08% for the year ended October 31, 1995 and
(0.75%) for the period ended October 31, 1994.
(7) Ratio of expenses to average net assets prior to expense limitation was
2.23% for the six months ended April 30, 1997 and 2.54% for the period
ended October 31, 1996.
(8) Ratio of net investment income to average net assets prior to expense
limitation was 0.00% for the six months ended April 30, 1997 and 0.38% for
the period ended October 31, 1996.
1997 SEMI-ANNUAL REPORT 13
<PAGE>
Financial Highlights (Continued)
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Devon Fund Institutional Class
--------------------------------------------------------
Six Months 12/29/93(2)
Ended Year Ended to
4/30/97(1) 10/31/96 10/31/95 10/31/94
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period. . . . . . $14.670 $12.590 $10.860 $10.000
------- ------- ------- -------
Income from investment operations:
Net investment income . . . . . . . . . . . . . 0.083 0.267 0.241(3) 0.201
Net realized and unrealized gain (loss)
from security transactions. . . . . . . . . . . 1.622 2.693 2.049 0.749
------- ------- ------- -------
Total from investment operations. . . . . . . . 1.705 2.960 2.290 0.950
------- ------- ------- -------
Less dividends and distributions:
Dividends from net investment income. . . . . . (0.180) (0.240) (0.240) (0.090)
Distributions from net realized gain
on security transactions. . . . . . . . . . . . (0.965) (0.640) (0.320) -
------- ------- ------- -------
Total distributions . . . . . . . . . . . . . . (1.145) (0.880) (0.560) (0.090)
------- ------- ------- -------
Net asset value, end of period . . . . . . . . $15.230 $14.670 $12.590 $10.860
======= ======= ======= =======
Total return. . . . . . . . . . . . . . . . . . 12.03% 24.56% 22.26% 11.45%
Ratios and supplemental data:
Net assets, end of period (000 omitted) . . . $4,258 $3,290 $2,870 $2,516
Ratio of expenses to average net assets . . . 0.94%(4) 0.95%(4) 0.95%(4) 0.95%(4)
Ratio of net investment income to
average net assets. . . . . . . . . . . . . . 1.29%(5) 1.97%(5) 2.12%(5) 2.26%(5)
Portfolio turnover. . . . . . . . . . . . . . 40% 80% 99% 180%
Average commission rate paid. . . . . . . . . $0.0600 $0.0600 N/A N/A
</TABLE>
- ----------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios and total return have been
annualized.
(3) 1995 per share information was based on the average shares outstanding
method.
(4) Ratio of expenses to average net assets prior to expense limitation was
1.23% for the six months ended April 30, 1997, 1.54% for year ended October
31, 1996, 1.99% for the year ended October 31, 1995 and 2.96% for the period
ended October 31, 1994.
(5) Ratio of net investment income to average net assets prior to expense
limitation was 1.00% for the six months ended April 30, 1997, 1.38% for the
year ended October 31, 1996, 1.08% for the year ended October 31, 1995 and
0.25% for the period ended October 31, 1994.
14 1997 semi-annual report
<PAGE>
DELAWARE GROUP EQUITY FUNDS I, INC.-
DEVON FUND
NOTES TO FINANCIAL STATEMENTS
APRIL 30, 1997
(UNAUDITED)
Delaware Group Equity Funds I, Inc. - Delaware Fund ("the Company"), formerly
known as Delaware Group Delaware Fund, Inc., is registered as a diversified
open-end investment company under the Investment Company Act of 1940, as
amended. The Company currently offers two Series, Delaware Fund and Devon Fund
(the "Fund"). The Company is organized as a Maryland corporation. The Fund
offers four classes of shares.
The investment objective of the Fund is to seek current income and capital
appreciation.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 pm EST on the valuation date. Securities not
traded or securities not listed on an exchange are valued at the last mean of
the quoted bid and asked prices. Long-term debt securities are valued by an
independent pricing service when such prices are believed to reflect the fair
value of such securities. Money market instruments having less than 60 days
to maturity are valued at amortized cost.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes is required in the
financial statements. Income and capital gain distributions are determined
in accordance with federal income tax regulations which may differ from
generally accepted accounting principles.
Repurchase Agreements - The Fund may invest in a pooled cash account along
with other members of the Delaware Group of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements
secured by obligations of the U.S. government. The respective collateral is
held by the Fund's custodian bank until the maturity of the respective
repurchase agreements. Each repurchase agreement is 100% collateralized.
However, in the event of default or bankruptcy by the counterparty to the
agreement, realization of the collateral may be subject to legal proceedings.
Class Accounting - Investment income, common expenses, and gain realized and
unrealized (loss) on investments are allocated to the various classes of the
Fund on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make
estimates and assumptions that affect the reported amounts of assets and
liabilities at the date of the financial statements and the reported amounts
of revenues and expenses during the reporting period. Actual results could
differ from those estimates.
Other - Expenses common to all Funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on an accrual basis. Original issue discounts are accreted to
interest income over the lives of the respective securities.
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC), the Investment Manager of the
Fund, a fee which is calculated daily at the annual rate of 0.60% on the
first $500 million of average daily net assets of the Fund and 0.50% on the
average daily net assets over $500 million. At April 30, 1997, the Fund had a
liability for Investment Management fees and other expenses payable to DMC
for $85,594.
DMC has elected voluntarily to waive its fee and reimburse the Fund to the
extent that annual operating expenses, exclusive of taxes, interest,
brokerage commission, extraordinary expenses and 12B-1 expenses exceed 0.95%
of average net assets for each class through June 30, 1997. Total expenses
absorbed by DMC for the six months ended April 30, 1997, were $45,443.
<PAGE>
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of A Class and 1.00% of the
average daily net assets of B Class and C Class. No distribution expenses are
paid by the Institutional Class. At April 30, 1997, the Fund had a liability
for distribution fees and other expenses payable to DDLP for $20,398. For the
six months ended April 30, 1997, DDLP earned $29,598 for commissions on sales of
Devon Fund A Class shares.
The Fund has engaged Delaware Service Company, Inc. (DSC) and Delaware
Investment & Retirement Services, Inc. (DIRSI), affiliates of DMC, to serve
as dividend disbursing and transfer agents for the Fund. For the six months
ended April 30, 1997, the Fund has expensed $55,673 for these services. The
Fund also engaged DSC to provide accounting services for the Fund. For the
six months ended April 30, 1997, the Fund has expensed $4,444 for these
services. Previously fund personnel provided this service and the related
costs were recorded in salaries and other expense categories in the Statement
of Operations. At April 30, 1997, the Fund had a liability for dividend
disbursing, transfer agent, and accounting service fees and other expenses
payable to DSC and DIRSI for $34,218.
Certain officers of DMC are officers, directors, and/or employees of the
Fund. These officers, directors and employees are paid no compensation by the
Fund.
3. Investments
During the six months ended April 30, 1997, the Fund made purchases of
$25,051,942 and sales of $5,997,025 of investment securities other than U.S.
government securities and temporary cash investments.
At April 30, 1997, unrealized appreciation for federal income tax purposes
aggregated $4,880,964 of which $5,512,127 related to unrealized appreciation of
securities and $631,163 related to unrealized depreciation of securities. At
April 30, 1997, the aggregate cost of securities for federal tax purposes was
$41,780,036.
4. Capital Stock
SIX MONTHS YEAR
ENDED ENDED
4/30/97 10/31/96
------- --------
Shares sold:
Devon Fund A Class. . . . . . . 938,753 481,037
Devon Fund B Class. . . . . . . 562,826 167,538
Devon Fund C Class. . . . . . . 67,476 117,220
Devon Fund Institutional Class 92,575 63,036
Shares issued upon reinvestment of dividends from net
investment income and net realized gain on
security transactions:
Devon Fund A Class. . . . . . . 85,365 48,285
Devon Fund B Class. . . . . . . 18,889 4,965
Devon Fund C Class. . . . . . . 5,782 312
Devon Fund Institutional Class 17,849 16,198
--------- -------
1,789,515 898,591
--------- -------
Shares repurchased:
Devon Fund A Class. . . . . . . (205,030) (213,978)
Devon Fund B Class. . . . . . . (7,731) (7,814)
Devon Fund C Class. . . . . . . (8,191) (44,875)
Devon Fund Institutional Class (55,041) (82,931)
--------- -------
(275,993) (349,598)
--------- -------
Net increase. . . . . . . . . . . . . 1,513,522 548,993
--------- -------
5. Lines of Credit
The Fund has a committed line of credit for $800,000. No amount was outstanding
at April 30, 1997, or at any time during the last fiscal period.
1997 semi-annual report 15
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF DEVON FUND SHAREHOLDERS,
BUT IT MAY BE USED WITH PROSPECTIVE INVESTORS WHEN PRECEDED OR ACCOMPANIED BY
A CURRENT PROSPECTUS FOR DEVON FUND, WHICH SETS FORTH DETAILS ABOUT CHARGES,
EXPENSES, INVESTMENT OBJECTIVES AND OPERATING POLICIES OF THE FUND. YOU
SHOULD READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST. SUMMARY INVESTMENT
RESULTS ARE DOCUMENTED IN THE FUND'S CURRENT STATEMENT OF ADDITIONAL
INFORMATION. THE FIGURES IN THIS REPORT REPRESENT PAST RESULTS WHICH ARE NOT
A GUARANTEE OF FUTURE RESULTS. THE RETURN AND PRINCIPAL VALUE OF AN
INVESTMENT IN THE FUND WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE
WORTH MORE OR LESS THAN THEIR ORIGINAL COST.
INVESTMENT MANAGER
Delaware Management Company, Inc.
Philadelphia
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan: however, shares of the
Fund are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Fund are not bank or credit union
deposits.
Copy Rights Delaware Distributors, L.P.
DELAWARE
GROUP
- -----------
Philadelphia o London
Printed in the USA on
recycled paper
SA-039 [4/97] PP6/97
(DG-28)
