<PAGE>
For Growth of Capital
DELAWARE GROUP
Trend Fund
(VARIOUS PHOTOS DEMONSTRATING SERVICE
AND GUIDANCE, PROFESSIONAL MANAGEMENT AND GOALS)
service and guidance
professional management
goals
1997
Annual
Report
DELAWARE
GROUP
- --------
<PAGE>
(PHOTO OF GLASSES, PEN AND KEYBOARD)
A Commitment
To Our
Investors
The Delaware Group's investment tradition dates back to 1929. We have a long
and distinguished history of helping individuals and institutions including
some of America's largest pension funds reach their financial goals.
Headquartered in Philadelphia, a block from the nation's oldest stock
exchange, Delaware Group's first mutual fund was established in 1938.
Delaware International Advisers Ltd., our international affiliate, was
established in 1990 and is headquartered in London.
Delaware Group offers a full range of mutual funds. We also manage
annuity investments and closed-end funds, and offer retirement plan services
for individuals and businesses.
Delaware manages more than $38 billion in mutual fund assets and
institutional advisory accounts for more than half-a-million investors. We're
part of a global financial services and investment management business owned
by Lincoln National Corporation, whose subsidiaries manage more than $115
billion in assets.
growth of capital
A TRADITION OF SOUND INVESTING
Trend Fund Objective
To provide long-term capital appreciation by investing primarily in
securities of emerging and other growth-oriented companies.
(PHOTO OF ILLUSTRATION FROM GROWTH OF CAPITAL BROCHURE)
commitment
<PAGE>
professional management
professional management
More Than 68 Years Of Investment Experience has taught us that disciplined
strategies and prudent risk management are a sound approach to any market
environment.
goals
goals
Whatever Your Goals, the years ahead will be shaped by choices you make today.
Delaware offers many options that can be an appropriate part of a sound
investment plan.
service and guidance
service and guidance
Delaware Believes That The Guidance of a professional financial adviser is vital
to your long-term success. We are committed to providing you and your adviser
with the highest quality information and service.
(VARIOUS PHOTOS DEMONSTRATING SERVICE
AND GUIDANCE, PROFESSIONAL MANAGEMENT AND GOALS)
<PAGE>
AUGUST 8, 1997
(PHOTO OF WAYNE A. STORK, CHAIRMAN)
Dear Shareholder:
Fiscal 1997 was a disappointing year for most small company stocks.
Trend Fund had a +1.67% total return (based on Class A shares with
capital gains and dividends reinvested at net asset value) for the 12 months
ended June 30, 1997, a period when larger company stocks soared to new
heights.
Trend Fund did not perform well for most of the year. Your Fund faced
substantial challenges to preserve capital amid an increase in market
volatility in July 1996 and March 1997. Since the spring, however, the Fund's
results have been positive as well as competitive with mutual funds that have
similar objectives.
During the past fiscal year, your Fund's portfolio management team
has:
* enhanced its depth of experience by adding two veteran
analysts - John A. Heffern and Marshall T. Bassett;
* reaffirmed its commitment to fundamental research and
face-to-face meetings with executives;
* trimmed the number of holdings to concentrate on what
the team believes are the most promising small
companies; and,
* tightened stock selection criteria to focus on stocks
with a relatively high level of liquidity.
Partly as a result of this refocusing process under a new leadership
team, Trend Fund distributed a $1.26 per share long-term capital gain to
shareholders of record as of July 30, 1997. Since July 1996, management sold
positions in many small companies that had served the Fund well in the past but
appeared to have only modest potential for further capital appreciation.
We expect our efforts will take time to bear fruit. Because short-run
setbacks are inevitable, any investment in an aggressive growth mutual fund
should be viewed as a long-term commitment for at least five to seven years.
Investment success requires patience, even when the going gets tough.
Trend Fund's management team has taken a hard look at the Fund's holdings and
reaffirmed its commitment to fundamental research.
1 1997 annual report
<PAGE>
Average Annual Total Return
July 1, 1996 July 1, 1992
to June 30, 1997 to June 30, 1997
- -------------------------------------------------------------------------------
Trend Fund A Class +1.67% +18.45%
- -------------------------------------------------------------------------------
NASDAQ Industrial Index +7.01% +14.46%
Russell 2000 Growth Index +4.53% +15.12%
- -------------------------------------------------------------------------------
Lipper Capital Appreciation Fund Average +14.44% +15.94%
All performance quoted above assumes reinvestment of dividends and capital
gains. Trend Fund and Lipper Capital Appreciation Fund Average results are at
net asset value without effect of sales charges. Performance for all Fund
classes can be found on page 9. The Lipper Average consisted of 203 and 77
funds, respectively, for the 12 months and five years ended June 30, 1997.
The returns of aggressive growth funds are generally volatile,
offering potentially greater rewards for investors who are prepared to accept
a higher level of risk. For long-term investors, market volatility can
provide opportunity, and market history since the 1920s teaches us that small
company stocks have, over the long haul, been one of the best performing
asset classes. Although we can't offer any guarantees, we have every reason
to believe this historical trend remains intact. We will strive to continue
your Fund's long-term record of success, as shown above and on page 9.
On behalf of Delaware Group, I wish to thank you for your continuing
confidence in Trend Fund as it enters its 30th year.
Sincerely,
/s/ Wayne A. Stork
- ----------------------------------------------
Wayne A. Stork
Chairman, President and Chief Executive Officer
research & discipline
1997 annual report 2
<PAGE>
Introducing Your Fund's Portfolio Managers
Trend Fund's portfolio management team
is led by Gerald S. Frey (seated at center).
He is assisted by (clockwise) John A. Heffern,
Marshall T. Bassett, Judy Finger,
William H. Miller and Lori P. Wachs.
Trend Fund's portfolio management team
<TABLE>
<CAPTION>
Team Area of Years of
Member Previous Position Expertise Experience
- ------ ----------------- --------- ----------
<S> <C> <C> <C>
Gerald S. Frey Senior Director,
Morgan Grenfell Capital Management Technology Stocks 17
---------------------------------------------------------------------------------
Marshall T. Bassett Vice President, Morgan Stanley
Emerging Growth Group Business Services Stocks 11
---------------------------------------------------------------------------------
John A. Heffern Senior Vice President, NatWest Securities Financial Stocks 9
---------------------------------------------------------------------------------
Judy Finger Analyst, Fred Alger Management Health Care Stocks 8
---------------------------------------------------------------------------------
William H. Miller Analyst, Janney Montgomery Scott Technology Stocks 14
---------------------------------------------------------------------------------
Lori P. Wachs Equity-risk arbitrage, Goldman Sachs Consumer/Retail Stocks 7
</TABLE>
Performance Review
Our Team Approach
After several years of providing strong results, your Fund underperformed both
its benchmark and its peers in 1997. Market volatility increased and small cap
stocks were out of favor. We nevertheless enjoyed considerable success with
some of our business services stocks.
During fiscal 1997, amid an increase in market volatility, we
repositioned the portfolio and made operational adjustments that I believe
have built a firm foundation for your Fund's long-term future. By expanding
our portfolio management team, we reinforced our stock analysis capabilities.
Trend Fund had taken a team approach toward emerging growth stock
selection well before my predecessor, Edward N. Antoian, left in March. Lori
P. Wachs has been assisting in the selection of consumer stocks for the Fund
since 1992 while William H. Miller and Judy Finger joined the team in June
1995.
3 1997 annual report
<PAGE>
Portfolio Highlights
and Sector Diversification
June 30, 1997
Leisure & Lodging 9.4%
Computers & Electronics 20.9%
Telecommunications 4.3%
Other Capital Goods 6.8%
Other Consumer Goods & Services 13.5%
Retailing & Apparel 10.6%
Energy & Utilities 4.5%
Media 5.9%
Cash 8.6%
Healthcare 12.9%
Financial/Real Estate 2.6%
- -------------------------------------------------------------------------------
Percent of Net Assets
June 30, 1996 June 30, 1997
- -------------------------------------------------------------------------------
Market Value of Companies*
Less than $250 million 44.8% 24.9%
$250 million to $1.5 billion 44.9% 57.6%
Greater than $1.5 billion 10.3% 17.5%
Number of Stocks 163 116
Median Market Capitalization $295 million $371 million
Median Stock
Price-To-Earnings Ratio** 18x 21x
Beta*** 0.95 0.98
* Percent of net assets
** Based on a consensus of analysts' earnings estimates for fiscal 1998 as
reported by William O' Neil & Co., an investment research firm.
*** A measure of volatility relative to the S&P 500 Index based on monthly
returns for the past three years. Beta of the S&P 500 Index equals 1.0.
This past spring, we enhanced the Fund's team approach when we hired
John A. Heffern and Marshall T. Bassett. Individual team members have primary
responsibility for specific sectors. We meet regularly to review the Fund's
overall portfolio positioning. In my opinion, we cover the waterfront with
greater depth than ever and are poised to utilize our team's diverse range of
experience.
A New Benchmark
We now use the Russell 2000 Growth Index as our primary unmanaged benchmark
rather than the NASDAQ Industrial Index. In our opinion, the Russell 2000
Growth Index more closely reflects the average market capitalization of
stocks in your Fund's portfolio as well as the Fund's typical sector
weightings. Index stocks fit Frank Russell Co.'s definition of small rapidly
growing companies. We show your Fund's performance relative to these
unmanaged indexes on pages 6 and 9.
1997 annual report 4
<PAGE>
A Consistent Discipline
Your Fund's management team remains committed to investing in emerging growth
companies that we believe can profit from changing trends in society. We
believe it is always imperative to carefully examine the health of each
company we select for your Fund's portfolio, and it is especially important
in a difficult market for small cap stocks. One measure we regularly use to
evaluate capital appreciation potential is whether a company is selling at
less than its growth rate, the same discipline the Fund has successfully
employed for more than a decade.
We strive to benefit from the early phases of a company's life cycle,
a period that generally offers the greatest capital appreciation potential.
We look for what we believe are good, high quality companies selling at
attractive prices. As part of our research, we:
* use financial measures appropriate to each industry;
* study a company's history, strategic focus and competitive
environment; and,
* meet face-to-face with executives.
Strategic Positioning
Since June 1996, we've reduced the number of Fund holdings by 29% from 163 to
116 stocks. This has given our team the flexibility to more closely
scrutinize each company's operations and prospects. Our sector allocation
tends to parallel that of the Russell 2000 Growth Index.
Compared to a year ago, your Fund has modestly increased its
weighting in financial and industrial machinery stocks and substantially
reduced its position in some consumer sectors we believe were overvalued. The
Fund's weighting in technology stocks fluctuated in fiscal 1997 as we
responded to rapidly changing market conditions.
Our repositioning during fiscal 1997 led to an increase in your
Fund's portfolio turnover rate to 115%, higher than a year ago and greater
than the Fund's historical average. Going forward, I anticipate that, given
normal market conditions, annual turnover will probably be in the 90% to 110%
range, which would be modestly lower than the historical average for small
cap growth funds, as measured by Morningstar. (See page 15 for Trend's
historical turnover rates.)
We now cover the waterfront with greater depth than ever and are poised to
utilize our team's diverse range of experience.
strategy
5 1997 annual report
<PAGE>
<TABLE>
<CAPTION>
RESULTS BY SECTOR
Trend Fund vs. Russell 2000 Growth Index
- -----------------------------------------------------------------------------------------------
July 1, 1996 to June 30, 1997
Fund Position
Russell 2000 Relative to Russell 2000
Industry Group Trend Fund Growth Index Growth Index
- -----------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Technology -13.80% +6.90% Slightly Overweight
Consumer Services -8.27% +2.32% Twice that of Index
Healthcare -13.90% -7.63% Same as Index
Consumer Goods +19.70% +8.65% Slightly Overweight
Business Services +15.67% +12.29% Same as Index
</TABLE>
Performance is based on prices of stock holdings and index components and
does not include expenses.
The five sectors shown here represented 84% of Trend's holdings as of June 30,
1997. For complete Fund performance, see page 9.
Overall, your team's focus will be on individual stock selection
rather than trying to time the broad market. We will strive to keep the cash
component of your Fund at less than 10% of net assets.
Technology: Investors' Love-Hate Relationship
Investors had a love-hate relationship with technology stocks during fiscal
1997. While we achieved some success with companies such as EMC Corp., an
information storage device maker, we faced disappointments such as Inso Corp.,
a computer software maker and Komag Inc., which makes storage media for
small, high capacity, high speed disc drives. Our results in the technology
sector in fiscal 1997 were affected by investors' dislike of companies whose
short term earnings were lower than expectations. We are cautiously optimistic
that stocks in this sector will generally do well over the long term.
In evaluating technology companies, we take a multi-year perspective
and avoid investing in developing technologies whose prospects are highly
speculative. Instead, we focus on well-managed businesses that stand to
capitalize on technological change.
For example, many companies need to address "the year 2000 problem" -
the fact that many older computers won't easily adapt to a new millennium.
While some mutual fund managers have been focusing on businesses with
specific products to modify old systems, we believe many companies may simply
buy new systems. We have positioned Trend Fund's portfolio accordingly.
growth
1997 annual report 6
<PAGE>
Good News: A Healthy Consumer Sector
A majority of our selections in consumer goods stocks performed well during
the past year, partly as a result of a booming U.S. economy. We've increased
our position in some of your Fund's long-time holdings such as General
Nutrition Cos.(GNC), a retailer appealing to consumers who desire a healthy
lifestyle. We've also added new names such as Journal Register Co., a
newspaper publisher that went public this past spring. Its holdings include
the New Haven (Conn.) Register and The Trentonian in New Jersey.
GNC has been in your Fund's portfolio for several years, and we believe it is
a well-managed company that stands to benefit from the fact that vitamin
usage is at a record high. According to a Gallup poll, 40% of U.S. adults
take vitamins regularly, compared to just 33% five years ago. We're intrigued
by the fact that GNC plans to double advertising spending by the year 2000 to
capture market share.
Within some consumer industries, your Fund had its share of bitter
pills as well during fiscal 1997. For example, Wet Seal, the youth fashion
retailer, saw a slowdown in sales during the Christmas selling season and its
stock price suffered. We liquidated our position.
Healthcare Patience
Your Fund's performance in healthcare stocks was less than rewarding during
the past year. Our largest holding as of June 30, 1997, was a business we
also owned a year ago - American Oncology Resources. Based in Houston, the
company manages the practices of physicians who treat cancer patients. Its
share price declined substantially during July 1996 amid disappointing
earnings. Nevertheless, we believed the company had strong expansion
potential and we retained our position. American Oncology's share price has
recovered in recent months and as of June 30 was one of our top 10 holdings.
<TABLE>
<CAPTION>
Top Ten Holdings
June 30, 1997
- -------------------------------------------------------------------------------------------------
Company Main Product or Service Share of Net Assets
- -------------------------------------------------------------------------------------------------
<S> <C> <C>
Republic Industries Auto rentals/Waste disposal 2.8%
CUC International Consumer membership discounts 2.3%
CapStar Hotel Operates hotels 2.2%
General Nutrition Cos. Vitamin retailing 1.9%
Teleport Communications Local telephone service provider 1.7%
EMC Corp. Information storage devices 1.7%
Sunrise Assisted Living Assisted living facilities 1.6%
American Oncology Research Cancer treatment management 1.6%
Florida Panthers Holdings Hockey team, resorts 1.6%
Evergreen Media Radio broadcaster 1.5%
- -------------------------------------------------------------------------------------------------
Total 18.9%
</TABLE>
7 1997 annual report
<PAGE>
We had some success with pharmaceutical stocks. For example, Agouron
Pharmaceuticals makes drugs to treat AIDs-related diseases and was the Fund's
largest healthcare holding as of midyear. After the company's share price met
our target, we sold our position early in the second half, and thus avoided a
subsequent sharp price decline.
Business Services:
A Bright Spot
One of our more successful sectors during the year was business services.
Corporations continue to outsource non-core tasks to cut costs, and we
benefited from selecting small companies poised to fill this role. We did
especially well in the aerospace industry with companies such as Kellstrom
Industries, which refurbishes old jet engines for airliners.
But outsourcing has its limits. One disappointment in this area was
Individual Corp., which provides custom-tailored business data by repackaging
published and electronic news. We sold our position after our analysis showed
that potential customers were unwilling to pay extra for material that, in
many cases, can be retrieved on one's own via the Internet, wire services,
business periodicals and a direct search of public records.
Outlook
While small cap stocks have been showing signs of strength since the spring,
it is difficult to predict when stocks of small companies might outperform
those of large multinational businesses. The last such period - the early
1990s - was generally one of economic weakness for the U.S. economy, and we
see no signs of a recession looming on the horizon. By our estimate, small
cap stocks are selling at prices relative to large cap stocks below the
midpoint of a historical range, suggesting that small cap companies are
somewhat undervalued.
Historically, 75% to 80% of your Fund's net assets have been invested
in companies in four broad sectors - health care, business services,
technology and consumer goods and services. These have been and, we believe,
are likely to remain the most promising areas of economic growth as the U.S.
approaches a new millennium.
During 1997, I believe we have taken long-term steps to upgrade our
stock selection capability while retaining our historic investment
discipline. We've realigned responsibilities and brought a higher level of
focus to your Fund's portfolio. In my opinion, these efforts have the
potential to provide competitive results in the coming months.
Gerald S. Frey
Vice President and
Senior Portfolio Manager
August 8, 1997
By our estimate, small cap stocks, relative to large cap stocks, are selling at
prices below the midpoint of a historical range, suggesting that small
cap companies are somewhat undervalued.
outlook
1997 annual report 8
<PAGE>
Fund Performance
Trend Fund's
Long-Term Performance
Growth of a $10,000 Investment
Total Return July 1, 1987
through June 30, 1997
Trend Fund A Class ($38,798)
NASDAQ Industrial Index ($26,250)
Russell 2000 Growth Index ($23,576)
NASDAQ Russell 2000
Trend Fund A Industrial Index Growth Index
------------ ---------------- ------------
June '87 $ 9,530 $10,000 $10,000
June '88 $ 8,495 $ 9,130 $ 8,912
June '89 $11,832 $ 9,357 $ 9,827
June '90 $11,832 $11,073 $10,684
June '91 $12,874 $11,696 $10,746
June '92 $16,647 $13,350 $11,656
June '93 $22,514 $16,189 $14,040
June '94 $22,647 $15,851 $14,164
June '95 $28,172 $19,644 $17,832
June '96 $38,182 $24,645 $22,555
June '97 $38,798 $26,250 $23,576
For the 10-year period ended June 30, 1997, Trend Fund outperformed two
unmanaged benchmarks of the small cap stock market. The Russell 2000 Growth
Index is the Fund's primary benchmark. (See page 4 for more information.)
Performance shown above reflects a 4.75% front-end sales charge and
reinvestment of distributions. Returns for other classes will differ due to
different charges and expenses. Past performance does not guarantee future
returns.
<PAGE>
TREND FUND PERFORMANCE
Average Annual Return Through June 30, 1997
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Lifetime Ten Years Five Years One Year
- ---------------------------------------------------------------------------------------------------------------
Class A (Est. 10/3/68)
Excluding sales charge +9.31% +15.08% +18.45% +1.67%
Including sales charge +9.12% +14.52% +17.30% -3.16%
- ---------------------------------------------------------------------------------------------------------------
Class B (Est. 9/6/94)
Excluding sales charge +17.77% +0.96%
Including sales charge +16.97% -2.70%
- ---------------------------------------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding sales charge +12.63% +0.95%
Including sales charge +12.63% +0.03%
- ----------------------------------------------------------------------------------------------------------------
</TABLE>
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share value will fluctuate so that shares when
redeemed may be worth more or less than the original cost. Past performance is
not a guarantee of future results. B and C Class results "excluding sales
charge" assume investment was not redeemed.
Class A shares have a 4.75% front-end sales charge and a 12b-1 fee implemented
on June 1, 1992.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 4% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
The average annual total returns for the lifetime, ten-year, five-year and
one-year periods ended June 30, 1997, for Trend Fund's Institutional Class,
which is available without sales or asset-based distribution charges only to
certain eligible institutional accounts, were ,+9.35%, +15.21%, +18.72% and
+1.94%. The Institutional Class was initially made available November 9, 1992;
performance prior to that date was adjusted to eliminate the effect of the sales
charge, but not Class A's asset-based distribution charge in effect since June
1, 1992.
9 1997 annual report
<PAGE>
Financial Statements
Delaware Group Trend Fund, Inc.
Statement of Net Assets / June 30, 1997
- --------------------------------------------------------------------------------
Number Market
of Shares Value
------------------------
COMMON STOCK - 91.45%
Aerospace & Defense - 1.79%
AAR .............................................. 202,100 $ 6,530,356
*Kellstrom Industries ............................. 285,300 4,493,475
-----------
11,023,831
-----------
Banking, Finance & Insurance - 2.37%
*Long Beach Financial ............................. 72,300 632,625
Medallion Financial .............................. 244,100 4,622,644
Ocwen Asset Investment ........................... 293,600 5,927,050
Security Capital Pacific Trust ................... 149,600 3,422,100
-----------
14,604,419
-----------
Buildings & Materials - 0.48%
*Comfort Systems USA .............................. 188,200 2,940,625
-----------
2,940,625
-----------
Cable, Media, & Publishing - 5.94%
*Evergreen Media Class A .......................... 215,800 9,616,587
*Gemstar International Group ...................... 161,400 2,995,988
*HSN .............................................. 288,304 9,027,519
*Hollywood Entertainment .......................... 199,100 4,579,300
*Journal Register ................................. 195,500 3,885,563
*Metro Networks ................................... 95,600 2,330,250
*Norwood Promotional Products ..................... 284,700 4,128,150
-----------
36,563,357
-----------
Computers & Technology - 12.46%
*Activision ....................................... 203,918 2,931,321
*Aspect Development ............................... 170,400 4,435,725
*Black Box ........................................ 111,400 4,480,369
*Checkfree ........................................ 348,300 6,127,903
*Credit Management Solutions ...................... 230,000 2,961,250
*EMC .............................................. 267,200 10,420,800
*GTECH Holdings ................................... 206,200 6,649,950
*INSO ............................................. 165,700 3,443,453
*Komag ............................................ 328,300 5,386,172
*NOVA ............................................. 201,300 5,221,219
*PLATINUM Technology .............................. 576,132 7,705,765
*PSW Technologies ................................. 129,000 1,539,938
*Peerless Systems ................................. 411,500 5,761,000
*Puma Technology .................................. 173,300 1,462,219
*Veritas Software ................................. 161,600 8,100,200
-----------
76,627,284
-----------
Consumer Products - 0.82%
*Home Products International ...................... 102,200 1,015,613
*Racing Champions ................................. 222,100 3,428,669
*Zag Industries ................................... 57,800 587,031
-----------
5,031,313
-----------
Electronics & Electrical - 8.40%
*Aavid Thermal Technologies ........................ 137,900 2,818,331
<PAGE>
Number Market
of Shares Value
------------------------
COMMON STOCK (Continued)
Electronics & Electrical (Continued)
*Cypress Semiconductor ............................. 543,600 $ 7,882,200
*ITI Technologies .................................. 198,800 4,559,975
*KLA Instruments ................................... 92,700 4,522,022
*Micrel ............................................ 48,800 2,476,600
*P-COM ............................................. 268,800 8,836,800
Pittston Brink's Group ............................ 237,600 7,128,000
*Protection One .................................... 324,200 4,396,963
*Sipex ............................................. 253,500 9,030,938
-----------
51,651,829
-----------
Energy - 2.97%
*Patterson Energy .................................. 194,800 8,814,700
*Precision Drilling ................................ 195,100 9,437,963
-----------
18,252,663
-----------
Environmental Services - 4.74%
*Republic Industries ............................... 721,033 17,485,045
*Superior Services ................................. 178,500 4,205,906
*Tetra Technologies ................................ 105,700 2,503,769
*Veritas DGC ....................................... 203,400 4,627,350
*Waste Industries .................................. 19,500 344,906
-----------
29,166,976
-----------
Food, Beverage & Tobacco - 0.62%
*Cheesecake Factory ................................ 6,600 138,600
*United Natural Foods .............................. 177,200 3,665,825
-----------
3,804,425
-----------
Healthcare & Pharmaceuticals - 12.94%
ADAC Laboratories ................................. 172,200 4,068,225
*Alternative Living Services ....................... 187,400 4,204,788
*American Oncology Resources ....................... 590,600 9,929,463
*ArQule ............................................ 135,600 2,339,100
*Ariad Pharmaceuticals ............................. 393,900 2,511,113
*Capstone Pharmacy ................................. 537,600 5,829,600
*Cerus ............................................. 203,000 1,852,375
*DUSA Pharmaceuticals .............................. 311,200 1,925,550
*DepoTech .......................................... 237,200 3,217,025
*FPA Medical Management ............................ 220,000 5,211,250
*Guilford Pharmaceuticals .......................... 309,000 7,570,500
*Medical Resources ................................. 48,400 804,650
*Physician Sales and Service ....................... 247,000 4,700,719
*PMR ............................................... 160,300 3,787,088
*Renal Care Group .................................. 143,900 6,007,825
*Res-Care .......................................... 73,000 1,382,438
*Sunrise Assisted Living ........................... 285,300 10,021,163
*Vertex Pharmaceuticals ............................ 110,900 4,228,063
-----------
79,590,935
-----------
Industrial Machinery - 3.76%
*Central Sprinkler ............................. 209,900 5,588,588
*PRI Automation ................................ 189,800 7,200,538
*Spinnaker Industries Common ................... 164,428 4,850,626
- -------------------
Top 10 Holdings, representing 18.99% of the net assets are in bold face.
1997 annual report 10
<PAGE>
Number Market
of Shares Value
------------------------
COMMON STOCK (Continued)
Industrial Machinery (Continued)
*Spinnaker Industries Class A .................. 164,428 $ 5,508,338
-----------
23,148,090
-----------
Leisure, Lodging, & Entertainment - 9.36%
*Ascent Entertainment Group .................... 389,000 3,610,406
*CapStar Hotel ................................. 417,500 13,360,000
*Dave & Buster's ............................... 60,400 1,623,250
*Equity Marketing .............................. 260,500 6,252,000
*Extended Stay America ......................... 869,979 13,702,166
*Florida Panthers .............................. 409,000 9,867,125
*Mirage Resorts ................................ 182,200 4,600,550
*Morton's Restaurant Group ..................... 226,000 4,491,750
*Teardrop Golf ................................. 21,300 78,544
-----------
57,585,791
-----------
Metals & Mining - 0.37%
*Kaynar Technologies ........................... 123,200 2,263,800
-----------
2,263,800
-----------
Packaging & Containers - 1.29%
*Silgan Holdings ............................... 204,700 7,919,331
-----------
7,919,331
-----------
Real Estate - 0.25%
*CWM Mortgage Holdings ......................... 63,600 1,522,425
-----------
1,522,425
-----------
Retail - 9.60%
*Amazon.com .................................... 137,100 2,557,772
*Cost Plus ..................................... 285,000 7,374,375
Duty Free International ....................... 387,400 7,263,750
*Eagle Hardware & Garden ....................... 302,600 6,912,519
*General Nutrition ............................. 418,400 11,689,050
*Linens N Things ............................... 112,700 3,338,738
*Piercing Pagoda ............................... 184,900 4,622,500
Schultz Sav-O Stores .......................... 412,900 7,458,006
*Staples ....................................... 202,600 4,697,787
*Wilmar Industries ............................. 128,600 3,174,813
-----------
59,089,310
-----------
Telecommunications - 4.34%
*IntelCom Group ................................ 212,900 4,085,019
*Powerwave Technologies ........................ 52,500 1,181,250
*PageMart Wireless ............................. 466,500 3,994,406
*PairGain Technologies ......................... 96,600 1,500,319
*Telco Systems ................................. 444,000 3,912,750
*Teleport Communications Group ................. 312,300 10,637,719
*Yurie Systems ................................. 82,000 1,396,562
-----------
26,708,025
-----------
<PAGE>
Number Market
of Shares Value
------------------------
COMMON STOCK (Continued)
Textiles, Apparel, & Furniture - 0.95%
*Cyrk ............................................ 39,100 $ 454,538
*Quicksilver ..................................... 98,400 3,136,500
*Sport-Haley ..................................... 132,500 2,235,938
------------
5,826,976
------------
Transportation & Shipping - 0.47%
*Midwest Express Holdings ........................ 106,500 2,915,438
------------
2,915,438
------------
Utilities - 1.55%
*AES ............................................. 100,775 7,129,831
*York Research ................................... 311,400 2,393,888
------------
9,523,719
------------
Miscellaneous - 5.98%
*AHL Services .................................... 134,500 2,059,531
*CUC International ............................... 535,211 13,815,122
*Catalina Marketing .............................. 76,100 3,662,313
*NFO Research .................................... 208,575 5,318,663
Norrell ......................................... 210,800 6,956,400
*Pierce Leahy .................................... 66,000 1,188,000
*RCM Technologies ................................ 91,600 978,975
*TeleSpectrum Worldwide .......................... 397,100 2,804,519
------------
36,783,523
------------
Total Common Stock (cost $441,374,166) .......... $562,544,085
------------
Principal
Amount
REPURCHASE AGREEMENTS - 11.08%
With Chase Manhattan Bank 5.80% 7/1/97
(dated 6/30/97, collateralized by
$23,235,000 U.S. Treasury Notes 5.375%
due 11/30/97, market value $23,311,634) ....... $22,833,000 $22,833,000
With PaineWebber 5.80% 7/1/97 (dated
6/30/97, collateralized by $22,809,000
U.S. Treasury Notes 5.75% due 9/30/97,
market value $23,145,383) ..................... 22,683,000 22,683,000
With J.P. Morgan Securities 5.95% 7/1/97
(dated 6/30/97, collateralized by
$22,683,000 U.S. Treasury Notes
6.125% due 7/31/00, market value
$23,166,474) ................................. 22,683,000 22,683,000
-----------
Total Repurchase Agreements
(cost $68,199,000) ........................... 68,199,000
-----------
11 1997 annual report
<PAGE>
Statement of Net Assets (Continued)
- --------------------------------------------------------------------------------
TOTAL MARKET VALUE OF SECURITIES OWNED -
(cost $509,573,166) 102.53% ................................ $630,743,085
LIABILITIES NET OF RECEIVABLES AND OTHER ASSETS - (2.53%) ... (15,590,793)
-------------
NET ASSETS APPLICABLE TO 36,747,827 SHARES
($.50 par value) OUTSTANDING - 100% ........................ $615,152,292
=============
NET ASSET VALUE - TREND FUND A CLASS
($428,309,378 / 25,594,010 shares) ........................ $16.73
=============
NET ASSET VALUE - TREND FUND B CLASS
($55,047,035 / 3,362,432 shares) .......................... $16.37
=============
NET ASSET VALUE - TREND FUND C CLASS
($11,477,196 / 693,944 shares) ............................ $16.54
=============
NET ASSET VALUE - TREND FUND INSTITUTIONAL CLASS
($120,318,683 / 7,097,441 shares) ......................... $16.95
=============
- ---------------
*Non-income producing securities for the year ended 6/30/97
COMPONENTS OF NET ASSETS AT JUNE 30, 1997:
Common stock, $.50 par value, 500,000,000
shares authorized to the Fund with 125,000,000
shares allocated ........................................... $454,848,929
Accumulated net realized gain on investments ................ 39,133,444
Net unrealized appreciation of investments .................. 121,169,919
-------------
Total net assets ............................................ $615,152,292
=============
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
A CLASS TREND FUND
Net asset value A Class (A) ................................. $16.73
Sales Charge (4.75% of offering price or 4.96%, of the amount
invested per share) (B) .................................... 0.83
-------------
Offering price .............................................. $17.56
=============
- ---------------
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon redemption or repurchase of shares.
(B) See Buying Shares in the current Prospectus for purchases of $100,000 or
more.
See accompanying notes
<PAGE>
Delaware Group Trend Fund, Inc.
Statement of Operations
Year Ended June 30, 1997
- -----------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ..................................... $ 3,172,772
Dividends .................................... 2,443,512 $ 5,616,284
------------
EXPENSES:
Management fees .............................. 4,865,223
Distribution expense ......................... 1,771,092
Dividend disbursing and transfer agent fees
and expenses ................................ 1,423,639
Accounting fees and salaries.................. 237,684
Reports and statements to shareholders ....... 193,901
Registration fees ............................ 107,867
Professional fees ............................ 37,421
Taxes (other than taxes on income) ........... 27,717
Directors' fees .............................. 18,130
Custodian fees ............................... 14,668
Other ........................................ 75,666
------------
8,773,008
------------
NET INVESTMENT LOSS .......................... (3,156,724)
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain from investment transactions 48,355,873
Net change in unrealized appreciation
on investments .............................. (38,283,267)
------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS .............................. 10,072,606
------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................. $ 6,915,882
============
1997 annual report 12
<PAGE>
Delaware Group Trend Fund, Inc.
Statement of Changes in Net Assets
- --------------------------------------------------------------------------------
Year Ended Year Ended
06/30/97 06/30/96
-----------------------------
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment loss ............................ $ (3,156,724) $ (3,923,736)
Net realized gain from investment transactions . 48,355,873 69,081,802
Net change in unrealized appreciation .......... (38,283,267) 88,249,218
------------- -------------
Net increase in net assets resulting
from operations ............................... 6,915,882 153,407,284
------------- -------------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net realized gain from investment transactions:
Trend Fund A Class ............................ (39,963,160) (20,793,378)
Trend Fund B Class ............................ (3,093,202) (501,207)
Trend Fund C Class ............................ (553,950) (1)
Trend Fund Institutional Class ................ (11,579,487) (3,884,806)
------------- -------------
(55,189,799) (25,179,392)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Trend Fund A Class ............................ 827,810,264 370,792,059
Trend Fund B Class ............................ 31,657,228 28,458,862
Trend Fund C Class ............................ 10,068,458 6,737,178
Trend Fund Institutional Class ................ 68,208,309 112,722,496
Net asset value of shares issued upon
reinvestment of distributions from realized
gain on investment transactions:
Trend Fund A Class ............................ 37,772,429 18,929,896
Trend Fund B Class ............................ 2,938,833 454,494
Trend Fund C Class ............................ 538,254 1
Trend Fund Institutional Class ................ 10,448,339 3,296,199
------------- -------------
989,442,114 541,391,185
------------- -------------
<PAGE>
Year Ended Year Ended
06/30/97 06/30/96
------------------------------
Cost of shares repurchased:
Trend Fund A Class ................... (899,972,498) (309,975,910)
Trend Fund B Class ................... (12,647,535) (2,941,394)
Trend Fund C Class ................... (5,261,927) (761,331)
Trend Fund Institutional Class ....... (97,466,112) (46,152,789)
--------------- ---------------
(1,015,348,072) (359,831,424)
--------------- ---------------
Increase (decrease) in net assets derived
from capital share transactions ...... (25,905,958) 181,559,761
--------------- ---------------
NET INCREASE (DECREASE) IN NET ASSETS .... (74,179,875) 309,787,653
NET ASSETS:
Beginning of year ........................ 689,332,167 379,544,514
--------------- ---------------
End of year .............................. $ 615,152,292 $ 689,332,167
=============== ===============
See accompanying notes
13 1997 annual report
<PAGE>
Delaware Group Trend Fund, Inc.
Financial Highlights
June 30, 1997
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each
period was as follows:
<TABLE>
<CAPTION>
Trend Fund Class A
----------------------------------------------------------
Year Ended
6/30/97 6/30/96 6/30/95 6/30/94 6/30/93
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period.................................. $18.160 $14.210 $12.210 $13.980 $11.380
Income from investment operations
Net investment loss(1)............................................ (0.075) (0.127) (0.074) (0.042) (0.004)
Net realized and unrealized gain from investments................. 0.155 4.977 2.864 0.212 3.754
------- -------- -------- -------- --------
Net increase (decrease) in net assets from investment operations 0.080 4.850 2.790 0.170 3.750
------- -------- -------- -------- --------
Less dividends and distributions:
Distributions from net realized gain on investment transactions (1.510) (0.900) (0.790) (1.940) (1.150)
------- -------- -------- -------- --------
Total dividends and distributions................................. (1.510) (0.900) (0.790) (1.940) (1.150)
------- -------- -------- -------- --------
Net asset value, end of period........................................ $16.730 $18.160 $14.210 $12.210 $13.980
======= ======== ======== ======== ========
Total Return(2)....................................................... 1.67% 35.53% 24.40% 0.59% 35.24%
Ratios and supplemental data:
Net assets, end of period (000 omitted)........................... $428,309 $497,188 $318,933 $253,964 $219,826
Ratio of expenses to average net assets........................... 1.34% 1.31% 1.36% 1.37% 1.33%
Ratio of net investment loss to average net assets................ (0.47%) (0.79%) (0.58%) (0.72%) (0.61%)
Portfolio turnover................................................ 115% 90% 64% 67% 75%
Average commission rate paid(3)................................... $0.0594 $0.0557 N/A N/A N/A
</TABLE>
- ------------------
1 Years ended 1995, 1996 and 1997 per share information was based on the
average shares outstanding method.
2 Does not include maximum sales charge of 4.75% nor the 1% limited
contingent deferred sales charge that would apply in the event of certain
redemptions within 12 months of purchase of A Class shares.
3 Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.
1997 annual report 14
<PAGE>
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each
period were as follows:
<TABLE>
<CAPTION>
Trend Fund Class B Trend Fund Class C
----------------------------------------------------------
Period Period
Year Year 9/6/94(4) Year 11/29/95(4)
Ended Ended to Ended to
6/30/97 6/30/96 6/30/95 6/30/97 6/30/96
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $17.920 $14.130 $12.110 $18.090 $15.460
Income from investment operations:
Net investment loss(1) .................. (0.189) (0.248) (0.142) (0.197) (0.253)
Net realized and unrealized gain
from investments ........................ 0.149 4.938 2.162 0.157 3.233
------- ------- ------- ------- -------
Net increase (decrease) in net assets from
investment operations ................... (0.040) 4.690 2.020 (0.040) 2.980
------- ------- ------- ------- -------
Less dividends and distributions:
Distributions from net realized gain on
investment transactions ................. (1.510) (0.900) -- (1.510) (0.350)
------- ------- ------- ------- -------
Total dividends and distributions ........ (1.510) (0.900) -- (1.510) (0.350)
------- ------- ------- ------- -------
Net asset value, end of period ............... $16.370 $17.920 $14.130 $16.540 $18.090
======= ======= ======= ======= =======
Total Return(2) ............................. 0.96% 34.55% 16.68% 0.95% 19.66%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .. $55,047 $35,090 $5,175 $11,477 $6,359
Ratio of expenses to average net assets .. 2.09% 2.06% 2.12% 2.09% 2.06%
Ratio of net investment income to
average net assets ..................... (1.25%) (1.54%) (1.34%) (1.28%) (1.54%)
Portfolio turnover ....................... 115% 90% 64% 115% 90%
Average commission rate paid(3) .......... $0.0594 $0.0557 N/A $0.0594 $0.0557
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
Trend Fund Institutional Class
-----------------------------------------------------
Period
Year Year Year Year 11/23/9(4)
Ended Ended Ended Ended to
6/30/97 6/30/96 6/30/95 6/30/94 6/30/93
------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ......... $18.330 $14.300 $12.250 $13.990 $12.760
Income from investment operations:
Net investment loss(1) .................. (0.034) (0.087) (0.044) (0.002) (0.035)
Net realized and unrealized gain
from investments ........................ 0.164 5.017 2.884 0.202 1.615
------- ------- ------- ------- -------
Net increase (decrease) in net assets from
investment operations ................... 0.130 4.930 2.840 0.200 1.580
------- ------- ------- ------- -------
Less dividends and distributions:
Distributions from net realized gain on
investment transactions ................. (1.510) (0.900) (0.790) (1.940) (0.350)
------- ------- ------- ------- -------
Total dividends and distributions ........ (1.510) (0.900) (0.790) (1.940) (0.350)
------- ------- ------- ------- -------
Net asset value, end of period ............... $16.950 $18.330 $14.300 $12.250 $13.990
======= ======= ======= ======= =======
Total Return(2) ............................. 1.94% 35.88% 24.74% 0.83% 21.69%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .. $120,319 $150,695 $55,437 $13,499 $2,237
Ratio of expenses to average net assets .. 1.08% 1.06% 1.12% 1.15% 1.21%
Ratio of net investment income to
average net assets ..................... (0.21%) (0.54%) (0.34%) (0.50%) (0.49%)
Portfolio turnover ....................... 115% 90% 64% 67% 75%
Average commission rate paid(3) .......... $0.0594 $0.0557 N/A N/A N/A
</TABLE>
- ------------------
1 Years ended 1995, 1996 and 1997 per share information was based on the
average shares outstanding method.
2 Does not include contingent deferred sales charge which varies from 1-4%
depending upon the holding period for Class B and Class C shares.
3 Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.
4 Date of initial public offering. Ratios have been annualized and total
returns have not been annualized for Trend Fund B Class and Trend Fund C
Class. Ratios and total return have been annualized for Trend Fund
Institutional Class.
15 1997 annual report
<PAGE>
Delaware Group Trend Fund, Inc.
Notes to Financial Statements
June 30, 1997
- --------------------------------------------------------------------------------
Delaware Group Trend Fund, Inc. (The "Fund") is registered as a diversified
open-end investment company under the Investment Company Act of 1940, as
amended. The Fund is organized as a Maryland Corporation and offers four classes
of shares. The Trend Fund A Class carries a front-end sales charge of 4.75%. The
Trend Fund B Class carries a back-end deferred sales charge. Trend Fund C Class
carries a level load deferred sales charge and Trend Fund Institutional Class
has no sales charge. The Fund's objective is to seek to achieve capital
appreciation by investing in securities of emerging and other growth-oriented
companies.
1. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Money market instruments having less than 60
days to maturity are valued at amortized cost which approximates market value.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Fund on the basis of daily net assets of each class. Distribution expenses
relating to a specific class are charged directly to that class.
Repurchase Agreements - The Fund may invest in a pooled cash account along with
other members of the Delaware Group of Funds. The aggregate daily balance of the
pooled cash account is invested in repurchase agreements secured by obligations
of the U.S. Government. The respective collateral is held by the Fund's
custodian bank until the maturity of the respective repurchase agreements. Each
repurchase agreement is at least 100% collateralized. However, in the event of
default or bankruptcy by the counterparty to the agreement, realization of the
collateral may be subject to legal proceedings.
Other - Expenses common to all Funds within the Delaware Group of Funds are
allocated amongst the funds on the basis of average net assets. Security
transactions are recorded on the date the securities are purchased or sold
(trade date). Costs used in calculating realized gains and losses on the sale of
investment securities are those of the specific securities sold. Dividend income
is recorded on the ex-dividend date and interest income is recorded on the
accrual basis. The Fund declares and pays dividends from net investment income
and capital gains, if any, semi-annually.
Certain Fund expenses are paid through "soft dollar" arrangements with brokers.
The amount of these expenses is less than 0.01% of the Fund's average daily net
assets.
<PAGE>
The Fund declared distributions from net realized gains from security
transactions in the amount of $1.26, per share payable on August 7, 1997 to
shareholders of record as of July 30, 1997. The ex-dividend date was July 31,
1997.
Use of Estimates - The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
2. Investment Management and Other Transactions with Affiliates
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company, Inc. (DMC) the Investment Manager of the Fund,
an annual fee which is calculated daily at the rate of 0.75% on the average
daily net assets of the Fund less the fees paid to the unaffiliated directors.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to serve as dividend disbursing and transfer agent for the Fund. Effective
August 19, 1996, the Fund also engaged DSC to provide accounting services for
the Fund. Previously, fund personnel provided this service and the related costs
were recorded in salaries and other expense categories in the statement of
operations. For the year ended June 30, 1997, the Fund expensed $1,423,639 for
dividend disbursing and transfer agent services and $158,691 for accounting
services. At June 30, 1997, the Fund had a liability for such fees and other
expenses payable to DSC of $45,437.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class. For the year ended June 30, 1997,
DDLP earned $265,831 for commissions on sales of the Fund A Class shares.
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Fund. These officers, directors and employees are paid no compensation by
the Fund.
3. Investments
During the year ended June 30, 1997, the Fund made purchases of $679,724,031 and
sales of $729,293,994 of investment securities other than U.S. government
securities and temporary cash investments.
At June 30, 1997, the aggregate cost of securities for federal income tax
purposes was $509,801,506.
At June 30, 1997, unrealized appreciation for federal income tax purposes
aggregated $120,941,579 of which $148,298,736 related to unrealized appreciation
of securities and $27,357,157 related to unrealized depreciation of securities.
The Fund may invest up to 10% of its total assets in illiquid securities which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities. These securities, if any, have been
denoted in the Statement of Net Assets.
1997 annual report 16
<PAGE>
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
4. Capital Stock
Transactions in capital stock were as follows:
Year Ended Year Ended
6/30/97 6/30/96
Shares sold:
Trend Fund A Class ........................ 52,474,941 22,551,524
Trend Fund B Class ........................ 2,031,645 1,747,498
Trend Fund C Class ........................ 640,838 399,723
Trend Fund Institutional Class ............ 4,266,348 6,955,622
Shares issued upon reinvestment of dividends
from distributions and net realized gains
from investment transactions:
Trend Fund A Class ........................ 2,590,704 1,253,631
Trend Fund B Class ........................ 204,653 28,228
Trend Fund C Class ........................ 37,095 --
Trend Institutional Class ................. 708,843 216,362
----------- -----------
62,955,067 33,152,588
Shares repurchased:
Trend Fund A Class ........................ (56,846,419) (18,873,878)
Trend Fund B Class ........................ (831,622) (184,109)
Trend Fund C Class ........................ (335,440) (48,272)
Trend Institutional Class ................. (6,097,893) (2,827,946)
----------- -----------
(64,111,374) (21,934,205)
----------- -----------
Net Increase (decrease) ................... (1,156,307) 11,218,383
----------- -----------
5. Lines of Credit
The Fund has a committed line of credit for $24 million. No amount was
outstanding at June 30, 1997, or at any time during the fiscal year.
17 1997 annual report
<PAGE>
Delaware Group Trend Fund, Inc.
Report of Independent Auditors
- --------------------------------------------------------------------------------
To the Shareholders and Board of Directors
Delaware Group Trend Fund, Inc.
We have audited the accompanying statement of net assets of Delaware Group Trend
Fund, Inc. (the "Fund") as of June 30, 1997, and the related statement of
operations for the year then ended, the statements of changes in net assets for
each of the two years in the period then ended, and the financial highlights for
each of the periods indicated therein. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audits.
We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of June 30, 1997, by correspond ence with the Fund's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.
In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Trend Fund, Inc. at June 30, 1997, the results of its operations
for the year then ended, the changes in its net assets for each of the two years
in the period then ended, and the financial highlights for each of the periods
indicated therein, in conformity with generally accepted accounting principles.
/S/ ERNST & YOUNG LLP
Philadelphia, Pennsylvania
August 1, 1997
1997 annual report 18
<PAGE>
DELAWARE GROUP OF FUNDS
For Growth of Capital
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
For Total Return
Quantum Fund
Blue Chip Fund
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
For International Diversification
Emerging Markets Fund
New Pacific Fund
World Growth Fund
International Equity Fund
Global Assets Fund
Global Bond Fund
For Current Income
Delchester Fund
Strategic Income Fund
U.S. Government Fund
Delaware-Voyageur
U.S. Government
Securities Fund
Limited-Term Government Fund
For Tax-Exempt Current Income
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Exempt Funds*
Money Market Funds
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
* Available for the following states: AZ, CA, CO, FL, ID, IA, KS, MN, MO, ND,
NJ, NM, NY, OH, OR, PA, UT, WA, WI. Insured and intermediate bond funds are
available in selected states.
funds
Complete information on any Delaware Group fund can be found in each fund's
current prospectus. Prospectuses for all Delaware Group funds are available
from your financial adviser. Please read the prospectus carefully before you
invest or send money.
<PAGE>
This annual report is for the information of Trend Fund shareholders, but it
may be used with prospective investors when preceded or accompanied by a
current Prospectus for Trend Fund, which sets forth details about charges,
expenses, investment objectives and operating policies of the Fund. You
should read the prospectus carefully before you invest. Summary investment
results are documented in the Fund's current Statement of Additional
Information. The figures in this report represent past results which are not
a guarantee of future results. The return and principal value of an
investment in the Fund will fluctuate so that shares, when redeemed, may be
worth more or less than their original cost.
Board of Directors
Wayne A. Stork
Chairman, President and Chief Executive Officer Delaware Group of Funds
Philadelphia, PA
Walter P. Babich
Board Chairman, Citadel Constructors, Inc.
King of Prussia, PA
Anthony D. Knerr
Consultant, Anthony Knerr & Associates
New York, NY
Ann R. Leven
Treasurer, National Gallery of Art
Washington, DC
W. Thacher Longstreth
City Councilman
Philadelphia, PA
Charles E. Peck
Secretary/Treasurer, Enterprise Homes, Inc.
Fredericksburg, VA
<PAGE>
Affiliated Officers
George M. Chamberlain, Jr.
Senior Vice President and Secretary,
Delaware Group of Funds
Philadelphia, PA
David K. Downes
Senior Vice President, Chief Financial Officer and
Chief Administrative Officer
Delaware Group of Funds
Philadelphia, PA
Bruce D. Barton
President and CEO,
Delaware Distributors, L.P.
Philadelphia, PA
directors & officers
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Investment Manager
Delaware Management Company, Inc.
Philadelphia, Pennsylvania
International Affiliate
Delaware International Advisers Ltd.
London, England
National Distributor
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
Shareholder Servicing,
Dividend Disbursing
and Transfer Agent
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
<PAGE>
This report must be preceded or accompanied by a current Trend Fund
prospectus and the Delaware Group Fund Performance Update for the most
recently completed calendar quarter. For a prospectus of any other Delaware
Group fund, contact your financial adviser or Delaware Group.
(PHOTO OF GLOBES)
For Shareholders
1.800.523.1918
For Securities Dealers
1.800.362.7500
For Financial Institutions Representatives Only
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual
funds can be a valuable part of your financial plan; however, shares of the
Fund are not FDIC or NCUSIF insured, are not guaranteed by any bank or any
credit union, and involve investment risk, including the possible loss of the
principal amount invested. Shares of the Fund are not bank or credit union
deposits.
DELAWARE
GROUP
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Philadelphia * London
Printed in the USA on
recycled paper
(119)
AR-003[6/97]TKO8/97
(c) Delaware Distributors, L.P.
