<PAGE> 1
SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549
FORM N-1A
File No. 2-95928
File No. 811-4547
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]
Pre-Effective Amendment No. [ ]
----
Post-Effective Amendment No. 32 [X]
----
AND
REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]
Amendment No. 32
----
VOYAGEUR MUTUAL FUNDS III, INC.
(Exact Name of Registrant as Specified in Charter)
1818 Market Street, Philadelphia, Pennsylvania 19103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)
Registrant's Telephone Number, including Area Code: (215) 255-2923
--------------
George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)
Approximate Date of Public Offering: December 29, 1997
--------------------
It is proposed that this filing will become effective:
[ ] immediately upon filing pursuant to paragraph (b)
[X] on December 29, 1997 pursuant to paragraph (b)
[ ] 60 days after filing pursuant to paragraph (a)(1)
[ ] on (date) pursuant to paragraph (a)(1)
[ ] 75 days after filing pursuant to paragraph (a)(2)
[ ] on (date) pursuant to paragraph (a)(2) of Rule 485
Title of Securities Being Registered
Tax-Efficient Equity Fund A Class, Tax-Efficient Equity Fund B Class,
Tax-Efficient Equity Fund C Class, Tax-Efficient Equity Fund Institutional
Class, Aggressive Growth Fund A Class, Aggressive Growth Fund B Class,
Aggressive Growth Fund C Class, Aggressive Growth Fund Institutional Class,
Growth Stock Fund A Class, Growth Stock Fund B Class, Growth
Stock Fund C Class, Growth Stock Fund Institutional Class
<PAGE> 2
C O N T E N T S
This Post-Effective Amendment No. 32 to Registration File No. 2-95928 includes
the following:
1. Facing Page
2. Contents Page
3. Cross-Reference Sheet
4. Part A - Prospectuses*
5. Part B - Statement of Additional Information*
6. Part C - Other Information
7. Signatures
* This Post-Effective Amendment relates to the Registrant's three series of
shares and their classes: Tax-Efficient Equity Fund - Tax-Efficient Equity Fund
A Class, Tax-Efficient Equity Fund B Class, Tax-Efficient Equity Fund C Class,
Tax-Efficient Equity Fund Institutional Class; Aggressive Growth Fund -
Aggressive Growth Fund A Class, Aggressive Growth Fund B Class, Aggressive
Growth Fund C Class, Aggressive Growth Fund Institutional Class; and Growth
Stock Fund - Growth Stock Fund A Class, Growth Stock Fund B Class, Growth Stock
Fund C Class, Growth Stock Fund Institutional Class. Shares of Tax-Efficient
Equity Fund are described in a separate prospectus and shares of Aggressive
Growth Fund and Growth Stock Fund are described in a single prospectus. Each
Fund shares a common Statement of Additional Information and Part C. The
Registrant's Aggressive Growth Fund and Growth Stock Fund A Class, B Class and C
Class Prospectus and Institutional Class Prospectus, each dated August 28, 1997,
are incorporated into this filing by reference to the electronic filing of those
Prospectuses made pursuant to Rule 485(b) on August 27, 1997. The Supplement
dated October 15, 1997 to the Aggressive Growth Fund and Growth Stock Fund
Institutional Class Prospectus is incorporated into this filing by reference to
the electronic filing of the Supplement made pursuant to Rule 497(e) on October
15, 1997. The Registrant's Tax-Efficient Equity Fund A Class, B Class, C Class
Prospectus and Institutional Class Prospectus, each dated August 28, 1997, are
incorporated into this filing by reference to the electronic filing of those
Prospectuses made pursuant to Rule 485(b) on August 27, 1997. The Supplement
dated September 22, 1997 to the Tax-Efficient Equity Fund A Class, B Class and C
Class Prospectus filed on that date pursuant to Rule 497(e) is not incorporated
by reference into this filing. The Supplement will be superseded by the
Supplement included in this filing. The Statement of Additional Information
dated August 28, 1997 for Aggressive Growth Fund, Growth Stock Fund and
Tax-Efficient Equity Fund is incorporated into this filing by reference to the
electronic filing of the Statement of Additional Information made pursuant to
Rule 485(b) on August 27, 1997. The Supplement dated October 15, 1997 to the
Statement of Additional Information filed on that date pursuant to Rule 497(e)
is not incorporated by reference into this filing. The Supplement will be
superseded by the Supplement included in this filing.
<PAGE> 3
CROSS-REFERENCE SHEET
PART A*
<TABLE>
<CAPTION>
Item No. Description Location in Prospectus
- -------- ----------- ----------------------
<S> <C> <C> <C>
Tax-Efficient Equity Fund
A Class
B Class Institutional
C Class Class
1 Cover Page.................................. Cover Cover
2 Synopsis ................................... Synopsis; Summary Synopsis; Summary of
of Expenses Expenses
3 Condensed Financial Information ............ Financial Highlights N/A
4 General Description of Registrant .......... Investment Objective Investment Objective and
and Policies; Classes Policies; Classes of Shares
of Shares
5 Management of the Fund ..................... Management of the Management of the Fund
the Fund
6 Capital Stock and Other Securities ......... The Delaware Dividends and Distributions;
Difference; Dividends Taxes; Classes of Shares
and Distributions;
Taxes; Classes of
Shares
7 Purchase of Securities Being Offered ....... Cover; How to Buy Cover; How to Buy Shares;
Shares; Calculation of Calculation of Net Asset Value
Net Asset Value Per Per Share; Management of the
Share; Management Fund
of the Fund
8 Redemption or Repurchase ................... How to Buy Shares; How to Buy Shares;
Redemption and Redemption and Exchange
Exchange
9 Legal Proceedings .......................... None None
</TABLE>
*The Registrant's Tax-Efficient Equity Fund A Class, B Class, C Class Prospectus
and Institutional Class Prospectus, each dated August 28, 1997, are incorporated
into this filing by reference to the electronic filing of those Prospectuses
made pursuant to Rule 485(b) on August 27, 1997. The Supplement dated September
22, 1997 to the Tax-Efficient Equity Fund A Class, B Class and C Class
Prospectus filed on that date pursuant to Rule 497(e) is not incorporated by
reference into this filing. The Supplement will be superseded by the Supplement
included in this filing.
<PAGE> 4
CROSS-REFERENCE SHEET
PART A*
<TABLE>
<CAPTION>
Item No. Description Location in Prospectus
- -------- ----------- ----------------------
<S> <C> <C> <C>
Tax-Efficient Equity Fund
A Class
B Class Institutional
C Class Class
1 Cover Page.................................. Cover Cover
2 Synopsis ................................... Synopsis; Summary Synopsis; Summary of
of Expenses Expenses
3 Condensed Financial Information ............ Financial Highlights N/A
4 General Description of Registrant .......... Investment Objective Investment Objective and
and Policies; Classes Policies; Classes of Shares
of Shares
5 Management of the Fund ..................... Management of the Management of the Fund
the Fund
6 Capital Stock and Other Securities ......... The Delaware Dividends and Distributions;
Difference; Dividends Taxes; Classes of Shares
and Distributions;
Taxes; Classes of
Shares
7 Purchase of Securities Being Offered ....... Cover; How to Buy Cover; How to Buy Shares;
Shares; Calculation of Calculation of Net Asset Value
Net Asset Value Per Per Share; Management of the
Share; Management Fund
of the Fund
8 Redemption or Repurchase ................... How to Buy Shares; How to Buy Shares;
Redemption and Redemption and Exchange
Exchange
9 Legal Proceedings .......................... None None
</TABLE>
*The Registrant's Aggressive Growth Fund and Growth Stock Fund A Class, B Class
and C Class Prospectus and Institutional Class Prospectus, each dated August 28,
1997, are incorporated into this filing by reference to the electronic filing of
those Prospectuses made pursuant to Rule 485(b) on August 27, 1997. The
Supplement dated October 15, 1997 to the Aggressive Growth Fund and Growth Stock
Fund Institutional Class Prospectus is incorporated into this filing by
reference to the electronic filing of the Supplement made pursuant to Rule
497(e) on October 15, 1997.
<PAGE> 5
CROSS-REFERENCE SHEET
PART B*
<TABLE>
<CAPTION>
Location in Statement of
Item No. Description Additional Information
- -------- ----------- ------------------------
<S> <C>
Aggressive Growth Fund/
Growth Stock Fund/
Tax-Efficient Equity Fund
10 Cover Page...................................................... Cover
11 Table of Contents............................................... Table of Contents
12 General Information and History................................. Not Applicable
13 Investment Objectives and Policy................................ Investment Policies and Restrictions
14 Management of the Registrant.................................... Officers and Directors
15 Control Persons and Principal Holders of Securities............. Officers and Directors
16 Investment Advisory and Other Services.......................... Officers and Directors; Investment
Management Agreement; General
Information; Financial Statements
17 Brokerage Allocation............................................ Trading Practices
18 Capital Stock and Other Securities.............................. Capitalization and
Noncumulative Voting (under General
Information)
19 Purchase, Redemption and Pricing of Securities
Being Offered................................................... Purchasing Shares; Offering Price;
Redemption; Exchange Privilege
20 Tax Status...................................................... Taxes
21 Underwriters ................................................... Purchasing Shares
22 Calculation of Performance Data................................. Performance Information
23 Financial Statements............................................ Financial Statements
</TABLE>
*The Statement of Additional Information dated August 28, 1997 for Aggressive
Growth Fund, Growth Stock Fund and Tax-Efficient Equity Fund is incorporated
into this filing by reference to the electronic filing of the Statement of
Additional Information made pursuant to Rule 485(b) on August 27, 1997. The
Supplement dated October 15, 1997 to the Statement of Additional Information
filed on that date pursuant to Rule 497(e) is not incorporated by reference into
this filing. The Supplement will be superseded by the Supplement included in
this filing.
<PAGE> 6
CROSS-REFERENCE SHEET
PART C
<TABLE>
<CAPTION>
Item No. Description Location in Part C
- -------- ----------- ------------------
<S> <C> <C>
24 Financial Statements and Exhibits..................... Item 24
25 Persons Controlled by or under Common Control
with Registrant....................................... Item 25
26 Number of Holders of Securities....................... Item 26
27 Indemnification....................................... Item 27
28 Business and Other Connections of Investment
Adviser............................................... Item 28
29 Principal Underwriters................................ Item 29
30 Location of Accounts and Records...................... Item 30
31 Management Services................................... Item 31
32 Undertakings.......................................... Item 32
</TABLE>
<PAGE> 7
The Registrant's Aggressive Growth Fund and Growth Stock Fund A Class, B Class
and C Class Prospectus and Institutional Class Prospectus, each dated August 28,
1997, are incorporated into this filing by reference to the electronic filing of
those Prospectuses made pursuant to Rule 485(b) on August 27, 1997. The
Supplement dated October 15, 1997 to the Aggressive Growth Fund and Growth Stock
Fund Institutional Class Prospectus is incorporated into this filing by
reference to the electronic filing of the Supplement made pursuant to Rule
497(e) on October 15, 1997. The Registrant's Tax-Efficient Equity Fund A Class,
B Class, C Class Prospectus and Institutional Class Prospectus, each dated
August 28, 1997, are incorporated into this filing by reference to the
electronic filing of those Prospectuses made pursuant to Rule 485(b) on August
27, 1997. The Supplement dated September 22, 1997 to the Tax-Efficient Equity
Fund A Class, B Class and C Class Prospectus filed on that date pursuant to Rule
497(e) is not incorporated by reference into this filing. The Supplement will be
superseded by the Supplement included in this filing. The Statement of
Additional Information dated August 28, 1997 for Aggressive Growth Fund, Growth
Stock Fund and Tax-Efficient Equity Fund is incorporated into this filing by
reference to the electronic filing of the Statement of Additional Information
made pursuant to Rule 485(b) on August 27, 1997. The Supplement dated October
15, 1997 to the Statement of Additional Information filed on that date pursuant
to Rule 497(e) is not incorporated by reference into this filing. The Supplement
will be superseded by the Supplement included in this filing.
<PAGE> 8
DECEMBER 29, 1997
VOYAGEUR MUTUAL FUNDS III, INC.
TAX-EFFICIENT EQUITY FUND
A CLASS/B CLASS/C CLASS
SUPPLEMENT TO PROSPECTUS DATED AUGUST 28, 1997
The following supplements the Prospectus.
FINANCIAL HIGHLIGHTS
The following unaudited financial highlights for Tax-Efficient Equity Fund
(the "Fund") are derived from the unaudited financial statements of the Fund for
the period July 27, 1997 (date of initial public offering) through October 31,
1997. The data should be read in conjunction with the financial statements and
related notes for the period ended October 31, 1997, included in the Fund's
Semi-Annual Report which is incorporated by reference into Voyageur Mutual
Funds III, Inc.'s Statement of Additional Information.
<TABLE>
<CAPTION>
TAX-EFFICIENT EQUITY TAX-EFFICIENT EQUITY TAX-EFFICIENT EQUITY
FUND A CLASS FUND B CLASS FUND C CLASS
UNAUDITED UNAUDITED UNAUDITED
6/27/97(1) 6/27/97(1) 6/27/97(1)
THROUGH THROUGH THROUGH
10/31/97 10/31/97 10/31/97
----------- ----------- -----------
<S> <C> <C> <C>
Net Asset Value, Beginning of Period ..................... $ 8.5000 $ 8.5000 $ 8.5000
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income (Loss) ............................. 0.0049 (0.0158) (0.0153)
Net Realized and Unrealized Gains on Securities .......... 0.4551 0.4658 0.4653
Total From Investment Operations ................... 0.4600 0.4500 0.4500
----------- ----------- -----------
LESS DISTRIBUTIONS
Dividends from Net Investment Income ..................... none none none
Distributions from Capital Gains ......................... none none none
----------- ----------- -----------
Total Distributions ................................ none none none
----------- ----------- -----------
Net Asset Value, End of Period ........................... $ 8.9600 $ 8.9500 $ 8.9500
=========== =========== ===========
TOTAL RETURN(2)(3) ....................................... 5.41% 5.29% 5.29%
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................ $ 2,655 $ 969 $ 175
Ratio of Expenses to Average Daily Net Assets ............ 1.50% 2.20% 2.20%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation ........................... 3.11% 3.81% 3.81%
Ratio of Net Investment Income to Average
Daily Net Assets ...................................... 0.26% (0.44%) (0.44%)
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation ........................... (1.35%) (2.05%) (2.05%)
Portfolio Turnover Rate .................................. 12% 12% 12%
Average Commission Rate Paid (4) ......................... $ 0.0600 $ 0.0600 $ 0.0600
</TABLE>
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized. Total return for this short of a time
period may not be representative of longer term results.
(2) Does not reflect maximum sales charge of 4.75%, nor the 1% Limited CDSC
that would apply in the event of certain redemptions within 12 months of
purchase for Class A Shares. Does not reflect contingent deferred sales
charge which varies from 1%-4% depending on the holding period for Class
B Shares and 1% for Class C Shares for 12 months from the date of
purchase.
(3) Total return reflects the expense limitations referenced under Summary
of Expenses in the Prospectus.
(4) 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.
<PAGE> 9
The following replaces the first footnote under the Shareholder Transaction
Expenses Table under Summary of Expenses:
* Class A purchases of $1 million or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is
paid to the financial adviser through whom such purchase is effected, a
CDSC of 1% will be imposed on certain redemptions within 12 months of
purchase ("Limited CDSC"). See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange, for more information concerning the Limited
CDSC and other circumstances where a CDSC may be imposed on redemptions
of Class A Shares.
The following replaces the first footnote for the expense illustration provided
under Summary of Expenses:
1 Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC or other
CDSC, which has not been reflected in this calculation, may be imposed
on certain redemptions. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange.
The following supplements the sections Buying Class A Shares at Net Asset Value
under Classes of Shares:
For the period September 22, 1997 through December 31, 1997, Class A
Shares of the Fund may be purchased at net asset value by any investor
participating in the HD Vest Financial Advisors' NAV Purchase Program for
purchases of less than $1 million. However, a contingent deferred sales charge
may apply upon redemption of such shares. This program has been extended
through April 15, 1998. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption and
Exchange.
The following supplements the section Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange.
A contingent deferred sales charge will be imposed on redemptions of Class
A Shares (or shares into which such Class A Shares are exchanged) made within
two years of purchase, if such shares were purchased at net asset value pursuant
to the HD Vest Financial Advisors' NAV Purchase Program. The contingent deferred
sales charge will be paid to the Distributor and will be equal to the lesser of
2.5% of: (1) the net asset value at the time of purchase of Class A Shares being
redeemed; or (2) the net asset value of such Class A Shares at the time of
redemption. For purposes of this formula, the "net asset value at the time of
purchase" will be the net asset value at purchase of Class A Shares even if
those shares are later exchanged for shares of another Delaware Group fund and,
in the event of an exchange of Class A Shares, the "net asset value of such
shares at the time of redemption" will be the net asset value of the shares
acquired in exchange.
<PAGE> 10
DECEMBER 29, 1997
VOYAGEUR MUTUAL FUNDS III, INC.
TAX-EFFICIENT EQUITY FUND
INSTITUTIONAL CLASS
SUPPLEMENT TO PROSPECTUS DATED AUGUST 28, 1997
The following supplements the Prospectus.
FINANCIAL HIGHLIGHTS
The following unaudited financial highlights for Tax-Efficient Equity Fund (the
"Fund") are derived from the unaudited financial statements of the Fund for the
period August 28, 1997 (date of initial public offering) through October 31,
1997. The data should be read in conjunction with the financial statements and
related notes for the period ended October 31, 1997, included in the Fund's
Semi-Annual Report which is incorporated by reference into Voyageur Mutual
Funds III, Inc.'s Statement of Additional Information.
<TABLE>
<CAPTION>
TAX-EFFICIENT EQUITY
FUND
INSTITUTIONAL CLASS
UNAUDITED
8/28/97(1)
THROUGH
10/31/97
-----------
<S> <C>
Net Asset Value, Beginning of Period ..................... $ 8.7300
INCOME FROM INVESTMENT OPERATIONS
Net Investment Income .................................... 0.0139
Net Realized and Unrealized Gains on Securities0.2261
Total From Investment Operations ................... 0.2400
-----------
LESS DISTRIBUTIONS
Dividends from Net Investment Income ..................... none
Distributions from Capital Gains ......................... none
Total Distributions ................................... none
Net Asset Value, End of Period ........................... $ 8.9700
===========
TOTAL RETURN(2) .......................................... 2.75%
-----------
RATIOS/SUPPLEMENTAL DATA
Net Assets, End of Period (000's omitted) ................ $ 1,582
Ratio of Expenses to Average Daily Net Assets ............ 1.20%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation ........................... 2.81%
Ratio of Net Investment Income to Average
Daily Net Assets ...................................... 0.56%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation............. .............. (1.05%)
Portfolio Turnover Rate .................................. 12%
Average Commission Rate Paid (3) ......................... $ 0.0600
</TABLE>
(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized. Total return for this short of a time
period may not be representative of longer term results.
(2) Total return reflects the expense limitations referenced under Summary
of Expenses in the Prospectus.
(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.
<PAGE> 11
DECEMBER 29, 1997
VOYAGEUR MUTUAL FUNDS III, INC.
SUPPLEMENT TO STATEMENT OF ADDITIONAL INFORMATION DATED AUGUST 28, 1997
The following supplements the information in the section of the
Statement of Additional Information entitled Performance Information.
The performance of Aggressive Growth Fund Institutional Class shares and
Growth Stock Fund Institutional Class shares, as shown below, is the average
annual total return quotation through April 30, 1997.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
AGGRESSIVE GROWTH FUND(1)
INSTITUTIONAL CLASS(2)
<S> <C>
1 year ended 4/30/97 4.17%
Period 5/16/94(3)
through 4/30/97 12.56%
</TABLE>
(1) Reflects the voluntary waivers in effect during the periods.
(2) Date of initial public offering of Institutional Class shares was August
28, 1997.
(3) Date of initial public offering of Class A Shares.
<TABLE>
<CAPTION>
AVERAGE ANNUAL TOTAL RETURN
GROWTH STOCK FUND(1)
INSTITUTIONAL CLASS(2)
<S> <C>
1 year ended 4/30/97 14.91%
3 years ended 4/30/97 18.87%
5 years ended 4/30/97 11.16%
10 years ended 4/30/97 11.75%
Period 8/1/85(3)
through 4/30/97 15.43%
</TABLE>
(1) Reflects the voluntary waivers in effect during the periods.
(2) Date of initial public offering of Institutional Class shares was August
28, 1997.
(3) Date of initial public offering of Class A Shares.
<PAGE> 12
The performance of Class A Shares and Institutional Class shares of
Tax-Efficient Equity Fund (the "Fund"), as shown below, is the cumulative total
return quotations through October 31, 1997.
CUMULATIVE TOTAL RETURN(1)
<TABLE>
<CAPTION>
TAX-EFFICIENT TAX-EFFICIENT TAX-EFFICIENT
EQUITY EQUITY EQUITY
FUND A CLASS FUND A CLASS FUND
(AT OFFER) (AT NAV) INSTITUTIONAL CLASS
<S> <C> <C> <C> <C>
3 months ended 10/31/97 (6.86%) (2.18%) Period 8/28/97(1)
through 10/31/97 2.75%
Period 6/27/97(2)
through 10/31/97 0.45% 5.41%
</TABLE>
<TABLE>
<CAPTION>
TAX-EFFICIENT TAX-EFFICIENT TAX-EFFICIENT TAX-EFFICIENT
EQUITY EQUITY EQUITY EQUITY
FUND B CLASS FUND B CLASS FUND C CLASS FUND C CLASS
(INCLUDING (EXCLUDING (INCLUDING (EXCLUDING
DEFERRED DEFERRED DEFERRED DEFERRED
SALES CHARGE) SALES CHARGE) SALES CHARGE) SALES CHARGE)
<S> <C> <C> <C> <C>
3 months ended 10/31/97 (6.20%) (2.29%) (3.27%) (2.29%)
Period 7/1/97(2)
through 10/31/97 1.29% 5.29% 4.29% 5.29%
</TABLE>
(1) Delaware Management Company, Inc. has elected voluntarily to waive that
portion, if any, of the annual management fees payable by the Fund and
to pay certain expenses of the Fund to the extent necessary to ensure
that the Total Operating Expenses of Class A, Class B, Class C and
Institutional Class of the Fund does not exceed 1.50%, 2.20%, 2.20% and
1.20%, respectively (in each case, exclusive of taxes, interest,
brokerage commissions, and extraordinary expenses and applicable 12b-1
expenses) through December 31, 1997. In the absence of such waiver,
performance would have been affected negatively.
(2) Date of initial public offering; total return for this short of a time
period may not be representative of longer term results.
The performance of Aggressive Growth Fund Class A Shares and Institutional
Class shares and Growth Stock Fund Institutional Class shares, as shown below,
is the cumulative total return quotation through April 30, 1997.
CUMULATIVE TOTAL RETURN
AGGRESSIVE GROWTH FUND(1)
<TABLE>
<CAPTION>
CLASS A SHARES INSTITUTIONAL S&P 500 DOW JONES
(AT OFFER) CLASS(2) INDEX(3) INDUSTRIAL(3)
<S> <C> <C> <C> <C>
3 months
ended
4/30/97 (21.25%) (17.31%) 2.42% 2.88%
6 months
ended
4/30/97 (9.83%)(4) (5.32%) 14.71% 16.25%
9 months
ended
4/30/97 9.09% 14.49% 27.13% 26.77%
1 year
ended
4/30/97 (0.77%) 4.17% 25.12% 25.86%
Period
5/16/94(5)
through
4/30/97 35.18% 41.94% 91.29% 90.37%
</TABLE>
(1) Reflects the voluntary waivers in effect during the periods.
(2) Date of initial public offering of Institutional Class shares was August
28, 1997.
(3) Source: Lipper Analytical.
(4) For the six months ended April 30, 1997, cumulative total return for
Aggressive Growth Fund A Class at net asset value was (5.32%).
(5) Date of initial public offering of Class A Shares.
<PAGE> 13
<TABLE>
<CAPTION>
CUMULATIVE TOTAL RETURN
GROWTH STOCK FUND(1)
INSTITUTIONAL CLASS(2)
<S> <C>
3 months ended 4/30/97 1.98%
6 months ended 4/30/97 7.12%
9 months ended 4/30/97 14.57%
1 year ended 4/30/97 14.91%
3 years ended 4/30/97 67.97%
5 years ended 4/30/97 69.69%
10 years ended 4/30/97 203.66%
Period 8/1/85(3)
through 4/30/97 439.67%
</TABLE>
(1) Reflects the voluntary waivers in effect during the periods.
(2) Date of initial public offering of Institutional Class shares was August
28, 1997.
(3) Date of initial public offering of Class A Shares.
The following provides updated information in the section of the Statement
of Additional Information entitled Officers and Directors.
As of November 30, 1997, the officers and directors of Voyageur Mutual
Equity Funds IV, Inc. ("Mutual Funds III, Inc.") owned less than 1% of the
outstanding shares of Class A Shares, Class B Shares, Class C Shares and
Institutional Class shares of Aggressive Growth Fund, Growth Stock Fund and
Tax-Efficient Equity Fund, respectively.
Management believes the following accounts held 5% or more of the
outstanding shares of a Class as of November 30, 1997:
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Tax-Efficient Equity PaineWebber for the Benefit of
Fund A Class Charles R. Wallace
393 Prairie Ave
Elmhurst, IL 60126 44,705 19.53%
Tax-Efficient Equity Merrill Lynch, Pierce, Fenner & Smith
Fund B Class For the Sole Benefit of its Customers
Attention: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246 24,318 15.26%
The Ohio Company FBO Heile R C
155 East Broad Street
Columbus, OH 43215 13,601 8.53%
Anthony Bellocchio and Rose Wood JTTEN
6626 Lebanon Avenue
Philadelphia, PA 19151-3014 9,277 5.82%
Dain Soworth Inc. FBO
William H. Woolley Family Trust
78 7190 Kaleiopapa 8,145 5.11%
Tax-Efficient Equity Donaldson Lufkin Jenrette
Fund C Class Securities Corporation Inc.tion
P.O. Box 2052
Jersey City, NJ 07303 11,310 25.74%
</TABLE>
<PAGE> 14
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Tax-Efficient Equity Frank E. Crane Jr. TTEE
Fund C Class Frank E. Crane Living Trust
131 Lakeview Lane
Mt. Dora, FL 32727 5,512 12.54%
NFSC FEBO 1994 Irrevocable Trust
FBO TON Anthony Sabia Jr.
201 Ponus Ave. Ext
Norwalk, CT 06850 5,512 12.54%
Mary Ellen Crane TTEE
Mary Ellen Crane Living Trust
131 Lakeview Lane
Mt. Dora, FL 32757 2,756 6.27%
NFSC FEBO David I. Scheraga
Irrevocable Trust
Susan L. Scheraga TTEE
26 Strawberry Hill, Apt. 4B
Stamford, CT 06902 2,750 6.26%
Tax-Efficient Equity Lincoln National Life Insurance Co.
Fund Institutional Class c/o Lincoln Investment Management, Inc.
Attn: Carol A. Schmidt
200 East Berry St.
Ft. Wayne, IN 46802 176,470 99.99%
Aggressive Growth Fund Olcoba Company - Reinvest
A Class P.O. Box 1000
Minneapolis, MN 55480 84,064 15.66%
NFSC FEBO Robert Bral
912 N. Roxbury Dr.
Beverly Hills, CA 90210 52,798 9.83%
Merrill Lynch, Pierce, Fenner & Smith
For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246 42,109 7.84%
Aggressive Growth Fund Merrill Lynch, Pierce, Fenner & Smith
B Class For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East, 3rd Floor
Jacksonville, FL 32246 21,453 14.07%
JC Bradford & Co Cust. FBO
Hewell T. Winn
330 Commerce St.
Nashville, TN 37201 8,157 5.35%
Aggressive Growth Fund Merrill Lynch, Pierce, Fenner & Smith
C Class For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 32246 12,346 20.68%
Emery Jahnke & Ann Jahnke JT TEN
2402 Lilac Lane
Fargo, ND 58102 6,732 11.28%
</TABLE>
<PAGE> 15
<TABLE>
<CAPTION>
Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>
Aggressive Growth Fund Donaldson Lufkin Jenrette
C Class Securities Corporation Inc.
P.O. Box 2052
Jersey City, NJ 07303 3,200 5.36%
Aggressive Growth Fund RS DMC Employee Profit Sharing Plan
Institutional Class Delaware Management Co p/s trust
c/o Rick Seidel
1818 Market St.
Philadelphia, PA 19103 20,272 98.56%
Growth Stock Fund Dougherty Financial Group, Inc
A Class 401(k) Salary Reduction Plan
Attn: Robin Lang
90 South 7th Street - Ste. 4300
Minneapolis, MN 55402 63,715 4.95%
Growth Stock Fund Merrill Lynch, Pierce, Fenner & Smith
B Class For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 23346 6,243 15.17%
Smith Barney Inc.
388 Greenwich Street
New York, NY 10013 2,193 5.33%
Growth Stock Fund Merrill Lynch, Pierce, Fenner & Smith
C Class For the Sole Benefit of its Customers
Attn: Fund Administration
4800 Deer Lake Drive East - 3rd Floor
Jacksonville, FL 23346 4,473 14.17%
Emery Jahnke & Ann Jahnke JT TEN
2402 Lilac Lane
Fargo, ND 58102 3,544 11.22%
Mabel Walters TTEE
Covell Family Trust
7324 NW Pendridge Road
Portland, OR 97229 1,740 5.51%
Growth Stock Fund Delaware Management Company, Inc.
Institutional Class Attn: Joseph Hastings
1818 Market St, 17th floor
Philadelphia, PA 19103 1 100.00%
</TABLE>
The following replaces the section of the Statement of Additional Information
entitled Financial Statements.
FINANCIAL STATEMENTS
KPMG Peat Marwick LLP served as the independent auditors for Voyageur
Mutual Funds III, Inc. through April 30, 1997 and, in its capacity as such,
audited the annual financial statements of the Aggressive Growth Fund and Growth
Stock Fund. Beginning May 1, 1997, Ernst & Young LLP began serving in such
capacity. Aggressive Growth Fund's and Growth Stock Fund's Statements of Net
Assets, Statements of Assets and Liabilities, Statements of Operations,
Statements of Changes in Net Assets, and Notes to Financial Statements, as well
as the report of KPMG Peat Marwick LLP, independent auditors, for the fiscal
year ended April 30, 1996 are included in Voyageur Mutual Funds III, Inc.'s
Annual Report to shareholders. The financial statements, the notes relating
thereto and the report of KPMG Peat Marwick LLP, listed above are incorporated
by reference from the Annual Report into this Part B. Unaudited financial
information for the period ended October 31, 1997 for Tax-Efficient Equity Fund
are incorporated by reference from the Semi-Annual Report into this Part B.
<PAGE> 16
Delaware Group
Tax - Efficient Equity Fund
Statement of Net Assets
October 31, 1997
<TABLE>
<CAPTION>
(Unaudited) Number Market
of shares Value
--------- -------
<S> <C> <C>
COMMON STOCK - 88.26%
Aerospace & Defense - 0.77%
GenCorp 1,700 $41,544
-------
41,544
-------
Automobiles & Automotive Parts - 1.63%
Danaher 1,600 87,700
-------
87,700
-------
Banking, Finance & Insurance - 15.61%
American International Group 800 81,650
BB&T 1,300 70,769
Equifax 4,000 124,250
Federal National Mortgage 2,000 96,875
Nationwide Financial Services Class A 2,000 60,875
PMI Group 1,500 90,656
Provident 2,700 90,113
SAFECO 1,500 71,391
State Street Bank 1,000 55,750
Unum 2,000 97,500
-------
839,829
-------
Buildings & Materials - 2.77%
Masco 3,400 149,175
-------
149,175
-------
Cable, Media & Publishing - 3.78%
Banta 2,500 65,156
Wallace Computer Services 3,600 138,375
-------
203,531
-------
Chemicals - 5.02%
Fuller (HB) 1,900 89,656
Valspar 2,900 85,550
W.R. Grace & Company 1,400 95,200
-------
270,406
-------
Computers & Technology - 3.63%
Hewlett-Packard 1,900 117,206
Microsoft 600 77,963
-------
195,169
-------
Consumer Products - 1.80%
</TABLE>
<PAGE> 17
<TABLE>
<CAPTION>
Number Market
of shares Value
--------- -------
<S> <C> <C>
General Electric 1,500 96,844
-------
96,844
-------
Electronics & Electrical - 7.84%
Intel 1,600 123,250
Motorola 1,000 61,750
Northern Telecom Ltd 900 80,719
Rockwell International 1,900 93,100
Teleflex 1,700 63,325
-------
422,144
-------
Energy - 3.67%
Kerr-McGee 1,000 67,563
Royal Dutch Petroleum 1,200 63,150
Total S A-ADR 1,200 66,600
-------
197,313
-------
Environment Services - 2.74%
Ecolab 3,100 147,444
-------
147,444
-------
Food, Beverage & Tobacco - 9.43%
ConAgra 4,800 144,600
Hershey Foods 1,200 66,300
Philip Morris 3,100 122,838
Ralston-Purina Group 1,100 98,725
Universal Foods 1,900 74,931
-------
507,394
-------
Healthcare & Pharmaceuticals - 8.70%
American Home Products 2,000 148,250
Johnson & Johnson 2,100 120,488
Schering-Plough 1,600 89,700
SmithKline Beecham 2,300 109,538
-------
467,976
-------
Packaging & Containers - 1.36%
TriMas 2,500 73,125
-------
73,125
-------
Retail - 9.29%
Federated Department Stores 2,600 114,400
Lowe's Companies 2,000 83,250
May Department Stores 1,500 80,813
Rite Aid 2,700 160,313
Sherwin-Williams 2,200 61,050
-------
499,826
-------
Textiles, Apparel & Furniture - 3.70%
</TABLE>
<PAGE> 18
<TABLE>
<CAPTION>
Number Market
of shares Value
------ -------
<S> <C> <C>
HON Industries 1,700 87,763
Newell 2,900 111,288
---------
199,051
---------
Miscellaneous - 6.52%
Pentair 2,100 81,113
Service International 3,900 118,706
Tyco International 4,000 151,000
---------
350,819
---------
Total Common Stock (cost $4,708,451) 4,749,290
---------
</TABLE>
<TABLE>
<CAPTION>
Principal
Amount
-------------
<S> <C> <C>
REPURCHASE AGREEMENTS - 9.01%
With Paine Webber 5.65% 11/3/97
(dated 10/31/97, collateralized by $160,000
U.S. Treasury Notes 5.125% due 2/28/98
market value $161,532) 158,000 158,000
With Chase 5.65% 11/3/97
(dated 10/31/97, collateralized by $172,000
U.S. Treasury Notes 5.75% due 10/31/00
market value $172,230) 169,000 169,000
With Prudential Securities 5.65% 11/3/97
(dated 10/31/97, collateralized by $159,000
U.S. Treasury Notes 5.875% due 2/28/99
market value $161,481) 158,000 158,000
-------------
Total Repurchase Agreements (cost $485,000) 485,000
-------------
TOTAL MARKET VALUE OF SECURITIES
(cost$5,193,451) - 97.27% 5,234,290
RECEIVABLES AND OTHER ASSETS NET
OF LIABILITIES - 2.73% 147,168
-------------
NET ASSETS APPLICABLE TO 600,551 SHARES
($1 PAR VALUE) OUTSTANDING - 100.00% $5,381,458
-------------
NET ASSET VALUE - TAX EFFICIENT FUND A CLASS
($2,654,998 / 296,270 shares) $ 8.96
=============
NET ASSET VALUE - TAX EFFICIENT FUND B CLASS
($968,810 / 108,240 shares) $ 8.95
=============
NET ASSET VALUE - TAX EFFICIENT FUND C CLASS
($175,182 / 19,570 shares) $ 8.95
=============
NET ASSET VALUE - TAX EFFICIENT FUND INSTITUTIONAL CLASS
($1,582,468 / 176,471 shares) $ 8.97
=============
COMPONENTS OF NET ASSETS AT OCTOBER 31, 1997
Common stock, $.01 par value, 10,000,000,000 shares authorized
to the Fund with 1,000,000,000 shares allocated to
Tax Efficient A Class, 1,000,000,000 shares allocated to
Tax Efficient B Class, 1,000,000,000 shares allocated to
Tax Efficient C Class, 1,000,000,000 shares allocated to
</TABLE>
<PAGE> 19
<TABLE>
<CAPTION>
<S> <C> <C>
Institutional Class $5,350,954
Accumulated net investment income 2,538
Accumulated net realized (loss) on investments (12,873)
Net unrealized appreciation of investments 40,839
-------------
Total net assets $5,381,458
=============
</TABLE>
ADR - American Depository Receipt
See accompanying notes.
<PAGE> 20
DELAWARE GROUP TAX-EFFICIENT EQUITY FUND
STATEMENT OF OPERATIONS
FOR THE PERIOD JUNE 27, 1997* TO OCTOBER 31, 1997
<TABLE>
<CAPTION>
INVESTMENT INCOME:
<S> <C> <C>
Interest $ 4,368
Dividends 10,762 15,130
-------- --------
EXPENSES:
Management fees 6,307
Registration fees 6,331
Professional fees 3,702
Custodian fees 2,651
Distribution expense 2,580
Reports and statements to shareholders 2,235
Dividend disbursing and transfer agent fees and expenses 1,444
Directors' fees 421
Accounting fees and salaries 387
Taxes (other than taxes on income) 68
Other 186
------
26,312
Less expenses absorbed by Delaware Management
Company, Inc. (13,720) 12,592
-------- --------
NET INVESTMENT INCOME 2,538
--------
NET REALIZED AND UNREALIZED GAIN(LOSS)
ON INVESTMENTS:
Net realized loss on investment transactions (12,873)
Net unrealized appreciation during the period 40,839
--------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 27,966
--------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $ 30,504
========
</TABLE>
- ------------------------------
*Date of commencement of operations
See accompanying notes
<PAGE> 21
DELAWARE GROUP TAX-EFFICIENT EQUITY FUND
STAEMENT OF CHANGES IN NET ASSETS
FOR THE PERIOD JUNE 27, 1997* TO OCTOBER 31, 1997
<TABLE>
<S> <C>
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income $ 2,538
Net realized loss on investment transactions (12,873)
Net unrealized appreciation during the period 40,839
-----------
Net increase in net assets resulting from operations 30,504
-----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
Tax-Efficient Equity Fund A Class 2,655,851
Tax-Efficient Equity Fund B Class 981,067
Tax-Efficient Equity Fund C Class 177,170
Tax-Efficient Equity Fund Institutional Class 1,539,234
-----------
5,353,322
Cost of shares repurchased:
Tax-Efficient Equity Fund A Class (2,368)
Tax-Efficient Equity Fund B Class -
Tax-Efficient Equity Fund C Class -
Tax-Efficient Equity Fund Institutional Class -
-----------
(2,368)
-----------
Increase in net assets derived from capital
share transactions 5,350,954
-----------
NET INCREASE IN NET ASSETS 5,381,458
NET ASSETS:
Beginning of year -
-----------
End of year $ 5,381,458
===========
</TABLE>
- ---------------------------------------
*Date of commencement of operations
See accompanying notes
<PAGE> 22
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout the period were
as follows:
<TABLE>
<CAPTION>
TAX-EFFICIENT
TAX-EFFICIENT TAX-EFFICIENT TAX-EFFICIENT EQUITY
EQUITY EQUITY EQUITY FUND
FUND FUND FUND INSTITUTIONAL
A CLASS B CLASS CCLASS CLASS
6/27/97 6/27/97 6/27/97 8/28/97
TO TO TO TO
10/31/97 10/31/97 10/31/97 10/31/97
--------- --------- --------- ---------
<S> <C> <C> <C> <C>
Net asset value, beginning of period $ 8.50 $ 8.50 $ 8.50 $ 8.73
Income from investment operations:
Net investment income (loss) 0.00 -0.02 -0.02 0.01
Net realized and unrealized gain (loss) from
investments & foreign currencies 0.46 0.47 0.47 0.23
--------- --------- --------- ---------
Net increase in net assets from investment operations 0.46 0.45 0.45 0.24
--------- --------- --------- ---------
Less dividends and distributions:
Dividends from net investment income 0.00 0.00 0.00 0.00
Distributions from net realized gain on security transactions 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
Total dividends and distributions 0.00 0.00 0.00 0.00
--------- --------- --------- ---------
Net asset value, end of period $ 8.96 $ 8.95 $ 8.95 $ 8.97
========= ========= ========= =========
Total Return (2) 5.41% 5.29% 5.29% 2.05%
Ratios and supplemental data:
Net assets, end of period (000 omitted) 2,655.00 969.00 175.00 1,582.00
Ratio of expenses to average net assets 1.50% 2.20% 2.20% 1.20%
Ratio of expenses to average net assets prior to expense
limitation 3.11% 3.81% 3.81% 2.81%
Ratio of net investment income to average net assets 0.44% -0.49% -0.59% 0.35%
Ratio of net investment income to average net assets prior
to expense limitation -1.17% -2.10% -2.20% -1.26%
Portfolio turnover 12.00% 12.00% 12.00% 12.00%
Average commission rate paid (3) $ 0.06 $ 0.06 $ 0.06 $ 0.06
</TABLE>
- ----------------------------------
(1) Date of commencement of trading; ratios and total return have been
annualized.
(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. Does not
include contingent deferred sales charge which varies from 1-4%
depending upon the holding period for B Class and 1% for C Class.
(3) Computed by dividing tha total amount of commissions paid by the total
number of shares purchased and sold during the period for which there
was a commission charged.
<PAGE> 23
DELAWARE GROUP TAX-EFFICIENT EQUITY FUND
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
(UNAUDITED)
Delaware Group Tax-Efficient Equity Fund (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 Tax-Efficient Equity Fund A Class carries a
front-end sales charge of 4.75%. The Tax-Efficient Equity Fund B Class carries a
back-end deferred sales charge. The Tax-Efficient Equity Fund C Class carries a
level load deferred sales charge and Tax-Efficient Equity Fund Institutional
Class has no sales charge.
The objective of the Fund is to obtain for taxable investors a high total return
on an after-tax basis.
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 lasted
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. 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 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
<PAGE> 24
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.
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.
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 first $500
million of average daily net assets, 0.725% on the next $500 million and 0.70%
on the average daily net assets in excess of $1 billion. At October 31, 1997 the
Fund has an outstanding liability to DMC for $2,050.
DMC has elected to waive that portion if any of the management fee and reimburse
the Fund to the extent that annual operating expenses exclusive of taxes,
interest, distribution fees, brokerage commissions and extraordinary expenses,
exceed 1.20% of average daily net assets of the Fund through April 30, 1998.
Total expenses absorbed by DMC for the period ended October 31, 1997 were
$13,720.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to serve as dividend disbursing and transfer agent for the Fund. The Fund also
engaged DSC to provide accounting services for the Fund. For the period ended
October 31, 1997, the Fund expensed $1,444 for dividend disbursing and transfer
agent services and $322 for accounting services. At October 31, 1997, the Fund
had a liability for such fees and other expenses payable to DSC of $7,258.
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
<PAGE> 25
the B and C Class. For the period ended October 31, 1997, DDLP earned $9,178 for
commissions on sales of the Fund A Class shares. At October 31, 1997 the Fund
had an outstanding liability for $14,078.
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 period ended October 31, 1997, the Fund made purchases of $4,836,605
and sales of $115,266 of investment securities other than U.S. government
securities and temporary cash investments.
At October 31, 1997, the aggregate cost of securities for federal income tax
purposes was $5,193,451.
At October 31, 1997, unrealized appreciation for federal income tax purposes
aggregated $40,839 of which $138,381 related to unrealized appreciation of
securities and $97,542 related to unrealized depreciation of securities.
4. CAPITAL STOCK
Transactions in capital stock were as follows:
<TABLE>
<CAPTION>
6/27/97 *
To
10/31/97
--------
<S> <C>
Shares sold:
Tax-Efficient Equity Fund A Class ................................. 296,524
Tax-Efficient Equity Fund B Class ................................. 108,240
Tax-Efficient Equity Fund C Class ................................. 19,570
Tax-Efficient Equity Fund Institutional Class ..................... 176,471
--------
600,805
Shares repurchased:
Tax-Efficient Equity Fund A Class ................................. (254)
Tax-Efficient Equity Fund B Class ................................. -0-
Tax-Efficient Equity Fund C Class ................................. -0-
Tax-Efficient Equity Fund Institutional Class ..................... -0-
--------
(254)
Net Increase ........................................................ 600,551
--------
</TABLE>
5. Concentrations of Credit Risk
The Fund may invest up to 15 % 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
<PAGE> 26
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.
<PAGE> 27
PART C
Other Information
Item 24. Financial Statements and Exhibits
(a) Financial Statements:
Part A - Financial Highlights
*Part B - Statement of Net Assets
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Notes to Financial Statements
Accountant's Report
* The financial statements and Accountant's Report listed
above relating to Aggressive Growth Fund and Growth Stock
Fund are incorporated into this filing by reference into the
Funds' Part B from the Registrant's Annual Report for the
fiscal year ended April 30, 1997. The unaudited financial
statements relating to Tax-Efficient Equity Fund are
incorporated into this filing by reference into the Fund's
Part B from the Registrant's Semi-Annual Report for the
period ended October 31, 1997.
(b)Exhibits:
(1) Articles of Incorporation.
(a) Amended and Restated Articles of
Incorporation (November 22, 1993)
incorporated into this filing by
reference to Post-Effective Amendment No.
25 filed September 1, 1995.
(b) Certification of Designation (April 28,
1994) incorporated into this filing by
reference to Post-Effective Amendment No.
25 filed September 1, 1995.
(c) Certification of Designation (August 24,
1995) incorporated into this filing by
reference to Post-Effective Amendment No.
25 filed September 1, 1995.
(d) Certification of Designation (August 25,
1995) incorporated into this filing by
reference to Post-Effective Amendment No.
25 filed September 1, 1995.
(e) Articles of Correction (July 27, 1994)
incorporated into this filing by
reference to Post-Effective Amendment No.
25 filed September 1, 1995.
(f) Certification of Designation (January 23,
1997) incorporated into this filing by
reference to Post-Effective Amendment No.
29 filed February 18, 1997.
(g) Form of Certificate of Designation
(August 1997) incorporated into this
filing by reference to Post-Effective
Amendment No. 30 filed June 27, 1997.
<PAGE> 28
PART C - Other Information
(Continued)
(2) By-Laws. By-Laws, as amended, (October 30, 1996)
incorporated into this filing by reference to
Post-Effective Amendment No. 29 filed February
18, 1997.
(3) Voting Trust Agreement. Inapplicable.
(4) Copies of All Instruments Defining the Rights of
Holders.
(a) Articles of Incorporation and Articles
Supplementary.
(i) Article 7 and Article 8(d) of
Amended and Restated Articles of
Incorporation (November 22, 1993)
incorporated into this filing by
reference to Post-Effective
Amendment No. 25 filed September 1,
1995.
(ii) Certificate of Designation (April
28, 1994) incorporated into this
filing by reference to
Post-Effective Amendment No. 25
filed September 1, 1995.
(iii) Certificate of Designation (August
24, 1995) incorporated into this
filing by reference to
Post-Effective Amendment No. 25
filed September 1, 1995.
(iv) Certificate of Designation (August
25, 1995) incorporated into this
filing by reference to
Post-Effective Amendment No. 25
filed September 1, 1995.
(v) Certificate of Designation (January
23, 1997) incorporated into this
filing by reference to
Post-Effective Amendment No. 29
filed February 18, 1997.
(v) Form of Certificate of Designation
(August 1997) incorporated into
this filing by reference to
Post-Effective Amendment No. 30
filed June 27, 1997.
(b) By-Laws.
(i) Article Second, Article Fifth,
Article Sixth and Article Twelfth
incorporated into this filing by
reference to Post-Effective
Amendment No. 29 filed February 18,
1997.
(5) Investment Management Agreement.
(a) Executed Investment Management Agreement
(April 30, 1997) between Delaware
Management Company, Inc. and the
Registrant on behalf of Aggressive Growth
Fund and Growth Stock Fund incorporated
into this filing by reference to
Post-Effective Amendment No. 30 filed
June 27, 1997.
<PAGE> 29
PART C - Other Information
(Continued)
(b) Executed Investment Management Agreement
(June 26, 1997) between Delaware
Management Company, Inc. and the
Registrant on behalf of Tax-Efficient
Equity Fund incorporated into this filing
by reference to Post-Effective Amendment
No. 30 filed June 27, 1997.
(c) Executed Investment Sub-Advisory
Agreement (April 30, 1997) between
Delaware Management Company, Inc. and
Voyageur Asset Management LLC on behalf
of Growth Stock Fund incorporated into
this filing by reference to
Post-Effective Amendment No. 30 filed
June 27, 1997.
(6) (a) Distribution Agreements.
(i) Executed Distribution Agreement
(April 30, 1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of Aggressive
Growth Fund and Growth Stock Fund
incorporated into this filing by
reference to Post-Effective
Amendment No. 30 filed June 27,
1997.
(ii) Executed Distribution Agreement
(June 26, 1997) between Delaware
Distributors, L.P. and the
Registrant on behalf of
Tax-Efficient Equity Fund
incorporated into this filing by
reference to Post-Effective
Amendment No. 30 filed June 27,
1997.
(b) Administration and Service Agreement Form
of Administration and Service Agreement
(as amended November 1995) (Module)
incorporated into this filing by
reference to Post-Effective Amendment No.
30 filed June 27, 1997.
(c) Dealer's Agreement. Dealer's Agreement,
as amended, (November 1995) (Module)
incorporated into this filing by
reference to Post-Effective Amendment
No. 30 filed June 27, 1997.
(d) Mutual Fund Agreement for the Delaware
Group of Funds, as amended, (November
1995) (Module) incorporated into this
filing by reference to Post-Effective
Amendment No. 30 filed June 27, 1997.
(7) Bonus, Profit Sharing, Pension Contracts.
Inapplicable.
(8) Custodian Agreement.
(a) Custodian Contract with Norwest Bank
Minnesota N.A. (May 16, 1994)
incorporated into this filing by
reference to Post-Effective Amendment No.
25 filed September 1, 1995.
(b) Custodian Agreement between The Chase
Manhattan Bank and the Registrant on
behalf of Tax-Efficient Equity Fund
(1997) (Module) incorporated into this
filing by reference to Post-Effective
Amendment No. 30 filed June 27, 1997.
<PAGE> 30
PART C - Other Information
(Continued)
(9) Other Material Contracts.
(a) Executed Shareholder Services Agreement
(April 30, 1997) between Delaware Service
Company, Inc. and the Registrant on
behalf of the Aggressive Growth Fund,
Growth Stock Fund and Tax-Efficient
Equity Fund incorporated into this filing
by reference to Post-Effective Amendment
No. 30 filed June 27, 1997.
(b) Executed Fund Accounting Agreement (April
30, 1997) between Delaware Service
Company, Inc. and the Registrant on
behalf of each Fund incorporated into
this filing by reference to
Post-Effective Amendment No. 30 filed
June 27, 1997.
(10) Opinion of Counsel. Inapplicable.
(11) Consent of Auditors. Attached as Exhibit.
(12) Inapplicable.
(13) Letter of Investment Intent. Incorporated into
this filing by reference to Pre-Effective
Amendment No. 1.
(14) Model Plans. To be filed by Amendment.
***(15) Plans under Rule 12b-1.
(a) Plan under Rule 12b-1 for Class A (April
30, 1997) on behalf of Aggressive Growth
Fund and Growth Stock Fund incorporated
into this filing by reference to Post-
Effective Amendment No. 30 filed June 27,
1997.
(b) Plan under Rule 12b-1 for Class B (April
30, 1997) on behalf of Aggressive Growth
Fund and Growth Stock Fund incorporated
into this filing by reference to Post-
Effective Amendment No. 30 filed June 27,
1997.
(c) Plan under Rule 12b-1 for Class C (April
30, 1997) on behalf of Aggressive Growth
Fund and Growth Stock Fund attached
incorporated into this filing by
reference to Post-Effective Amendment No.
30 filed June 27, 1997.
(d) Plan under Rule 12b-1 for Class A (June
26, 1997) on behalf of Tax-Efficient
Equity Fund incorporated into this filing
by reference to Post-Effective Amendment
No. 30 filed June 27, 1997.
*** Relates to Class A, Class B and Class C Shares of Aggressive Growth Fund,
Growth Stock Fund and Tax-Efficient Equity Fund only.
<PAGE> 31
PART C - Other Information
(Continued)
(e) Plan under Rule 12b-1 for Class B (June
26, 1997) on behalf of Tax-Efficient
Equity Fund incorporated into this filing
by reference to Post-Effective Amendment
No. 30 filed June 27, 1997.
(f) Plan under Rule 12b-1 for Class C (June
26, 1997) on behalf of Tax-Efficient
Equity Fund incorporated into this filing
by reference to Post-Effective Amendment
No. 30 filed June 27, 1997.
(16) Schedules of Computation for each Performance
Quotation.
(a) Schedules of Computation of Fund
Performance for Aggressive Growth Fund
and Growth Stock Fund incorporated into
this filing by reference to
Post-Effective Amendment No. 31 filed
August 27, 1997.
(b) Schedules of Computation of Fund
Performance for Tax-Efficient Equity Fund
for periods not previously filed attached
as Exhibit.
(17) Financial Data Schedules.
(a) Financial Data Schedules for Aggressive
Growth and Growth Stock Funds
incorporated into this filing by
reference to Post-Effective Amendment No.
31 filed August 27, 1997.
(b) Financial Data Schedules for
Tax-Efficient Equity Fund for the period
July 1, 1997 through October 31, 1997
attached as Exhibit.
(18) Plan under Rule 18f-3.
(a) Plan under Rule 18f-3 (April 30, 1997)
incorporated into this filing by
reference to Post-Effective Amendment No.
30 filed June 27, 1997.
(19) Other: Directors' Power of Attorney.
Incorporated into this filing to
Post-Effective Amendment No. 30 filed
June 27, 1997.
Item 25. Persons Controlled by or under Common Control with Registrant. None.
<PAGE> 32
PART C - Other Information
(Continued)
Item 26. Number of Holders of Securities.
<TABLE>
<CAPTION>
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Voyageur Mutual Funds III, Inc's
Growth Stock Fund:
Growth Stock Fund A Class
Common Stock Par Value 2,225 Accounts
$.01 Per Share as of November 30, 1997
Growth Stock Fund B Class
Common Stock Par Value 90 Accounts
$.01 Per Share as of November 30, 1997
Growth Stock Fund C Class
Common Stock Par Value 64 Accounts
$.01 Per Share as of November 30, 1997
Growth Stock Fund Institutional Class
Common Stock Par Value 1 Account
$.01 Per Share as of November 30, 1997
Voyageur Mutual Funds III, Inc.'s
Aggressive Growth Fund:
Aggressive Growth Fund A Class
Common Stock Par Value 724 Accounts
$.01 Per Share as of November 30, 1997
Aggressive Growth Fund B Class
Common Stock Par Value 248 Accounts
$.01 Per Share as of November 30, 1997
Aggressive Growth Fund C Class
Common Stock Par Value 97 Accounts
$.01 Per Share as of November 30, 1997
Aggressive Growth Fund Institutional Class
Common Stock Par Value 5 Accounts
$.01 Per Share as of November 30, 1997
Voyageur Mutual Funds III, Inc.'s
Tax-Efficient Equity Fund:
Tax-Efficient Equity Fund A Class
Common Stock Par Value 152 Accounts
$.01 Per Share as of November 30, 1997
</TABLE>
<PAGE> 33
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Number of
Title of Class Record Holders
Tax-Efficient Equity Fund B Class
Common Stock Par Value 79 Accounts
$.01 Per Share as of November 30, 1997
Tax-Efficient Equity Fund C Class
Common Stock Par Value 30 Accounts
$.01 Per Share as of November 30, 1997
Tax-Efficient Equity Fund Institutional Class
Common Stock Par Value 2 Accounts
$.01 Per Share as of November 30, 1997
</TABLE>
Item 27. Indemnification. Incorporated into this filing by reference to
Post-Effective Amendment No. 29 filed February 18, 1997.
Item 28. Business and Other Connections of Investment Adviser.
(a) Delaware Management Company, Inc. (the "Manager") serves as
investment manager to the Registrant and also serves as investment manager or
sub-adviser to certain of the other funds in the Delaware Group (Delaware Group
Equity Funds I, Inc., Delaware Group Equity Funds II, Inc., Delaware Group
Equity Funds III, Inc., Delaware Group Equity Funds IV, Inc., Delaware Group
Equity Funds V, Inc., Delaware Group Government Fund, Inc., Delaware Group
Income Funds, Inc., Delaware Group Limited-Term Government Funds, Inc., Delaware
Group Cash Reserve, Inc., Delaware Group Tax- Free Fund, Inc., Delaware Group
State Tax-Free Income Trust, Delaware Group Tax-Free Money Fund, Inc., Delaware
Group Premium Fund, Inc., Delaware Group Global & International Funds, Inc.,
Delaware Pooled Trust, Inc., Delaware Group Adviser Funds, Inc., Delaware Group
Dividend and Income Fund, Inc., Delaware Group Global Dividend and Income Fund,
Inc., Voyageur Tax-Free Funds, Inc., Voyageur Intermediate Tax-Free Funds, Inc.,
Voyageur Insured Funds, Inc., Voyageur Funds, Inc., Voyageur Investment Trust,
Voyageur Investment Trust II, Voyageur Mutual Funds, Inc., Voyageur Mutual Funds
II, Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur Colorado
Insured Municipal Income Fund, Inc., Voyageur Florida Insured Municipal Income
Fund, Voyageur Minnesota Municipal Fund, Inc., Voyageur Minnesota Municipal Fund
II, Inc. and Voyageur Minnesota Municipal Fund III, Inc.) and provides
investment advisory services to institutional accounts, primarily retirement
plans and endowment funds. In addition, certain directors of the Manager also
serve as directors/trustees of the other Delaware Group funds, and certain
officers are also officers of these other funds. A company owned by the
Manager's parent company acts as principal underwriter to the mutual funds in
the Delaware Group (see Item 29 below) and another such company acts as the
shareholder services, dividend disbursing, accounting servicing and transfer
agent for all of the mutual funds in the Delaware Group.
<PAGE> 34
PART C - Other Information
(Continued)
The following persons serving as directors or officers of the Manager
have held the following positions during the past two years:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Wayne A. Stork Chairman of the Board, President, Chief Executive Officer, Chief Investment Officer and
Director of Delaware Management Company, Inc.; Chairman of the Board, President, Chief
Executive Officer and Director of DMH Corp., Delaware Distributors, Inc. and Founders
Holdings, Inc.; Chairman, Chief Executive Officer and Director of Delaware International
Holdings Ltd. and Delaware International Advisers Ltd.; Chairman of the Board and
Director and/or Trustee of the Registrant, each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc. and Delaware Capital Management, Inc.; Chairman
of Delaware Distributors, L.P.; President and Chief Executive Officer of Delvoy, Inc.; and
Director of Delaware Service Company, Inc. and Delaware Investment & Retirement
Services, Inc.
Richard G. Unruh, Jr. Executive Vice President and Director of Delaware Management Company, Inc.; Executive
Vice President of the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc. and Delaware Capital Management, Inc; and Director of
Delaware International Advisers Ltd.
Board of Directors, Chairman of Finance Committee, Keystone
Insurance Company since 1989, 2040 Market Street, Philadelphia,
PA; Board of Directors, Chairman of Finance Committee, AAA Mid
Atlantic, Inc. since 1989, 2040 Market Street, Philadelphia,
PA; Board of Directors, Metron, Inc. since 1995, 11911 Freedom
Drive, Reston, VA
Paul E. Suckow Executive Vice President/Chief Investment Officer, Fixed Income of Delaware
Management Company, Inc., the Registrant, each of the other funds in the
Delaware Group and Delaware Management Holdings, Inc.; Executive Vice President
and Director of Founders Holdings, Inc.; Executive Vice President of Delaware
Capital Management, Inc.; and Director of Founders CBO Corporation Director,
HYPPCO Finance Company Ltd.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 35
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
David K. Downes Executive Vice President, Chief Operating Officer, Chief Financial Officer and
Director of Delaware Management Company, Inc., DMH Corp, Delaware Distributors,
Inc., Founders Holdings, Inc. and Delvoy, Inc.; Executive Vice President, Chief
Operating Officer and Chief Financial Officer of the Registrant and each of the
other funds in the Delaware Group, Delaware Management Holdings, Inc., Founders
CBO Corporation, Delaware Capital Management, Inc. and Delaware Distributors,
L.P.; President, Chief Executive Officer, Chief Financial Officer and Director
of Delaware Service Company, Inc.; President, Chief Operating Officer, Chief
Financial Officer and Director of Delaware International Holdings Ltd.;
Chairman, Chief Executive Officer and Director of Delaware Investment &
Retirement Services, Inc.; Chairman and Director of Delaware Management Trust
Company; Director of Delaware International Advisers Ltd.; and Vice President of
Lincoln Funds Corporation
Chief Executive Officer and Director of Forewarn, Inc. since 1993, 8 Clayton Place,
Newtown Square, PA
George M. Chamberlain, Jr. Senior Vice President, General Counsel, Secretary and Director of Delaware Management
Company, Inc., DMH Corp., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Founders Holdings, Inc., Delaware Capital Management, Inc., Delaware Investment &
Retirement Services, Inc. and Delvoy, Inc.; Senior Vice President, Secretary and General
Counsel of the Registrant, each of the other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Management Holdings, Inc.; Senior Vice President and
Director of Delaware International Holdings Ltd.; Executive Vice President, Secretary,
General Counsel and Director of Delaware Management Trust Company; Director of
Delaware International Advisers Ltd.; Secretary of Lincoln Funds Corporation
</TABLE>
*Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 36
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Richard J. Flannery Senior Vice President/Corporate and International Affairs of the Registrant, each of the
other funds in the Delaware Group, Delaware Management Holdings, Inc., DMH Corp.,
Delaware Management Company, Inc., Delaware Distributors, Inc., Delaware Distributors,
L.P., Delaware Management Trust Company, Delaware Capital Management, Inc.,
Delaware Service Company, Inc. and Delaware Investment & Retirement Services, Inc.;
Executive Vice President/Corporate & International Affairs and Director of Delaware
International Holdings Ltd.; Senior Vice President/ Corporate and International Affairs and
Director of Founders Holdings, Inc. and Delvoy, Inc.; Senior Vice President of Founders
CBO Corporation; and Director of Delaware International Advisers Ltd.
Director, HYPPCO Finance Company Ltd.
Limited Partner of Stonewall Links, L.P. since 1991, Bulltown Rd., Elverton, PA; Director
and Member of Executive Committee of Stonewall Links, Inc. since 1991, Bulltown Rd.,
Elverton, PA
Michael P. Bishof Senior Vice President and Treasurer of the Registrant, each of the other funds in the
Delaware Group and Founders Holdings, Inc.; Senior Vice President/Investment
Accounting of Delaware Management Company, Inc. and Delaware Service Company, Inc.;
Senior Vice President and Treasurer/ Manager, Investment Accounting of Delaware
Distributors, L.P.; Assistant Treasurer of Founders CBO Corporation; and Senior Vice
President and Manager of Investment Accounting of Delaware International Holdings Ltd.
Joseph H. Hastings Senior Vice President/Corporate Controller and Treasurer of Delaware Management
Holdings, Inc., DMH Corp., Delaware Management Company, Inc., Delaware Distributors,
Inc., Delaware Capital Management, Inc., Delaware Distributors, L.P., Delaware Service
Company, Inc., Delaware International Holdings Ltd. and Delvoy, Inc.; Senior Vice
President/Corporate Controller of the Registrant, each of the other funds in the Delaware
Group and Founders Holdings, Inc.; Executive Vice President, Chief Financial Officer and
Treasurer of Delaware Management Trust Company; Chief Financial Officer and Treasurer
of Delaware Investment & Retirement Services, Inc.; Senior Vice President/Assistant
Treasurer of Founders CBO Corporation; and Treasurer of Lincoln Funds Corporation.
Michael T. Taggart Senior Vice President/Facilities Management and Administrative Services of Delaware
Management Company, Inc.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 37
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Douglas L. Anderson Senior Vice President/Operations of Delaware Management Company, Inc., Delaware
Investment and Retirement Services, Inc. and Delaware Service Company, Inc.; Senior Vice
President/ Operations and Director of Delaware Management Trust Company
James L. Shields Senior Vice President/Chief Information Officer of Delaware Management Company, Inc.,
Delaware Service Company, Inc. and Delaware Investment & Retirement Services, Inc.
Eric E. Miller Vice President, Assistant Secretary and Deputy General Counsel of the Registrant and each
of the other funds in the Delaware Group, Delaware Management Company, Inc., Delaware
Management Holdings, Inc., DMH Corp., Delaware Distributors, L.P., Delaware
Distributors Inc., Delaware Service Company, Inc., Delaware Management Trust Company,
Founders Holdings, Inc., Delaware Capital Management, Inc. and Delaware Investment &
Retirement Services, Inc.; and Vice President and Assistant Secretary of Delvoy, Inc.
Richelle S. Maestro Vice President and Assistant Secretary of Delaware Management Company, Inc., the
Registrant, each of the other funds in the Delaware Group, Delaware Management
Holdings, Inc., Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service
Company, Inc., DMH Corp., Delaware Management Trust Company, Delaware Capital
Management, Inc., Delaware Investment & Retirement Services, Inc., Founders Holdings,
Inc. and Delvoy, Inc.; Vice President and Secretary of Delaware International Holdings
Ltd.; and Secretary of Founders CBO Corporation;
Partner of Tri=R Associates since 1989, 10001 Sandmeyer Lane, Philadelphia, PA
Richard Salus1 Vice President/Assistant Controller of Delaware Management Company, Inc. and Delaware
Management Trust Company
Bruce A. Ulmer Vice President/Director of LNC Internal Audit of Delaware Management Company,
Inc., the Registrant, each of the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware Management Trust Company and
Delaware Investment & Retirement Services, Inc.; Vice President/Director of
Internal Audit of Delvoy, Inc.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 38
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Steven T. Lampe Vice President/Taxation of Delaware Management Company, Inc., the Registrant, each of
the other funds in the Delaware Group, Delaware Management Holdings, Inc., DMH Corp.,
Delaware Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Founders Holdings, Inc., Founders CBO
Corporation, Delaware Capital Management, Inc., Delaware Investment & Retirement
Services, Inc. and Delvoy, Inc.
Christopher Adams Vice President/Strategic Planning of Delaware Management Company, Inc. and Delaware
Service Company, Inc.
Susan L. Hanson Vice President/Strategic Planning of Delaware Management Company, Inc. and Delaware
Service Company, Inc.
Dennis J. Mara2 Vice President/Acquisitions of Delaware Management Company, Inc.
Scott Metzger Vice President/Business Development of Delaware Management Company, Inc. and
Delaware Service Company, Inc.
Lisa O. Brinkley Vice President/Compliance of Delaware Management Company, Inc., the Registrant, each
of the other funds in the Delaware Group, DMH Corp., Delaware Distributors, L.P.,
Delaware Distributors, Inc., Delaware Service Company, Inc., Delaware Management Trust
Company, Delaware Capital Management, Inc. and Delaware Investment & Retirement
Services, Inc.; Vice President of Delvoy, Inc.
Rosemary E. Milner Vice President/Legal Registrations of Delaware Management Company, Inc., the Registrant,
each of the other funds in the Delaware Group, Delaware Distributors, L.P. and Delaware
Distributors, Inc.
Mary Ellen Carrozza Vice President/Client Services of Delaware Management Company, Inc. and the
Registrant
Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds, the fixed income funds and the closed-end funds in the
Delaware Group; Vice President of Founders Holdings, Inc.; and Treasurer, Assistant Secretary and
Director of Founders CBO Corporation
Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds, the fixed income funds and the closed-end funds in the
Delaware Group; Vice President of Founders Holdings, Inc.; and President and Director of Founders
CBO Corporation.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 39
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Gary A. Reed Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware Group and
Delaware Capital Management, Inc.
Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware
Group and Delaware Capital Management, Inc.
Roger A. Early Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant, each of the tax-exempt funds and the fixed income funds in the Delaware
Group
Mitchell L. Conery(3) Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and each of the tax-exempt and fixed income funds in the Delaware Group
George H. Burwell Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group
John B. Fields Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant and each of the equity funds in the Delaware Group and Delaware Capital
Management, Inc.
Gerald S. Frey(4) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group
Christopher Beck(5) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant and each of the equity funds in the Delaware Group
Elizabeth H. Howell(6) Vice President/Senior Portfolio Manager of Delaware Management Company, Inc. and the
Delaware-Voyageur Tax-Free Minnesota Intermediate, Delaware-Voyageur Minnesota
Insured, Delaware-Voyageur Tax-Free Minnesota, Delaware-Voyageur Tax-Free Idaho,
Delaware-Voyageur Tax-Free Kansas, Delaware-Voyageur Tax-Free Missouri, Delaware-
Voyageur Tax-Free Oregon, Delaware-Voyageur Tax-Free Washington, Delaware-
Voyageur Tax-Free Iowa and Delaware-Voyageur Tax-Free Wisconsin Funds.
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 40
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
Andrew M. McCullagh, Jr.(7) Vice President/Senior Portfolio Manager of Delaware Management
Company, Inc. and the Delaware-Voyageur Tax-Free Arizona Insured, Delaware-Voyageur
Tax-Free Arizona, Delaware-Voyageur Tax-Free California Insured, Delaware-Voyageur
Tax-Free Colorado, Delaware-Voyageur Tax-Free New Mexico, Delaware-Voyageur Tax-Free
North Dakota and Delaware-Voyageur Tax-Free Utah Funds.
Babak Zenouzi Vice President/Senior Portfolio Manager of Delaware Management Company, Inc.,
the Registrant and each of the equity funds and the closed-end funds in the Delaware
Group
Paul Grillo Vice President/Portfolio Manager of Delaware Management Company, Inc. and each of the
tax-exempt and fixed income funds in the Delaware Group
Marshall T. Bassett Vice President/Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group.
John Heffern Vice President/Portfolio Manager of Delaware Management Company, Inc., the
Registrant and each of the equity funds in the Delaware Group.
</TABLE>
1 SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
2 CORPORATE CONTROLLER, IIS prior to July 1997 and DIRECTOR, FINANCIAL
PLANNING, Decision One prior to March 1996. 3 INVESTMENT OFFICER,
Travelers Insurance prior to January 1997.
4 SENIOR DIRECTOR, Morgan Grenfell Capital Management prior to June 1996.
5 SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
6 SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May
1997.
7 SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset
Management LLC prior to May 1997.
<PAGE> 41
PART C - Other Information
(Continued)
(b) Voyageur Asset Management LLC serves as sub-adviser (the
"Sub-Adviser") for Growth Stock Fund. The Sub-Adviser is an indirect
wholly-owned subsidiary of Dougherty Financial Group LLC ("DFG"), which is owned
50% by Michael E. Dougherty and 50% equally by James A. Pohlad, Robert C. Pohlad
and William M. Pohlad (the "Pohlads"). Mr. Dougherty co-founded the predecessor
of DFG in 1977 and has served as DFG's Chairman of the Board and Chief Executive
Officer since inception. The Sub-Adviser serves as adviser or sub-adviser to
other investment companies and administers numerous private accounts and
together with its affiliates managed approximately $8 billion in assets as of
April 30, 1997. The Sub-Adviser's principal business address is 90 South Seventh
Street, Suite 4400, Minneapolis, Minnesota 55402.
<TABLE>
<CAPTION>
Name and Principal Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------
<S> <C>
John G. Taft Chairman of the Board, Director and Chief Executive Officer of Voyageur Asset
Management LLC
Edward J. Kohler Director and President of Voyageur Asset Management LLC
Steven B. Johansen Director, Treasurer and Chief Financial Officer of Voyageur Asset Management LLC
Thomas J. Abood Secretary of Voyageur Asset Management LLC
</TABLE>
*Business address of each is 90 South Seventh Street, Suite 4400, Minneapolis,
Minnesota 55402.
<PAGE> 42
PART C - Other Information
(Continued)
Item 29. Principal Underwriters.
(a) Delaware Distributors, L.P. serves as principal
underwriter for all the mutual funds in the Delaware
Group.
(b) Information with respect to each director, officer or
partner of principal underwriter:
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Delaware Distributors, Inc. General Partner None
Delaware Management
Company, Inc. Limited Partner Investment Manager
Delaware Capital
Management, Inc. Limited Partner None
Wayne A. Stork Chairman Chairman
Bruce D. Barton President and Chief Executive None
Officer
David K. Downes Senior Vice President, Executive Vice
Chief Administrative Officer President/Chief
and Chief Financial Officer Operating Officer/
Chief Financial Officer
George M. Chamberlain, Jr. Senior Vice President/Secretary/ Senior Vice President/
General Counsel Secretary/General Counsel
Terrence P. Cunningham Senior Vice President/ Financial None
Institutions
Thomas E. Sawyer Senior Vice President/ None
National Sales Director
Dana B. Hall Senior Vice President/ None
Key Accounts
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 43
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Mac McAuliffe Senior Vice President/Sales None
Manager, Western Division
William F. Hostler Senior Vice President/ None
Marketing Services
J. Chris Meyer Senior Vice President/ None
Director Product Management
Stephen H. Slack Senior Vice President/Wholesaler None
William M. Kimbrough Senior Vice President/Wholesaler None
Daniel J. Brooks Senior Vice President/Wholesaler None
Richard J. Flannery Senior Vice President/Corporate Senior Vice President/
and International Affairs Corporate and
International Affairs
Bradley L. Kolstoe Senior Vice President/Western None
Division Sales Manager
Henry W. Orvin Senior Vice President/Eastern None
Division Sales Manager - Wire/
Regional Channel
Michael P. Bishof Senior Vice President and Treasurer/ Senior Vice
Manager, Investment Accounting President/Treasurer
Eric E. Miller Vice President/Assistant Secretary/ Vice President/
Deputy General Counsel Assistant Secretary/
Deputy General Counsel
Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary
Steven T. Lampe Vice President/Taxation Vice President/Taxation
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 44
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Joseph H. Hastings Vice President/Corporate Senior Vice President/
Controller & Treasurer Corporate Controller
Lisa O. Brinkley Vice President/Compliance Vice President/
Compliance
Rosemary E. Milner Vice President/Legal Registrations Vice President/Legal
Registrations
Daniel H. Carlson Vice President/Strategic Marketing None
Diane M. Anderson Vice President/Plan Record Keeping None
and Administration
Anthony J. Scalia Vice President/Defined Contribution None
Sales, SW Territory
Courtney S. West Vice President/Defined Contribution None
Sales, NE Territory
Denise F. Guerriere Vice President/Client Services None
Gordon E. Searles Vice President/Client Services None
Julia R. Vander Els Vice President/Participant Services None
Jerome J. Alrutz Vice President/Retail Sales None
Joanne A. Mettenheimer Vice President/New Business None
Development
Scott Metzger Vice President/Business Development Vice President/Business
Development
Stephen C. Hall Vice President/Institutional Sales None
Gregory J. McMillan Vice President/ National Accounts None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 45
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Christopher H. Price Vice President/Manager, None
Insurance
Stephen J. DeAngelis Vice President/Product None
Development
Andrew W. Whitaker Vice President/Financial Institutions None
Jesse Emery Vice President/ Marketing None
Communications
Darryl S. Grayson Vice President, Broker/Dealer None
Internal Sales
Susan T. Friestedt Vice President/Client Service None
Dinah J. Huntoon Vice President/Product None
Manager Equity
Soohee Lee Vice President/Fixed Income None
Product Management
Michael J. Woods Vice President/ UIT Product None
Management
Ellen M. Krott Vice President/Marketing None
Dale L. Kurtz Vice President/Marketing Support None
Holly W. Reimel Vice President/Manager, Key Accounts None
David P. Anderson Vice President/Wholesaler None
Lee D. Beck Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 46
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Gabriella Bercze Vice President/Wholesaler None
Terrence L. Bussard Vice President/Wholesaler None
William S. Carroll Vice President/Wholesaler None
William L. Castetter Vice President/Wholesaler None
Thomas J. Chadie Vice President/Wholesaler None
Thomas C. Gallagher Vice President/Wholesaler None
Douglas R. Glennon Vice President/Wholesaler None
Ronald A. Haimowitz Vice President/Wholesaler None
Christopher L. Johnston Vice President/Wholesaler None
Michael P. Jordan Vice President/Wholesaler None
Jeffrey A. Keinert Vice President/Wholesaler None
Thomas P. Kennett Vice President/ Wholesaler None
Debbie A. Marler Vice President/Wholesaler None
Nathan W. Medin Vice President/Wholesaler None
Roger J. Miller Vice President/Wholesaler None
Patrick L. Murphy Vice President/Wholesaler None
Stephen C. Nell Vice President/Wholesaler None
Julia A. Nye Vice President/Wholesaler None
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 47
PART C - Other Information
(Continued)
<TABLE>
<CAPTION>
Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Joseph T. Owczarek Vice President/Wholesaler None
Mary Ellen Pernice=Fadden Vice President/Wholesaler None
Mark A. Pletts Vice President/Wholesaler None
Philip G. Rickards Vice President/Wholesaler None
Laura E. Roman Vice President/Wholesaler None
Linda Schulz Vice President/Wholesaler None
Edward B. Sheridan Vice President/Wholesaler None
Robert E. Stansbury Vice President/Wholesaler None
Julia A. Stanton Vice President/Wholesaler None
Larry D. Stone Vice President/Wholesaler None
Edward J. Wagner Vice President/Wholesaler None
Wayne W. Wagner Vice President/Wholesaler None
John A. Wells Vice President/Marketing Technology None
Scott Whitehouse Vice President/Wholesaler None
Frank C. Tonnemaker Vice President None
</TABLE>
(c) Not applicable.
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE> 48
PART C - Other Information
(Continued)
Item 30. Location of Accounts and Records.
All accounts and records are maintained in Philadelphia
at 1818 Market Street, Philadelphia, PA 19103 or One
Commerce Square, Philadelphia, PA 19103 or 90 South
Seventh Street, Suite 4400, Minneapolis, Minnesota 55402.
Item 31. Management Services. None.
Item 32. Undertakings.
(a) Not Applicable.
(b) Not Applicable.
(c) The Registrant hereby undertakes to furnish
each person to whom a prospectus is delivered
with a copy of the Registrant's latest annual
report to shareholders, upon request and
without charge.
(d) The Registrant hereby undertakes to promptly
call a meeting of shareholders for the purpose
of voting upon the question of removal of any
director when requested in writing to do so by
the record holders of not less than 10% of the
outstanding shares.
<PAGE> 49
SIGNATURES
Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia, Commonwealth of Pennsylvania on this
29th day of December, 1997.
VOYAGEUR MUTUAL FUNDS III, INC.
By /s/Wayne A. Stork
--------------------
Wayne A. Stork
Chairman
Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:
<TABLE>
<CAPTION>
Signature Title Date
--------- ----- ----
<S> <C> <C>
/s/ Wayne A. Stork Chairman and Director December 29, 1997
- -----------------------------------------
Wayne A. Stork
Executive Vice President/Chief Operating
Officer/Chief Financial Officer
/s/ David K. Downes (Principal Financial Officer and Principal December 29, 1997
- ----------------------------------------- Accounting Officer)
David K. Downes
/s/Walter P. Babich * Director December 29, 1997
- -----------------------------------------
Walter P. Babich
/s/Anthony D. Knerr * Director December 29, 1997
- -----------------------------------------
Anthony D. Knerr
/s/Ann R. Leven * Director December 29, 1997
- -----------------------------------------
Ann R. Leven
/s/W. Thacher Longstreth * Director December 29, 1997
- -----------------------------------------
W. Thacher Longstreth
/s/Thomas F. Madison * Director December 29, 1997
- -----------------------------------------
Thomas F. Madison
/s/Jeffrey J. Nick * Director December 29, 1997
- -----------------------------------------
Jeffrey J. Nick
/s/Charles E. Peck * Director December 29, 1997
- -----------------------------------------
Charles E. Peck
</TABLE>
*By /s/ Wayne A. Stork
-------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated
<PAGE> 50
SECURITIES AND EXCHANGE COMMISSION
Washington, DC 20549
Exhibits
to
Form N-1A
REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933
<PAGE> 51
INDEX TO EXHIBITS
<TABLE>
<CAPTION>
Exhibit No. Exhibit
- ----------- -------
<S> <C>
EX-99.B11 Consent of Auditor
EX-99.B16A Schedules of Computation for Tax-Efficient Equity Fund
EX-27 Financial Data Schedules for Tax-Efficient Equity Fund
</TABLE>
<PAGE> 1
EX-99.B11
[letterhead of KPMG Peat Marwick LLP appears here]
INDEPENDENT AUDITORS' CONSENT
The Board of Directors
Voyageur Mutual Funds III, Inc.:
We consent to the use of our report incorporated herein by reference to Part B
of the Registration Statement.
/s/ KPMG Peat Marwick LLP
KPMG Peat Marwick LLP
Minneapolis, Minnesota
December 27, 1997
<PAGE> 1
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - INSTITUTIONAL CLASS
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN
PERIOD ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.73
Initial Shares 114.548
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 114.548 $0.000 0.000 114.548
- -------------------------------------------------------------------------------
Ending Shares 114.548
Ending NAV x $8.97
---------
Investment Return $1,027.50
Total Return Performance
- ------------------------
Investment Return $1,027.50
Less Initial Investment $1,000.00
---------
$27.50 / $1,000.00 x 100
Total Return: 2.75%
Page 1
<PAGE> 2
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS A
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (AT NAV)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.16
Initial Shares 109.170
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 109.170 $0.000 0.000 109.170
- -------------------------------------------------------------------------------
Ending Shares 109.170
Ending NAV x $8.96
---------
Investment Return $978.16
Total Return Performance
- ------------------------
Investment Return $978.16
Less Initial Investment $1,000.00
---------
$(21.84)/ $1,000.00 x 100
Total Return: -2.18%
<PAGE> 3
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS A
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (AT OFFER)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.62
Initial Shares 103.950
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 103.950 $0.111 0.000 103.950
- -------------------------------------------------------------------------------
Ending Shares 103.950
Ending NAV x $8.96
---------
$931.39
Less CDSC $0.00
---------
Investment Return $931.39
Total Return Performance
- ------------------------
Investment Return $931.39
Less Initial Investment $1,000.00
---------
$(68.61)/ $1,000.00 x 100
Total Return: -6.86%
<PAGE> 4
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS A
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (AT NAV)
PERIOD ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.96
---------
Investment Return $1,054.12
Total Return Performance
- ------------------------
Investment Return $1,054.12
Less Initial Investment $1,000.00
---------
$54.12 / $1,000.00 x 100
Total Return: 5.41%
<PAGE> 5
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS A
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (AT OFFER)
PERIOD ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.92
Initial Shares 112.108
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 112.108 $0.000 0.000 112.108
- -------------------------------------------------------------------------------
Ending Shares 112.108
Ending NAV x $8.96
---------
$1,004.49
Less CDSC $0.00
---------
Investment Return $1,004.49
Total Return Performance
- ------------------------
Investment Return $1,054.49
Less Initial Investment $1,000.00
---------
$4.49 / $1,000.00 x 100
Total Return: 0.45%
<PAGE> 6
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS B
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITH CDSC)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.16
Initial Shares 109.170
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 109.170 $0.000 0.000 109.170
- -------------------------------------------------------------------------------
Ending Shares 109.170
Ending NAV x $8.95
---------
$977.07
Less CDSC $39.08
---------
Investment Return $937.99
Total Return Performance
- ------------------------
Investment Return $937.99
Less Initial Investment $1,000.00
---------
($62.01)/ $1,000.00 x 100
Total Return: -6.20%
<PAGE> 7
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS B
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITHOUT CDSC)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.16
Initial Shares 109.170
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 109.170 $0.000 0.000 109.170
- -------------------------------------------------------------------------------
Ending Shares 109.170
Ending NAV x $8.95
---------
Investment Return $977.07
Total Return Performance
- ------------------------
Investment Return $977.07
Less Initial Investment $1,000.00
---------
($22.93)/ $1,000.00 x 100
Total Return: -2.29%
<PAGE> 8
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS B
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITHOUT CDSC)
PERIOD ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.95
---------
Investment Return $1,052.94
Total Return Performance
- ------------------------
Investment Return $1,052.94
Less Initial Investment $1,000.00
---------
$52.94 / $1,000.00 x 100
Total Return: 5.29%
<PAGE> 9
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS B
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITH CDSC)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.95
---------
$1,052.94
Less CDSC $40.00
---------
Investment Return $1,012.94
Total Return Performance
- ------------------------
Investment Return $1,012.94
Less Initial Investment $1,000.00
---------
$12.94 / $1,000.00 x 100
Total Return: 1.29%
<PAGE> 10
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS C
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITH CDSC)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.16
Initial Shares 109.170
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 109.170 $0.000 0.000 109.170
- -------------------------------------------------------------------------------
Ending Shares 109.170
Ending NAV x $8.95
---------
$977.07
Less CDSC $9.77
---------
Investment Return $967.30
Total Return Performance
- ------------------------
Investment Return $967.30
Less Initial Investment $1,000.00
---------
($32.70)/ $1,000.00 x 100
Total Return: -3.27%
<PAGE> 11
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS C
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITHOUT CDSC)
PERIOD ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.95
---------
Investment Return $1,052.94
Total Return Performance
- ------------------------
Investment Return $1,052.94
Less Initial Investment $1,000.00
---------
$52.94 / $1,000.00 x 100
Total Return: 5.29%
<PAGE> 12
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS C
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITHOUT CDSC)
THREE MONTHS ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial Investment $1,000.00
Beginning NAV $9.16
Initial Shares 109.170
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 109.170 $0.000 0.000 109.170
- -------------------------------------------------------------------------------
Ending Shares 109.170
Ending NAV x $8.95
---------
Investment Return $ 977.07
Total Return Performance
- ------------------------
Investment Return $ 977.07
Less Initial Investment $1,000.00
---------
($22.93) / $1,000.00 x 100
Total Return: -2.29%
<PAGE> 13
DELAWARE GROUP TAX EFFICIENT EQUITY FUND - CLASS C
TOTAL RETURN PERFORMANCE
CUMULATIVE TOTAL RETURN (WITH CDSC)
PERIOD ENDED 10/31/97
- -------------------------------------------------------------------------------
Initial investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647
Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- -------------------------------------------------------------------------------
1997 117.647 $0.000 0.000 117.647
- -------------------------------------------------------------------------------
Ending Shares 117.647
Ending NAV x $8.95
---------
$1,052.94
Less CDSC $10.00
---------
Investment Return $1,042.94
Total Return Performance
- ------------------------
Investment Return $1,042.94
Less Initial Investment $1,000.00
---------
$42.94 / $1,000.00 x 100
Total Return: 4.29%
<TABLE> <S> <C>
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<PER-SHARE-NII> (0.016)
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<PAID-IN-CAPITAL-COMMON> 5,344,948
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<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 2,538
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<ACCUMULATED-NET-GAINS> (12,873)
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<ACCUM-APPREC-OR-DEPREC> 40,839
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