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For Growth of Capital
DELAWARE GROUP
Aggressive Growth Fund
Growth Stock Fund
1997
Semi-Annual
Report
professional management
service and guidance
goals
DELAWARE
GROUP
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<PAGE>
professional
management
professional
management
More Than 68 Years Of
Investment Experience
has taught us that disciplined strategies and
prudent risk management are a sound approach
to any market environment.
goals
goals
Whatever Your Goals,
the years ahead will be shaped by choices
you make today. Delaware offers many
options that can be an appropriate part of
a sound investment plan.
service and
guidance
service and guidance
Delaware Believes That
The Guidance of a professional
financial adviser is vital to your long-
term success. We are committed to
providing you and your adviser with the
highest quality information and service.
<PAGE>
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NOVEMBER 14, 1997
Dear Shareholder:
The first half of fiscal 1998 was a time of dynamic and rewarding change for
both the stock market and Delaware Group.
This past spring, we assumed management of Aggressive Growth Fund and
the Growth Stock Fund as part of our acquisition of the Voyageur family of
funds. Since April 30, 1997, both Funds have performed well despite higher
levels of market volatility, as shown on page 3.
On May 1, responsibility for Aggressive Growth Fund's portfolio was
transferred from Voyageur to Delaware's aggressive growth management team, which
is headed by Gerald S. Frey. James King of Voyageur has continued as Growth
Stock Fund's portfolio manager.
Companies of all sizes in technology and retailing helped boost
Aggressive Growth Fund's performance during the first half of fiscal 1998. For
the six months ended October 31, 1997, the Fund's returns were +64.33% (for
Class A shares at net asset value with distributions reinvested).
Aggressive Growth Fund's returns ranked #1 out of 891 growth funds
tracked by Lipper Analytical Services for the six-month period ended October 31.
These results should be carefully interpreted with the understanding that such
strong short-term performance is not a guarantee of future results.
Delaware believes it is important for investors and their financial
advisers to look for long-term consistency of returns when evaluating a mutual
fund. We are thus delighted to report that Aggressive Growth has been in the top
5% of an increasingly competitive class since its inception ranking 13th of 799,
18th out of 499 and 16th out of 452 funds, respectively, for the 12-, 36-month
and lifetime periods ended October 31, 1997*.
*AGGRESSIVE GROWTH FUND'S INCEPTION DATE WAS 5/16/94. RANKINGS ARE BASED ON
CLASS A SHARES AND DETERMINED BY LIPPER ANALYTICAL SERVICES.
DELAWARE BELIEVES IT IS IMPORTANT FOR AN
INVESTOR AND HIS OR HER FINANCIAL ADVISER TO
LOOK FOR LONG-TERM CONSISTENCY OF RETURNS
WHEN EVALUATING A MUTUAL FUND.
1997 SEMI-ANNUAL REPORT 1
<PAGE>
Growth Stock Fund's results slightly outpaced the unmanaged S&P 500
index for the six months ended October 31, 1997. The Fund's Class A shares
provided a total return of +15.67% for the period (at net asset value with
distributions reinvested).
However, Growth Stock's six-month returns were less than the average of
other growth funds. This is partly because the Fund's strict focus on stocks
with the highest Standard & Poor's quality ratings tends to lead it to large,
multinational companies. These companies' stocks generally did not perform as
well as stocks of mid-size companies during the late summer and autumn of 1997.
In the 1990s, the U.S. has enjoyed steady economic growth, the
unemployment rate has fallen to 4.7% and inflation is half of what it was a
generation ago. Our federal budget deficit has declined to levels not seen since
the Nixon administration in the early 1970s. We believe these long-term trends
remain intact and will continue to have a positive effect on U.S.
financial markets.
Still, we are cautiously optimistic as we approach the end of the
millennium, especially after three years of exceptionally ebullient stock market
returns. We believe short-term stock price fluctuations of 10% or more are
likely to grow more numerous in the coming years, and that such times will
present opportunities for patient and savvy investors.
Since 1929, Delaware Group has built a solid reputation among
institutional and individual investors by taking a disciplined, value-oriented
approach to equity investing. Through our union with Voyageur and internal
expansion, we believe we are making our mark as a fund family that offers a full
line of investment styles and fund options designed to help meet the goals of
21st Century investors.
We look forward to reporting to you again in the spring. Please accept
our best wishes for a new year of prosperity and happiness.
Sincerely,
/s/ Wayne A. Stork
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Wayne A. Stork
CHAIRMAN
/s/ Jeffrey J. Nick
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Jeffrey J. Nick
PRESIDENT AND CHIEF EXECUTIVE OFFICER
2 1997 SEMI-ANNUAL REPORT
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CUMULATIVE TOTAL RETURN
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SIX MONTHS ENDED 12 MONTHS ENDED
October 31, 1997 October 31, 1997
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Aggressive Growth Fund A Class +64.33% +55.59%
Growth Stock Fund A Class +15.67% +23.91%
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Lipper Growth Fund Average +18.71% (891 funds) +27.28% (799 funds)
Standard & Poor's 500 Index +15.16% +32.20%
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ALL PERFORMANCE SHOWN ABOVE IS BASED ON NET ASSET VALUE WITHOUT EFFECT OF
SALES CHARGES AND ASSUMES REINVESTMENT OF DISTRIBUTIONS. PERFORMANCE
INFORMATION FOR ALL FUND CLASSES CAN BE FOUND ON PAGES 11 AND 12. PAST
PERFORMANCE DOES NOT GUARANTEE FUTURE RESULTS.
New President and CEO
On October 14, 1997, Jeffrey J. Nick was named President and Chief Executive
Officer of the Delaware Group of Funds. Mr. Nick has been CEO of Lincoln
National Investment Companies, Delaware's indirect parent, since October 1996.
He joined Lincoln National in April 1990, and from 1992 to 1996 he managed
Lincoln's operations in the United Kingdom. Mr. Nick holds an MBA from the
University of Chicago and a bachelor of arts degree from Princeton University.
Your Funds' Portfolio Managers
AGGRESSIVE GROWTH FUND
Gerald S. Frey has 17 years of investment experience. Prior to joining
Delaware in June 1996, he was a senior director with Morgan Grenfell Asset
Management in New York. He holds a bachelor's degree in economics from
Bloomsburg University. Mr. Frey is assisted by Marshall T. Bassett, John A.
Heffern and Lori Wachs.
GERALD S. FREY
AGGRESSIVE GROWTH FUND
GROWTH STOCK FUND
James King has 30 years of investment experience. He has been with the Voyageur
organization since 1989. Prior to that he was President and Chief Investment
Officer of King Management Company. Mr. King is a lecturer at the Drake
University School of Finance and holds a bachelor of arts degree from Parsons
College.
JAMES KING
GROWTH STOCK FUND
1997 SEMI-ANNUAL REPORT 3
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Aggressive Growth Fund
Portfolio Manager's Review
INVESTMENT STRATEGY
Overall, Aggressive Growth Fund takes a "multicap" approach to investing and
uses a growth style management philosophy. That is, the Fund may invest in
small, medium or large companies whose earnings growth rate appears to be
accelerating or consistently high. Typically, we look for companies whose
profits are projected to grow at least 20% per year. We tend to favor industries
that appear well-positioned to benefit from changes in consumer or business
buying habits.
When appropriate, we also attempt to take advantage of special
situations that we believe have temporarily depressed a growth stock's price. We
look for depressed valuations resulting from short-term earnings disappointment,
management turnover or regulatory concerns.
Stocks with the highest capital appreciation potential usually have a
high risk profile as well. Your Fund's relatively high beta, or historical price
volatility as shown in the chart on page 5, reflects our aggressive investment
strategy.
Shareholders should keep in mind that investing in a mutual fund that
aggressively seeks capital appreciation is a long-term commitment. The
performance of any fund should be judged over an entire market cycle, which may
include periods of weakness.
AGGRESSIVE GROWTH'S STOCK SELECTION PROCESS
Companies of All Sizes
High and Consistent, or Accelerating Earnings Growth Rates
Industry Special
Specific Situations/
Dynamics Fallen Angels
Aggressive Growth
Fund Portfolio
4 1997 SEMI-ANNUAL REPORT
<PAGE>
STRATEGIC POSITIONING
Between May and October, the Fund's performance relative to the stock market and
our peers has been spectacular. When we assumed management of the Fund in the
spring, we retained some stock selections. We repositioned the Fund to take
advantage of other growth opportunities in the U.S. equity market, particularly
in technology. To preserve capital, we also temporarily maintained a large cash
position. When appropriate, we will prudently reduce our cash position.
Aggressive Growth Fund's performance was aided by large companies such
as LUCENT TECHNOLOGIES - AT&T's spin-off of the former Bell Labs - as well as
mid-size companies such as KEANE, INC., an applications software company which
manages computer "help desks" for larger companies.
As your Fund's net assets more than doubled since April 30 through a
combination of rapid capital appreciation and cash flow from new investors in
the Fund, we made additional technology selections that performed well. These
included CITRIX SYSTEMS, which makes computer server products.
We also added a greater element of diversity to the Fund by increasing
our holdings of retail, health care and entertainment stocks. These included
COMPUSA, the personal computer retailer, AMAZON.COM INC., an on-line book
seller, and PHYCOR, a medical services provider which unfortunately did not meet
our expectations.
On balance, we are pleased to report that your Fund outperformed the S&P
500 Index in most sectors, including health care, as shown on page 6.
WE ADDED A GREATER ELEMENT OF DIVERSITY TO
THE FUND BY INCREASING OUR HOLDINGS OF RETAIL,
HEALTH CARE AND ENTERTAINMENT STOCKS.
AGGRESSIVE GROWTH FUND
SECTOR ALLOCATION AND PORTFOLIO HIGHLIGHTS
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October 31, 1997
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Median Market Capitalization $1 billion
Number of Stocks 49
Average Stock Price-to-Earnings Ratio 24x
Top Sector Technology
Beta* 1.75
P/ES ARE BASED ON ANALYSTS' EARNINGS ESTIMATES AS REPORTED BY FIRST CALL.
*A MEASURE OF RISK RELATIVE TO THE S&P 500 INDEX. A NUMBER LESS THAN 1.0
MEANS LESS HISTORICAL PRICE VOLATILITY THAN THE INDEX. A NUMBER HIGHER THAN
1.0 MEANS MORE HISTORICAL VOLATILITY.
Technology 23.5%
Cash 33.2%
Telecommunications 6.2%
Financial 5.6%
Health Care 6.5%
Retailing 6.3%
Leisure, Lodging
& Entertainment 4.2%
Energy 1.1%
Consumer & Business
Services 10.7%
Capital Goods 2.7%
1997 SEMI-ANNUAL REPORT 5
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OUTLOOK
For 1998, the investment climate appears more favorable for America's medium-
and small-size companies than for larger companies, some of which appear
overvalued. In our opinion, the Federal Reserve Board is not likely to raise its
interest rate target substantially. Meanwhile, many economists believe that
growth in the country's output of goods and services is likely to continue at a
moderate, sustainable pace.
One factor that may increase demand for growth stocks of all sizes is
the Taxpayer Relief Act passed by Congress this past summer. It provides
favorable treatment of long-term capital gains, potentially benefiting investors
whose primary goal is to build wealth over time.
That said, however, we want to add a note of caution for the balance of
fiscal 1998. Based on the stock market's movements in October, it appears that
short-term volatility has returned to historical norms. We believe that to add
value to a portfolio in today's investment climate, a longer term investment
horizon is important. We have an experienced, disciplined team, and we believe
we are in a good position to respond to whatever challenges arise in the coming
months.
Gerald S. Frey
SENIOR PORTFOLIO MANAGER
November 7, 1997
PERFORMANCE BY SECTOR
AGGRESSIVE GROWTH FUND VS. S&P 500 INDEX
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May 1, 1997, to October 31, 1997
INDUSTRY GROUP AGGRESSIVE GROWTH FUND S&P 500
- --------------------------------------------------------------------------------
Consumer Services +58.6% +9.3%
Technology +54.7% +19.4%
Consumer Goods* +45.6% +9.9%
Health Care +42.2% +16.8%
Capital Goods +40.3% +8.0%
Business Services +39.0% +16.7%
Financial +36.1% +21.2%
PERFORMANCE IS BASED ON PRICES OF STOCK HOLDINGS AND INDEX COMPONENTS AND DOES
NOT INCLUDE EXPENSES. THE SEVEN SHOWN HERE REPRESENT MORE THAN 90% OF AGGRESSIVE
GROWTH FUND'S EQUITY HOLDINGS AND 87% OF THE UNMANAGED S&P 500 INDEX AS OF
OCTOBER 31, 1997. *NON-DURABLE PRODUCTS SUCH AS PROCESSED FOOD, CLOTHING AND
NEWSPAPERS. FOR COMPLETE FUND PERFORMANCE, SEE PAGE 11.
6 1997 SEMI-ANNUAL REPORT
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Growth Stock Fund
Portfolio Manager's Review
INVESTMENT STRATEGY
There are three tenets to Growth Stock Fund's investment strategy. First, we
limit our purchases to companies with Standard and Poor's quality ratings of A+
or A. Stock quality ratings are based on earnings consistency over a 10-year
period, with companies rated A+ and A having the most historical consistency in
expanding their profits. Of course, a high rating doesn't guarantee a company's
profits will grow, imply that a stock is undervalued or is an appropriate
selection for the Fund's portfolio. We use S&P ratings as a starting point to
determine which stocks to consider for further research and analysis. We pay
particular attention to a company's earnings prospects.
Secondly, we concentrate the portfolio in no more than 30 stocks. This
number gives us the flexibility to create a diverse yet highly manageable
portfolio that we believe has greater potential to outperform our benchmark
over time.
WE USE S&P RATINGS AS A STARTING POINT TO
DETERMINE WHICH STOCKS WE CONSIDER FOR FURTHER
RESEARCH AND ANALYSIS, WE PAY PARTICULAR
ATTENTION TO A COMPANY'S EARNINGS PROSPECTS.
GROWTH STOCK FUND
SECTOR ALLOCATION AND PORTFOLIO HIGHLIGHTS
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October 31, 1997
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Median Market Capitalization $15 billion
Number of Stocks 27
Average Stock Price-to-Earnings Ratio 18x
Top Sector Food, Beverage &
Tobacco
Beta* 0.80
P/ES ARE BASED ON ANALYSTS' EARNINGS ESTIMATES AS REPORTED TO FIRST CALL.
*A MEASURE OF RISK RELATIVE TO THE S&P 500 INDEX. A NUMBER LESS THAN 1.0
MEANS LESS HISTORICAL PRICE VOLATILITY THAN THE INDEX. A NUMBER HIGHER THAN
1.0 MEANS MORE HISTORICAL VOLATILITY.
Health Care 11%
Food, Beverage
& Tobacco 21.4%
Energy 7.3%
Technology 10.5%
Capital Goods 3.6%
Packaging 3.1%
Retailing 14.5%
Cash 2.5%
Auto Parts 7.2%
Banks 7.6%
Newspapers 3.8%
Chemicals 7.5%
1997 SEMI-ANNUAL REPORT 7
<PAGE>
A LONG-TERM, LOW TURNOVER APPROACH
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<TABLE>
<CAPTION>
PORTFOLIO TURNOVER RATES 1997 1996 1995 1994 1993
- ---------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Growth Stock Fund 29% 37% 22% 34% 17%
Morningstar Large-Cap Blend Category 63% 71% 69% 66% 63%
Number of Funds in Category 685 656 565 468 378
</TABLE>
SOURCE: MORNINGSTAR MUTUAL FUNDS. 1997 DATA IS THROUGH JULY, WHICH IS THE
LATEST FIGURE AVAILABLE.
Finally, we select companies based on earnings growth potential, which
we believe, along with dividend growth, is a good indicator of capital
appreciation potential. Our average holding period has historically been
slightly more than four years. This long-term approach is reflected in the
Fund's modest portfolio turnover rate, which has historically been lower than
the average of similar funds that also focus on large company stocks with a
blend of growth and value characteristics, according to Morningstar.
Historically, Growth Stock Fund has kept pace with the S&P 500 and other
large cap market measures such as the Wilshire Large Company Index, during
periods of increased market volatility. The Fund has generally underperformed
during periods of rapid price appreciation. We believe this has occurred because
the earnings performance of companies with high S&P quality ratings tends to be
less dependent on overall economic growth than other companies in the S&P 500 or
Wilshire Indexes.
When the economy or stock market are performing well, history has shown
that investors tend to increase their risk profile by seeking out companies with
the most robust earnings growth prospects. High-quality and consistency tend to
become less important than a rapid rise in projected profits. However, once the
economy or stock market cools, or other uncertainties such as higher interest
rates or international concerns enter the picture - as happened in late 1990 and
1991 - investors have coveted earnings consistency. While there's no guarantee
this pattern will hold true in the future, we believe the current market
environment bodes well for your Fund.
Q.
WHAT IS A STANDARD & POOR'S QUALITY RATING AND HOW IS IT DIFFERENT FROM A
DEBT RATING?
a.
S&P quality ratings are based on consistency of earnings growth. Debt ratings
are based on a company's ability to pay its obligations based on leverage and
economic conditions.
8 1997 SEMI-ANNUAL REPORT
<PAGE>
STRATEGIC POSITIONING
AND OUTLOOK
As of October 31, the price-to-earnings ratio (P/E ratio) of most S&P 500 stocks
was near the high end of its historical range, supported in part by the fact
that annual inflation in the U.S. has been at a benign 2.2% level for the past
year. We believe it is prudent to focus on the stock market's downside risk, and
we have been upgrading the average quality rating of stocks in the Fund's
portfolio. As of October, about two-thirds of the stocks in the Fund's portfolio
had quality ratings of A+, the highest available, while the average P/E ratio
(based on 1998 earnings estimates) was 20.5, about 10% lower than the overall
stock market.
Generally, we sell companies when their P/E reaches a historical peak
and replace them with companies within the same sector that are trading at
historically low P/Es. During this past spring, for example, we sold SUNTRUST
BANKS, a Georgia regional bank, to purchase NORWEST CORP., a Minnesota regional
bank. Within the retail sector, we replaced CIRCUIT CITY, the electronics
retailer, with HOME DEPOT, the do-it-yourself hardware giant.
When we sold SunTrust, the company's shares were selling at more than 20
times trailing earnings, its highest valuation ever, while Norwest was trading
at about 15 times trailing earnings despite the
AS OF OCTOBER, ABOUT TWO-THIRDS OF THE STOCKS
IN THE FUND'S PORTFOLIO HAD QUALITY
RATINGS OF A+, THE HIGHEST AVAILABLE.
GROWTH STOCK FUND
TOP 10 HOLDINGS
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October 31, 1997
S&P QUALITY PERCENT OF
COMPANY P/E RATING NET ASSETS
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Sysco Corp. 21.4x A+ 4.1%
Schering Plough Corp. 30.7 A+ 4.1%
Norwest Corp. 18.8 A+ 4.0%
Sara Lee Corp. 23.1 A 4.0%
Home Depot Inc. 33.7 A+ 3.9%
Albertson's Inc. 33.4 A+ 3.9%
Gannett Inc. 21.7 A 3.8%
Sigma-Aldrich 21.8 A 3.8%
Shell Transport & Trading 20.6 A 3.8%
Abbott Laboratories 23.1 A+ 3.7%
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Total 39.1%
SOURCES: BLOOMBERG BUSINESS NEWS AND SMITH BARNEY. PRICE-TO-EARNINGS RATIOS
BASED ON A CONSENSUS OF ANALYSTS' ESTIMATES FOR 1998.
1997 SEMI-ANNUAL REPORT 9
<PAGE>
fact that the two banking companies had very similar performance records.
Circuit City, meanwhile, had a P/E of 30 times trailing 12-month earnings and
was facing an increasingly competitive environment for computer sales. Home
Depot offered a 22 P/E and better earnings prospects, in our opinion.
From January through August 1997, our strategy sometimes negatively
affected our short-term results because some of the stock market's best
performers were companies with high valuations. However, we are confident that
over the long run our growth and value approach will put us in a good position
should we encounter challenging market conditions for the balance of fiscal
1998.
James King
SENIOR PORTFOLIO MANAGER
November 7, 1997
outlook
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A New Benchmark
We now use the unmanaged Standard & Poor's 500 Index as Growth Stock
Fund's primary benchmark rather than the unmanaged Wilshire Large Company Stock
Index. In our opinion, the S&P 500 Index, a measure of large company stocks with
both growth and value characteristics, more closely reflects the type of
stocks in your Fund's portfolio. We illustrate the Fund's long-term performance
relative to both indexes on page 12.
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1997 SEMI-ANNUAL REPORT 10
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AGGRESSIVE GROWTH FUND PERFORMANCE
Growth of a $10,000 Investment
May 16, 1994, to October 31, 1997
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Aggressive Growth Fund
A Class S&P 500
Period End Market Value Index
- --------------------------------------------------------------------------------
May/16/94 $ 9,524 $10,000
Aug/31/94 $ 9,752 $10,488
Dec/31/94 $ 9,429 $10,230
Apr/30/95 $ 9,905 $11,557
Aug/31/95 $11,676 $12,738
Dec/31/95 $11,697 $14,075
Apr/30/96 $12,977 $15,049
Jul/31/96 $11,806 $14,811
Nov/30/96 $15,567 $17,656
Mar/31/97 $12,896 $17,770
Jul/31/97 $19,540 $22,533
Oct/31/97 $22,213 $21,687
CHART ASSUMES $10,000 INVESTED ON MAY 16, 1994, AND INCLUDES THE EFFECT OF A
4.75% FRONT-END SALES CHARGE AND THE REINVESTMENT OF ALL DISTRIBUTIONS.
PERFORMANCE OF OTHER CLASSES WILL VARY DUE TO DIFFERING CHARGES AND EXPENSES.
AGGRESSIVE GROWTH FUND PERFORMANCE
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Average Annual Return Through October 31, 1997
LIFETIME ONE YEAR
- --------------------------------------------------------------------------------
Class A (Est. 5/16/94)
Excluding Sales Charge +27.71% +55.59%
Including Sales Charge +25.92% +48.18%
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Class B (Est. 4/16/96)
Excluding Sales Charge +48.59% +53.38%
Including Sales Charge +46.49% +49.38%
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Class C (Est. 5/20/94)
Excluding Sales Charge +26.81% +54.17%
Including Sales Charge +26.81% +53.17%
AGGRESSIVE GROWTH FUND'S RETURN AND SHARE VALUE FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE
IS NOT A GUARANTEE OF FUTURE RESULTS. RETURNS REFLECT REINVESTMENT OF
DISTRIBUTIONS AND SALES CHARGES AS NOTED BELOW. PERFORMANCE EXCLUDING SALES
CHARGE FOR B AND C CLASSES ASSUMES EITHER CONTINGENT SALES CHARGES DID NOT APPLY
OR THE INVESTMENT WAS NOT REDEEMED.
CLASS A SHARES HAVE A 4.75% MAXIMUM FRONT-END SALES CHARGE AND A 12B-1 FEE OF UP
TO 0.25%.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT
TO A 1% ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE SUBJECT TO A DEFERRED
SALES CHARGE OF UP TO 4% IF REDEEMED BEFORE THE END OF THE SIXTH YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE AND A 1% CONTINGENT
DEFERRED SALES CHARGE IF REDEEMED WITHIN 12 MONTHS.
THE CUMULATIVE TOTAL RETURN FOR AGGRESSIVE GROWTH FUND'S INSTITUTIONAL CLASS,
WHICH WAS MADE AVAILABLE WITHOUT SALES OR ASSET-BASED DISTRIBUTION CHARGES AS OF
AUGUST 28, 1997, ONLY TO CERTAIN ELIGIBLE INSTITUTIONAL ACCOUNTS, WAS +10.62%
FOR THE LIFETIME PERIOD ENDED OCTOBER 31, 1997.
1997 SEMI-ANNUAL REPORT 11
<PAGE>
GROWTH STOCK FUND PERFORMANCE
Growth of a $10,000 Investment
August 1, 1985, to October 31, 1997
- --------------------------------------------------------------------------------
Growth Stock S&P 500 Wilshire Large
Fund A Class Index Company Index
- --------------------------------------------------------------------------------
Aug/1/85 $ 9,524 $10,000 $10,000
Oct/31/85 $ 9,743 $10,135 $10,054
Oct/31/86 $13,836 $13,498 $13,245
Oct/31/87 $14,350 $14,362 $13,964
Oct/31/88 $16,259 $16,487 $15,885
Oct/31/89 $21,283 $20,840 $20,858
Oct/31/90 $18,050 $19,281 $19,037
Oct/31/91 $29,114 $25,739 $28,026
Oct/31/92 $31,954 $28,302 $31,943
Oct/31/93 $31,791 $32,531 $33,017
Oct/31/94 $32,364 $33,789 $34,874
Oct/31/95 $40,819 $42,723 $45,791
Oct/31/96 $48,770 $53,017 $57,182
Oct/31/97 $60,444 $70,042 $75,727
CHART ASSUMES $10,000 INVESTED ON AUGUST 1, 1985, AND INCLUDES THE EFFECT OF A
4.75% FRONT-END SALES CHARGE AND THE REINVESTMENT OF ALL DISTRIBUTIONS.
PERFORMANCE OF OTHER CLASSES WILL VARY DUE TO DIFFERING CHARGES AND EXPENSES.
GROWTH STOCK FUND PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Return Through October 31, 1997
<TABLE>
<CAPTION>
LIFETIME TEN YEARS FIVE YEARS ONE YEAR
- ----------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Class A (Est. 8/1/85)
Excluding Sales Charge +16.12% +15.28% +13.40% +23.91%
Including Sales Charge +15.66% +14.72% +12.30% +18.01%
- ----------------------------------------------------------------------------------------------------
Class B (Est. 9/8/95)
Excluding Sales Charge +20.94% +23.11%
Including Sales Charge +19.81% +19.11%
- ----------------------------------------------------------------------------------------------------
Class C (Est. 10/21/95)
Excluding Sales Charge +19.74% +23.10%
Including Sales Charge +19.74% +22.10%
</TABLE>
GROWTH STOCK FUND'S RETURN AND SHARE VALUE FLUCTUATE SO THAT SHARES, WHEN
REDEEMED, MAY BE WORTH MORE OR LESS THAN THEIR ORIGINAL COST. PAST PERFORMANCE
IS NOT A GUARANTEE OF FUTURE RESULTS. RETURNS REFLECT REINVESTMENT OF
DISTRIBUTIONS AND SALES CHARGES AS NOTED BELOW. PERFORMANCE EXCLUDING SALES
CHARGE FOR B AND C CLASSES ASSUMES EITHER CONTINGENT SALES CHARGES DID NOT APPLY
OR THE INVESTMENT WAS NOT REDEEMED.
CLASS A SHARES HAVE A 4.75% MAXIMUM FRONT-END SALES CHARGE AND A 12B-1 FEE OF UP
TO 0.25%.
CLASS B SHARES DO NOT CARRY A FRONT-END SALES CHARGE, BUT ARE SUBJECT TO A 1%
ANNUAL DISTRIBUTION AND SERVICE FEE. THEY ARE SUBJECT TO A DEFERRED SALES CHARGE
OF UP TO 4% IF REDEEMED BEFORE THE END OF THE SIXTH YEAR.
CLASS C SHARES HAVE A 1% ANNUAL DISTRIBUTION AND SERVICE FEE AND A 1% CONTINGENT
DEFERRED SALES CHARGE IF REDEEMED WITHIN 12 MONTHS.
THE CUMULATIVE TOTAL RETURN FOR GROWTH STOCK FUND'S INSTITUTIONAL CLASS, WHICH
WAS MADE AVAILABLE WITHOUT SALES OR ASSET-BASED DISTRIBUTION CHARGES AS OF
AUGUST 28, 1997, ONLY TO CERTAIN ELIGIBLE INSTITUTIONAL ACCOUNTS, WAS +2.74% FOR
THE LIFETIME PERIOD ENDED OCTOBER 31, 1997.
12 1997 SEMI-ANNUAL REPORT
<PAGE>
Financial Statements
DELAWARE GROUP AGGRESSIVE GROWTH FUND
STATEMENT OF NET ASSETS --
OCTOBER 31, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
- --------------------------------------------------------------------------------
COMMON STOCK - 66.67%
AUTOMOBILES & AUTO PARTS - 1.52%
*Avis Rent-A-Car..................... 7,500 $ 205,781
---------
205,781
---------
BANKING, FINANCE & INSURANCE - 5.55%
*Blanch (E.W.) Holdings.............. 4,300 144,050
*Hagler Bailly....................... 10,000 199,375
*Mego Mortgage....................... 5,000 57,813
Ocwen Asset Investment.............. 9,500 188,516
*Security Capital Group-B............ 5,000 160,000
---------
749,754
---------
BUILDINGS AND MATERIALS - 2.67%
*Comfort Systems USA................. 10,000 170,000
*White Cap........................... 10,000 190,625
---------
360,625
---------
COMPUTERS & TECHNOLOGY - 23.47%
*BISYS Group......................... 4,000 124,250
*BMC Software........................ 2,500 150,625
*Cadence Design Systems.............. 2,000 106,500
*Cambridge Technology Partner........ 8,000 294,500
*Citrix Systems...................... 3,500 257,031
Computer Associates International 5,000 372,812
*Compuware........................... 5,000 330,000
*Credit Management Solutions......... 5,000 73,438
*J.D. Edwards........................ 1,800 61,088
*Keane............................... 4,000 118,500
*Logility............................ 3,000 43,781
*May & Speh.......................... 15,000 185,625
*Micrel.............................. 10,000 359,688
*Platinum Technology................. 10,000 241,562
*Secure Computing.................... 20,000 241,250
*Veritas Software.................... 5,000 208,125
---------
3,168,775
---------
CONSUMER PRODUCTS - .56%
*Styling Technology.................. 5,000 76,250
---------
76,250
---------
ELECTRONICS & ELECTRICAL - 2.00%
*Sipex............................... 8,000 269,500
---------
269,500
---------
ENERGY - 1.10%
*Marine Drilling..................... 5,000 147,969
---------
147,969
---------
ENVIRONMENTAL SERVICES - 1.53%
*Republic Industries................. 7,000 206,500
---------
206,500
---------
- ----------------------
Top 10 holdings, representing 22.63% of net assets, are in boldface.
<PAGE>
NUMBER MARKET
OF SHARES VALUE
- ----------------------------------------------------------------------
COMMON STOCK (CONTINUED)
FACTORY OUTLET CENTERS REITS - .55%
Prime Retail......................... 5,000 $ 74,688
---------
74,688
---------
HEALTHCARE & PHARMACEUTICALS - 6.54%
*Brookdale Living Communities........ 11,000 209,000
*MedPartners......................... 11,500 292,531
*National Research................... 4,000 81,500
*Phycor.............................. 13,000 299,406
---------
882,437
---------
LEISURE, LODGING & ENTERTAINMT - 4.19%
*Anchor Gaming....................... 3,100 243,350
*Florida Panthers.................... 7,800 156,975
*Outback Steakhouse.................. 6,100 165,272
---------
565,597
---------
RETAIL - 5.74%
*Amazon.com.......................... 1,500 91,593
*CompUSA............................. 1,700 55,675
Home Depot.......................... 5,100 283,688
*Il Fornaio America.................. 10,000 133,438
*Viking Office Products.............. 8,800 210,375
---------
774,769
---------
TELECOMMUNICATIONS - 6.15%
*CIENA............................... 3,500 192,936
Lucent Technologies................. 2,500 206,094
*Nextlevel Systems................... 10,000 135,000
*Tellabs............................. 5,500 296,828
---------
830,858
---------
TRANSPORTATION & SHIPPING - 1.40%
*Galileo International............... 7,500 188,438
---------
188,438
---------
MISCELLANEOUS - 3.70%
*CUC International................... 6,100 179,950
*Edutrek International-A............. 10,000 244,375
*Volt Info Sciences.................. 1,100 75,900
---------
500,225
---------
Total Common Stock
(cost of $7,965,106)............... 9,002,166
---------
MONEY MARKET INSTRUMENTS - 27.10%
FEDERAL AGENCY (DISCOUNTED) - 27.10%
FNMA Discount Note 5.45% 11/03/97... 3,660,000 3,658,892
---------
Total Money Market Instruments
(cost of $3,658,892)............... 3,658,892
---------
1997 SEMI-ANNUAL REPORT 13
<PAGE>
Delaware Group Aggressive Growth Fund
Statement of Net Assets (Continued)
- ----------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
- ----------------------------------------------------------------------
SHORT-TERM INVESTMENTS - 5.21%
Dreyfus Tax Exempt Cash Management
(cost of $43,000)................... 43,000 $ 43,000
Norwest Advantage Municipal Money
Market Fund (cost of $661,000)...... 661,000 661,000
-----------
Total Short-Term Investments
(cost of $704,000).................. 704,000
-----------
TOTAL MARKET VALUE OF SECURITIES
OWNED - 98.98%
(cost of $12,327,998)............... $13,365,058
RECEIVABLES AND OTHER ASSETS
NET OF LIABILITIES - 1.02%.......... 137,607
-----------
NET ASSETS APPLICABLE TO 713,914 SHARES
($1 PAR VALUE) OUTSTANDING - 100%... $13,502,665
===========
NET ASSET VALUE - AGGRESSIVE GROWTH
FUND A CLASS ($9,449,017 / 496,463
shares)............................. $19.03
======
NET ASSET VALUE - AGGRESSIVE GROWTH
FUND B CLASS ($2,516,574 / 135,113
shares)............................. $18.63
======
NET ASSET VALUE - AGGRESSIVE GROWTH
FUND C CLASS ($987,735 / 53,523
shares)............................. $18.45
======
NET ASSET VALUE - AGGRESSIVE GROWTH FUND
INSTITUTIONAL CLASS
($549,339 / 28,815 share)........... $19.06
======
COMPONENTS OF NET ASSETS AT OCTOBER 31, 1997:
Common stock, $0.01 par value, 10,000,000,000
shares authorized to the Fund with 1,000,000,000
shares allocated to the Growth Stock A Class,
1,000,000,000 shares allocated to Growth
Stock B Class, 1,000,000,000 allocated to
Growth Stock C Class, and 1,000,000,000
allocated to Growth Stock Institutional Class....... $10,818,002
Accumulated undistributed:
Undistributed net investment loss.................... (113,805)
Net realized gain on investments..................... 1,761,408
Net unrealized appreciation of investments........... 1,037,060
-----------
Total net assets..................................... $13,502,665
- -----------------------
*Non-income producing securities for the six months ended October 31, 1997.
<PAGE>
DELAWARE GROUP GROWTH STOCK FUND
STATEMENT OF NET ASSETS -
OCTOBER 31, 1997
(UNAUDITED)
- ----------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
- ----------------------------------------------------------------------
COMMON STOCK - 97.39%
AUTOMOBILES & AUTO PARTS - 7.18%
Bandag............................... 27,000 $1,363,500
Genuine Parts........................ 45,000 1,409,062
----------
2,772,562
----------
BANKING, FINANCE & INSURANCE - 7.62%
Norwest.............................. 48,000 1,539,000
SouthTrust........................... 29,000 1,399,250
----------
2,938,250
----------
CABLE, MEDIA & PUBLISHING - 3.82%
Gannett.............................. 28,000 1,471,750
----------
1,471,750
----------
CHEMICALS - 7.47%
Great Lakes Chemical................. 30,000 1,410,000
Sigma-Aldrich........................ 42,000 1,470,000
----------
2,880,000
----------
COMPUTERS & TECHNOLOGY - 6.97%
Electronic Data Systems.............. 36,000 1,392,750
Hewlett-Packard...................... 21,000 1,295,438
----------
2,688,188
----------
ENERGY - 7.31%
Royal Dutch Petroleum................ 26,000 1,368,250
Shell Transport and Trading.......... 34,000 1,451,375
----------
2,819,625
----------
FOOD, BEVERAGE & TOBACCO - 21.40%
Anheuser-Busch Cos................... 31,000 1,238,063
ConAgra.............................. 40,000 1,205,000
Philip Morris........................ 32,000 1,268,000
Sara Lee............................. 30,000 1,533,750
Sysco................................ 40,000 1,600,000
UST.................................. 47,000 1,407,063
----------
8,251,876
----------
HEALTHCARE & PHARMACEUTICALS - 10.97%
Abbott Laboratories.................. 23,000 1,410,188
Merck & Company...................... 14,000 1,249,500
Schering-Plough...................... 28,000 1,569,750
----------
4,229,438
----------
INDUSTRIAL MACHINERY - 3.63%
Grainger (W.W.)...................... 16,000 1,399,000
----------
1,399,000
----------
PACKAGING & CONTAINERS - 3.06%
Bemis................................ 31,000 1,181,875
----------
1,181,875
----------
RETAIL - 14.46%
Albertson's.......................... 41,000 1,511,875
Dillard.............................. 32,000 1,228,000
Home Depot........................... 27,000 1,501,875
Wal-Mart Stores...................... 38,000 1,334,750
----------
5,576,500
----------
- -------------------
Top 10 holdings, representing 39.10% of net assets, are in boldface.
14 1997 SEMI-ANNUAL REPORT
<PAGE>
Delaware Group Growth Stock Fund
Statement of Net Assets (Continued)
- -----------------------------------------------------------------------------
NUMBER MARKET
OF SHARES VALUE
- -----------------------------------------------------------------------------
COMMON STOCK (CONTINUED)
MISCELLANEOUS - 3.50%
Pitney Bowes................................... 17,000 $ 1,348,311
------------
1,348,311
------------
Total Common Stock (cost of $25,295,307)....... 37,557,375
------------
SHORT-TERM INVESTMENTS - 2.68%
Norwest Advantage Municipal
Money Market Fund............................. 1,035,000 1,035,000
------------
Total Short-Term Investments
(cost of $1,035,000)........................... 1,035,000
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 100.07%
(cost of $26,330,307).......................... $38,592,375
LIABILITIES NET OF RECEIVABLES
AND OTHER ASSETS - (0.07%)..................... (26,906)
------------
NET ASSETS APPLICABLE TO 1,356,656 SHARES
($1 PAR VALUE) OUTSTANDING - 100%.............. $38,565,469
============
NET ASSET VALUE - GROWTH STOCK FUND A CLASS
($36,526,011 / 1,283,757 shares)............... $28.45
======
NET ASSET VALUE - GROWTH STOCK FUND B CLASS
($1,154,110 / 41,251 shares)................... $27.98
======
NET ASSET VALUE - GROWTH STOCK FUND C CLASS
($885,319 / 31,647 shares)..................... $27.97
======
NET ASSET VALUE - GROWTH STOCK FUND
INSTITUTIONAL CLASS ($29 / 1 share)............ $28.51
======
COMPONENTS OF NET ASSETS AT OCTOBER 31,1997:
Common stock, $0.01 par value, 10,000,000,000
shares authorized to the Fund with 1,000,000,000
shares allocated to the Growth Stock A Class,
1,000,000,000 shares allocated to Growth Stock B Class,
1,000,000,000 allocated to Growth Stock C Class, and
1,000,000,000 allocated to Growth Stock
Institutional Class............................ $24,495,566
Accumulated undistributed:
Net investment income........................... 116,624
Net realized gain on investments................ 1,691,211
Net unrealized appreciation of investments...... 12,262,068
------------
Total net assets................................ $38,565,469
============
<PAGE>
DELAWARE GROUP
AGGRESSIVE GROWTH FUND --
STATEMENT OF ASSETS AND LIABILITIES
OCTOBER 31, 1997
(UNAUDITED)
ASSETS:
Investments at market (cost $12,327,998) $13,365,058
Cash............................................ 62,830
Dividends and interest receivable............... 12,224
Subscriptions receivable........................ 372,622
Receivable for securities sold 1,403,781
Other assets.................................... 16,871
------------
Total assets................................... 15,233,386
------------
LIABILITIES:
Liquidations payable............................ -
Payable for securities purchased................ 1,731,759
Other accounts payable and accrued expenses..... (1,038)
------------
Total liabilities.............................. 1,730,721
------------
TOTAL NET ASSETS................................ $13,502,665
============
See accompanying notes
1997 SEMI-ANNUAL REPORT 15
<PAGE>
THE DELAWARE - VOYAGEUR FUNDS
STATEMENT OF OPERATIONS
SIX MONTHS ENDED OCTOBER 31, 1997
(UNAUDITED)
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------------
Aggressive Growth
Growth Stock
Fund Fund
-------------------------------------
<S> <C> <C>
INVESTMENT INCOME:
Interest........................................................ $ 15,258 $ 11,040
Dividends....................................................... 6,044 361,209
------------ ------------
21,302 372,249
------------ ------------
EXPENSES:
Management fees................................................. 31,120 197,533
Custodian fees.................................................. 4,253 4,937
Dividend disbursing and transfer agent fees and expenses........ 8,176 32,502
Distribution expense............................................ 11,408 55,634
Registration fees............................................... 5,929 16,014
Reports and statements to shareholders.......................... 1,613 19,863
Accounting fees and salaries.................................... 1,821 10,608
Professional fees............................................... 6,103 17,146
Directors' fees................................................. 1,566 1,660
Taxes (other than taxes on income).............................. 230 2,838
Other........................................................... 140 5,345
------------ -----------
72,359 364,080
Less expenses absorbed by advisor............................... (9,992) (11,034)
------------ -----------
Total net expenses.............................................. 62,367 353,046
------------ -----------
NET INVESTMENT INCOME (LOSS).................................... (41,065) 19,203
------------ -----------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain from investment transactions.................. 1,686,538 1,790,873
Net change in unrealized appreciation on investment
transactions................................................... 960,808 3,734,439
------------ -----------
NET REALIZED AND UNREALIZED GAIN ON INVESTMENTS................. 2,647,346 5,525,312
------------ -----------
NET INCREASE IN NET ASSETS RESULTING FROM OPERATIONS............ $2,606,281 $5,544,515
============= ===========
</TABLE>
See accompanying notes
16 1997 SEMI-ANNUAL REPORT
<PAGE>
THE DELAWARE - VOYAGEUR FUNDS
STATEMENT OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
- -----------------------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH FUND GROWTH STOCK FUND
-----------------------------------------------------------
<S> <C> <C> <C> <C>
FOR SIX MONTHS FOR THE YEAR FOR SIX MONTHS FOR THE YEAR
ENDED ENDED ENDED ENDED
10/31/97 4/30/97 10/31/97 4/30/97
(UNAUDITED) (UNAUDITED)
INCREASE IN NET ASSETS FROM OPERATIONS:
Net investment income (loss)......................... $ (41,065) $ (80,183) $ 19,203 $ 218,850
Net realized gain on investments..................... 1,686,538 1,050,816 1,790,873 2,360,603
Net change in unrealized appreciation on
investment transactions............................. 960,808 (904,641) 3,734,439 2,070,120
----------- ----------- ----------- -----------
Net increase in net assets resulting from operations. 2,606,281 65,992 5,544,515 4,649,573
----------- ----------- ----------- -----------
DISTRIBUTION TO SHAREHOLDERS FROM:
Net investment income:
A Class............................................. 0 0 (129,269) (96,623)
B Class............................................. 0 0 0 0
C Class............................................. 0 0 0 (526)
Institutional Class................................. 0 0 0 0
Net realized gain from security transactions:
A Class............................................. (59,426) (823,497) (896,481) (2,225,694)
B Class............................................. (1,968) (11,522) (30,200) (67,421)
C Class............................................. (4,873) (14,534) (20,811) (32,506)
Institutional Class................................. 0 0 0 0
(66,267) (849,553) (1,076,761) (2,422,770)
----------- ----------- ----------- -----------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class............................................. 5,562,953 2,592,893 2,653,871 6,323,206
B Class............................................. 2,473,963 177,549 90,950 697,999
C Class............................................. 679,765 186,497 141,815 730,728
Institutional Class................................. 677,590 0 0 0
Net asset value of shares issued upon reinvestment of
dividends from net investment income and net realized
gain on security transactions:
A Class............................................. 58,796 801,188 985,746 2,176,239
B Class............................................. 1,963 6,145 28,842 55,265
C Class............................................. 4,771 11,804 20,759 32,495
Institutional Class................................. 0 0 0 0
----------- ----------- ----------- -----------
9,459,801 3,776,076 3,921,983 10,015,932
----------- ----------- ----------- -----------
Cost of shares repurchased:
A Class............................................. (3,506,113) (2,035,066) (5,608,075) (5,369,765)
B Class............................................. (78,148) (69,487) (291,913) (70,952)
C Class............................................. (55,452) (112,429) (72,688) (168,125)
Institutional Class................................. (117,322) 0 0 0
----------- ----------- ----------- -----------
(3,757,035) (2,216,982) (5,972,676) (5,608,842)
----------- ----------- ----------- -----------
Increase (decrease) in net assets derived from capital
share transactions................................... 5,702,766 1,559,094 (2,050,693) 4,407,090
----------- ----------- ----------- -----------
NET INCREASE IN NET ASSETS........................... 8,242,780 775,533 2,417,061 6,633,893
----------- ----------- ----------- -----------
NET ASSETS:
Beginning of year.................................... 5,259,885 4,484,352 36,148,408 29,514,515
----------- ----------- ----------- -----------
End of period........................................ $13,502,665 $5,259,885 $38,565,469 $36,148,408
=========== =========== =========== ===========
</TABLE>
See accompanying notes
1997 SEMI-ANNUAL REPORT 17
<PAGE>
THE DELAWARE - VOYAGEUR FUNDS
FINANCIAL HIGHLIGHTS
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were as follows:
AGGRESSIVE GROWTH FUND A CLASS
-----------------------------------------------------------------
Period from
For Six Months For the Year For the Year 5/16/94(1)
Ended Ended Ended to
10/31/97 4/30/97 4/30/96(4) 4/30/95
(Unaudited)
<S> <C> <C> <C> <C>
Net asset value, beginning of period $11.77 $13.08 $10.40 $10.00
Income from investment operations:
Net investment loss ................ (0.06) (0.18) (0.10) (0.09)
Net realized and unrealized gain
from investments................... 7.57 0.96 3.27 0.49
------------ ------------ ------------- -------------
Net increase in net assets
from investment operations ........ 7.51 0.78 3.17 0.40
------------ ------------ ------------- -------------
Less dividends and distributions:
Dividends from net
investment income.................. - (2.09) (0.40) -
Distributions from net realized gain
on security transactions........... ( 0.25) - (0.09) -
------------ ------------ ------------- -------------
Total dividends and distributions (0.25) (2.09) (0.49) -
------------ ------------ ------------- -------------
Net asset value, end of period....... $19.03 $11.77 $13.08 $10.40
============ ============ ============= =============
Total return(3)..................... 55.59% 4.34% 31.02% 4.00%
Ratios and supplemental data:
Net assets, end of period
(000 omitted)...................... $9,449 $ 4,944 $4,334 $2,189
Ratio of expenses to average
net assets(5)...................... 1.75%(7) 1.84% 2.01% 1.74%(1)
Ratio of expenses
to average net assets
prior to expense limitation(6)..... 1.98%(7) 2.65% 2.74% 2.97%(1)
Ratio of net investment loss
to average net assets.............. (0.88%)(7) (1.38%) (1.00%) (1.21%)(1)
Ratio of net investment income
to average net assets prior
to expense limitation(6)........... (1.11%)(7) (2.19%) (1.73%) (2.44%)(1)
Portfolio turnover.................. 425.90%(7) 179.50% 165.50% 88.30%
Average commission rate paid(2)..... 0.0600 0.0600 N/A N/A
</TABLE>
<PAGE>
<TABLE>
<CAPTION>
- ----------------------------------------------------------------------------------------------------------
AGGRESSIVE GROWTH FUND B CLASS
------------------------------------------------------
Period from
For Six Months For the Year 4/16/96(1)
Ended Ended to
10/31/97 4/30/97 4/30/96(4)
(Unaudited)
<S> <C> <C> <C>
Net asset value, beginning of period ...... $11.57 $13.06 $11.91
Income from investment operations:
Net investment loss ...................... (0.02) (0.21) (0.01)
Net realized and unrealized gain
from investments......................... 7.33 0.81 1.16
------------- ------------ ------------
Net increase in net assets
from investment operations .............. 7.31 0.60 1.15
------------- ------------ ------------
Less dividends and distributions:
Dividends from net
investment income. . .................... - (2.09) -
Distributions from net realized gain on
security transactions ................... (0.25) - -
------------- ------------ ------------
Total dividends and distributions ........ (0.25) (2.09) -
------------- ------------ ------------
Net asset value, end of period ............ $18.63 $11.57 $13.06
============= ============ ============
Total return(3) ........................... 53.38% 2.84% 9.66%
Ratios and supplemental data:
Net assets, end of period
(000 omitted)............................ $2,517 $95 $0
Ratio of expenses to average
net assets(5) ........................... 2.44%(7) 2.57% 1.86%(1)
Ratio of expenses
to average net assets
prior to expense limitation(6) .......... 3.26%(7) 3.37% 1.86%(1)
Ratio of net investment loss
to average net assets ................... (0.63%)(7) (1.97%) (1.39%)(1)
Ratio of net investment income
to average net assets prior
to expense limitation(6) ................ (1.45%)(7) (2.77%) (1.39%)(1)
Portfolio turnover........................ 425.90% (7) 179.50% 165.50%
Average commission rate paid(2) .......... 0.0600 0.0600 N/A
</TABLE>
- ----------
(1) Date of commencement of trading; ratios and total return have been
annualized.
(2) Beginning in the year ended April 30, 1997, the average commission rate
paid per share for security transactions is a required disclosure.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value.
(4) Effective May 1, 1995, Voyageur replaced George D. Bjurman & Associates as
the investment advisor for Aggressive Growth Fund to become the sole
investment advisor to the Fund.
(5) Beginning in the period ended April 30, 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
(6) Prior to the year ended April 30, 1997, the ratios reflect the most
restrictive state limitation in effect.
(7) Annualized.
18 1997 SEMI-ANNUAL REPORT
<PAGE>
Financial Highlights (Continued)
<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were as follows:
Aggressive Aggressive
Growth Fund Growth Fund
C Class Institutional Class
---------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
Period from Period from
For Six Months For the Year For the Year 5/20/94(1) 8/29/97(1)
Ended 10/31/97 Ended 4/30/97 Ended 4/30/96(4) to 4/30/95 to 10/31/97
(Unaudited) (Unaudited)
Net asset value, beginning of period..... $11.47 $12.88 $10.33 $10.00 17.15
Income from investment operations:
Net investment loss.................... (0.07) (0.23) (0.21) (0.16) -
Net realized and unrealized gain
from investments...................... 7.30 0.91 3.25 0.49 1.91
-------------- ------------- --------------- ------------ --------------
Net increase in net assets from
investment operations................. 7.23 0.68 3.04 0.33 1.91
-------------- ------------- --------------- ------------ --------------
Less dividends and distributions:
Dividends from net investment income... - (2.09) (0.40) - -
Distributions from net realized gain
on security transactions.............. (0.25) - (0.09) - -
--------------- ------------- --------------- ------------ --------------
Total dividends and distributions...... (0.25) (2.09) (0.49) - -
--------------- ------------- --------------- ------------ --------------
Net asset value, end of period........... $18.45 $11.47 $12.88 $10.33 19.06
=============== ============= =============== ============ ==============
Total return(3).......................... 54.17% 3.58% 29.96% 3.30% N/A
Ratios and supplemental data:
Net assets, end of period (000 omitted) $988 $222 $150 $128 $549
Ratio of expenses to average net assets(5) 2.53%(7) 2.62% 2.77% 2.40%(1) 1.53%(1)
Ratio of expenses to average net assets
prior to expense limitation(6)........ 2.87%(7) 3.43% 3.50% 3.50%(1) 2.88%(1)
Ratio of net investment loss to average
net assets............................ (0.84%)(7) (2.02%) (1.73%) (1.80%)(1) (0.45%)(1)
Ratio of net investment loss to average
net assets prior to expense limitation(6) (1.18%)(7) (2.83%) (2.46%) (2.90%)(1) (1.80%)(1)
Portfolio turnover..................... 425.90%(7) 179.50% 165.50% 88.30% 425.90%(7)
Average commission rate paid(2)........ 0.0600 0.0600 N/A N/A 0.0600
</TABLE>
- ----------
(1) Date of commencement of trading; ratios and total return have been
annualized.
(2) Beginning in the year ended April 30, 1997, the average commission rate
paid per share for security transactions is a required disclosure.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value.
(4) Effective May 1, 1995, Voyageur replaced George D. Bjurman & Associates as
the investment advisor for Aggressive Growth Fund to become the sole
investment advisor to the Fund.
(5) Beginning in the period ended April 30, 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
(6) Prior to the year ended April 30, 1997, the ratios reflect the most
restrictive state limitation in effect.
(7) Annualized.
1997 SEMI-ANNUAL REPORT 19
<PAGE>
Financial Highlights (Continued)
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were as follows:
GROWTH STOCK A CLASS
------------------------------------------------------------------
<S> <C> <C> <C> <C>
For Six Months For the Year For the Year For the Year
Ended 10/31/97 Ended 4/30/97 Ended 4/30/96 Ended 4/30/95
(Unaudited)
Net asset value, beginning of period..... $25.34 $23.66 $19.91 $17.51
Income from investment operations:
Net investment income.................. 0.10 0.16 0.08 0.15
Net realized and unrealized gain (loss)
from investments...................... 3.80 3.36 4.82 2.77
------------- ------------ ------------ ------------
Net increase (decrease) in net assets
from investment operations............ 3.90 3.52 4.90 2.92
------------- ------------ ------------ ------------
Less dividends and distributions:
Dividends from net investment income... (0.10) (0.08) (0.11) (0.13)
Distributions from net realized gain
on security transactions.............. (0.69) (1.76) (1.04) (0.39)
------------- ------------ ------------ ------------
Total dividends and distributions...... (0.79) (1.84) (1.15) (0.52)
------------- ------------ ------------ ------------
Net asset value, end of period........... $28.45 $25.34 $23.66 $19.91
============= ============ ============ ============
Total return(2).......................... 23.91% 15.27% 25.00% 17.04%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $36,526 $34,255 $28,956 $23,651
Ratio of expenses to average net assets(3) 1.75%(4) 1.72% 1.78% 1.90%
Ratio of expenses to average net assets
prior to expense limitation........... 1.80%(4) 1.72% 1.87% 1.99%
Ratio of net investment income to
average net assets.................... 0.88%(4) 0.68% 0.36% 0.75%
Ratio of net investment income to average
net assets prior to expense limitation 0.83%(4) 0.68% 0.27% 0.66%
Portfolio turnover..................... 11.90%(4) 28.50% 36.60% 21.80%
Average commission rate paid(1)........ 0.0600 0.0600 N/A N/A
</TABLE>
<PAGE>
GROWTH STOCK A CLASS
(continued)
------------------------------------
For the Year For the Year
Ended 4/30/94 Ended 4/30/93
Net asset value, beginning of period..... $17.81 $23.81
Income from investment operations:
Net investment income.................. 0.07 0.05
Net realized and unrealized gain (loss)
from investments...................... (0.16) 0.22
------------ -----------
Net increase (decrease) in net assets
from investment operations............ (0.09) 0.27
------------ -----------
Less dividends and distributions:
Dividends from net investment income... (0.06) -
Distributions from net realized gain
on security transactions.............. (0.15) (6.27)
------------ -----------
Total dividends and distributions...... (0.21) (6.27)
------------ -----------
Net asset value, end of period........... $17.51 $17.81
============ ===========
Total return(2).......................... (0.52%) 1.51%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $28,518 $26,784
Ratio of expenses to average net assets(3) 1.90% 1.90%
Ratio of expenses to average net assets
prior to expense limitation........... 2.13% 2.70%
Ratio of net investment income to
average net assets.................... 0.40% 0.26%
Ratio of net investment income to average
net assets prior to expense limitation. 0.17% (0.54%)
Portfolio turnover..................... 34.20% 16.50%
Average commission rate paid(1)........ N/A N/A
- ----------
(1) Beginning in the year ended April 30, 1997, the average commission rate
paid per share for security transactions is a required disclosure.
(2) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value.
(3) Beginning in the period ended April 30, 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
(4) Annualized.
20 1997 SEMI-ANNUAL REPORT
<PAGE>
Financial Highlights (Continued)
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding throughout each period were as follows:
Growth Stock B Class Growth Stock C Class
-------------------------------------------------------------------------------------------------
For Six Months For the Year Period from For Six Months For the Year Period from
Ended Ended 9/8/95(1) Ended Ended 10/31/95(1)
10/31/97 4/30/97 to 4/30/96 10/31/97 4/30/97 to 4/30/96
(Unaudited) (Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning
of period................. $24.93 $23.39 $21.64 $24.93 $23.43 $22.61
Income from investment
operations:
Net investment income...... 0.08 - 0.06 0.04 0.07 0.11
Net realized and unrealized
gain from investments..... 3.66 3.30 2.96 3.69 3.22 2.00
------ ------ ------ ------ ------ ------
Net increase in net assets
from investment operations. 3.74 3.30 3.02 3.73 3.29 2.11
------ ------ ------ ------ ------ ------
Less dividends and
distributions:
Dividends from net investment
income................... - - (0.23) - (0.03) (0.25)
Distributions from net realized
gain on security transactions (0.69) (1.76) (1.04) (0.69) (1.76) (1.04)
------ ------ ------ ------ ------ ------
Total dividends and
distributions............ (0.69) (1.76) (1.27) (0.69) (1.79) (1.29)
------ ------ ------ ------ ------ ------
Net asset value, end of period $27.98 $24.93 $23.39 $27.97 $24.93 $23.43
====== ====== ====== ====== ====== ======
Total return(3)........... 23.11% 14.50% 14.37% 23.10% 14.42% 9.72%
Ratios and supplemental data:
Net assets, end of period
(000 omitted)............. $1,154 $1,182 $454 $885 $712 $104
Ratio of expenses to average
net assets(4)............. 2.49%(5) 2.47% 2.41%(1) 2.49%(5) 2.47% 2.35%(1)
Ratio of expenses
to average net assets
prior to expense limitation 2.54%(5) 2.47% 2.50%(1) 2.54%(5) 2.47% 2.43%(1)
Ratio of net investment income
to average net assets..... 0.90%(5) (0.01%) (0.62%)(1) 0.75%(5) 0.14% (0.65%)(1)
Ratio of net investment income
to average net assets prior
to expense limitation..... 0.85%(5) (0.01%) (0.71%)(1) 0.70%(5) 0.14% (0.73%)(1)
Portfolio turnover........ 11.90% 28.50% (36.60%) 11.90%(5) 28.50% 36.60%(1)
Average commission rate paid(2) 0.0600 0.0600 N/A 0.0600 0.0600 N/A
</TABLE>
<PAGE>
Growth Stock Fund
Institutional
Class
--------------------
Period from
8/29/97(1)
to 10/30/97
(Unaudited)
Net asset value, beginning
of period....................... $ 27.52
Income from investment
operations:
Net investment income........... -
Net realized and unrealized
gain from investments.......... 1.68
-----
Net increase in net assets
from investment operations..... 1.68
-----
Less dividends and
distributions:
Dividends from net investment
income......................... -
Distributions from net realized
gain on security transactions.. (0.69)
-----
Total dividends and
distributions.................. (0.69)
-----
Net asset value, end of period. 28.51
=====
Total return(3).................. N/A
Ratios and supplemental data:
Net assets, end of period
(000 omitted).................. $0
Ratio of expenses to average
net assets(4).................. 1.50%(1)
Ratio of expenses
to average net assets
prior to expense limitation.... 1.50%(1)
Ratio of net investment income
to average net assets.......... 1.02%(1)
Ratio of net investment income
to average net assets prior
to expense limitation.......... 1.02%(1)
Portfolio turnover.............. 11.90%(5)
Average commission rate paid(2). 0.0600
- ----------
(1) Date of commencement of trading; ratios and total return have been
annualized.
(2) Beginning in the year ended April 30, 1997, the average commission rate
paid per share for security transactions is a required disclosure.
(3) Total investment return is based on the change in net asset value of a
share during the period and assumes reinvestment of distributions at net
asset value.
(4) Beginning in the period ended April 30, 1996, the expense ratio reflects
the effect of gross expenses attributable to earnings credits on uninvested
cash balances received by the Funds. Prior period expense ratios have not
been adjusted.
(5) Annualized.
1997 SEMI-ANNUAL REPORT 21
<PAGE>
THE DELAWARE - VOYAGEUR FUNDS
NOTES TO FINANCIAL STATEMENTS
OCTOBER 31, 1997
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware - Voyageur Aggressive Growth Fund (formerly Voyageur Aggressive Growth
Fund) and Delaware - Voyageur Growth Stock Fund (formerly Voyageur Growth Stock
Fund) series within Voyageur Mutual Funds III Inc. (each referred to as a "Fund"
or collectively as the "Funds") are registered as diversified open-end
investment company under the Investment Company Act of 1940, as amended. The
Funds are organized as Maryland Corporations and each offers four classes of
shares. The Funds objectives are to provide shareholders with long-term capital
appreciation by investing in equity securities of companies having the potential
for high earnings growth.
1. Fund Reorganization
On April 30, 1997, Lincoln National Corporation ("LNC") acquired Voyageur Fund
Manager Inc.'s ("Voyageur") parent, Dougherty Financial Group, Inc. ("DFG")
pursuant to an agreement and plan of merger dated January 15, 1997, in which LNC
would acquire DFG including the mutual fund investment advisory business of DFG
conducted by Voyageur. Upon completion of the acquisition, Delaware Management
Company, Inc. ("DMC") became the investment advisor to the Funds, Delaware
Distributors, L.P. ("DDLP") became the distributor for the Funds, Delaware
Service Company, Inc. ("DSC") became the transfer, dividend-disbursing,
shareholder servicing agent and accounting service agent for the Funds.
2. Significant Accounting Policies
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Funds.
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. Money market instruments having less than 60
days to maturity are valued at amortized cost which approximates market value.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
Federal Income Taxes - Each Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations which may differ from generally
accepted accounting principles.
Class Accounting - Investment income, common expenses and realized and
unrealized gain (loss) on investments are allocated to the various classes of
the Funds 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 Funds may invest in a pooled cash account along with
other members of the Delaware Group of Funds. The aggregate daily balance of the
pooled cash account is invested in repurchase agreements secured by obligations
of the U.S. Government. The respective collateral is held by the Fund's
custodian bank until the maturity of the respective repurchase agreements. Each
repurchase agreement is at least 100% collateralized. However, in the event of
default or bankruptcy by the counterparty to the agreement, realization of the
collateral may be subject to legal proceedings.
<PAGE>
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. Original issue discounts are accreted to interest income over the
lives of the respective securities. The Fund declares and pays dividends from
net investment income and capital gains annually.
Certain Fund expenses are paid through "soft dollar" arrangements with brokers.
The amount of these expenses is less than 0.01% of the Fund's average daily net
assets.
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.
3. Investment Management and Other Transactions with Affiliates In accordance
with the terms of the Investment Management Agreement, the Funds pay DMC, the
Investment Manager of the Aggressive Growth Fund, and Voyageur Asset Management,
the Investment Manager of the Growth Stock Fund, an annual fee, which is
calculated daily on the average daily net assets of each Fund. The management
fee rates are as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
Management fee as a percentage of average daily
net assets (per annum)......................... 1.00% 1.00%
DMC has elected to waive that portion of the management fee and reimburse each
Fund to the extent that annual operating expenses exclusive of taxes, interest,
brokerage commissions and extraordinary expenses, exceed 1.75% of each Funds
average daily net assets attributable to Class A and Institutional Class shares
and 2.50% of each Funds average daily net assets attributable to Class B and
Class C shares. Total expenses absorbed by DMC for the six-month period ended
October 31, 1997 are as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
Total expenses absorbed by DMC.................. $9,992 $11,034
The Funds have engaged DSC, an affiliate of DMC, to serve as dividend
disbursing, transfer agent, and accounting services agent for each Fund. For the
six month period ended October 31, 1997, the amounts expensed for each Fund were
as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
Dividend disbursing, transfer agent fees and
other expenses................................. $8,176 $32,502
Accounting fees................................. $1,821 $10,608
22 1997 SEMI-ANNUAL REPORT
<PAGE>
Notes to Financial Statements (Continued)
- --------------------------------------------------------------------------------
On October 31, 1997, the Funds had payables to affiliates as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
Investment Management fee payable to DMC... $8,107 $25,585
Dividend disbursing, transfer agent fees,
accounting fees and other expenses payable
to DSC.................................... $6,730 $8,191
Other expenses payable to
DMC and affiliates........................ $605 $3,376
Pursuant to the Distribution Agreement, the Funds pay DDLP, the Distributor and
an affiliate of DMC, an annual fee not to exceed 0.25% of the average daily net
assets of the A Class and 1.00% of the average daily net assets of the B and C
Class. For the six month period ended October 31, 1997, DDLP earned commissions
on sales of the Fund A Class shares for each Fund as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
$14,051 $3,040
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.
4. Investments
During the period ended October 31, 1997, the Funds made purchases and sales of
investment securities other than U.S. government securities and temporary cash
investments for each Fund as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
Purchases.................................. $12,084,085 $1,981,532
Sales...................................... $10,658,387 $5,471,969
On October 31, 1997, the Funds aggregate cost of securities for federal income
tax purposes were as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
$12,329,420 $26,345,424
At October 31, 1997, the aggregate unrealized appreciation (depreciation) of
securities for federal income tax purposes for each Fund were as follows:
Aggressive Growth
Growth Fund Stock Fund
----------- ----------
Aggregate unrealized appreciation.......... $1,297,059 $12,882,928
Aggregate unrealized depreciation.......... $259,999 $620,860
Net unrealized appreciation................ $1,037,060 $12,262,068
5. Concentrations of Credit Risk
The Fund may invest up to 10% of its total assets in illiquid securities which
may include securities with contractual restrictions on resale, securities
exempt from registration under Rule 144A of the Securities Act of 1933, as
amended, and other securities which may not be readily marketable. The relative
illiquidity of some of these securities may adversely affect the Fund's ability
to dispose of such securities in a timely manner and at a fair price when it is
necessary to liquidate such securities. These securities, if any, have been
denoted in the Statement of Net Assets.
1997 SEMI-ANNUAL REPORT 23
<PAGE>
<TABLE>
<CAPTION>
Notes to Financial Statements (Continued)
- ------------------------------------------------------------------------------------------------------------------------------------
6. Capital Stock
Aggressive Growth Fund Growth Stock Fund
For Six Months For the Year For Six Months For the Year
Ended 10/31/97 Ended 4/30/97 Ended 10/31/97 Ended 4/30/97
-------------- ------------- -------------- -------------
<S> <C> <C> <C> <C>
Shares sold:
A Class. . . . . . . . . . . . . . . . . . . . 299,979 190,978 93,326 253,700
B Class. . . . . . . . . . . . . . . . . . . . 131,336 12,754 3,203 28,484
C Class. . . . . . . . . . . . . . . . . . . . 36,913 14,452 5,153 29,726
Institutional Class. . . . . . . . . . . . . . 34,866 0 1 0
Shares issued upon reinvestment of dividends from
net investment income and net realized gains
from security transactions:
A Class. . . . . . . . . . . . . . . . . . . . 3,512 61,299 33,724 90,300
B Class. . . . . . . . . . . . . . . . . . . . 120 474 1,001 2,328
C Class. . . . . . . . . . . . . . . . . . . . 293 924 721 1,367
Institutional Class. . . . . . . . . . . . . . 0 0 0 0
-------------- ------------- -------------- --------------
507,019 280,881 137,129 405,905
-------------- ------------- -------------- --------------
Shares repurchased:
A Class. . . . . . . . . . . . . . . . . . . . (227,207) (163,480) (195,379) (215,895)
B Class. . . . . . . . . . . . . . . . . . . . (4,530) (5,065) (10,344) (2,827)
C Class. . . . . . . . . . . . . . . . . . . . (3,010) (7,682) (2,769) (6,993)
Institutional Class. . . . . . . . . . . . . . (6,051) 0 0 0
-------------- ------------- -------------- --------------
(240,798) (176,227) (208,492) (225,715)
Net Increase (Decrease). . . . . . . . . . . . 266,221 104,654 (71,363) 180,190
============== ============= ============== ==============
</TABLE>
24 1997 SEMI-ANNUAL REPORT
<PAGE>
DELAWARE GROUP OF FUNDS
For Growth of Capital
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
For Total Return
Social Awareness Fund
Blue Chip Fund
Devon Fund
Decatur Total Return Fund
Decatur Income Fund
REIT Fund
Delaware Fund
For International Diversification
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Assets Fund
Global Bond Fund
For Current Income
Delchester Fund
Strategic Income Fund
U.S. Government Fund
Delaware-Voyageur
U.S. Government Securities Fund
Limited-Term Government Fund
For Tax-Exempt Current Income
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
Money Market Funds
Delaware Cash Reserve
U.S. Government Money Fund
Tax-Exempt Money Fund
* Available for the following states: Arizona, California, Colorado,
Florida, Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey,
New Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington and
Wisconsin. Insured and intermediate bond funds are available in selected
states.
Complete information on any Delaware Group fund can be found in each fund's
current prospectus. Prospectuses for all Delaware Group funds are available from
your financial adviser. Please read the prospectus carefully before you invest
or send money.
funds
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF AGGRESSIVE
GROWTH FUND AND GROWTH STOCK FUND SHAREHOLDERS, BUT IT MAY BE USED WITH
PROSPECTIVE INVESTORS WHEN PRECEDED OR ACCOMPANIED BY A CURRENT PROSPECTUS FOR
AGGRESSIVE GROWTH FUND AND GROWTH STOCK FUND, WHICH SETS FORTH DETAILS ABOUT
CHARGES, EXPENSES, INVESTMENT OBJECTIVES AND OPERATING POLICIES OF THE FUNDS.
YOU SHOULD READ THE PROSPECTUS CAREFULLY BEFORE YOU INVEST. SUMMARY INVESTMENT
RESULTS ARE DOCUMENTED IN THE FUNDS' CURRENT STATEMENT OF ADDITIONAL
INFORMATION. THE FIGURES IN THIS REPORT REPRESENT PAST RESULTS WHICH ARE NOT A
GUARANTEE OF FUTURE RESULTS. THE RETURN AND PRINCIPAL VALUE OF AN INVESTMENT IN
THE FUNDS WILL FLUCTUATE SO THAT SHARES, WHEN REDEEMED, MAY BE WORTH MORE OR
LESS THAN THEIR ORIGINAL COST.
INVESTMENT MANAGER
Delaware Management Company,
Inc. Philadelphia
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia
SUBADVISER
Voyageur Asset Management Inc.
90 South Seventh Street
Minneapolis, MN 55402
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING AND
TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia
1818 Market Street
Philadelphia, PA 19103-3682
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES
1.800.659.2265
Be sure to consult your financial adviser when making investments. Mutual funds
can be a valuable part of your financial plan: however, shares of the Funds are
not FDIC or NCUSIF insured, are not guaranteed by any bank or any credit union,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Funds are not bank or credit union deposits.
DELAWARE
GROUP
- -------
Philadelphia o London
Printed in the USA on recycled paper
(364)
SA-316 [10/97] PP12/97
Copyright Delaware Distributors, L.P.
