<PAGE>
July 15, 1996
Dear
- ------------------------
Shareholder:
- ------------------------
The first half of 1996 was a difficult period for bond investors. Relatively
robust economic growth generated concern the Federal Reserve Board would
raise its target for short-term interest rates in order to fight inflation.
As a result, long-term bond prices fell. From the beginning of January
through June 30, the yield on 30-year U.S. Treasury bonds rose nearly 100
basis points (1%) to 6.89%. Prices of short-term fixed-income securities
also declined.
Despite this adverse environment, Limited-Term Government Fund provided a
positive total return of +0.61% for the six months ended June 30, 1996,
(for Class A shares at net asset value with dividends reinvested). That
compares favorably with the negative average total return of -0.17% of 94
mutual funds with similar objectives.
During the first half, your Fund achieved its objective of preserving the
value of your investment. Roger A. Early, the Fund's portfolio manager,
decided in the fall of 1995 to shorten the portfolio's average effective
duration. This helped mitigate the effect of rising rates on net asset value.
Striving to provide high current income consistent with reasonable
safety of principal is a delicate balancing act, especially in a volatile
bond market. Your Fund continues to favor short-term mortgage securities as a
way to maximize income from high quality government-backed securities.
In 1996, Mr. Early repositioned the portfolio in a way that we believe has
the potential to allow your Fund's net asset value to benefit should interest
rates decline and at the same time help preserve principal should interest
rates rise. Mr. Early details these adjustments in his report and reviews the
Fund's performance since December.
Patient bond market investors may recall that the very poor returns of 1994
were followed by a substantial recovery in 1995. While there is certainly no
guarantee that a rebound is at hand, we are cautiously optimistic that the
bond market's setback in the spring was temporary.
Inflation remains relatively modest. As long as there are no extreme changes
in Washington's fiscal policies, we believe that the long-term trend toward
higher bond prices since the early 1980s can resume once the U.S. Presidential
election is over.
==============================================================================
TOTAL RETURN
SIX MONTHS ENDED
JUNE 30, 1996
Limited-Term Government Fund A Class +0.61%
- ------------------------------------------------------------------------------
Lipper Short U.S.Government Fund
Average (94 funds) -0.17%
Merrill Lynch One-to-Three Year
Government Bond Index +1.39%
- ------------------------------------------------------------------------------
Limited-Term Government Fund A Class performance and that of the funds in the
Lipper Average is based on net asset value and reinvestment of all
distributions. For Fund performance for all classes, see page 5.
==============================================================================
1
<PAGE>
With Alan Greenspan's recent appointment to a second term as chairman of the
Federal Reserve Board, we believe the Fed will maintain a prudent monetary
policy that can prevent an acceleration in consumer inflation. In our opinion,
this bodes well for fixed-income investors.
We thank you for being among the more than 27,000 shareholders who have
chosen Limited-Term Government Fund to help meet their current income needs.
As always, Delaware Group stands ready to serve you as you strive to reach
your financial goals.
Sincerely,
/s/ Wayne A. Stork
- --------------------------------
Wayne A. Stork
CHAIRMAN, PRESIDENT AND CHIEF EXECUTIVE OFFICER
U.S. Treasury Yields Have Risen Since December
6/28/96 12/29/95
3 months 5.152% 5.072%
6 months 5.358 5.147
1 year 5.674 5.132
2 years 6.107 5.15
3 years 6.269 5.208
5 years 6.462 5.374
10 years 6.714 5.57
30 years 6.894% 5.949%
Source: Bloomberg Business News
THE DIFFERENCE BETWEEN YIELDS ON THREE-MONTH U.S. TREASURIES AND 30-YEAR
TREASURIES GREW FROM 88 BASIS POINTS (0.88%) TO MORE THAN 180 BASIS POINTS
(1.80%) DURING THE FIRST HALF OF 1996. TYPICALLY, SUCH A WIDE SPREAD OCCURS
DURING A PERIOD OF RISING INTEREST RATES AND FALLING BOND PRICES.
<PAGE>
Portfolio
- -----------------------
Manager's
- -----------------------
Review
- -----------------------
In early 1996, the bond market faced a winter of discontent as investors
tried to interpret government economic statistics that were skewed by the
effects of unusually bitter weather and sharp swings in commodity prices.
On January 31, the Federal Reserve Board reduced its target for short-term
interest rates by a quarter-point to 5.25%. Less than a month later, however,
the bond market began worrying that the Fed would raise rates in the wake of
reports that job growth was quite strong.
As you can see in the chart to the left, the U.S. Treasury yield curve has
become quite steep since December. That is, the difference between the
income from short-term U.S. Treasury bills and the income from long-term
bonds increased. In fact, the yield of one-year Treasury bills as of
June 30 -- 5.67% -- was greater than the yield of 10-year bonds just
six months earlier.
==============================================================================
PORTFOLIO HIGHLIGHTS
(AS OF JUNE 30, 1996)
AVERAGE EFFECTIVE DURATION 2.1 years
AVERAGE EFFECTIVE MATURITY 3.4 years
AVERAGE QUALITY AAA
30-DAY YIELD* 5.83%
LARGEST SOURCE OF INCOME -
MORTGAGE-BACKED SECURITIES
NUMBER OF SECURITIES 540
* For Class A shares measured according to SEC guidelines. Yield for Class
B and C shares was 5.15%.
==============================================================================
2
<PAGE>
THE FUND'S INVESTMENT STRATEGY
Limited-Term Government Fund seeks to strike a balance between capital
preservation and income. We invest in high quality U.S. government securities
and emphasize mortgage securities.
Since December, we have maintained the Fund's average effective duration at
approximately 2.1 years, a relatively conservative posture. Duration is the
most common measure of a bond's sensitivity to changes in interest rates.
It indicates the approximate percentage of change in a bond's price given a
1% change in interest rates.
By focusing on bonds maturing in two to three years, your Fund was able to
generate more than 90% of the income available from 10-year U.S. Treasury
Bonds at considerably less risk to principal should interest rates rise.
OUR POSITIONING IN MORTGAGES
During the first half of the fiscal year, we repositioned the portfolio to
put more emphasis on mortgage-backed securities rather than collateralized
mortgage obligations (CMOs), since prices of CMOs generally tend to be more
sensitive to changes in interest rates. Mortgage-backed securities are issued
by agencies such as the Government National Mortgage Association (Ginnie Mae)
and the Federal Home Loan Mortgage Association (Freddie Mac).
Investing in mortgages carries with it the risk that homeowners will prepay
the balances they owe when interest rates drop sharply. However, when rates
rise, prices of mortgage securities are often not as negatively affected as
prices of Treasuries. This has been true for much of 1996.
To position the Fund to benefit from any capital appreciation potential in
the bond market, we began purchasing "discount mortgages" during the last
six months. Generally, we purchased mortgages issued in the 6% to 6.5% range
for less than face value or par.
Homeowners who enjoy such "bargain" rates are unlikely to refinance even if
interest rates decline substantially from current levels. By buying mortgages
at a discount, we believe the Fund has a reliable stream of income and is in a
good position to benefit from any rebound in bond prices. Such mortgages
accounted for about 10% of the Fund's net assets as of June 30.
==============================================================================
Portfolio Mix
June 30, 1996
Mortgage Backed Securities 41.3%
Collateralized Mortgage Obligations (CMOs) 22.7%
Treasuries 22.6%
Asset-Backed Securities 6.6%
Agency Obligations 6.2%
Cash 0.6%
==============================================================================
MORTGAGES AND MORTGAGE-RELATED SECURITIES HISTORICALLY HAVE PROVIDED GREATER
INCOME THAN U.S. TREASURIES. AS OF JUNE 30, SUCH SECURITIES COMPRISED
MORE THAN HALF OF YOUR FUND'S HOLDINGS
3
<PAGE>
OUTLOOK
Given the Federal Reserve's success at keeping inflation at a modest 2% to 3%
level during the past five years, we believe the long-term outlook for bond
prices is not as pessimistic as recent market activity would suggest. However,
judging the short-term direction of U.S. interest rates is at best difficult.
In a potentially volatile environment, your Fund remains committed to
maximizing current income by investing in what we believe to be the most
attractive, high-quality bonds available.
As we look forward, current Treasury yields imply that the Federal Reserve
will raise its target for the Federal Funds rate (the rate banks charge each
other for overnight loans) to a range of 5.75% to 6.5% by mid-1997. We believe
it is unlikely the Fed will increase its target much beyond 6.25%, which
would be the highest short-term loan rate in six years.
Overall, our long-term belief is that the Fed will be able to keep inflation
under control for the rest of the decade. Based on this, the weak market in
bonds this year should not be viewed as a return to the 1970s, but as an
opportunity to selectively invest in a short-term government bond market
that we believe offers good value and attractive income potential.
/s/ Roger A. Early
- --------------------------
Roger A. Early
VICE PRESIDENT AND SENIOR PORTFOLIO MANAGER
JULY 15, 1996
A Perspective on
- --------------------------
Long-Term
- --------------------------
Performance
- --------------------------
Throughout its history, Limited-Term Government Fund has sought to provide
shareholders with an attractive level of current income from short-term
bonds. The Fund has also helped shareholders who reinvest dividends keep
ahead of inflation. As you can see on the next page, we have accomplished our
income goals. A $10,000 investment in Limited-Term Government Fund on June
30, 1986, would have grown to $18,135 as of June 30, 1996, based on Class A
shares with dividends reinvested.
Your Fund's average annual total return -- which averaged +6.13% for the 10
years ended June 30 -- was substantially higher than the +3.66% average annual
increase in consumer prices during the period, as measured by the U.S.
Consumer Price Index.
4
<PAGE>
Limited-Term Government Fund Class A vs. Inflation
- -------------------------------------------------------------------------------
$10,000 investment 1986-1996
Investment assumes a 3% front-end sales charge and dividends reinvested.
U.S. CONSUMER LIMITED-TERM
PRICE INDEX GOVERNMENT A
------------- ------------
6/86 $10,000 $ 9,700
6/87 $10,372 $10,231
6/88 $10,777 $10,926
6/89 $11,334 $11,765
6/90 $11,864 $12,722
6/91 $12,421 $14,015
6/92 $12,805 $15,592
6/93 $13,188 $16,697
6/94 $13,517 $16,461
6/95 $13,928 $17,529
6/96 $14,321 $18,135
Inflation based on U.S. Consumer Price Index
- -------------------------------------------------------------------------------
YOUR FUND HELPED INCREASE THE PURCHASING POWER OF YOUR INVESTMENT DOLLARS BY
PROVIDING A CUMULATIVE TOTAL RETURN (WITH REINVESTED DIVIDENDS) THAT WAS
NEARLY DOUBLE THE CUMULATIVE INCREASE IN CONSUMER PRICES FOR THE 10 YEARS ENDED
JUNE 30, 1996.
LIMITED-TERM GOVERNMENT FUND PERFORMANCE
Average Annual Return Through June 30, 1996
LIFETIME 10 YEARS FIVE YEARS ONE YEAR
Class A (Est.1985) +6.32% +6.13% +4.65% +0.38%
- -------------------------------------------------------------------------------
Class B (Est.1994)
Excluding Sales Charge +3.41% -- -- +2.58%
Including Sales Charge +2.99% -- -- +0.65%
- -------------------------------------------------------------------------------
Class C* (Est.1995)
Excluding Sales Charge +1.20%
Including Sales Charge +0.22%
*Aggregate return through June 30, 1996
RESULTS INCLUDE REINVESTMENT OF DISTRIBUTIONS. RETURN AND SHARE VALUE WILL
FLUCTUATE WITH RISING AND FALLING INTEREST RATES 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 returns reflect the impact of the 3% maximum sales charge and the
12b-1 fee. Fund's inception was November 24, 1985.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are subject to a deferred sales
charge of up to 2% if redeemed before the end of the fourth year. Class B was
initially offered on May 2, 1994. The six-month total return for Class B for
the period ending June 30 was +0.19% with distributions reinvested (excluding
sales charges).
Class C performance is for only seven months and may not be representative of
longer term results. C shares have a 1% annual distribution and service fee.
If redeemed within 12 months, a 1% contingent deferred sales charge applies.
Class C was initially offered on November 29, 1995. The six-month total
return for Class C for the period ended June 30 was +0.19% with distributions
reinvested (excluding sales charges).
The average annual total returns for the lifetime, 10-year, five-year,
one-year and six-month periods ended June 30, 1996, for Limited-Term
Government Fund's Institutional Class, available without sales or asset-based
distribution charges only to certain institutional accounts, were +6.75%,
+6.59%, +5.44%, +3.60% and +0.68%.
5
<PAGE>
Limited-Term Government Fund Dividend History
- -----------------------------------------------------------------------------
$10,000 INVESTMENT 1986-1996
TOTAL DIVIDENDS $10,551
Jul-87 $711
Jul-88 $781
Jul-89 $942 REINVESTMENT OF DIVIDENDS
Jul-90 $1,031 HAS THE POTENTIAL TO INCREASE
Jul-91 $1,105 YOUR INCOME IN FUTURE YEARS.
Jul-92 $1,153
Jul-93 $1,122
Jul-94 $1,127
Jul-95 $1,316
Jul-96 $1,264
Chart assumes $10,000 investment in Limited-Term Government Fund A on June
30, 1986, and includes the impact of the 3% sales charge, the 12b-1 fee and
the reinvestment of all distributions. Dividends for B and C Class shares can
be expected to be lower than A Class dividends due to different sales charges
and expenses.
- -----------------------------------------------------------------------------
HOW DURATION CAN AFFECT BOND PRICES
IF INTEREST RATES... RISE 100 BASIS POINTS (1%) FALL 100 BASIS POINTS (1%)
- -------------------- -------------------------- --------------------------
EFFECTIVE DURATION PROBABLE CHANGE IN PRICE PROBABLE CHANGE IN PRICE
Two Years -1.8% +1.9%
Five Years -4.1% +4.3%
20 Years -10.6% +12.5%
The above illustration is not intended to represent the past or future
performance of Limited-Term Government Fund. It assumes a high quality bond
paying 6% interest and does not show changes in mortgage prepayment risk or
credit risk. These additional risks may increase principal losses when rates
rise and reduce capital appreciation potential when rates fall.
- ------------------------------------------------------------------------------
MAINTAINING A SHORT EFFECTIVE DURATION HAS THE POTENTIAL TO MINIMIZE
FLUCTUATIONS IN PRINCIPAL, BUT IT DOES NOT ENTIRELY ELIMINATE THE NEGATIVE
EFFECT OF RISING INTEREST RATES. WE BELIEVE THE INCOME THAT A SHORT-TERM BOND
FUND CAN PROVIDE HAS THE POTENTIAL TO HELP REDUCE THIS RISK.
6
<PAGE>
Financial
- -------------------------------
Statements
- -------------------------------
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUND, INC.-
LIMITED-TERM GOVERNMENT FUND
STATEMENT OF INVESTMENTS
JUNE 30, 1996
(UNAUDITED)
Principal Market
Amount Value
U.S. TREASURY OBLIGATIONS - 22.66%
U.S. Treasury Notes 5.75% 10/31/00 ......... $ 29,000,000 $ 28,261,367
U.S. Treasury Notes 6.125% 5/15/98 ......... 80,000,000 80,069,592
U.S. Treasury Notes 8.125% 2/15/98 ......... 22,100,000 22,802,778
------------
Total U.S. Treasury Obligations
(Cost $132,462,735) ....................... 131,133,737
------------
GOVERNMENT NATIONAL MORTGAGE
ASSOCIATION OBLIGATIONS
(GNMA) - 19.18%
GNMA 8.00% 2016 to 2017 ................... 14,212,867 14,446,800
GNMA 9.00% 2016 to 2022 ................... 60,030,136 63,444,864
GNMA 10.00% 2016 to 2018 .................. 1,457,022 1,589,975
GNMA 10.50% 2015 to 2016 .................. 546,054 602,195
GNMA 11.00% 2000 to 2020 .................. 7,107,016 7,953,766
GNMA 11.50% 2015 to 2019 .................. 111,062 125,743
GNMA 12.50% 2010 to 2015 .................. 291,310 337,556
GNMA GPM (Graduated Payment
Mortgage) 11.50% 2010 to 2013 .............. 242,499 274,554
GNMA GPM 12.00% 2010 to 2012 ............... 119,783 137,264
GNMA GPM 12.25% 2013 to 2014 ............... 325,217 374,711
GNMA GPM 13.75% 2014 ...................... 122,557 138,681
GNMA II 9.50% 2020 to 2021 ................. 6,413,561 6,830,873
GNMA II 9.75% 2016 to 2019 ................. 738,195 793,330
GNMA II 10.00% 2020 ....................... 4,442,489 4,782,508
GNMA II 10.50% 2020 ....................... 272,310 296,307
GNMA II 11.00% 2015 ....................... 2,162,957 2,371,818
GNMA II 11.50% 2017 to 2018 ................ 627,856 696,724
GNMA II 12.00% 2014 to 2016 ................ 4,114,785 4,622,705
GNMA II 12.50% 2013 to 2014 ................ 1,053,210 1,196,709
------------
Total Government National Mortgage
Association Obligations
(Cost $111,249,015) ....................... 111,017,083
------------
<PAGE>
Principal Market
Amount Value
COLLATERALIZED MORTGAGE
OBLIGATIONS (CMO) - 22.69%
Citicorp Mortgage Securities
1990- 10 A5 9.50% 7/25/05 .................... $ 976,887 $ 989,031
Federal Home Loan Mortgage Corporation
31D 7.55% 5/15/20 ........................... 786,119 790,235
Federal Home Loan Mortgage Corporation
1260E 8.00% 10/15/04 ........................ 1,910,979 1,921,015
Federal Home Loan Mortgage Corporation
1276H 8.00% 9/15/06 ......................... 20,413,000 20,921,020
Federal Home Loan Mortgage Corporation
1126I 8.50% 10/15/19 ........................ 11,827,476 11,973,876
Federal Home Loan Mortgage Corporation
69F 9.00% 12/15/05 .......................... 2,386,929 2,476,173
Federal Home Loan Mortgage Corporation
26F 9.50% 2/15/20 ........................... 8,429,110 8,994,606
Federal Home Loan Mortgage Corporation
139F 9.50% 6/15/20 .......................... 5,725,802 5,914,232
Federal National Mortgage Association
G-1 6.50% 3/1/09 ............................ 841,816 814,457
Federal National Mortgage Association
G-19H 8.40% 6/25/20 ......................... 10,000,000 10,287,500
Federal National Mortgage Association
1989-58E 8.50% 9/25/18 ...................... 5,760,620 5,878,162
Federal National Mortgage Association
1990-128H 8.50% 12/25/19 .................... 11,286,579 11,572,366
Federal National Mortgage Association
1990-137D 9.00% 12/25/18 .................... 10,262,859 10,401,369
Federal National Mortgage Association
1990-23G 9.20% 12/25/18 ..................... 6,410,724 6,547,629
Federal National Mortgage Association
1989-15D 10.00% 9/25/18 ..................... 1,308,277 1,343,575
Federal National Mortgage Association
1989-1C 10.30% 3/25/18 ...................... 1,639,387 1,696,704
Federal National Mortgage Association
1989-19A 10.30% 4/25/19 ..................... 6,570,236 7,177,417
Federal National Mortgage Association
46-2 11.00% 12/25/03 ........................ 4,456,005 4,812,485
Investors Securities Trust 1984-4 F5
10.875% 10/25/13 ............................ 197,597 217,799
Prudential Home Mortgage Securities
1992-2 A17 8.30% 3/25/07 .................... 2,091,206 2,136,258
Resolution Trust Mortgage Securities
1995-C1 6.55% 2/25/27 ....................... 6,535,000 6,516,620
Travelers Mortgage Securities
1984-1Z2 12.00% 3/1/14 ...................... 7,092,519 7,979,084
------------
Total Collateralized Mortgage Obligations
(Cost $130,355,829) ......................... 131,361,613
------------
7
<PAGE>
Statement of Net Assets (Continued)
Principal Market
Amount Value
ASSET-BACKED SECURITIES - 6.60%
Ammes Mortgage Trust 1994
DI AIA 9.00% 2/15/27 .......................... $12,272,601 $12,530,325
FirstBank Auto Receivables Grantor Trust
1995-B A 6.40% 7/17/00 ........................ 7,454,613 7,473,217
Olympic Automobile Receivables Trust
1995-B A2 7.35% 10/15/01 ...................... 4,029,512 4,078,269
UCFC Home Equity Loan Trust
1995-C1 A2 6.575% 6/10/11 ...................... 9,200,000 9,136,520
World Omni Automobile Lease Securitization
Trust 1995-A A 6.05% 11/25/01 .................. 5,000,000 4,973,500
------------
Total Asset-Backed Securities
(Cost $38,103,831) ............................ 38,191,831
------------
AGENCY OBLIGATIONS - 6.18%
Federal Home Loan Bank
BN-02 1 6.297% 11/20/02 ....................... 25,000,000 24,609,375
Federal Home Loan Bank
BI-02 A 6.457% 11/20/02 ....................... 11,300,000 11,169,344
------------
Total Agency Obligations
(Cost $36,272,312) ............................ 35,778,719
------------
AGENCY MORTGAGE-BACKED
SECURITIES - 22.11%
Federal Home Loan Mortgage Corporation
6.00% 2/1/11 to 5/1/11 ........................ 32,051,305 30,348,581
Federal Home Loan Mortgage Corporation
8.00% 3/1/09 to 7/1/11 ........................ 13,527,660 13,777,021
Federal Home Loan Mortgage Corporation
8.50% 12/1/08 to 11/1/10 ...................... 3,586,135 3,703,071
Federal Home Loan Mortgage Corporation
8.75% 5/1/10 .................................. 1,193,880 1,246,485
Federal Home Loan Mortgage Corporation
9.00% 6/1/09 to 1/1/24 ........................ 12,783,775 13,343,132
Federal Home Loan Mortgage Corporation
9.50% 11/1/05 ................................. 4,825,261 5,027,319
Federal Home Loan Mortgage Corporation
11.00% 9/1/10 to 11/1/15 ...................... 923,404 1,024,085
Federal Home Loan Mortgage Corporation
11.50% 3/1/01 to 3/1/16 ....................... 7,207,568 8,088,251
Federal National Mortgage Association
6.50% 12/1/10 ................................. 9,671,688 9,360,380
<PAGE>
Principal Market
Amount Value
AGENCY MORTGAGE-BACKED
SECURITIES (Continued)
Federal National Mortgage Association
8.00% 7/1/02 to 7/1/23 ........................ $ 2,918,800 $ 2,962,456
Federal National Mortgage Association
8.50% 8/1/07 to 8/1/17 ........................ 15,837,607 16,382,398
Federal National Mortgage Association
9.00% 8/1/04 to 4/1/16 ........................ 3,957,889 4,154,752
Federal National Mortgage Association
9.25% 7/1/08 to 8/1/16 ........................ 2,767,120 2,940,065
Federal National Mortgage Association
10.00% 1/1/19 ................................. 1,067,191 1,157,569
Federal National Mortgage Association
11.00% 8/1/10 to 8/1/20 ....................... 12,523,261 13,991,502
Federal National Mortgage Association
12.50% 2/01/11 ................................ 218,563 249,162
Federal National Mortgage Association
13.00% 7/01/15 ................................ 178,518 203,622
------------
Total Agency Mortgage-Backed Securities
(Cost $127,074,951) ........................... 127,959,851
------------
REPURCHASE AGREEMENTS - 0.58%
With Chase Manhattan Bank 5.40%
7/1/96 (dated 6/28/96, collateralized
by $1,133,000 U.S. Treasury Notes
7.75% due 1/31/00,
market value $1,216,823) ...................... 1,188,000 1,188,000
With J.P. Morgan Securities 5.40% 7/1/96
(dated 6/28/96, collateralized by
$1,097,000 U.S. Treasury Notes
6.25% due 8/31/00
market value $1,111,523 ........................ 1,085,000 1,085,000
With PaineWebber 5.40% 7/1/96
(dated 6/28/96, collateralized by
$225,000 U.S. Treasury Notes 8.50%
due 4/15/97 market value $233,744
and $856,000 U.S. Treasury Notes
6.875% due 4/30/97
market value $874,050) ........................ 1,085,000 1,085,000
------------
Total Repurchase Agreements
(Cost $3,358,000) ............................. 3,358,000
------------
TOTAL MARKET VALUE OF SECURITIES
OWNED -100.00%
(Cost $578,876,673) ........................... $578,800,834
8
<PAGE>
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.
LIMITED-TERM GOVERNMENT FUND
STATEMENT OF ASSETS AND LIABILITIES
JUNE 30, 1996
(UNAUDITED)
ASSETS:
Investments at market .......................................... $578,800,834
Receivable for investment securities sold ...................... 26,545,940
Interest receivable ............................................ 5,056,426
Cash ........................................................... 2,274,044
Other assets ................................................... 264,049
------------
Total assets ................................................... 612,941,293
------------
LIABILITIES:
Payable for investment securities purchased .................... 20,167,391
Other accounts payable and accrued expenses .................... 6,594,637
------------
Total Liabilities .............................................. 26,762,028
------------
TOTAL NET ASSETS APPLICABLE TO 61,334,441
LIMITED-TERM GOVERNMENT FUND A CLASS SHARES
1,446,319 LIMITED-TERM GOVERNMENT FUND B
CLASS SHARES, 164,606 LIMITED-TERM GOVERNMENT
FUND C CLASS SHARES AND 3,632,671 LIMITED-
TERM GOVERNMENT FUND INSTITUTIONAL
CLASS SHARES ($.001 PAR VALUE) OUTSTANDING;
EQUIVALENT TO $8.80 PER SHARE .................................. $586,179,265
------------
See accompanying notes
COMPONENTS OF NET ASSETS AT
JUNE 30, 1996:
Common stock, $.001 par value,
2,000,000,000 shares authorized to the
Limited-Term Government Fund with
950,000,000 shares allocated to
Limited-Term Government Fund
A Class, 200,000,000 shares allocated to
Limited-Term Government Fund B Class,
50,000,000 shares allocated to
Limited-Term Government Fund C Class
and 200,000,000 shares allocated to
Limited-Term Government Fund
Institutional Class ...................................... $ 716,762,567
Accumulated undistributed loss:
Net investment income .................................... 4,035
Net realized loss on investments ......................... (128,755,248)
Net unrealized appreciation of
investments and futures contracts ........................ (1,832,089)
--------------
Total net assets ......................................... $ 586,179,265
==============
9
<PAGE>
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.-
LIMITED-TERM GOVERNMENT FUND
STATEMENT OF OPERATIONS
JUNE 30, 1996
(UNAUDITED)
INVESTMENT INCOME:
Interest ....................................... $ 25,225,162
EXPENSES:
Management fees ($1,616,397) and
directors' fees ($4,183) ...................... $ 1,620,580
Dividend disbursing and transfer
agent fees and expenses ........................ 581,763
Distribution expenses .......................... 510,583
Salaries ....................................... 91,677
Reports and statements to shareholders ......... 60,055
Registration fees .............................. 30,700
Taxes (other than income) ...................... 19,473
Professional fees .............................. 13,979
Other .......................................... 22,158 2,950,968
----------- ------------
NET INVESTMENT INCOME .......................... 22,274,194
------------
NET REALIZED LOSS AND
UNREALIZED GAIN ON INVESTMENTS:
Net realized loss from security
transactions ................................... (8,314,601)
Net realized loss from futures contracts ....... (462,258) (8,776,859)
Net unrealized depreciation of
investments and futures contracts
during the period .............................. (9,054,450)
------------
NET REALIZED AND UNREALIZED
LOSS ON INVESTMENTS ............................ (17,831,309)
------------
NET INCREASE IN NET ASSETS
RESULTING FROM OPERATIONS ...................... $ 4,442,885
============
<PAGE>
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.-
LIMITED-TERM GOVERNMENT FUND
STATEMENTS OF CHANGES IN NET ASSETS
JUNE 30, 1996
Six Months Year
Ended Ended
6/30/96 12/31/95
(Unaudited)
OPERATIONS:
Net investment income ........................ $ 22,274,194 $ 60,161,119
Net realized loss from
investment transactions ...................... (8,776,859) (29,734,372)
Net unrealized appreciation (depreciation)
during the period ............................ (9,054,450) 34,845,517
------------- -------------
Net increase (decrease)
in net assets resulting from operations ...... 4,442,885 65,272,264
------------- -------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
Limited-Term Government Fund A Class ......... (20,671,873) (56,577,137)
Limited-Term Government Fund C Class ......... (384,759) (164)
Limited-Term Government Fund
Institutional Class .......................... (22,975) (2,903,493)
Limited-Term Government Fund B Class ......... (1,190,552) (680,325)
------------- -------------
(22,270,159) (60,161,119)
------------- -------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Limited-Term Government Fund A Class ......... 22,008,103 71,418,543
Limited-Term Government Fund B Class ......... 2,088,954 7,816,855
Limited-Term Government Fund C Class ......... 1,435,148 33,130
Limited-Term Government Fund
Institutional Class .......................... 4,152,465 9,883,383
Net asset value of share issued upon
reinvestment of dividends from net
investment income:
Limited-Term Government Fund A Class ......... 13,428,234 37,152,037
Limited-Term Government Fund B Class ......... 246,367 423,812
Limited-Term Government Fund C Class ......... 20,885 164
Limited-Term Government Fund
Institutional Class .......................... 1,188,230 2,894,542
------------- -------------
44,568,386 129,622,466
------------- -------------
10
<PAGE>
Statement of Changes in Net Assets (Continued)
Six Months Year
Ended Ended
6/30/96 12/31/95
Cost of shares repurchased:
Limited-Term Government Fund A Class ..... $(132,352,629) $(249,515,275)
Limited-Term Government Fund B Class ..... (1,558,589) (2,226,367)
Limited-Term Government Fund C Class ..... (21,248) (650)
Limited-Term Government Fund
Institutional Class ...................... (9,886,108) (12,779,876)
------------- -------------
(143,818,574) (264,522,168)
------------- -------------
Decrease in net assets derived from
capital share transactions ............... (99,250,188) (134,899,702)
------------- -------------
NET DECREASE IN NET ASSETS ............... (117,077,462) (129,788,557)
NET ASSETS:
Beginning of period ...................... 703,256,727 833,045,284
------------- -------------
End of period ............................ $ 586,179,265 $ 703,256,727
============= =============
See accompanying notes
DELAWARE GROUP LIMITED-TERM
GOVERNMENT FUNDS, INC.-
LIMITED-TERM GOVERNMENT FUND
NOTES TO FINANCIAL STATEMENTS
JUNE 30, 1996
(UNAUDITED)
Delaware Group Limited-Term Government Funds, Inc.-Limited-Term Government
Fund, (formerly known as Delaware Group Treasury Reserves, Inc.-Treasury
Reserves Intermediate Series)(the "Fund"), a series of Delaware Group
Limited-Term Government Funds, Inc., (the "Company"), is registered as a
diversified open-end investment company under the Investment Company Act of
1940, as amended. The Company is organized as a Maryland corporation. The
Fund offers four classes of shares.
1.Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund:
Security Valuation - Securities listed on an exchange are valued at the last
quoted sales price as of 4:00 p.m. on the valuation date. Securities not
listed on an exchange are valued at the mean of the last quoted bid and asked
prices. Long-term debt securities are valued by an independent pricing
service and such prices are believed to reflect the fair value of such
securities. Money market instruments having less than 60 days maturity
are valued at amortized cost.
Federal Income Taxes - The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes is required in the
financial statements.
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 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.
Class Accounting - Expenses directly attributable to a class are charged to
that class. Other common expenses are prorated between all classes of the Fund.
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.
Interest income is recorded on an accrual basis. Original issue discounts are
accreted to interest income over the lives of the respective securities.
The Fund declares dividends from net investment income daily and pays such
dividends monthly. Certain Fund expenses are paid directly by brokers. The
amount of these expenses is less than 0.01% of the Fund's average net assets.
11
<PAGE>
Notes to Financial Statements (Continued)
2.Investment Management Fee and Distribution Agreements
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 0.50% of the average daily
net assets of the Fund, less fees paid to the independent directors. At
June 30, 1996, the Fund had a liability for Investment Management fees and
other expenses payable to DMC for $2,392.
Pursuant to the Distribution Agreement, the Fund may pay Delaware
Distributors, L.P. (DDLP), the Distributor and an affiliate of DMC, an annual
12b-1 fee not to exceed 0.30% (currently, no more than 0.15% pursuant to
Board Action)of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B Class and the C Class. No distributions
expenses are paid by the Institutional Class. At June 30, 1996, the Fund had
a liability for distribution fees and other expenses payable to DDLP for
$12,989. For the six months ended June 30, 1996, the Fund paid DDLP $59,098
for commissions earned on sales of Limited-Term Government Fund A shares.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of
DMC, to serve as dividend disbursing and transfer agent for the Fund. For the
six months ended June 30, 1996, the Fund expensed $581,763 for these
services. At June 30, 1996, the Fund had a liability for such fees and other
expenses payable to DSC for $561.
Certain officers of the Investment Manager are officers, directors, and/or
employees of the Fund. These officers, directors, and employees are paid no
compensation by the Fund.
3. Investments
During the six months ended June 30, 1996, the Fund made purchases of
$159,559,963 and sales of $148,674,072 of investment securities other than
U.S. government securities and temporary cash investments.
At June 30, 1996, unrealized depreciation for federal income tax purposes
aggregated $1,832,089 of which $3,453,527 related to unrealized appreciation
of securities and $5,285,616 related to unrealized depreciation of securities
and futures contracts.
The realized loss for federal income tax purposes was $8,776,859 for the six
months ended June 30, 1996. For federal income tax purposes, the Fund had
accumulated capital losses of $119,978,389 at December 31, 1995, which may be
carried forward and applied against future capital gains. The capital loss
carryforward expires as follows: 1996-$859,564, 1997-$574,266, 1998-$707,105,
2001-$2,978,605, 2002-$85,079,081 and 2003-$29,779,768.
The Fund has financial futures contracts open at June 30, 1996, as follows:
CONTRACTS UNDERLYING
TO DELIVER FACE AMOUNT EXPIRATION DATE UNREALIZED LOSS
- ---------- ----------- --------------- ---------------
1,150 Five-Year $119,856,250 September 1996 $1,756,250
Treasury Note
Contracts
The market value of investments pledged to cover margin requirements for open
positions at June 30, 1996, was $3,095,400.
<PAGE>
4.Capital Stock
Transactions in capital stock shares were as follows:
Six Months Year
Ended Ended
6/30/96 12/31/95
Shares sold:
Limited-Term Government Fund A Class ........... 2,458,048 7,879,835
Limited-Term Government Fund B Class ........... 232,685 861,864
Limited-Term Government Fund C Class ........... 161,020 3,670
Limited-Term Government Fund
Institutional Class ............................ 463,280 1,090,957
Shares issued upon reinvestment of dividends
from net investment income:
Limited-Term Government Fund A Class ........... 1,507,998 4,098,270
Limited-Term Government Fund B Class ........... 27,687 46,761
Limited-Term Government Fund C Class ........... 2,361 18
Limited-Term Government Fund
Institutional Class ............................ 133,737 319,328
----------- -----------
4,986,816 14,300,703
----------- -----------
Shares repurchased:
Limited-Term Government Fund A Class ........... (14,863,094) (27,536,002)
Limited-Term Government Fund B Class ........... (175,147) (246,005)
Limited-Term Government Fund C Class ........... (2,391) (72)
Limited-Term Government Fund
Institutional Class ............................ (1,105,091) (1,410,138)
----------- -----------
(16,145,723) (29,192,217)
----------- -----------
Net decrease ................................... (11,158,907) (14,891,514)
=========== ===========
5. Concentration of Credit Risk
The Fund invests in securities whose value is derived from an underlying pool
of mortgages or consumer loans. Prepayment of these loans may shorten the
stated maturity of the respective obligation and may result in a loss of
premium, if any has been paid.
The Fund engaged in trading financial futures contracts during the six month
ended June 30, 1996. The Fund is exposed to market risk as a result of
changes in the value of the underlying financial instruments. Investments in
financial futures require the Fund to "mark to market" on a daily basis,
which reflects the change in the market value of the contract at the close of
each day's trading. Accordingly, variation margin payments are made or
received to reflect daily unrealized gains or losses. When the contracts are
closed, the Fund recognizes a realized gain or loss. These investments
require initial margin deposits with a custodian which consist of cash or
cash equivalents, up to approximately 10% of the contract amount. The amount
of these deposits is determined by the exchange or Board of Trade on which
the contract is traded and is subject to change. The Fund will not enter
into futures contracts to the extent that more than 5% of the Funds' assets
are required as futures contract margin deposits and will not engage in such
transactions to the extent that obligations relating to such transactions
exceed 20% of the Fund assets.
12
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Limited-Term Government Fund A Class(1)
-------------------------------------------------------------------------------
Six Months
Ended Year Ended December 31,
6/30/96(5) 1995 1994 1993 1992 1991
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period...... $9.050 $8.990 $9.840 $10.000 $10.190 $9.770
Income from investment operations:
Net investment income..................... 0.304 0.699 0.667 0.681 0.740 0.799
Net realized and unrealized gain
(loss) from security transactions (0.250) 0.060 (0.850) (0.160) (0.190) 0.420
-------- -------- -------- ---------- -------- --------
Total from investment operations.......... 0.054 0.759 (0.183) 0.521 0.550 1.219
Less distributions:
Dividends from net investment income...... (0.304) (0.699) (0.667) (0.681) (0.740) (0.799)
Distributions from net realized gain
on security transactions none none none none none none
-------- -------- -------- ---------- -------- --------
Total distributions....................... (0.304) (0.699) (0.667) (0.681) (0.740) (0.799)
Net asset value, end of period............ $8.800 $9.050 $8.990 $9.840 $10.000 $10.190
======== ======== ======== ========== ======== ========
Total return(4)........................... 0.61% 8.71% (1.88%) 5.31% 5.62% 13.04%
Ratios/supplemental data:
Net assets, end of period
(000 omitted)............................. $540,013 $653,451 $789,525 $1,126,031 $861,829 $144,129
Ratio of expenses to average
net assets................................ 0.90% 0.96% 0.91% 0.88% 0.87% 20.90%(2)
Ratio of net investment income
to average net assets 6.88% 7.71% 7.10% 6.77% 7.03%(3) 7.96%(3)
Portfolio turnover........................ 121% 73% 148% 171% 77% 42%
</TABLE>
1 Formerly known as Treasury Reserves Intermediate Fund A Class.
2 Ratio of expenses to average net assets prior to expense limitation was
0.90% for 1992 and 0.99% for 1991.
3 Ratio of net investment income to average net assets prior to expense
limitation was 7.01% for 1992 and 7.87% for 1991.
4 Does not include maximum sales charge of 3.00% nor the 1% limited
contingent deferred sales charge that would apply in the event of certain
redemptions within 12 months of purchase.
5 Ratios have been annualized and total return has not been annualized.
13
<PAGE>
Notes to Financial Statements (Continued)
6. Financial Highlights (Continued)
Selected data for each share of the Fund outstanding throughout each period
were as follows:
<TABLE>
<CAPTION>
Limited-Term Limited-Term
Government Government
Fund B Class(1) Fund C Class
-------------------------------------- --------------------------
Six Period Six Period
Months Year 5/2/94(4) Months 11/28/95(5)
Ended Ended to Ended to
6/30/96(8) 1995 12/31/94 6/30/96(8) 12/31/95
--------- ---- -------- -------- ---------
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $9.050 $8.990 $9.430 $9.050 $9.010
Income from investment operations:
Net investment income. . . . 0.267 0.622 0.399 0.267 0.051
Net realized and unrealized gain
(loss) from security transactions (0.250) 0.060 (0.440) (0.250) 0.040
-------- -------- -------- ---------- --------
Total from investment operations 0.017 0.682 (0.041) 0.170 0.091
Less distributions:
Dividends from net investment income (0.267) (0.622) (0.399) (0.267) (0.051)
Distributions from net realized
gain on security transactionsnone none none none none none
-------- -------- -------- ---------- --------
Total distributions. . . . . . (0.267) (0.622) (0.399) (0.267) (0.051)
Net asset value, end of period $8.800 $9.050 $8.990 $8.800 $9.050
======== ======== ======== ========== ========
Total return6. . . . . . . . . . . . 0.19% 7.80% (0.44%) 0.19% 5
Ratios/supplemental data:
Net assets, end of period (000 omitted) $12,734 $12,313 $6,282 $1,449 $33
Ratio of expenses to average net assets 1.75% 1.81% 1.76% 1.75% 5
Ratio of net investment income
to average net assets. . . . 6.03% 6.86% 6.25% 6.03% 5
Portfolio turnover. . . . . . . 121% 73% 148% 121% 5
<PAGE>
Limited-Term
Government Fund
Institutional Class*
-------------------------------------------------------------------------------
Six
Months
Ended Year Ended December 31,
6/30/96(8) 1995 1994 1993 1992 1991
-------- ---- ---- ---- ---- ----
Net asset value, beginning of period... $9.050 $8.990 $9.840 $10.000 $10.190 $9.770
Income from investment operations:
Net investment income.................. 0.311 0.712 0.681 0.696 0.754 0.816
Net realized and unrealized gain
(loss) from security transactions.... (0.250) 0.060 (0.850) (0.160) (0.190) 0.420
-------- -------- -------- ---------- -------- -------
Total from investment operations....... 0.061 0.772 (0.169) 0.536 0.564 1.236
Less distributions:
Dividends from net investment income... (0.311) (0.712) (0.681) (0.696) (0.754) (0.816)
Distributions from net realized
gain on security transactions........ none none none none none none
-------- -------- -------- ---------- -------- -------
Total distributions.................... (0.311) (0.712) (0.681) (0.696) (0.754) (0.816)
Net asset value, end of period $8.800 $9.050 $8.990 $9.840 $10.000 $10.190
======= ======== ======== ========== ======== =======
Total return(6)........................ 0.68% 8.87% (1.74%) 5.44% 5.77% 13.21%
Ratios/supplemental data:
Net assets, end of period (000 omitted) $31,983 $37,460 $37,238 $47,700 $52,403 $146,598
Ratio of expenses to average net assets 0.75% 0.81% 0.76% 0.74% 0.75% 20.75%(2)
Ratio of net investment income
to average net assets................ 7.03% 7.86% 7.25% 6.91% 7.58%(3) 8.11%(3)
Portfolio turnover..................... 121% 73% 148% 171% 77% 42%
</TABLE>
* The per share data for the year ended 1991 is derived from data of the
Investors I class, which like the Limited-Term Government Fund Institutional
Class (formerly known as Treasury Reserves Intermediate Fund Institutional
Class), a new class of shares, was not subject to Rule 12b-1 distribution
expenses. Shares of Investors I class were converted into shares of Investors
II class, now referred to as Limited-Term Government Fund A Class, on June 1,
1992, pursuant to a Plan of Recapitalization approved by shareholders of
Investors I class.
1 Formerly known as Treasury Reserves Intermediate Fund B Class.
2 Ratio of expenses to average net assets prior to expense limitation was
0.78% for 1992 and 0.84% for 1991 for the Limited-Term Government Fund
Institutional Class.
3 Ratio of net investment income to average net assets prior to expense
limitation was 7.54% for 1992 and 8.02% for 1991 for the Limited-Term
Government Fund Institutional Class.
4 Date of initial public offering; ratios have been annualized but total
return has not been annualized.
5 Date of initial public offering; the ratios of expenses and net investment
income to average net assets, portfolio turnover and total return have been
omitted as management believes that such ratios and return for the
relatively short period are not meaningful.
6 Does not include any applicable contingent deferred sales charge which
varies from 1%-2% for the Limited-Term Government Fund B Class and 1% for the
Limited-Term Government Fund C Class, depending upon the holding period.
7 The per share data and ratios for Investors I class and the Limited-Term
Government Institutional Class have been combined for 1992. For the five
months ended May 31, 1992, the Investor I class operating expenses and net
investment income per share were $0.031 and $0.325, respectively. For the
seven months ended December 31, 1992, the Limited-Term Government Fund
Institutional Class operating expenses and net investment income per share
were $0.045 and $0.429, respectively. All net investment income was
distributed to shareholders.
14
<PAGE>
This semi-annual report is for the information of Limited-Term Government
Fund shareholders, but it may be used with prospective investors when
preceded or accompanied by a current PROSPECTUS for Limited-Term Government
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.
Delaware Group
- --------------------------
of Funds
- --------------------------
FOR GLOBAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
World Growth Fund
International Equity Fund
Global Assets Fund
Global Bond Fund
FOR GROWTH OF CAPITAL
Trend Fund
Enterprise Fund
DelCap Fund
Value Fund
U.S. Growth Fund
FOR TOTAL RETURN
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
Delaware Fund
FOR CURRENT INCOME
Delchester Fund
Corporate Income Fund
Federal Bond Fund
U.S. Government Fund
Limited-Term Government Fund
FOR TAX-FREE CURRENT INCOME
Tax-Free Pennsylvania Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
MONEY MARKET FUNDS
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Free Money Fund
CLOSED-END EQUITY/INCOME*
Dividend and Income Fund
Global Dividend and Income Fund
For a prospectus of any Delaware Group fund, contact your
financial adviser or Delaware Group.
* Delaware Group Dividend and Income Fund and
Delaware Group Global Dividend and Income Fund
purchases can be made through any registered broker.
<PAGE>
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, are not obligations of any bank or any credit union, and
involve investment risk, including the possible loss of principal. Shares of
the Fund are not bank or credit union deposits.
This report must be preceded or accompanied by a current Limited-Term Government
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.
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, Pennsylvania 19103-3682
Nationwide (800) 523-4640
SECURITIES DEALERS ONLY
Nationwide (800) 362-7500
FINANCIAL INSTITUTIONS REPRESENTATIVES ONLY
Nationwide (800) 659-2265
Copy Rights Delaware Distributors, L.P.
Printed in the U.S.A. on recycled paper.
SA - 022 [6/96] PP8/96
<PAGE>
- ---------------------------------
DELAWARE
GROUP
LIMITED-TERM
GOVERNMENT
FUND
- -----------------------------------
1996
Semi-Annual
Report
A Tradition of Sound Investing Since 1929
DELAWARE
GROUP
- ---------
Philadelphia * London
