<PAGE> 1
SUPPLEMENT DATED APRIL 15, 1995
TO THE CURRENT PROSPECTUSES
OF THE FOLLOWING DELAWARE GROUP FUNDS
DELAWARE GROUP DELAWARE FUND, INC., DELAWARE GROUP TREND FUND, INC.,
DELAWARE GROUP VALUE FUND, INC., DELAWARE GROUP DECATUR FUND, INC.,
DELAWARE GROUP DELCAP FUND, INC., DELAWARE GROUP DELCHESTER HIGH-YIELD
BOND FUND, INC., DELAWARE GROUP GOVERNMENT FUND, INC., DELAWARE GROUP
TAX-FREE FUND, INC., DELAWARE GROUP TREASURY RESERVES, INC., DELAWARE
GROUP TAX-FREE MONEY, INC., DELAWARE GROUP CASH RESERVE, INC.
On March 29, 1995, shareholders of each of the above referenced Funds
or, as relevant, the series thereof, approved a new Investment Management
Agreement with Delaware Management Company, Inc. ("DMC"), an indirect
wholly-owned subsidiary of Delaware Management Holdings, Inc. ("DMH"). The
approval of new Investment Management Agreements was subject to the completion
of the merger (the "Merger") between DMH and a wholly-owned subsidiary of
Lincoln National Corporation ("Lincoln National") which occurred on April 3,
1995. Accordingly, the previous Investment Management Agreements terminated and
the new Investment Management Agreements became effective on that date.
As a result of the Merger, DMC and its two affiliates, Delaware
Service Company, Inc., the Funds' shareholder servicing, dividend disbursing
and transfer agent and Delaware Distributors, L.P., the Funds' national
distributor became indirect wholly-owned subsidiaries of Lincoln National.
Lincoln National, with headquarters in Fort Wayne, Indiana, is a diversified
organization with operations in many aspects of the financial services
industry, including insurance and investment management.
Under the new Investment Management Agreements, DMC will be paid at
the same annual fee rates and on the same terms as it was under the previous
Investment Management Agreements. In addition, the investment approach and
operation of each Fund and, as relevant, each series of a Fund, will remain
substantially unchanged.
PS-OTH-4/95
<PAGE> 2
NOVEMBER 9, 1994
Delaware Group of Funds
U.S. GOVERNMENT FUND
A CLASS/B CLASS
(September 29, 1994)
DELCHESTER FUND
A CLASS/B CLASS
(September 29, 1994)
TREASURY RESERVES INTERMEDIATE FUND
A CLASS/B CLASS
(May 2, 1994)
TREND FUND
A CLASS/B CLASS
(SEPTEMBER 6, 1994)
DELCAP FUND A CLASS/B CLASS
(SEPTEMBER 6, 1994)
DELAWARE FUND
A CLASS/B CLASS
DIVIDEND GROWTH FUND
A CLASS/B CLASS
(SEPTEMBER 6, 1994)
DECATUR INCOME FUND
A CLASS/B CLASS
(SEPTEMBER 6, 1994)
DECATUR TOTAL RETURN FUND
A CLASS/B CLASS
(SEPTEMBER 6, 1994)
VALUE FUND
A CLASS/B CLASS
(SEPTEMBER 6, 1994)
INTERNATIONAL EQUITY FUND
A CLASS/B CLASS
(SEPTEMBER 6, 1994)
SUPPLEMENT TO PROSPECTUSES
DATED AS NOTED ABOVE
The following supplements the information appearing on the front cover of
the Prospectus:
Shares of this Fund are not federally insured by the Federal Deposit Insurance
Corporation, the Federal Reserve Board, or any other agency. Shares are not
deposits, obligations of, guaranteed or endorsed by any bank and involve
investment risks including possible loss of principal.
Shares of the Fund are not NCUSIF insured, are not guaranteed by the credit
union, are not obligations of the credit union, and involve investment risk,
including the possible loss of principal. Shares of the Fund are not credit
union deposits.
(over)
<PAGE> 3
The following supplements the section Buying at Net Asset Value under
Buying Shares:
Purchases of Class A Shares also may be made at net asset value by bank
employees that provide services in connection with agreements between the bank
and unaffiliated brokers or dealers concerning sales of fund shares. Also,
officers, directors and key employees of institutional clients of Delaware
Management Company, Inc. or any of its affiliates may purchase Class A Shares
at net asset value.
The following replaces the second paragraph in the section Other
Payments to Dealers--Class A and Class B Shares under Buying Shares:
In connection with the promotion of Delaware Group fund shares,
Delaware Distributors, Inc. may, from time to time, pay to participate in
dealer-sponsored seminars and conferences, reimburse dealers for expenses
incurred in connection with preapproved seminars, conferences and advertising
and may, from time to time, pay or allow additional promotional incentives to
dealers, which shall include non-cash concessions, such as certain luxury
merchandise or a trip to or attendance at a business or investment seminar at a
luxury resort, as part of preapproved sales contests. In addition, Delaware
Distributors, Inc. may pay dealers a commission in connection with net asset
value purchases.
The following replaces the categories of eligible purchasers of
Institutional Class Shares in the section Buying Shares:
(a) 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; (b) tax-exempt
employee benefit plans of Delaware Management Company, Inc. or its affiliates
and securities dealer firms with a selling agreement with Delaware
Distributors, Inc.; (c) institutional advisory accounts of Delaware Management
Company, Inc. or its affiliates and those having client relationships with
Delaware Investment Advisers, a division of Delaware Management Company, Inc.,
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; (d) banks, trust companies and similar
financial institutions investing for their own account or for the account of
their trust customers for whom such financial institution is exercising
investment discretion in purchasing shares of the class; and (e) 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.
PS-NAV1-11/94-U
<PAGE> 4
DELAWARE GROUP
TREND FUND, INC.
PROSPECTUS SUPPLEMENT FOR RESIDENTS OF VERMONT
While not a fundamental policy, under normal market conditions, the
Fund invests principally in securities issued by small to mid-cap companies,
those having a market capitalization generally of less then $1.5 billion. As a
general matter, small to mid-cap companies may have more limited product lines,
markets and financial resources than large-cap companies. In addition,
securities of small and mid-cap companies, generally, may trade less frequently
(and with a lesser volume), may be more volatile and may be somewhat less
liquid than securities issued by larger capitalization companies.
PS-3VT-9/94-U
<PAGE> 5
- -----------------------------------------------------------------
PROSPECTUS
SEPTEMBER 6, 1994
- -----------------------------------------------------------------
TREND FUND
- -----------------------------------------------------------------
A CLASS SHARES
- -----------------------------------------------------------------
B CLASS SHARES
- -----------------------------------------------------------------
1818 MARKET STREET
PHILADELPHIA, PA 19103
- -----------------------------------------------------------------
FOR PROSPECTUS AND PERFORMANCE:
NATIONWIDE 800-523-4640
PHILADELPHIA 988-1333
INFORMATION ON EXISTING ACCOUNTS:
(SHAREHOLDERS ONLY)
NATIONWIDE 800-523-1918
PHILADELPHIA 988-1241
DEALER SERVICES:
(BROKER/DEALERS ONLY)
NATIONWIDE 800-362-7500
PHILADELPHIA 988-1050
- -----------------------------------------------------------------
<TABLE>
<S> <C>
TABLE OF CONTENTS
- -----------------------------------------------------------------
COVER PAGE 1
- -----------------------------------------------------------------
SYNOPSIS 2
- -----------------------------------------------------------------
SUMMARY OF EXPENSES 3
- -----------------------------------------------------------------
FINANCIAL HIGHLIGHTS 4
- -----------------------------------------------------------------
INVESTMENT OBJECTIVE AND POLICIES
INVESTMENT STRATEGY 5
SUITABILITY 5
- -----------------------------------------------------------------
THE DELAWARE DIFFERENCE
PLANS AND SERVICES 6
- -----------------------------------------------------------------
RETIREMENT PLANNING 7
- -----------------------------------------------------------------
BUYING SHARES 8
- -----------------------------------------------------------------
REDEMPTION AND EXCHANGE 16
- -----------------------------------------------------------------
DIVIDENDS AND DISTRIBUTIONS 20
- -----------------------------------------------------------------
TAXES 21
- -----------------------------------------------------------------
CALCULATION OF OFFERING PRICE AND
NET ASSET VALUE PER SHARE 22
- -----------------------------------------------------------------
MANAGEMENT OF THE FUND 22
</TABLE>
This Prospectus describes the Trend Fund A Class of shares (the "Class A
Shares") and the Trend Fund B Class of shares (the "Class B Shares")
(collectively, the "Classes") of Delaware Group Trend Fund, Inc. (the "Fund"),
a professionally-managed mutual fund. The Fund's objective is to achieve
capital appreciation by investing primarily in securities of emerging and other
growth-oriented companies.
Class A Shares may be purchased at the public offering price, which is
equal to the next determined net asset value per share, plus a front-end sales
charge, and Class B Shares may be purchased at a price equal to the next
determined net asset value per share. The Class A Shares are subject to a
maximum front-end sales charge of 5.75% and annual 12b-1 Plan expenses. The
Class B Shares are subject to a contingent deferred sales charge ("CDSC") which
may be imposed on redemptions made within six years of purchase and 12b-1 Plan
expenses which are higher than those to which Class A Shares are subject and
are assessed against the Class B Shares for no longer than approximately eight
years after purchase. See Summary of Expenses, and Automatic Conversion of
Class B Shares under Buying Shares. These alternatives permit an investor to
choose the method of purchasing shares that is most beneficial given the amount
of the purchase, the length of time the investor expects to hold the shares and
other circumstances. See Buying Shares.
The minimum initial investment with respect to the Class A Shares is $250
and with respect to the Class B Shares is $1,000. Subsequent investments must
be at least $25 with respect to the Class A Shares and $100 with respect to the
Class B Shares. Class B Shares are also subject to a maximum purchase
limitation of $250,000. The Fund will therefore reject any order for purchase
of more than $250,000 for Class B Shares. See Buying Shares.
This Prospectus relates only to the Classes and sets forth information
that you should read and consider before you invest. Please retain it for
future reference. Part B of the Fund's registration statement, dated September
6, 1994, as it may be amended from time to time, contains additional
information about the Fund and has been filed with the Securities and Exchange
Commission. Part B is incorporated by reference into this Prospectus and is
available, without charge, by writing to Delaware Distributors, Inc. at the
above address or by calling the above numbers. The Fund's financial statements
appear in its Annual Report, which will accompany any response to requests for
Part B.
The Fund also offers the Trend Fund Institutional Class. That class is
available for purchase only by certain enumerated institutions, has no
front-end or contingent deferred sales charge and is not subject to annual
12b-1 Plan expenses.
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
1
<PAGE> 6
SYNOPSIS
CAPITALIZATION
The Fund offers three classes of shares: the Class A Shares, the Class B
Shares and the Trend Fund Institutional Class. The Fund has a present
authorized capitalization of one hundred million shares of capital stock with a
$.50 par value per share. Thirty-five million shares of that stock have been
allocated to the Class A Shares, twenty-five million shares have been allocated
to the Class B Shares and twenty-five million shares have been allocated to the
Trend Fund Institutional Class. See Shares under Management of the Fund.
INVESTMENT MANAGER, DISTRIBUTOR AND SERVICE AGENT
Delaware Management Company, Inc. (the "Manager") is the investment
manager for the Fund. The Manager or its affiliate, Delaware International
Advisers Ltd., manages the other funds in the Delaware Group. Delaware
Distributors, Inc. (the "Distributor") is the national distributor for the Fund
and for all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing and transfer agent for the Fund and for all of the other mutual
funds in the Delaware Group. See Management of the Fund.
SALES CHARGE
The price of the Class A Shares includes a maximum front-end sales charge
of 5.75% of the offering price, which is equivalent to 6.10% of the amount
invested, reduced on certain transactions of at least $100,000 but under
$1,000,000. For purchases of $1,000,000 or more, the front-end sales charge is
eliminated. Class A Shares are also subject to annual 12b-1 Plan expenses. The
price of the Class B Shares is equal to the net asset value per share. Class B
Shares are subject to a CDSC of (i) 4% if shares are redeemed within two years
of purchase; (ii) 3% if shares are redeemed in the third or fourth year of
purchase; (iii) 2% if shares are redeemed in the fifth year of purchase; and
(iv) 1% if shares are redeemed in the sixth year of purchase. Class B Shares
are also subject to annual 12b-1 Plan expenses for no longer than approximately
eight years after purchase. See Buying Shares and Automatic Conversion of Class
B Shares thereunder; and Distribution (12b-1) and Service under Management of
the Fund.
MINIMUM INVESTMENT
The minimum initial investment for the Class A Shares is $250 and for the
Class B Shares is $1,000 (see Part B or contact your investment dealer for each
Retirement Plan minimum), and subsequent investments must be at least $25 for
the Class A Shares and $100 for the Class B Shares. Class B Shares are also
subject to a maximum purchase limitation of $250,000. See Buying Shares.
INVESTMENT OBJECTIVE
The objective of the Fund is to seek to achieve capital appreciation by
investing primarily in securities of emerging and other growth-oriented
companies. See Investment Objective and Policies.
OPEN-END INVESTMENT COMPANY
The Fund, which was organized as a Maryland corporation in 1983, is a
diversified, open-end management investment company. Previously, it was a
Delaware corporation organized in 1966. See Shares under Management of the
Fund.
INVESTMENT MANAGEMENT FEES
The Manager furnishes investment management services to the Fund, subject
to the supervision and direction of the Board of Directors. Under the
Investment Management Agreement, the annual compensation paid to the Manager is
equal to 3/4 of 1% of the average daily net assets, less a proportionate share
of all directors' fees paid to the unaffiliated directors by the Fund. See
Management of the Fund.
REDEMPTION AND EXCHANGE
The Class A Shares of the Fund are redeemed or exchanged at the net asset
value calculated after receipt of the redemption or exchange request. Neither
the Fund nor the Distributor assesses a charge for redemptions or exchanges of
Class A Shares, except for certain redemptions of shares purchased at net asset
value which may be subject to a contingent deferred sales charge if such
purchases triggered the payment of a dealer's commission. The Class B Shares
are redeemed or exchanged at the net asset value calculated after receipt of
the redemption or exchange request, less, in the case of redemptions, any
applicable CDSC. Neither the Fund nor the Distributor assesses any additional
charges for redemptions or exchanges of the Class B Shares. See Redemption and
Exchange.
2
<PAGE> 7
SUMMARY OF EXPENSES
A general comparison of the sales arrangements and other expenses
applicable to the Class A and Class B Shares follows:
<TABLE>
<CAPTION>
CLASS A CLASS B
SHAREHOLDER TRANSACTION EXPENSES SHARES SHARES
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price) . . . . . . . . . . . . . . 5.75% None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price) . . . . . . . . . . . . . . None None
Contingent Deferred Sales Charge
(as a percentage of original purchase price or redemption
proceeds, whichever is lower) . . . . . . . . . . . . . . . . . None* 4.00%*
Redemption Fees . . . . . . . . . . . . . . . . . . . . . . . . . None** None**
</TABLE>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES CLASS A CLASS B
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) SHARES SHARES
- ------------------------------------------------------------------------------------------
<S> <C> <C>
Management Fees . . . . . . . . . . . . . . . . . . . . . . . . . 0.75% 0.75%
12b-1 Expenses (including service fees) . . . . . . . . . . . . . 0.22%***+ 1.00%+
Other Operating Expenses . . . . . . . . . . . . . . . . . . . . 0.40% 0.40%++
----- -----
Total Operating Expenses . . . . . . . . . . . . . . . . . . 1.37%*** 2.15%
===== =====
</TABLE>
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in either of the Classes will bear
directly or indirectly. *With respect to the Class A Shares, purchases of $1
million or more may be made at net asset value; however, if in connection with
any such purchase, certain dealer commissions are paid to financial advisers
through whom such purchases are effected, a contingent deferred sales charge of
1% will be imposed in the event of certain redemptions within 12 months of
purchase ("Limited CDSC"). The Class B Shares are subject to a CDSC of (i) 4%
if shares are redeemed within two years of purchase; (ii) 3% if shares are
redeemed in the third or fourth year of purchase; (iii) 2% if shares are
redeemed in the fifth year of purchase; (iv) 1% if shares are redeemed in the
sixth year of purchase; and (v) 0% thereafter. See Deferred Sales Charge
Alternative--Class B Shares under Buying Shares; and Contingent Deferred Sales
Charge for Certain Purchases of Class A Shares Made at Net Asset Value under
Redemption and Exchange. **CoreStates Bank, N.A. currently charges $7.50 per
redemption for redemptions payable by wire. ***The actual 12b-1 Plan expenses
to be paid and, consequently, the Total Operating Expenses of the Class A
Shares, may be somewhat more (but the 12b-1 Plan expenses may be no more than
.30%) or somewhat less (but the 12b-1 Plan expenses may be no less than .10%)
because of the formula adopted by the Board of Directors for use in calculating
the 12b-1 Plan expenses beginning June 1, 1992. See Distribution (12b-1) and
Service. +Class A Shares and Class B Shares are subject to separate 12b-1
Plans. Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by rules of the National Association
of Securities Dealers, Inc. (the "NASD"). See Distribution (12b-1) and Service.
++"Other Operating Expenses" for Class B Shares are estimates derived from
actual expenses incurred by the Class A Shares for its fiscal year ended June
30, 1994. Also, see Trend Fund Institutional Class for expense information
about that class.
The following example illustrates the expenses that an investor would pay
on a $1,000 investment over various time periods assuming (1) a 5% annual rate
of return and (2) redemption at the end of each time period. As noted in the
table above, the Fund charges no redemption fees with respect to the Class A
Shares and, if shares are redeemed within six years after purchase, the Fund
charges a CDSC with respect to the Class B Shares.
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES $71(1) $98 $128 $213 CLASS B SHARES $62 $97 $135 $228(2)
</TABLE>
An investor would pay the following expenses on the same $1,000 investment
assuming no redemption at the end of the period
<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C>
CLASS A SHARES $71 $98 $128 $213 CLASS B SHARES $22 $67 $115 $228(2)
</TABLE>
(1) Under certain circumstances, a Limited CDSC, which has not been reflected
in this calculation, may be imposed in the event of certain redemptions
within 12 months of purchase. See Contingent Deferred Sales Charge for
Certain Purchases of Class A Shares Made at Net Asset Value under
Redemption and Exchange.
(2) At the end of no more than approximately eight years after purchase, Class
B Shares will be automatically converted into Class A Shares. The example
above assumes conversion of Class B Shares at the end of year eight.
However, the conversion may occur as late as three months after the eighth
anniversary of purchase, during which time the higher 12b-1 Plan fees
payable by Class B Shares will continue to be assessed. See Automatic
Conversion of Class B Shares under Buying Shares for a description of the
automatic conversion feature. Years nine and ten reflect expenses of the
Class A Shares. The conversion will constitute a tax-free exchange for
federal income tax purposes. See Taxes.
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
3
<PAGE> 8
FINANCIAL HIGHLIGHTS*
The following financial highlights are derived from the financial statements of
Delaware Group Trend Fund, Inc. and have been audited by Ernst & Young LLP,
independent auditors. The data should be read in conjunction with the financial
statements, related notes, and the report of Ernst & Young LLP covering such
financial information and highlights, all of which are incorporated by
reference into Part B. Further information about the Fund's performance is
contained in its Annual Report to shareholders, a copy of which (including the
report of Ernst & Young LLP) may be obtained from the Fund upon request at no
charge.
- --------------------------------------------------------------------------------
* Prior to September 6, 1994, the Fund consisted of two classes of shares of
common stock, the Class A Shares and the Trend Fund Institutional Class. As
of September 6, 1994, the Fund consists of three classes of shares of common
stock, the Class A Shares, the Class B Shares and the Trend Fund
Institutional Class. The Class B Shares of the Fund were not offered prior
to September 6, 1994. Consequently, no financial highlights have been
provided for the Class B Shares.
<TABLE>
<CAPTION>
CLASS A SHARES
--------------------------------------------------------
YEAR ENDED
6/30/94(2) 6/30/93(2) 6/30/92(2) 6/30/91 6/30/90
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $13.980 $11.380 $ 8.920 $9.970 $10.870
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . (0.042) (0.004) (0.005) (0.020) 0.146
Net Gains or Losses on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 0.212 3.754 2.625 (0.460) 1.224
------- ------- ------- ------ -------
Total From Investment Operations . . . . . . . . . . . . . . 0.170 3.750 2.620 (0.480) 1.370
------- ------- ------- ------ -------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . none none none (0.050) (0.050)
Distributions (from capital gains) . . . . . . . . . . . . . . (1.940) (1.150) (0.160) (0.520) (2.220)
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none none none none
------- ------- ------- ------ -------
Total Distributions . . . . . . . . . . . . . . . . . . . . . (1.940) (1.150) (0.160) (0.570) (2.270)
------- ------- ------- ------ -------
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $12.210 $13.980 $11.380 $8.920 $ 9.970
======= ======= ======= ====== =======
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) . . . . . . . . . . . . . . . . . . . . . . . . 0.59% 35.24% 29.31% (4.82%) 14.32%
- ---------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000 omitted) . . . . . . . . . . . . $253,964 $219,826 $124,548 $78,631 $88,274
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 1.37% 1.33% 1.18% 1.29% 1.27%
Ratio of Net Investment Income to Average Daily Net Assets . . (0.72%) (0.61%) (0.43%) (0.24%) 0.82%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 67% 75% 76% 67% 80%
</TABLE>
<TABLE>
<CAPTION>
CLASS A SHARES
--------------------------------------------------------
YEAR ENDED
6/30/89 6/30/88 6/30/87 6/30/86(1) 6/30/85(1)
<S> <C> <C> <C> <C> <C>
Net Asset Value, Beginning of Period . . . . . . . . . . . . . $ 8.130 $9.120 $8.910 $6.430 $5.500
INCOME FROM INVESTMENT OPERATIONS
- ---------------------------------
Net Investment Income . . . . . . . . . . . . . . . . . . . . . 0.018 (0.066) (0.082) (0.042) 0.128
Net Gains or Losses on Securities
(both realized and unrealized) . . . . . . . . . . . . . . . 3.042 (0.924) 0.292 2.650 0.884
------- ------ ------ ------ ------
Total From Investment Operations . . . . . . . . . . . . . . 3.060 (0.990) 0.210 2.608 1.012
------- ------ ------ ------ ------
LESS DISTRIBUTIONS
- ------------------
Dividends (from net investment income) . . . . . . . . . . . . none none none (0.128) (0.082)
Distributions (from capital gains) . . . . . . . . . . . . . . (0.320) none none none none
Returns of Capital . . . . . . . . . . . . . . . . . . . . . . none none none none none
------- ------ ------ ------ ------
Total Distributions . . . . . . . . . . . . . . . . . . . . . (0.320) none none (0.128) (0.082)
------- ------ ------ ------ ------
Net Asset Value, End of Period . . . . . . . . . . . . . . . . $10.870 $8.130 $9.120 $8.910 $6.430
======= ====== ====== ====== ======
- ----------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN(3) . . . . . . . . . . . . . . . . . . . . . . . . 39.27% (10.86%) 2.36% 41.37% 18.66%
- ---------------
- ----------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of Period (000 omitted) . . . . . . . . . . . . $67,111 $59,879 $79,266 $109,884 $86,951
Ratio of Expenses to Average Daily Net Assets . . . . . . . . . 1.28% 1.20% 1.18% 1.20% 1.28%
Ratio of Net Investment Income to Average Daily Net Assets . . 0.19% (0.51%) (0.64%) (0.57%) 2.23%
Portfolio Turnover Rate . . . . . . . . . . . . . . . . . . . . 48% 63% 93% 113% 85%
</TABLE>
- --------------
(1) All figures prior to May 9, 1986 are adjusted for a 2-for-1 stock split
paid on that date.
(2) Reflects 12b-1 distribution expenses beginning June 1, 1992.
(3) Does not reflect maximum sales charge of 5.75%.
4
<PAGE> 9
INVESTMENT OBJECTIVE
AND POLICIES
INVESTMENT STRATEGY
The objective of the Fund is long-term capital appreciation. The strategy
is to invest primarily in the common stocks and securities convertible into
common stocks of emerging and other growth-oriented companies that, in the
judgment of the Manager, are responsive to changes within the marketplace and
have the fundamental characteristics to support growth.
The Fund will seek to identify changing and dominant trends within the
economy, the political arena and our society. The Fund will purchase securities
which it believes will benefit from these trends and which have the
fundamentals to exploit them. The fundamentals include managerial skills,
product development and sales and earnings.
In investing for capital appreciation, the Fund may hold securities for
any period of time. The Fund may also invest in foreign securities.
The Fund may purchase privately placed securities the resale of which is
restricted under applicable securities laws. Such securities may offer a higher
return than comparably registered securities but involve some additional risk
as they can be resold only in privately negotiated transactions, in accordance
with an exemption from the registration requirements under applicable
securities laws or after registration. The Fund will not purchase illiquid
assets, including such restricted securities, if more than 10% of the value of
its assets would then consist of illiquid securities.
Certain of the privately placed securities acquired by the Fund will be
eligible for resale by the Fund pursuant to Rule 144A under the Securities Act
of 1933 ("Rule 144A Securities"). Rule 144A permits many privately placed or
legally restricted securities to be freely traded without restriction among
certain institutional buyers such as the Fund. While maintaining oversight, the
Board of Directors of the Fund has delegated to the Manager the day-to-day
function of determining whether or not individual Rule 144A Securities are
liquid for purposes of the Fund's 10% limitation on investments in illiquid
securities.
Income is not an objective of the Fund. However, should the market warrant
a temporary defensive approach, the Fund may alsoinvest in cash equivalents,
and fixed income obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities, as well as corporate bonds.
The Fund may invest in repurchase agreements, but will not normally do so
except to invest excess cash balances. In a repurchase agreement, the Fund
purchases a security and simultaneously agrees to sell it back to the seller at
a set (generally higher) price. Delays or losses could result if the other
party to the repurchase agreement defaults or becomes insolvent.
While the Fund is permitted under certain circumstances to borrow money,
it does not normally do so. The Fund will not purchase securities while any
borrowings are outstanding.
Although the Fund will constantly strive to attain the objective of
long-term capital growth, there can be no assurance that it will be attained.
The objective of the Fund may not be changed without shareholder approval. Part
B provides more information on the Fund's investment policies and restrictions.
PORTFOLIO LOAN TRANSACTIONS
The Fund may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.
The major risk to which the Fund would be exposed on a loan transaction is
the risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, the Fund will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to
be received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.
SUITABILITY
The Fund may be suitable for the patient investor interested in long-term
capital appreciation. The prices of common stocks, especially those of smaller
companies, tend to fluctuate, particularly in the shorter term. The investor
should be willing to accept the risks associated with investments in
growth-oriented securities, some of which may be speculative and subject the
Fund to an additional risk. Also, ownership of Fund shares reduces the
bookkeeping and administrative inconveniences connected with direct purchases
of these securities.
Net asset value may fluctuate in response to the condition of individual
companies and general market and economic conditions and, as a result, the Fund
is not appropriate for a short-term investor.
This Fund is designed primarily for capital appreciation. Providing
current income is not an objective of the Fund. Any income produced is expected
to be minimal. An investor should not consider a purchase of Fund shares as
equivalent to a complete investment program. The Delaware Group includes a
family of funds, generally available through registered investment dealers,
which may be used in concert to create a more complete investment program.
5
<PAGE> 10
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
INVESTOR INFORMATION CENTER
800-523-4640
(PHILADELPHIA 988-1333)
FUND INFORMATION; LITERATURE;
PRICE, YIELD AND PERFORMANCE FIGURES
SHAREHOLDER SERVICE CENTER
800-523-1918
(PHILADELPHIA 988-1241)
INFORMATION ON EXISTING REGULAR INVESTMENT
ACCOUNTS AND RETIREMENT PLAN ACCOUNTS;
WIRE INVESTMENTS; WIRE LIQUIDATIONS;
TELEPHONE LIQUIDATIONS; TELEPHONE EXCHANGES
DELAPHONE
800-362-FUND (800-362-3863)
SHAREHOLDER SERVICES
During business hours, you can call the Fund's Shareholder Service Center.
The representatives can answer any of your questions about your account, the
Fund, the various service features and other funds in the Delaware Group.
PERFORMANCE INFORMATION
During business hours, you can call the Investor Information Center to get
current performance information.
DELAPHONE SERVICE
Delaphone is an account inquiry service for investors with Touch-Tone(R)
phone service. It enables you to get information on your account faster than
the mailed statements and confirmations seven days a week, 24 hours a day.
STATEMENTS AND CONFIRMATIONS
You will receive quarterly statements of your account as well as
confirmations of all investments and redemptions. You should examine statements
and confirmations immediately and promptly report any discrepancy by calling
the Shareholder Service Center.
DUPLICATE CONFIRMATIONS
If your investment dealer is noted on your investment application, we will
send your dealer a duplicate confirmation. This makes it easier for your
investment dealer to help you manage your investments.
TAX INFORMATION
Each year, the Fund will mail you information on the tax status of your
dividends and distributions.
DIVIDEND REINVESTMENT PLAN
You can elect to have your distributions (capital gains and/or dividend
income) paid to you by check or reinvested in your account. Also, you may be
permitted to invest your distributions in certain other funds in the Delaware
Group, subject to the exceptions noted below as well as the eligibility and
minimum purchase requirements set forth in each fund's prospectus.
Reinvestments of distributions into Class A Shares of the Fund or other
Delaware Group funds may be effected without a front-end sales charge. Class B
Shares of the Fund or other Delaware Group funds acquired through reinvestments
of distributions will not be subject to a contingent deferred sales charge if
those shares are later redeemed. See Automatic Conversion of Class B Shares
under Buying Shares for information concerning the automatic conversion of
Class B Shares acquired by reinvesting dividends.
Holders of Class A Shares of the Fund may not reinvest their distributions
in the Class B Shares of any fund in the Delaware Group, including the Fund.
Holders of Class B Shares of the Fund may reinvest their distributions only in
the Class B Shares of the funds in the Delaware Group which offer that class of
shares (the "Class B Funds"). See Class B Funds under Buying Shares for a list
of the funds offering Class B Shares. For more information about reinvestments,
please call the Shareholder Service Center.
EXCHANGE PRIVILEGE
The Exchange Privilege permits shareholders to exchange all or part of
their shares into shares of the other funds in the Delaware Group, subject to
the exceptions noted below as well as the eligibility and minimum purchase
requirements set forth in each fund's prospectus. Shareholders of Class B
Shares of the Fund are permitted to exchange all or part of their Class B
Shares only into the corresponding class of shares of the Class B Funds,
subject to the minimum purchase and other requirements set forth in each fund's
prospectus. Exchanges are not permitted between Class A Shares and Class B
Shares of any of the funds of the Delaware Group. See Redemption and Exchange.
6
<PAGE> 11
Except as noted below, permissible exchanges can be made without payment
of a front-end sales charge or the imposition of a CDSC at the time of the
exchange, as applicable. Persons exchanging into the Class A Shares from a fund
in the Delaware Group offered without a front-end sales charge may be required
to pay the applicable front-end sales charge. See Investing by Exchange under
How to Buy Shares and Redemption and Exchange.
See Redemption and Exchange for additional information on exchanges.
WEALTH BUILDER OPTION
You may be permitted to elect to have amounts in your account
automatically invested in shares of other funds in the Delaware Group.
Investments under this feature are exchanges and are therefore subject to the
same conditions and limitations as other exchanges of Class A and Class B
Shares. See Redemption and Exchange.
RIGHT OF ACCUMULATION
With respect to Class A Shares, the Right of Accumulation feature allows
the combining of Class A Shares and Class B Shares of the Fund that are
currently owned with the dollar amount of new purchases of Class A Shares for a
reduced front-end sales charge. Under the COMBINED PURCHASES PRIVILEGE, this
includes certain shares owned in other funds in the Delaware Group. See Buying
Shares.
LETTER OF INTENTION
With respect to Class A Shares, the Letter of Intention feature permits
the aggregation of purchases over a 13-month period to obtain a reduced
front-end sales charge. See Part B.
12-MONTH REINVESTMENT PRIVILEGE
The 12-Month Reinvestment Privilege permits shareholders to reinvest
proceeds of Class A Shares redeemed, within one year from the redemption,
without a front-end sales charge. See Part B.
FINANCIAL INFORMATION ABOUT THE FUND
Each fiscal year, you will receive an annual report containing financial
statements audited by Ernst & Young LLP (the Fund's independent auditors), and
an unaudited semi-annual report. These reports provide detailed information
about the Fund's investments and performance. The Fund's fiscal year ends on
June 30.
RETIREMENT PLANNING
An investment in the Fund may also be suitable for tax-deferred Retirement
Plans. Among the Retirement Plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, Simplified Employee Pension
Plans, 457 Deferred Compensation Plans and 403(b)(7) Deferred Compensation
Plans.
Prototype Profit Sharing and Money Purchase Pension Plans are each subject
to a one-time fee of $200 per plan, or $300 for paired plans. No such fee is
charged for owner-only plans if the Delaware Group does not provide a Summary
Plan Description. In addition, these plans are subject to an annual maintenance
fee of $30 per participant account. Each of the other Retirement Plans
described below (other than 401(k) Defined Contribution Plans) is subject to an
annual maintenance fee of $15 for each participant's account, regardless of the
number of funds selected. Annual maintenance fees for 401(k) Defined
Contribution Plans are based on the number of participants in the Plan and the
services selected by the employer. Fees are quoted upon request. All of the
fees noted above are subject to change. Additional information about fees is
contained in Part B. The minimum initial investment in the Classes (as
available) for each Plan is $250; subsequent investments must be at least $25.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to Retirement Plan shareholders. Certain
Retirement Plans may qualify to purchase the Trend Fund Institutional Class.
For additional information on any of the Plans and Delaware's retirement
services, call the Shareholder Service Center or see Part B.
INDIVIDUAL RETIREMENT ACCOUNT ("IRA")
Individuals, even if they participate in an employer-sponsored retirement
plan, may establish their own retirement program for investments in each of the
Classes. Contributions to an IRA may be tax-deductible and earnings are
tax-deferred. Under the Tax Reform Act of 1986, the tax deductibility of IRA
contributions is restricted, and in some cases eliminated, for individuals who
participate in certain employer-sponsored retirement plans and whose annual
income exceeds certain limits. Existing IRAs and future contributions up to the
IRA maximums, whether deductible or not, still earn on a tax-deferred basis.
7
<PAGE> 12
SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA")
A SEP/IRA may be established on a group basis by an employer who wishes to
sponsor a tax-sheltered retirement program by making IRA contributions on
behalf of all eligible employees. Each of the Classes is available for
investment by a SEP/IRA.
SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the ability to
establish a SEP/IRA that permits salary deferral contributions. An employer may
also elect to make additional contributions to this Plan. Class B Shares are
not available for purchase by such Plans.
403(b)(7) DEFERRED COMPENSATION PLAN
Permits employees of public school systems or of certain types of
non-profit organizations to enter into a deferred compensation arrangement for
the purchase of shares of each of the Classes.
457 DEFERRED COMPENSATION PLAN
Permits employees of state and local governments and certain other
entities to enter into a deferred compensation arrangement for the purchase of
shares of each of the Classes.
PROTOTYPE PROFIT SHARING OR MONEY PURCHASE PENSION PLAN
Offers self-employed individuals, partnerships and corporations a
tax-qualified plan which provides for the investment of contributions in Class
A Shares. Class B Shares are not available for purchase by such Plans.
PROTOTYPE 401(k) DEFINED CONTRIBUTION PLAN
Permits employers to establish a tax-qualified plan based on salary
deferral contributions. An employer may elect to make profit sharing
contributions and/or matching contributions into the Plan. Class B Shares are
not available for purchase by such Plans.
BUYING SHARES
PURCHASE AMOUNTS
The minimum initial purchase with respect to the Class A Shares is $250
and with respect to the Class B Shares is $1,000. Subsequent purchases must be
$25 or more with respect to the Class A Shares and $100 or more with respect to
the Class B Shares. Retirement Plans have other minimums. Refer to Part B or
call the Shareholder Service Center for more information on these Plans. Class
B Shares are also subject to a maximum purchase limitation of $250,000.
ALTERNATIVE PURCHASE ARRANGEMENTS
Shares may be purchased at a price equal to the next determined net asset
value per share, plus a sales charge which may be imposed, at the election of
the purchaser, at the time of the purchase with respect to Class A Shares
("front-end sales charge alternative") or on a contingent deferred basis with
respect to Class B Shares ("deferred sales charge alternative").
Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares. Although Class A Shares incur a sales
charge when they are purchased, generally they are not subject to any sales
charge when they are redeemed but are subject to annual 12b-1 Plan expenses of
up to a maximum of .30% of average daily net assets of such shares. See
Contingent Deferred Sales Charge for Certain Purchases of Class A Shares Made
at Net Asset Value and Distribution (12b-1) and Service. Certain purchases of
Class A Shares qualify for reduced front-end sales charges. See Front-End Sales
Charge Alternative--Class A Shares, below.
Class B Shares. An investor who elects the deferred sales charge
alternative acquires Class B Shares. Class B Shares do not incur a front-end
sales charge when they are purchased, but they are subject to a sales charge if
they are redeemed within six years of purchase and are subject to annual 12b-1
Plan expenses of up to a maximum of 1% (.25% of which are service fees to be
paid by the Fund to the Distributor, dealers or others for providing personal
service and/or maintaining shareholder accounts) of average daily net assets of
such shares for no longer than approximately eight years after purchase. Class
B Shares permit all of the investor's dollars to work from the time the
investment is made. The higher 12b-1 Plan expenses paid by Class B Shares will
cause such shares to have a higher expense ratio and to pay lower dividends
than those related to the Class A Shares. At the end of no more than
approximately eight years after purchase, the Class B Shares are automatically
converted into Class A Shares. See Automatic Conversion of Class B Shares. Such
conversion will constitute a tax-free exchange for federal income tax purposes.
See Taxes.
8
<PAGE> 13
The alternative purchase arrangements permit investors in the Fund to
choose the method of purchasing shares that is most beneficial given the amount
of their purchase, the length of time they expect to hold their shares and
other relevant circumstances. Investors should determine whether under their
particular circumstances it is more advantageous to incur a front-end sales
charge by purchasing Class A Shares or to have the entire initial purchase
price invested in the Fund with the investment thereafter being subject to a
CDSC, if shares are redeemed within six years of purchase, by purchasing Class
B Shares.
As an illustration, investors who qualify for significantly reduced
front-end sales charges on purchases of Class A Shares, as described below,
might elect the front-end sales charge alternative because similar sales charge
reductions are not available for purchases under the deferred sales charge
alternative. Moreover, shares acquired under the front-end sales charge
alternative are subject to annual 12b-1 Plan expenses of up to .30%, whereas
shares acquired under the deferred sales charge alternative are subject to
higher annual 12b-1 Plan expenses of 1% for no more than approximately eight
years after purchase. See Automatic Conversion of Class B Shares. However,
because front-end sales charges are deducted at the time of purchase, such
investors would not have all their funds invested initially. Certain other
investors might determine it to be more advantageous to have all their funds
invested initially, although they would be subject to a CDSC for up to six
years after purchase as well as annual 12b-1 Plan expenses of 1% until the
shares are automatically converted into Class A Shares. The 12b-1 Plan
distribution expenses with respect to the Class B Shares will be offset to the
extent any return is realized on the additional funds initially invested under
the deferred sales charge alternative. However, there can be no assurance as to
the return, if any, which will be realized on such additional funds.
For the distribution and related services provided to, and the expenses
borne on behalf of, the Fund, the Distributor and others will be paid, in the
case of the Class A Shares, from the proceeds of the front-end sales charge and
12b-1 Plan fees and, in the case of the Class B Shares, from the proceeds of
the 12b-1 Plan fees and, if applicable, the CDSC incurred upon redemption
within six years of purchase. Sales personnel may receive different
compensation for selling Class A or Class B Shares. INVESTORS SHOULD UNDERSTAND
THAT THE PURPOSE AND FUNCTION OF THE 12b-1 PLAN AND THE CDSC WITH RESPECT TO
THE CLASS B SHARES ARE THE SAME AS THOSE OF THE 12b-1 PLAN AND THE FRONT-END
SALES CHARGE WITH RESPECT TO THE CLASS A SHARES IN THAT THE FEES AND CHARGES
PROVIDE FOR THE FINANCING OF THE DISTRIBUTION OF THE RESPECTIVE CLASSES. SEE
12b-1 DISTRIBUTION PLANS--CLASS A AND CLASS B SHARES.
Dividends paid by the Fund with respect to the Class A and Class B Shares,
to the extent any dividends are paid, will be calculated in the same manner at
the same time, on the same day and will be in the same amount, except that the
additional amount of 12b-1 Plan expenses relating to the Class B Shares will be
borne exclusively by such shares. See Calculation of Offering Price and Net
Asset Value Per Share. The shareholders of the Class A and Class B Shares each
have an exchange privilege by which they may exchange their Class A Shares or
Class B Shares for the Class A Shares or Class B Shares, respectively, of
certain other Delaware Group funds. See Exchange Privilege under The Delaware
Difference and Redemption and Exchange.
The NASD has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to
operate in compliance with these rules with respect to both Class A and Class B
Shares.
FRONT-END SALES CHARGE ALTERNATIVE--CLASS A SHARES
The Class A Shares may be purchased at the offering price which reflects a
maximum front-end sales charge of 5.75%. See Calculation of Offering Price and
Net Asset Value Per Share. Lower sales charges apply for larger purchases. See
the table below. The Class A Shares represent a proportionate interest in the
Fund's assets and are subject to annual 12b-1 Plan expenses. See Distribution
(12b-1) and Service under Management of the Fund.
9
<PAGE> 14
REDUCED FRONT-END SALES CHARGES
Purchases of $100,000 or more at the offering price carry a reduced
front-end sales charge as shown in the following table.
<TABLE>
<CAPTION>
Trend Fund A Class
- --------------------------------------------------------------------------------------------------------
Front-End Sales Dealer's
Charge as % of Concession**
Amount of Purchase Offering Amount as % of
Price Invested Offering Price
- --------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 5.75% 6.10% 5.00%
$100,000 but under $250,000 4.75 4.99 4.00
$250,000 but under $500,000 3.50 3.63 3.00
$500,000 but under $1,000,000* 3.00 3.09 2.60
</TABLE>
* There is no front-end sales charge on purchases of $1 million or more but,
under certain limited circumstances, a 1% Limited CDSC may apply with
respect to Class A Shares.
- -------------------------------------------------------------------------------
The Fund must be notified when a sale takes place which would qualify for the
reduced front-end sales charge on the basis of previous purchases and current
purchases. The reduced front-end sales charge will be granted upon confirmation
of the shareholder's holdings by the Fund. Such reduced front-end sales charges
are not retroactive.
From time to time, upon written notice to all of its dealers, the Distributor
may hold special promotions for specified periods during which the Distributor
may reallow dealers up to the full front-end sales charge shown above. In
addition, certain dealers who enter into an agreement to provide extra training
and information on Delaware Group products and services and who increase sales
of Delaware Group funds may receive an additional concession of up to .15% of
the offering price. Dealers who receive 90% or more of the sales charge may be
deemed to be underwriters under the Securities Act of 1933.
** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- -------------------------------------------------------------------------------
For initial purchases of Class A Shares of $1,000,000 or more made on or
after June 1, 1993, a dealer's commission may be paid by the Distributor to
financial advisers through whom such purchases are effected in accordance with
the following schedule:
<TABLE>
<CAPTION>
DEALER'S COMMISSION
-------------------
AMOUNT OF PURCHASE (as a percentage of amount purchased)
- ------------------
<S> <C>
Up to $2 million 1.00%
Next $1 million up to $3 million .75
Next $2 million up to $5 million .50
Amount over $5 million .25
</TABLE>
In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Group funds as to
which a Limited CDSC applies may be aggregated with those of the Class A Shares
of the Fund. Financial advisers should contact the Distributor concerning the
applicability and calculation of the dealer's commission in the case of
combined purchases. Financial advisers also may be eligible for a dealer's
commission in connection with certain purchases made under a Letter of
Intention or pursuant to an investor's Right of Accumulation. The Distributor
also should be consulted concerning the availability of and program for these
payments.
An exchange from other Delaware Group funds will not qualify for payment
of the dealer's commission, unless such exchange is from a Delaware Group fund
with assets as to which a dealer's commission or similar payment has not been
previously paid. The schedule and program for payment of the dealer's
commission are subject to change or termination at any time by the Distributor
in its discretion.
Redemptions of Class A Shares purchased at net asset value may result in
the imposition of a Limited CDSC if the dealer's commission described above was
paid in connection with the purchase of those shares. See Contingent Deferred
Sales Charge for Certain Purchases of Class A Shares Made at Net Asset Value
under Redemption and Exchange.
COMBINED PURCHASES PRIVILEGE
By combining your holdings in the Class A Shares with your holdings in the
Class B Shares of the Fund and, except as noted below, shares of the other
funds in the Delaware Group, you can reduce the front-end sales charges on any
additional purchases of Class A Shares. Except for shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products, shares of other funds which do not carry a front-end sales
charge or CDSC may not be included unless they were acquired through an
exchange from one of the other Delaware Group funds which carried a front-end
sales charge or CDSC.
This privilege permits you to combine your purchases and holdings with
those of your spouse, your children under 21 and any trust, fiduciary or
retirement account for the benefit of such family members.
It also permits you to use these combinations under a Letter of Intention.
This allows you to make purchases over a 13-month period and qualify the entire
purchase for a reduction in front-end sales charges on Class A Shares.
10
<PAGE> 15
Combined purchases of $1,000,000 or more, including certain purchases made
pursuant to a Right of Accumulation or under a Letter of Intention, may trigger
the payment of a dealer's commission and the applicability of a Limited CDSC.
Investors should consult their financial advisers or the Transfer Agent about
the operation of these features. See Reduced Front-End Sales Charges under
Buying Shares.
BUYING AT NET ASSET VALUE
Class A Shares may be purchased at net asset value under the Delaware
Group Dividend Reinvestment Plan and, under certain circumstances, the 12-month
Reinvestment Privilege and the Exchange Privilege. (See The Delaware Difference
and Redemption and Exchange for additional information.)
Purchases of Class A Shares may be made at net asset value by officers,
directors and employees (including former officers and directors and former
employees who had been employed for at least ten years) and members of their
immediate families of the Manager, any affiliate, any of the funds in the
Delaware Group, certain of their agents and registered representatives and
employees of authorized investment dealers and by employee benefit plans for
such entities. Individual purchases include retirement accounts and must be for
accounts in the name of the individual or a qualifying family member. Purchases
of Class A Shares also may be made at net asset value by persons establishing
rollover IRA accounts with assets distributed from accounts advised by the
Manager or its affiliates. Purchases of Class A Shares may be made by clients
of registered representatives of an authorized investment dealer at net asset
value within six months of a change of the registered representative's
employment, if the purchase is funded by proceeds from an investment where a
front-end sales charge has been assessed and the redemption of the investment
did not result in the imposition of a contingent deferred sales charge or other
redemption charge. Moreover, purchases may be effected at net asset value for
the benefit of the clients of brokers, dealers and registered investment
advisers affiliated with a broker or dealer, if such broker, dealer or
investment adviser has entered into an agreement with the Distributor providing
specifically for the purchase of Class A Shares in connection with special
investment products, such as wrap accounts or similar fee based programs.
Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.
The Fund must be notified in advance that an investment qualifies for
purchase of Class A Shares at net asset value.
GROUP INVESTMENT PLANS
Group Investment Plans (e.g., SEP/IRA, SAR/SEP, Prototype Profit Sharing,
Pension and 401(k) Defined Contribution Plans) may also benefit from the
reduced front-end sales charges relating to the Class A Shares set forth in the
table on page 10, based on total plan assets. In addition, 403(b)(7) and 457
Retirement Plan Accounts may also benefit from a reduced front-end sales charge
on Class A Shares based on the total amount invested by all participants in the
plan by satisfying the following criteria: (i) the employer for which the plan
was established has 250 or more eligible employees and the plan lists only one
broker of record, or (ii) the plan includes employer contributions and the plan
lists only one broker of record. If a company has more than one plan investing
in the Delaware Group of funds, then the total amount invested in all plans
would be used in determining the applicable front-end sales charge reduction.
Employees participating in such Group Investment Plans may also combine the
investments made in their plan account when determining the front-end sales
charge on purchases to non-retirement Delaware Group investment accounts.
For additional information on these Plans, including Plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.
For other Retirement Plans and special services, see Retirement Planning.
DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES
Class B Shares may be purchased at net asset value without the imposition
of a front-end sales charge at the time of purchase. The Class B Shares are
being sold without a front-end sales charge so that the Fund will invest the
full amount of the investor's purchase payment. The Distributor currently
anticipates compensating dealers or brokers for selling Class B Shares at the
time of purchase from its own funds in an amount equal to no more than 4% of
the dollar amount purchased. As discussed below, however, Class B Shares are
subject to annual 12b-1 Plan expenses and, if shares are redeemed within six
years of purchase, a CDSC.
11
<PAGE> 16
Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for the distribution and related services provided to,
and the related expenses borne on behalf of, the Fund for the benefit of the
Class B Shares in connection with the sale of the Class B Shares, including the
compensation paid to dealers or brokers for selling Class B Shares. Payments to
the Distributor and others under the 12b-1 Plan relating to the Class B Shares
may be, annually, in an amount equal to no more than 1%. The combination of the
CDSC and the proceeds of the 12b-1 Plan fees facilitates the ability of the
Fund to sell the Class B Shares without a front-end sales charge being deducted
at the time of purchase.
Shareholders of the Class B Shares exercising the exchange privilege
described below will continue to be subject to the CDSC schedule of the Class B
Shares described in this Prospectus. Such schedule may be higher than the CDSC
schedule relating to the Class B Shares acquired as a result of the exchange.
See Redemption and Exchange.
AUTOMATIC CONVERSION OF CLASS B SHARES
Except for shares acquired through a reinvestment of dividends, Class B
Shares held for eight years after purchase are eligible for automatic
conversion into Class A Shares. The Fund will effect conversions of Class B
Shares into Class A Shares only four times in any calendar year, on the last
business day of the second full week of March, June, September and December
(each, a "Conversion Date"). If the eighth anniversary after a purchase of
Class B Shares falls on a Conversion Date, an investor's Class B Shares will be
converted on that date. If the eighth anniversary occurs between Conversion
Dates, an investor's Class B Shares will be converted on the next Conversion
Date after such anniversary. Consequently, if a shareholder's eighth
anniversary falls on the day after a Conversion Date, that shareholder will
have to hold Class B Shares for as long as an additional three months after the
eighth anniversary after purchase before the shares will automatically convert
into Class A Shares.
Class B Shares of a fund acquired through reinvestment of dividends will
convert to the corresponding Class A Shares of that fund (or, in the case of
Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant Class)
pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.
All such automatic conversions of Class B Shares will constitute tax-free
exchanges for federal income tax purposes. See Taxes.
CONTINGENT DEFERRED SALES CHARGE
Class B Shares redeemed within six years of purchase may be subject to a
CDSC at the rates set forth below, charged as a percentage of the dollar amount
subject thereto. The charge will be assessed on an amount equal to the lesser
of the net asset value at the time of purchase of the shares being redeemed or
the net asset value of the shares at the time of redemption. For purposes of
this formula, the "net asset value at the time of purchase" will be the net
asset value at purchase of the Class B Shares of the Fund even if those shares
are later exchanged for Class B Shares of another Delaware Group fund and, in
the event of an exchange of the shares, the "net asset value of such shares at
the time of redemption" will be the net asset value of the shares into which
the shares have been exchanged. Accordingly, no CDSC will be imposed on
increases in net asset value above the initial purchase price. In addition, no
CDSC will be assessed on redemption of shares received upon reinvestment of
dividends or capital gains distributions.
The following table sets forth the rates of the CDSC for the Class B
Shares of the Fund:
<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE
(AS A PERCENTAGE OF
YEAR AFTER DOLLAR AMOUNT
PURCHASE MADE SUBJECT TO CHARGE)
------------- ------------------
<S> <C>
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
</TABLE>
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares of the Fund, the Class B Shares will continue
to be subject to annual 12b-1 Plan expenses of 1% of average daily net assets
representing those shares. See Automatic Conversion of Class B Shares above.
Investors are reminded that the Class A Shares into which the Class B Shares
will convert are subject to ongoing annual 12b-1 Plan expenses of up to a
maximum of .30% of average daily net assets representing such shares.
12
<PAGE> 17
In determining whether a CDSC is applicable to a redemption, the
calculation will be determined in a manner that results in the lowest
applicable rate being charged. Therefore, with respect to the Class B Shares,
it will be assumed that the redemption is first for shares held over six years
or shares acquired pursuant to reinvestment of dividends or distributions and
then of shares held longest during the six-year period. The charge will not be
applied to dollar amounts representing an increase in the net asset value since
the time of purchase. All investments made during a calendar month, regardless
of when during the month the investment occurred, will age one month on the
last day of that month and each subsequent month.
The CDSC is waived on redemptions of Class B Shares in connection with the
following redemptions: (i) redemptions effected pursuant to the Fund's right to
liquidate a shareholder's account if the aggregate net asset value of the
shares held in the account is less than the then effective minimum account
size; (ii) tax-free returns of excess contributions to an IRA or 403(b)(7)
Deferred Compensation Plan; (iii) required minimum distributions from an IRA,
403(b)(7) Deferred Compensation Plan, or 457 Deferred Compensation Plan; and
(iv) distributions from an IRA, 403(b)(7) Deferred Compensation Plan or 457
Deferred Compensation Plan due to death or disability.
12b-1 DISTRIBUTION PLANS--CLASS A AND CLASS B SHARES
Pursuant to the distribution plans adopted by the Fund pursuant to Rule
12b-1 under the Investment Company Act of 1940, the Fund is permitted to pay
the Distributor annual distribution fees payable monthly of .30% of the average
daily net assets of the Class A Shares and 1% of the average daily net assets
of the Class B Shares in order to compensate the Distributor for providing
distribution and related services and bearing certain expenses of each Class.
Class B Shares of the Fund were not sold prior to the date of this Prospectus.
The Class B Shares' 12b-1 Plan is designed to permit an investor to purchase
Class B Shares through dealers or brokers without the assessment of a front-end
sales charge and at the same time permit the Distributor to compensate dealers
and brokers in connection with the sale of the Class B Shares. In this regard,
the purpose and function of the 12b-1 Plan and the CDSC with respect to the
Class B Shares are the same as those of the front-end sales charge and 12b-1
Plan with respect to the Class A Shares in that the fees and charges provide
for the financing of the distribution of the respective Classes. For more
detailed discussion of the 12b-1 Plans relating to the Class A and Class B
Shares, see Distribution (12b-1) and Service.
OTHER PAYMENTS TO DEALERS--CLASS A AND CLASS B SHARES
In addition, from time to time at the discretion of the Distributor, all
registered broker/dealers whose aggregate sales of the Classes exceed certain
limits as set by the Distributor, may receive from the Distributor an
additional payment of up to .25% of the dollar amount of such sales. The
Distributor may also provide additional promotional incentives or payments to
dealers that sell shares of the Delaware Group of funds. In some instances,
these incentives or payments may be offered only to certain dealers who
maintain, have sold or may sell certain amounts of shares.
In connection with the promotion of Delaware Group fund shares, the
Distributor may, from time to time, pay to participate in dealer-sponsored
seminars and conferences, reimburse dealers for expenses incurred in connection
with preapproved seminars, conferences and advertising and may, from time to
time, pay or allow additional promotional incentives to dealers, which may
include non-cash concessions, as part of preapproved sales contests. In
addition, as noted above, the Distributor may pay dealers a commission in
connection with net asset value purchases.
CLASS B FUNDS
The following funds currently offer Class B Shares: DMC Tax-Free Income
Trust-Pennsylvania, Delaware Group Delchester High-Yield Bond Fund, Inc.,
Delaware Group Government Fund, Inc., Treasury Reserves Intermediate Series of
Delaware Group Treasury Reserves, Inc., Delaware Group Cash Reserve, Inc.,
Tax-Free USA Fund, Tax-Free Insured Fund and Tax-Free USA Intermediate Fund of
Delaware Group Tax-Free Fund, Inc., Delaware Group DelCap Fund, Inc., Delaware
Fund and Dividend Growth Fund of Delaware Group Delaware Fund, Inc., Delaware
Group Value Fund, Inc., Decatur Income Fund and Decatur Total Return Fund of
Delaware Group Decatur Fund, Inc., International Equity Series of Delaware
Group Global & International Funds, Inc. and the Fund.
13
<PAGE> 18
TREND FUND INSTITUTIONAL CLASS
In addition to offering the Class A and Class B Shares, the Fund also
offers the Trend Fund Institutional Class of shares, which is described in a
separate prospectus relating to that class of shares. That class may be
purchased only by: (a) defined contribution retirement plans with 1,000 or more
eligible employees; (b) tax-exempt employee benefit plans of the Manager or its
affiliates and securities dealer firms with a selling agreement with the
Distributor; (c) institutional advisory accounts of the Manager or its
affiliates and those having client relationships with Delaware Investment
Advisers, a division of the Manager, or its affiliates and their corporate
sponsors, as well as subsidiaries and related employee benefit plans; and (d)
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. Such Trend Fund Institutional Class shares generally are distributed
directly by the Distributor and do not have a front-end or contingent deferred
sales charge or a 12b-1 fee. Sales or service compensation available in respect
of such class, therefore, differs from that available in respect of the Class A
Shares and the Class B Shares. All three classes of shares have a proportionate
interest in the underlying portfolio of securities of the Fund. Total Operating
Expenses incurred by the Trend Fund Institutional Class as a percentage of
average daily net assets for the fiscal year ended June 30, 1994 were 1.15%. To
obtain a prospectus which describes the Trend Fund Institutional Class, contact
the Distributor.
DIVIDEND ORDERS
SOME SHAREHOLDERS WANT THE DIVIDENDS EARNED IN ONE FUND AUTOMATICALLY
INVESTED IN ANOTHER DELAWARE GROUP FUND WITH A DIFFERENT INVESTMENT OBJECTIVE.
For more information on the requirements of the other funds, see Dividend
Reinvestment Plan under The Delaware Difference or call the Shareholder Service
Center.
HOW TO BUY SHARES
The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
INVESTING THROUGH YOUR INVESTMENT DEALER
You can make a purchase of shares of the Classes through most investment
dealers who, as part of the service they provide, must transmit orders
promptly. They may charge for this service. If you want a dealer but do not
have one, we can refer you to one.
INVESTING BY MAIL
1. Initial Purchases--An Investment Application must be completed, signed
and sent with a check payable to Trend Fund A Class or B Class, depending upon
which Class is being purchased, to 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to Trend Fund A Class or B Class, depending upon which
Class is being purchased. Your check should be identified with your name(s) and
account number. An investment slip (similar to a deposit slip) is provided at
the bottom of transaction confirmations and dividend statements that you will
receive from the Fund, and should be used when you are making additional
purchases. You can expedite processing by including an investment slip with
your check when making additional purchases. Your investment may be delayed if
you send additional purchases by certified mail.
INVESTING BY WIRE
You may purchase shares by requesting your bank to transmit funds by wire
to CoreStates Bank, N.A., ABA #031000011, account number 0114-2596 (include
your name(s) and your account number for the Class in which you are investing).
1. Initial Purchases--Before you invest, telephone the Fund's Shareholder
Service Center to get an account number. If you do not call first, it may delay
processing your investment. In addition, you must promptly send your Investment
Application to Trend Fund A Class or B Class, depending upon which Class is
being purchased, 1818 Market Street, Philadelphia, PA 19103.
2. Subsequent Purchases--You may make additional investments anytime by
wiring funds to CoreStates Bank, N.A., as described above. You should advise
the Fund's Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a Retirement Plan Account, call the
Shareholder Service Center for special wiring instructions.
INVESTING BY EXCHANGE
If you have an investment in another mutual fund in the Delaware Group,
you may write and authorize an exchange of part or all of your investment into
shares of the Fund. If you wish to open an account by exchange, call the
Shareholder Service Center for more information.
14
<PAGE> 19
Exchanges will not be permitted between Class A Shares and Class B Shares
of the Fund or between the Class A Shares and Class B Shares of any other funds
in the Delaware Group. Class B Shares of any of the Class B Funds may be
exchanged for Class B Shares of the Fund. Class B Shares of the Fund acquired
by exchange will continue to carry the contingent deferred sales charge and the
automatic conversion schedules of the fund from which the exchange is made. The
holding period of the Class B Shares of the Fund will be added to that of the
exchanged shares for purposes of determining the time of the automatic
conversion into Class A Shares of the Fund.
Permissible exchanges into the Classes of the Fund will be made without a
front-end sales charge imposed by the Fund or, at the time of the exchange, a
contingent deferred sales charge imposed by the fund from which the exchange is
being made, except for exchanges into Class A Shares from funds not subject to
a front-end sales charge (unless such shares were acquired in an exchange from
a fund subject to such a charge or such shares were acquired through the
reinvestment of dividends).
ADDITIONAL METHODS OF ADDING TO YOUR INVESTMENT
Call the Shareholder Service Center for more information if you wish to
use the following services:
1. Direct Deposit
YOU MAY WISH YOUR EMPLOYER OR BANK TO MAKE REGULAR INVESTMENTS DIRECTLY TO
YOUR ACCOUNT FOR YOU (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.
2. Automatic Investing Plan
THE AUTOMATIC INVESTING PLAN ENABLES YOU TO MAKE REGULAR MONTHLY
INVESTMENTS WITHOUT WRITING OR MAILING CHECKS. You may authorize the Fund to
transfer a designated amount monthly from your checking account to your Class
account. Many shareholders use this as an automatic savings plan for IRAs and
other purposes. Shareholders should allow a reasonable amount of time for
initial purchases and changes to these plans to become effective.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Should investments by these two methods be reclaimed or returned for some
reason, the Fund has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your Class
account, you are obligated to reimburse the Fund.
PURCHASE PRICE AND EFFECTIVE DATE
The offering price and net asset value of the Class A and Class B Shares
are determined as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when such exchange is open.
The effective date of a purchase made through an investment dealer is the
date the order is received by the Fund. The effective date of a direct purchase
is the day your wire, electronic transfer or check is received unless it is
received after the time the offering price or net asset value of shares is
determined, as noted above. Those received after such time will be effective
the next business day.
THE CONDITIONS OF YOUR PURCHASE
The Fund reserves the right to reject any purchase or exchange. If a
purchase is cancelled because your check is returned unpaid, you are
responsible for any loss incurred. The Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in the Delaware Group. The Fund
reserves the right, upon 60 days' written notice, to redeem accounts that
remain under $250 as a result of redemptions. An investor making the minimum
initial investment will be subject to involuntary redemption without the
imposition of a CDSC or Limited CDSC if he or she redeems any portion of his or
her account.
15
<PAGE> 20
REDEMPTION AND EXCHANGE
YOU CAN REDEEM OR EXCHANGE YOUR SHARES IN A NUMBER OF DIFFERENT WAYS. The
exchange service is useful if your investment requirements change and you want
an easy way to invest in other equity funds, bond funds, tax-advantaged funds
or money market funds. This service is also useful if you are anticipating a
major expenditure and want to move a portion of your investment into a fund
that has the checkwriting feature. Exchanges are subject to the requirements of
each fund and all exchanges of shares from one fund or class to another
pursuant to this privilege constitute taxable events. See Taxes. You may want
to call us for more information or consult your financial adviser or investment
dealer to discuss which funds in the Delaware Group will best meet your
changing objectives, and the consequences of any exchange transaction.
Your shares will be redeemed or exchanged based on the net asset value
next determined after we receive your request in good order subject, in the
case of a redemption, to any applicable CDSC or Limited CDSC. Redemption or
exchange requests received in good order after the time the offering price and
net asset value of shares are determined, as noted above, will be processed on
the next business day. See Purchase Price and Effective Date under Buying
Shares. Except as otherwise noted below, for a redemption request to be in
"good order," you must provide your Class account number, account registration,
and the total number of shares or dollar amount of the transaction. If a holder
of Class B Shares submits a redemption request for a specific dollar amount,
the Fund will redeem that number of shares necessary to deduct the applicable
CDSC and tender to the shareholder the requested amount to the extent enough
shares are then held in the shareholder account. With regard to exchanges, you
must also provide the name of the fund you want to receive the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Fund at 800-523-1918 (in Philadelphia, 988-1241).
The Fund reserves the right to reject exchange requests at any time. The Fund
may suspend or terminate, or amend the terms of, the exchange privilege upon 60
days' written notice to shareholders.
The Fund will honor written redemption requests of shareholders who
recently purchased shares by check, but will not mail the proceeds until it is
reasonably satisfied the purchase check has cleared, which may take up to 15
days from the purchase date. The Fund will not honor telephone redemptions for
Class shares recently purchased by check unless it is reasonably satisfied that
the purchase check has cleared. You can avoid this potential delay if you
purchase shares by wiring Federal Funds. The Fund reserves the right to reject
a written or telephone redemption request or delay payment of redemption
proceeds if there has been a recent change to the shareholder's address of
record.
Class A Shares may be exchanged for certain of the shares of the other
funds in the Delaware Group, including other Class A Shares, subject to the
eligibility and minimum purchase requirements set forth in each fund's
prospectus. All Delaware Group funds offer Class A Shares. Class A Shares may
not be exchanged for Class B Shares of the funds offering such shares. Class B
Shares of the Fund may be exchanged only for the Class B Shares of any of the
Class B Funds. See Exchange Privilege under The Delaware Difference. In each
instance, permissible exchanges are subject to the minimum purchase and other
requirements set forth in each prospectus.
Permissible exchanges may be made at net asset value, provided: (1) the
investment satisfies the eligibility and minimum purchase requirements set
forth in the prospectus of the fund being acquired; and (2) the shares of the
fund being acquired are in a state where that fund is registered.
There is no front-end sales charge or fee for exchanges made between
shares of funds which both carry a front-end sales charge. Any applicable
front-end sales charge will apply to exchanges from shares of funds not subject
to a front-end sales charge, except for transfers involving assets that were
previously invested in a fund with a front-end sales charge and/or transfers
involving the reinvestment of dividends.
16
<PAGE> 21
Holders of the Class B Shares that exchange their shares ("outstanding
Class B Shares") for the Class B Shares of other Class B Funds ("new Class B
Shares") will not be subject to a CDSC that might otherwise be due upon
redemption of the outstanding Class B Shares. However, such shareholders will
continue to be subject to the CDSC and automatic conversion schedules of the
outstanding Class B Shares described in this Prospectus and any CDSC assessed
upon redemption will be charged by the Fund. The Fund's CDSC schedule may be
higher than the CDSC schedule relating to the new Class B Shares acquired as a
result of the exchange. For purposes of computing the CDSC that may be payable
upon a disposition of the new Class B Shares, the holding period for the
outstanding Class B Shares is added to the holding period of the new Class B
Shares. The automatic conversion schedule of the outstanding Class B Shares may
be longer than that of the new Class B Shares. Consequently, an investment in
new Class B Shares by exchange may subject an investor to the higher 12b-1 fees
applicable to Class B Shares for a longer time than if the investment in new
Class B Shares was made directly.
Different redemption and exchange methods are outlined below. Except for
the CDSC with respect to redemption of Class B Shares and the Limited CDSC with
respect to certain redemptions of Class A Shares purchased at net asset value,
there is no fee charged by the Fund or the Distributor for redeeming or
exchanging your shares, but such fees could be charged in the future. You may
also have your investment dealer arrange to have your shares redeemed or
exchanged. Your investment dealer may charge for this service.
All authorizations given by shareholders with respect to an account,
including selection of any of the features described below, shall continue in
effect until revoked or modified in writing and until such time as such written
revocation or modification has been received by the Fund or its agent.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
WRITTEN REDEMPTION
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Class A or Class B Shares. The request must be
signed by all owners of the account or your investment dealer of record. For
redemptions of more than $50,000, or when the proceeds are not sent to the
shareholder(s) at the address of record, the Fund requires a signature by all
owners of the account and a signature guarantee for each owner. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.
The redemption request is effective at the net asset value next determined
after it is received in good order. Class B Shares may be subject to a CDSC and
Class A Shares may be subject to a Limited CDSC with respect to certain shares
purchased at net asset value. Payment is normally mailed the next business day,
but no later than seven days after receipt of your request. If your Class A
Shares are in certificate form, the certificate must accompany your request and
also be in good order. The Fund only issues certificates for Class A Shares if
a shareholder submits a specific request. The Fund does not issue certificates
for Class B Shares.
WRITTEN EXCHANGE
You can also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your Class A or Class B Shares
into another mutual fund in the Delaware Group, subject to the same conditions
and limitations as other exchanges noted above.
TELEPHONE REDEMPTION AND EXCHANGE
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your Class A Shares in certificate form, you can
only redeem or exchange by written request and you must return your
certificates.
17
<PAGE> 22
The Telephone Redemption service enabling you to have redemption proceeds
mailed to your address of record and the Telephone Exchange service, both of
which are described below, are automatically provided unless the Fund receives
written notice from the shareholder to the contrary. The Fund reserves the
right to modify, terminate or suspend these procedures upon 60 days' written
notice to shareholders. It may be difficult to reach the Fund by telephone
during periods when market or economic conditions lead to an unusually large
volume of telephone requests.
Neither the Fund nor the Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption
or exchange of Fund shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, the shareholder is acknowledging prior receipt
of a prospectus for the fund into which shares are being exchanged.
TELEPHONE REDEMPTION--CHECK TO YOUR ADDRESS OF
RECORD
THE TELEPHONE REDEMPTION FEATURE IS A QUICK AND EASY METHOD TO REDEEM
SHARES. You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your record address. Checks will be payable to
the shareholder(s) of record. Payment is normally mailed the next business day,
but no more than seven days, after receipt of the request. This service is only
available to individual, joint and individual fiduciary-type accounts.
TELEPHONE REDEMPTION--PROCEEDS TO YOUR BANK
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, the Fund requires an Authorization Form with your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption. If you ask for a check, it will normally be mailed the next
business day, but no later than seven days after receipt of your request, to
your predesignated bank account. Except for any CDSC which may be applicable
to the Class B Shares and the Limited CDSC which may be applicable to purchases
made at net asset value with respect to the Class A Shares, there are no fees
for this method, but the mail time may delay getting funds into your bank
account. Simply call the Fund's Shareholder Service Center prior to the time
the offering price and net asset value are determined, as noted above.
If expedited payment by check or wire could adversely affect the Fund, the
Fund may take up to seven days to pay.
TELEPHONE EXCHANGE
The Telephone Exchange feature is a convenient and efficient way to adjust
your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange Class A
or Class B Shares into any fund in the Delaware Group under the same
registration, subject to the same conditions and limitations as other exchanges
noted above. As with the written exchange service, telephone exchanges are
subject to the requirements of each fund, as described above. Telephone
exchanges may be subject to limitations as to amounts or frequency.
18
<PAGE> 23
SYSTEMATIC WITHDRAWAL PLAN FOR CLASS A SHARES
1. Regular Plans
This plan provides holders of the Class A Shares with a consistent monthly
(or quarterly) payment. THIS IS PARTICULARLY USEFUL TO SHAREHOLDERS LIVING ON
FIXED INCOMES, SINCE IT CAN PROVIDE THEM WITH A STABLE SUPPLEMENTAL AMOUNT.
With accounts of at least $5,000, you may elect monthly withdrawals of $25
(quarterly $75) or more. The Fund does not recommend any particular monthly
amount, as each shareholder's situation and needs vary. Payments are normally
made by check. In the alternative, you may elect to have your payments
transferred from your Fund account to your predesignated bank account through
the Delaware Group's MoneyLine service. Your funds will normally be credited to
your bank account after two business days. Except with respect to the Limited
CDSC which may be applicable to Class A Shares as noted below, there are no
fees for this method. You can initiate this service by completing an
Authorization Agreement. If the name and address on your bank account are not
identical to the name and address on your Fund account, you must have your
signature guaranteed. Please call the Shareholder Service Center for additional
information.
2. Retirement Plans
For shareholders eligible under the applicable Retirement Plan to receive
benefits in periodic payments, the Fund's Systematic Withdrawal Plan provides
you with maximum flexibility. A number of formulas are available for
calculating your withdrawals, depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no minimum
account balance is required.
* * *
Shareholders should not purchase Class A Shares while participating in a
Systematic Withdrawal Plan. Also, redemptions of Class A Shares pursuant to a
Systematic Withdrawal Plan may be subject to a Limited CDSC if the original
purchase was made within the 12 months prior to the withdrawal at net asset
value and a dealer's commission has been paid on that purchase. See Contingent
Deferred Sales Charge for Certain Purchases of Class A Shares Made at Net Asset
Value. For more information on both of these plans, please call the Shareholder
Service Center.
The Systematic Withdrawal Plan is not available with respect to the Class
B Shares.
WEALTH BUILDER OPTION
Shareholders may elect to invest in other mutual funds in the Delaware
Group through our Wealth Builder Option. Under this automatic exchange program,
shareholders can authorize regular monthly amounts (minimum of $100 per fund)
to be liquidated from their Class account and invested automatically into one
or more funds in the Delaware Group. Investments under this option are
exchanges and are therefore subject to the same conditions and limitations as
other exchanges of Class A and Class B Shares noted above.
Shareholders can also use the Wealth Builder Option to invest in the Fund
through regular liquidations of shares in their accounts in other funds in the
Delaware Group, subject to the same conditions and limitations as other
exchanges noted above. Shareholders can terminate their participation at any
time by written notice to the Fund. See Redemption and Exchange.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
CONTINGENT DEFERRED SALES CHARGE FOR CERTAIN
PURCHASES OF CLASS A SHARES MADE AT NET ASSET VALUE
For purchases of Class A Shares, a Limited CDSC will be imposed by the
Fund upon certain redemptions of Class A Shares (or shares into which such
Class A Shares are exchanged) made within 12 months of purchase, if such
purchases were made at net asset value and triggered the payment by the
Distributor of the dealer's commission described above. See Buying Shares.
The Limited CDSC will be paid to the Distributor and will be equal to the
lesser of 1% of (1) the net asset value at the time of purchase of the Class A
Shares being redeemed or (2) the net asset value of such Class A Shares at the
time of redemption. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of the Class A Shares
even if those shares are later exchanged for shares of another Delaware Group
fund and, in the event of an exchange of Class A Shares, the "net asset value
of such shares at the time of redemption" will be the net asset value of the
shares into which the Class A Shares have been exchanged.
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<PAGE> 24
Redemptions of such Class A Shares held for more than 12 months will not
be subjected to the Limited CDSC and an exchange of such Class A Shares into
another Delaware Group fund will not trigger the imposition of the Limited CDSC
at the time of such exchange. The period a shareholder owns shares into which
Class A Shares are exchanged will count towards satisfying the 12-month holding
period. The Fund assesses the Limited CDSC if such 12-month period is not
satisfied irrespective of whether the redemption triggering its payment is of
the Class A Shares of the Fund or the Class A Shares into which the Class A
Shares of the Fund have been exchanged.
In determining whether a Limited CDSC is payable, it will be assumed that
shares not subject to the Limited CDSC are the first redeemed followed by other
shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or upon amounts
representing share appreciation. All investments made during a calendar month,
regardless of when during the month the investment occurred, will age one month
on the last day of that month and each subsequent month.
The Limited CDSC will be waived in the following instances: (i)
redemptions effected pursuant to the Fund's right to liquidate a shareholder's
account if the aggregate net asset value of the shares held in the account is
less than the then effective minimum account size; (ii) distributions to
participants from a retirement plan qualified under section 401(a) or 401(k) of
the Internal Revenue Code of 1986, as amended ("the Code"), or due to death of
a participant in such a plan; (iii) redemptions pursuant to the direction of a
participant or beneficiary of a retirement plan qualified under section 401(a)
or 401(k) of the Code with respect to that retirement plan; (iv) distributions
from a section 403(b)(7) Plan or an Individual Retirement Account ("IRA") due
to death, disability, or attainment of age 59 1/2; (v) tax-free returns of
excess contributions to an IRA; (vi) distributions by other employee benefit
plans to pay benefits; (vii) distributions described in (ii), (iv), and (vi)
above pursuant to a systematic withdrawal plan; and (viii) redemptions by the
classes of shareholders who are permitted to purchase shares at net asset
value, regardless of the size of the purchase (see Buying at Net Asset Value).
DIVIDENDS AND DISTRIBUTIONS
The Fund will make payments from net investment income and net realized
securities profits, if any, twice a year. The first payment would be made
during the first quarter of the next fiscal year. The second payment would be
made near the end of the calendar year if necessary to comply with certain
requirements of the Internal Revenue Code. During the fiscal year ended June
30, 1994, distributions totaling $1.94 per share of the Class A Shares were
paid from realized securities profits. On August 5, 1994, a distribution of
$0.79 per share of the Class A Shares was paid from realized securities profits
to shareholders of record July 28, 1994. Class B Shares of the Fund were not
offered prior to the date of this Prospectus.
Each of the Classes will share proportionately in the investment income
and expenses of the Fund, except that: (i) the per share dividends and
distributions on the Class B Shares will be lower than the per share dividends
and distributions on the Class A Shares as a result of the higher expenses
under the 12b-1 Plan relating to the Class B Shares; and (ii) the per share
dividends and distributions on both the Class A Shares and the Class B Shares
will be lower than the per share dividends and distributions on the Trend Fund
Institutional Class as such class will not incur any expenses under the Rule
12b-1 Plans. See Distribution (12b-1) and Service under Management of the Fund.
Both dividends and distributions, if any, are automatically reinvested in
your account at net asset value unless you elect otherwise. Any check in
payment of dividends or other distributions which cannot be delivered by the
Post Office or which remains uncashed for a period of more than one year may be
reinvested in the shareholder's account at the then-current net asset value and
the dividend option may be changed from cash to reinvest. If you elect to take
your dividends and distributions in cash and such dividends and distributions
are in an amount of $25 or more, you may elect the Delaware Group's MoneyLine
service to enable such payments to be transferred from your Fund account to
your predesignated bank account. Your funds will normally be credited to your
bank account after two business days. There are no fees for this method. See
Systematic Withdrawal Plan for Class A Shares under Redemption and Exchange for
information regarding authorization of this service. (See The Delaware
Difference for more information on reinvestment options.)
20
<PAGE> 25
TAXES
The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Internal Revenue Code (the
"Code"). As such, the Fund will not be subject to federal income tax, or to any
excise tax, to the extent its earnings are distributed as provided in the Code.
The Fund intends to distribute substantially all of its net investment
income and net capital gains, if any. Dividends from net investment income or
net short-term capital gains will be taxable to you as ordinary income, whether
received in cash or in additional shares. For corporate investors, dividends
from net investment income will generally qualify in part for the corporate
dividends-received deduction. The portion of dividends paid by the Fund that
so qualifies will be designated each year in a notice mailed to the Fund's
shareholders.
Distributions paid by the Fund from long-term capital gains, whether
received in cash or in additional shares, are taxable to those investors who
are subject to income taxes as long-term capital gains, regardless of the
length of time an investor has owned shares in the Fund. The Fund does not seek
to realize any particular amount of capital gains during a year; rather,
realized gains are a byproduct of Fund management activities. Consequently,
capital gains distributions may be expected to vary considerably from year to
year. Also, for those investors subject to tax, if purchases of shares in the
Fund are made shortly before the record date for a dividend or capital gains
distribution, a portion of the investment will be returned as a taxable
distribution.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record on a specified date in one of those months, but which, for
operational reasons, may not be paid to the shareholder until the following
January, will be treated for tax purposes as if paid by the Fund and received
by the shareholder on December 31 of the year declared.
The sale of shares of the Fund is a taxable event and may result in a
capital gain or loss to shareholders subject to tax. Capital gain or loss may
be realized from an ordinary redemption of shares or an exchange of shares
between two mutual funds (or two series or portfolios of a mutual fund). Any
loss incurred on sale or exchange of the Fund's shares which had been held for
six months or less will be treated as a long-term capital loss to the extent of
capital gain dividends received with respect to such shares. All or a portion
of the sales charge incurred in purchasing Fund shares will be excluded from
the federal tax basis of any of such shares sold or exchanged within ninety
(90) days of their purchase (for purposes of determining gain or loss upon sale
of such shares) if the sale proceeds are reinvested in the Fund or in another
fund in the Delaware Group of funds and a sales charge that would otherwise
apply to the reinvestment is reduced or eliminated. Any portion of such sales
charge excluded from the tax basis of the shares sold will be added to the tax
basis of the shares acquired in the reinvestment.
The automatic conversion of Class B Shares into Class A Shares at the end
of no longer than approximately eight years after purchase will constitute a
tax-free exchange for federal tax purposes. Shareholders should consult their
own tax advisers regarding specific questions as to federal, state, local or
foreign taxes. See Automatic Conversion of Class B Shares under Buying Shares.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital
gains realized from certain types of U.S. government securities may be exempt
from state personal income taxes. Shares of the Fund are exempt from
Pennsylvania county personal property taxes.
Each year, the Fund will mail you information on the tax status of the
Fund's dividends and distributions. Shareholders will also receive each year
information as to the portion of dividend income, if any, that is derived from
U.S. government securities that are exempt from state income tax. Of course,
shareholders who are not subject to tax on their income would not be required
to pay tax on amounts distributed to them by the Fund.
The Fund is required to withhold 31% of taxable dividends, capital gains
distributions, and redemptions paid to shareholders who have not complied with
IRS taxpayer identification regulations. You may avoid this withholding
requirement by certifying on your Account Registration Form your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.
The tax discussion set forth above is included for general information
only. Prospective investors should consult their own tax advisers concerning
the federal, state, local or foreign tax consequences of an investment in the
Fund.
See Taxes in Part B for additional information on tax matters relating to
the Fund and its shareholders.
21
<PAGE> 26
CALCULATION OF OFFERING
PRICE AND NET ASSET VALUE
PER SHARE
Class A Shares are purchased at the offering price and Class B Shares are
purchased at the net asset value ("NAV") per share. The offering price of the
Class A Shares consists of the NAV per share next determined after the order is
received, plus any applicable front-end sales charges. The offering price and
NAV are computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when such exchange is open.
The NAV per share is computed by adding the value of all securities and
other assets in the portfolio, deducting any liabilities (expenses and fees are
accrued daily) and dividing by the number of shares outstanding. Portfolio
securities for which market quotations are available are priced at market
value. Short-term investments having a maturity of less than 60 days are valued
at amortized cost, which approximates market value. All other securities are
valued at their fair value as determined in good faith and in a method approved
by the Fund's Board of Directors.
Each of the Fund's three classes will bear, pro-rata, all of the common
expenses of the Fund. The net asset values of all outstanding shares of each
class of the Fund will be computed on a pro-rata basis for each outstanding
share based on the proportionate participation in the Fund represented by the
value of shares of that class. All income earned and expenses incurred by the
Fund will be borne on a pro-rata basis by each outstanding share of a class,
based on each class' percentage in the Fund represented by the value of shares
of such classes, except that the Trend Fund Institutional Class will not incur
any of the expenses under the Fund's 12b-1 Plans and the Class A and Class B
Shares alone will bear the 12b-1 Plan expenses payable under their respective
Plans. Due to the specific distribution expenses and other costs that will be
allocable to each class, the net asset value of and dividends paid to each
class of the Fund will vary.
MANAGEMENT OF THE FUND
DIRECTORS
The business and affairs of the Fund are managed under the direction of
its Board of Directors. Part B contains additional information regarding the
directors and officers.
INVESTMENT MANAGER
The Manager furnishes investment management services to the Fund.
The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. On June 30, 1994, the Manager and its affiliate,
Delaware International Advisers Ltd., were supervising in the aggregate more
than $25 billion in assets in the various institutional (approximately
$16,301,004,000) and investment company (approximately $9,540,710,000)
accounts.
The Manager is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). By reason of its percentage ownership of DMH common
stock and through a Voting Trust Agreement with certain other DMH shareholders,
Legend Capital Group, L.P. ("Legend") controls DMH and the Manager. As General
Partners of Legend, Leonard M. Harlan and John K. Castle have the ability to
direct the voting of more than a majority of the shares of DMH common stock and
thereby control the Manager.
The Manager manages the Fund's portfolio and makes investment decisions
which are implemented by the Fund's Trading Department. The Manager also pays
the salaries of all the directors, officers and employees of the Fund who are
affiliated with the Manager. For these services, the Manager is paid an annual
fee of 3/4 of 1% of the average daily net assets of the Fund, less all
directors' fees paid to unaffiliated directors. This fee was paid by the Fund
during the last fiscal year. This fee is higher than that paid by many other
funds. The fee may be higher or lower than that paid by funds with comparable
investment objectives. Investment management fees paid by the Fund for the
fiscal year ended June 30, 1994 were 0.75% of average daily net assets.
22
<PAGE> 27
Edward N. Antoian has primary responsibility for making day-to-day
investment decisions for the Fund. He has been the Fund's senior portfolio
manager since 1984. A graduate of The State University of New York at Albany
with an MBA in Finance from the University of Pennsylvania's Wharton School,
Mr. Antoian began his career with Price Waterhouse. Prior to joining the
Delaware Group in June 1984, he worked in the Institutional Equity Department
of E.F. Hutton in Philadelphia. A Chartered Financial Analyst, Mr. Antoian is a
member of the Philadelphia Finance Association and the Philadelphia Securities
Association.
In making investment decisions for the Fund, Mr. Antoian regularly
consults with Wayne A. Stork, David G. Kern, David C. Dalrymple and other
members of Delaware's equity department. Mr. Stork, Chairman of Delaware
Management Company, Inc. and the Fund's Board of Directors, is a graduate of
Brown University and attended New York University's Graduate School of Business
Administration. Mr. Kern and Mr. Dalrymple are assistant portfolio managers.
Mr. Kern has been working with Mr. Antoian since 1990. He is a graduate of
Lehigh University. Mr. Dalrymple, a CFA, has been working with Mr. Antoian
since 1991 and is a graduate of Clarkson University with an MBA from Cornell's
Johnson School of Management.
PORTFOLIO TRADING PRACTICES
The Fund normally will not invest for short-term trading purposes.
However, the Fund may sell securities without regard to the length of time they
have been held. The degree of portfolio activity will affect brokerage costs of
the Fund and may affect taxes payable by the Fund's shareholders. Given the
Fund's investment objective, its annual portfolio turnover rate may exceed
100%. A turnover rate of 100% would occur, for example, if all the investments
in the Fund's portfolio at the beginning of the year were replaced by the end
of the year. The turnover rate also may be affected by cash requirements from
redemptions and repurchases of Fund shares. During the past two fiscal years,
the Fund's portfolio turnover rates were 75% for 1993 and 67% for 1994.
The Fund uses its best efforts to obtain the best available price and most
favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager
or its advisory clients. These services may be used by the Manager in servicing
any of its accounts. Subject to best price and execution, the Fund may consider
a broker/dealer's sales of Fund shares in placing portfolio orders and may
place orders with broker/dealers that have agreed to defray certain Fund
expenses such as custodian fees.
PERFORMANCE INFORMATION
From time to time, the Fund may quote total return performance of the
Classes in advertising and other types of literature. Total return will be
based on a hypothetical $1,000 investment, reflecting the reinvestment of all
distributions at net asset value and (i) in the case of Class A Shares, the
impact of the maximum front-end sales charge at the beginning of each specified
period and (ii) in the case of Class B Shares, the deduction of any applicable
CDSC at the end of the relevant period. Each presentation will include the
average annual total return for one-, five- and ten-year periods, as relevant.
The Fund may also advertise aggregate and average total return information
concerning a Class over additional periods of time.
Because stock prices fluctuate, investment results of the Classes will
fluctuate over time and past performance should not be considered as a
representation of future results.
DISTRIBUTION (12b-1) AND SERVICE
The Distributor, Delaware Distributors, Inc., serves as the national
distributor for the Fund under an Amended and Restated Distribution Agreement
dated as of September 6, 1994.
The Fund has adopted a distribution plan under Rule 12b-1 for the Class A
Shares and a separate distribution plan under Rule 12b-1 for the Class B Shares
(the "Plans"). The Plans permit the Fund to pay the Distributor from the assets
of the respective Class a monthly fee for its services and expenses in
distributing and promoting sales of shares. These expenses include, among other
things, preparing and distributing advertisements, sales literature, and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, holding special promotions for specified periods of time,
and paying distribution and maintenance fees to brokers, dealers and others. In
connection with the promotion of Class A and Class B Shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, and reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising. The Distributor may pay or
allow additional promotional incentives to dealers as part of preapproved sales
contests and/or to dealers who provide extra training and information
concerning a Class and increase sales of the Class. In addition, the Fund may
make payments from the assets of the respective Class directly to others, such
as banks, who aid in the distribution of Class shares or provide services in
respect of a Class, pursuant to service agreements with the Fund.
The 12b-1 Plan expenses relating to the Class B Shares are also used to
pay the Distributor for advancing the commission costs to dealers with respect
to the initial sale of such shares.
23
<PAGE> 28
The aggregate fees paid by the Fund from the assets of the respective
Class to the Distributor and others under the Plans may not exceed (i) .30% of
the Class A Shares' average daily net assets in any year; and (ii) 1% (.25% of
such amount representing service fees to be paid by the Fund to the
Distributor, dealers or others, for providing personal service and/or
maintaining shareholder accounts) of the Class B Shares' average daily net
assets in any year. The Class A and Class B Shares will not incur any
distribution expenses beyond these limits, which may not be increased without
shareholder approval. The Distributor may, however, incur additional expenses
and make additional payments to dealers from its own resources to promote the
distribution of shares of the Classes.
Effective June 1, 1992, the Board of Directors has determined that the
annual fee payable on a monthly basis, under the Plan relating to the Class A
Shares, will be equal to the sum of: (i) the amount obtained by multiplying
.30% by the average daily net assets represented by shares of the Class A
Shares that are acquired by shareholders on or after June 1, 1992, and (ii) the
amount obtained by multiplying .10% by the average daily net assets represented
by shares of the Class A Shares that were acquired before June 1, 1992. While
this is the method for calculating the Class A Shares' 12b-1 fee, the fee is a
Class expense so that all shareholders, regardless of when they purchase their
shares, will bear 12b-1 expenses at the same per share rate. As Class A Shares
are sold on or after June 1, 1992, the initial rate of at least .10% will
increase over time. Thus, as the proportion of Class A Shares purchased on or
after June 1, 1992, to Class A Shares outstanding prior to June 1, 1992,
increases, the expenses attributable to payments under the Plan will also
increase (but will not exceed .30% of average daily net assets). While this
describes the current formula for calculating the fees which will be payable
under the Plan, such Plan permits a full .30% on all Class A Shares' assets to
be paid at any time following Board approval.
The Fund's Plans do not apply to the Trend Fund Institutional Class of
shares. Those shares are not included in calculating the Plans' fees, and the
Plans are not used to assist in the distribution and marketing of Trend Fund
Institutional Class shares.
While payments pursuant to the Plans may not exceed .30% annually with
respect to the Class A Shares and 1% annually with respect to the Class B
Shares, the Plans do not limit fees to amounts actually expended by the
Distributor. It is therefore possible that the Distributor may realize a profit
in any particular year. However, the Distributor currently expects that its
distribution expenses will likely equal or exceed payments to it under the
Plans. The monthly fees paid to the Distributor are subject to the review and
approval of the Fund's unaffiliated directors who may reduce the fees or
terminate the Plans at any time.
The staff of the Securities and Exchange Commission ("SEC") has proposed
amendments to Rule 12b-1 and other related regulations that could impact Rule
12b-1 Distribution Plans. The Fund intends to amend the Plans, if necessary, to
comply with any new rules or regulations the SEC may adopt with respect to Rule
12b-1.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Fund
under an Agreement dated June 29, 1988. The unaffiliated directors review
service fees paid to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
EXPENSES
The Fund is responsible for all of its own expenses other than those borne
by the Manager under the Investment Management Agreement and those borne by the
Distributor under the Amended and Restated Distribution Agreement. The Class A
Shares' ratio of expenses to average daily net assets for the fiscal year ended
June 30, 1994 was 1.37%. The expense ratio of the Class A Shares reflects the
impact of its 12b-1 Plan. Class B Shares of the Fund were not offered prior to
the date of this Prospectus but, based on the expenses incurred by the Class A
Shares during its last fiscal year, the expenses of the Class B Shares are
expected to be 2.15%.
24
<PAGE> 29
SHARES
The Fund is a diversified, open-end management investment company.
Commonly known as a mutual fund, the Fund was organized as a Maryland
corporation on March 4, 1983. Previously, it was a Delaware corporation
organized in 1966.
Fund shares have a par value of $.50, equal voting rights, except as noted
below, and are equal in all other respects. All Fund shares have noncumulative
voting rights which means that the holders of more than 50% of the Fund's
shares voting for the election of directors can elect 100% of the directors if
they choose to do so. Under Maryland law, the Fund is not required, and does
not intend, to hold annual meetings of shareholders unless, under certain
circumstances, it is required to do so under the Investment Company Act of
1940. Shareholders of 10% or more of the Fund's shares may request that a
special meeting be called to consider the removal of a director.
The Fund also offers the Trend Fund Institutional Class of shares as well
as the Class A and Class B Shares. Shares of each class represent proportionate
interests in the assets of the Fund and have the same voting and other rights
and preferences as the other classes of the Fund, except that shares of the
Trend Fund Institutional Class are not subject to, and may not vote on matters
affecting, the Distribution Plans under Rule 12b-1 relating to the Class A and
Class B Shares. Similarly, the shareholders of the Class A Shares may not vote
on matters affecting the Fund's Plan under Rule 12b-1 relating to the Class B
Shares, and the shareholders of the Class B Shares may not vote on matters
affecting the Fund's Plan under Rule 12b-1 relating to the Class A Shares.
Prior to September 6, 1994, the Trend Fund A Class was known as the Trend
Fund class and the Trend Fund Institutional Class was known as the Trend Fund
(Institutional) class. The Trend Fund B Class was not offered prior to the date
of this Prospectus.
25
<PAGE> 30
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<PAGE> 31
SHARES OF THIS FUND ARE NOT FEDERALLY INSURED
BY THE FEDERAL DEPOSIT INSURANCE CORPORATION,
THE FEDERAL RESERVE BOARD, OR ANY OTHER
AGENCY. SHARES ARE NOT DEPOSITS, OBLIGATIONS OF,
GUARANTEED OR ENDORSED BY ANY BANK.
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The Delaware Group includes 20 different
funds with a wide range of investment
objectives. Stock funds, income funds,
tax-free funds, money market funds and
closed-end equity funds give investors the
ability to create a portfolio that fits their
personal financial goals. For more information
contact your financial adviser or call the
Delaware Group at 800-523-4640, in
Philadelphia 215-988-1333.
INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103
NATIONAL DISTRIBUTOR
Delaware Distributors, Inc.
1818 Market Street
Philadelphia, PA 19103
<TABLE>
<S> <C>
SHAREHOLDER SERVICING, [PHOTO OF GEORGE WASHINGTON CROSSING THE DELAWARE RIVER]
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103
</TABLE>
LEGAL COUNSEL
Stradley, Ronon, Stevens & Young
One Commerce Square
Philadelphia, PA 19103
INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103
CUSTODIAN
Chemical Bank
450 West 33rd Street
New York, NY 10001
P-003/P-064-9/94-RRD
Printed in the U.S.A.
TREND
FUND
- --------
A CLASS
B CLASS
PROSPECTUS
SEPTEMBER 6, 1994
DELAWARE
GROUP
- --------
