<PAGE>
Supplement Dated April 15, 1995
to the Current Prospectuses
of the Following Delaware Group Funds
Delaware Group Delaware Fund, Inc., Delaware
Group Trend Fund, Inc., Delaware Group Value
Fund, Inc., Delaware Group Decatur Fund, Inc.,
Delaware Group DelCap Fund, Inc., Delaware
Group Delchester High-Yield Bond Fund, Inc.,
Delaware Group Government Fund, Inc.,
Delaware Group Tax-Free Fund, Inc., Delaware
Group Treasury Reserves, Inc., Delaware Group
Tax-Free Money, Inc., Delaware Group Cash
Reserve, Inc.
On March 29, 1995, shareholders of each of the above
referenced Funds or, as relevant, the series thereof, approved a new
Investment Management Agreement with Delaware Management
Company, Inc. ("DMC"), an indirect wholly-owned subsidiary of
Delaware Management Holdings, Inc. ("DMH"). The approval of
new Investment Management Agreements was subject to the
completion of the merger (the "Merger") between DMH and a wholly-
owned subsidiary of Lincoln National Corporation ("Lincoln
National") which occurred on April 3, 1995. Accordingly, the
previous Investment Management Agreements terminated and the new
Investment Management Agreements became effective on that date.
As a result of the Merger, DMC and its two affiliates,
Delaware Service Company, Inc., the Funds' shareholder servicing,
dividend disbursing and transfer agent and Delaware Distributors,
L.P., the Funds' national distributor became indirect wholly-owned
subsidiaries of Lincoln National. Lincoln National, with headquarters
in Fort Wayne, Indiana, is a diversified organization with operations
in many aspects of the financial services industry, including insurance
and investment management.
Under the new Investment Management Agreements, DMC
will be paid at the same annual fee rates and on the same terms as it
was under the previous Investment Management Agreements. In
addition, the investment approach and operation of each Fund and, as
relevant, each series of a Fund, will remain substantially unchanged.
PS-OTH-4/95
<PAGE> 1
U.S. GOVERNMENT MONEY FUND PROSPECTUS
CONSULTANT CLASS February 28, 1995
-------------------------------------------------
1818 MARKET STREET, PHILADELPHIA, PA 19103
FOR PROSPECTUS AND PERFORMANCE: NATIONWIDE 800-523-4640
PHILADELPHIA 215-988-1333
INFORMATION ON EXISTING ACCOUNTS: (SHAREHOLDERS ONLY)
NATIONWIDE 800-523-1918 PHILADELPHIA 215-988-1241
DEALER SERVICES: (BROKER/DEALERS ONLY)
NATIONWIDE 800-362-7500 PHILADELPHIA 215-988-1050
This Prospectus describes the U.S. Government Money Fund Consultant Class
(the "Class") of shares of the U.S. Government Money Series (the "Series") of
Delaware Group Treasury Reserves, Inc. (the "Fund"). Shares of the Class are
available for sale through brokers, financial institutions and other entities
which have a dealer agreement with the Fund's Distributor or a service
agreement with the Fund. The Fund is an investment company offering shares of
two Series, the U.S. Government Money Series and the Treasury Reserves
Intermediate Series.
The Series is a professionally-managed mutual fund seeking maximum current
income while preserving principal and maintaining liquidity. The Series
intends to achieve its objective by investing its assets only in short-term
securities issued or guaranteed as to principal and interest by the U.S.
government, its agencies or instrumentalities and repurchase agreements
secured by the same.
The Series is a money market fund. The minimum initial investment is
$1,000; subsequent investments must be at least $25. The Fund has adopted for
the Class a 12b-1 Plan covering distribution expenses, but no fees are
currently being paid. There is no front-end or contingent deferred sales
charge.
This Prospectus sets forth information that you should read and consider
before you invest. Please retain it for future reference. Part B of the
registration statement, dated February 28, 1995, as it may be amended from
time to time, contains additional information about the Series and has been
filed with the Securities and Exchange Commission. Part B is incorporated by
reference into this Prospectus and is available, without charge, by writing
to Delaware Distributors, L.P. at the above address or by calling the above
numbers. The Fund's financial statements appear in its Annual Report, which
will accompany any response to requests for Part B.
The Series also offers the U.S. Government Money Fund A Class of shares.
Shares of that class can be purchased directly from the Fund or its
Distributor, and have no annual 12b-1 Plan distribution expenses. A
prospectus for that class can be obtained by writing to Delaware
Distributors, L.P. at the above address or by calling the above numbers. See
U.S. Government Money Fund A Class.
TABLE OF CONTENTS
Cover Page................................ 1
Synopsis.................................. 2
Summary of Expenses....................... 3
Financial Highlights...................... 4
Investment Objective and Policies
Suitability............................. 5
Investment Strategy..................... 5
The Delaware Difference
Plans and Services...................... 6
Retirement Planning....................... 7
Buying Shares............................. 8
Redemption and Exchange................... 10
Dividends and Distributions............... 13
Taxes..................................... 14
Net Asset Value Per Share................. 14
Management of the Fund.................... 15
THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.
- -------------------------------------------------------------------------------
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 SERIES
ARE NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY CREDIT UNION OR ANY
BANK, ARE NOT OBLIGATIONS OF ANY CREDIT UNION OR ANY BANK, AND INVOLVE
INVESTMENT RISK,INCLUDING THE POSSIBLE LOSS OF PRINCIPAL. SHARES OF THE SERIES
ARE NOT CREDIT UNION OR BANK DEPOSITS.
- -------------------------------------------------------------------------------
1
<PAGE> 2
SYNOPSIS
Capitalization
The Series offers the U.S. Government Money Fund Consultant Class and the
U.S. Government Money Fund A Class. The Fund has a present authorized
capitalization of three billion shares of common stock with a $.001 par value
per share. Five hundred million shares of the Fund have been allocated to each
class of shares. See Shares under Management of the Fund.
Investment Manager, Distributor and Service Agent
Delaware Management Company, Inc. (the "Manager") is the investment manager
for the Series. The Manager or its affiliate, Delaware International Advisers
Ltd., manages the other funds in the Delaware Group. Delaware Distributors,
L.P. (the "Distributor") is the national distributor for the Series and for
all of the other mutual funds in the Delaware Group. Delaware Service Company,
Inc. (the "Transfer Agent") is the shareholder servicing, dividend disbursing
and transfer agent for the Series and for all of the other mutual funds in the
Delaware Group. See Management of the Fund.
Purchase Price
Shares of the Class offered by this Prospectus are available at net asset
value, without a sales charge and are subject to distribution fees under a
Rule 12b-1 distribution plan. There are no payments being made under the Plan
at this time. See Buying Shares; and Distribution (12b-1) and Service under
Management of the Fund.
Minimum Investment
Shares of the Class are available for sale through brokers, financial
institutions and other entities which have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The minimum initial
investment is $1,000 and all subsequent investments must be at least $25. See
Buying Shares.
Investment Objective
The objective of the Series is to seek maximum current income while
preserving principal and maintaining liquidity. The Series intends to achieve
its objective by investing its assets only in short-term securities issued or
guaranteed as to principal and interest by the U.S. government, its agencies
or instrumentalities, and repurchase agreements secured by the same. See
Investment Objective and Policies.
Open-End Investment Company
The Fund, which was organized as a Pennsylvania business trust in 1981 and
reorganized as a Maryland corporation in 1990, is a diversified, open-end
management investment company, commonly known as a mutual fund. The Series
portfolio of assets is diversified for purposes of the Investment Company Act
of 1940. See Shares under Management of the Fund.
Investment Management Fees
The Manager furnishes investment management services to the Series, subject
to the supervision and direction of the Fund's Board of Directors. Under the
Investment Management Agreement, the annual compensation paid to the Manager
is equal to 1/2 of 1% of average daily net assets of the Series, less all
directors' fees paid to the unaffiliated directors by the Fund. See Management
of the Fund.
Redemption and Exchange
Shares of the Series are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.
2
<PAGE> 3
SUMMARY OF EXPENSES
<TABLE>
<CAPTION>
Annual Operating Expenses
Shareholder Transaction Expenses (as a percentage of average daily net assets)
- -------------------------------------------------------- ---------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases Management Fees.................................. 0.46%
(as a percentage of offering price)............ None 12b-1 Fees....................................... None***
Maximum Sales Charge Imposed on Reinvested Other Operating Expenses......................... 0.80%
Dividends (as a percentage of offering price).. None -----
Redemption Fees.................................. None* Total Operating Expenses....................... 1.26%
Exchange Fees.................................... None** =====
</TABLE>
The purpose of this table is to assist the investor in understanding the
various costs and expenses that an investor in the Class will bear directly or
indirectly. *CoreStates Bank, N.A. currently charges $7.50 per redemption for
redemptions payable by wire. **Exchanges are subject to the requirements of
each fund and a sales charge may apply. ***Shares of the Class are subject to a
12b-1 Plan; however, the Board of Directors of the Fund has suspended 12b-1
Plan payments from the Class to the Distributor effective June 1, 1990.
(See Distribution (12b-1) and Service under Management of the Fund.) Also, see
U.S. Government Money Fund A Class for expense information about that class.
The following example illustrates the expenses that an investor would pay on
a $1,000 investment over various time periods assuming (1) a 5% annual rate of
return and (2) redemption at the end of each time period. As noted in the table
above, the Fund charges no redemption fees.
1 year 3 years 5 years 10 years
------ ------- ------- --------
$13 $40 $69 $152
THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.
3
<PAGE> 4
FINANCIAL HIGHLIGHTS
The following financial highlights are derived from the financial statements
of Delaware Group Treasury Reserves, Inc.-U.S. Government Money Series and have
been audited by Ernst & Young LLP, independent auditors. The data should be
read in conjunction with the financial statements, related notes, and the report
of Ernst & Young LLP covering such financial information and highlights, all
of which are incorporated by reference into Part B. Further information about
the Series' performance is contained in its Annual Report to shareholders.
A copy of the Series' Annual Report (including the report of Ernst & Young LLP)
may be obtained from the Fund upon request at no charge.
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------------------
Year Ended
12/31/94 12/31/93 12/31/92 12/31/91
<S> <C> <C> <C> <C>
Net Asset Value, Beginning of Period(2)............................... $1.0000 $1.0000 $1.0000 $1.0000
Income From Investment Operations
- ---------------------------------
Net Investment Income................................................. 0.0289 0.0200 0.0308 0.0519
Net Gains or Losses on Securities (both realized and unrealized)...... none none none none
------- ------- ------- -------
Total From Investment Operations.................................... 0.0289 0.0200 0.0308 0.0519
------- ------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)................................ (0.0289) (0.0200) (0.0308) (0.0519)
Distributions (from capital gains).................................... none none none none
Returns of Capital.................................................... none none none none
------- ------- ------- -------
Total Distributions................................................. (0.0289) (0.0200) (0.0308) (0.0519)
------- ------- ------- -------
Net Asset Value, End of Period........................................ $1.0000 $1.0000 $1.0000 $1.0000
======= ======= ======= =======
- ---------------------------------------------------------------------------------------------------------------
Total Return.......................................................... 2.93% 2.01% 3.13% 5.32%
- ------------
- ---------------------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)............................. $1,077 $555 $747 $1,399
Ratio of Expenses to Average Daily Net Assets......................... 1.26% 1.04% 0.91% 0.85%
Ratio of Net Investment Income to Average Daily Net Assets............ 2.91% 2.06% 3.11% 5.23%
</TABLE>
<PAGE> 5
<TABLE>
<CAPTION>
- ---------------------------------------------------------------------------------------------------
Period
3/29/88(1)
Year Ended through
12/31/90 12/28/89 12/29/88
<S> <C> <C> <C>
Net Asset Value, Beginning of Period(2)...............................$1.0000 $1.0000 $1.0000
Income From Investment Operations
- ---------------------------------
Net Investment Income................................................. 0.0700 0.0744 0.0458
Net Gains or Losses on Securities (both realized and unrealized)...... none none none
------- ------- -------
Total From Investment Operations.................................... 0.0700 0.0744 0.0458
------- ------- -------
Less Distributions
- ------------------
Dividends (from net investment income)................................(0.0700) (0.0744) (0.0458)
Distributions (from capital gains).................................... none none none
Returns of Capital.................................................... none none none
------- ------- -------
Total Distributions.................................................(0.0700) (0.0744) (0.0458)
------- ------- -------
Net Asset Value, End of Period........................................ 1.0000 $1.0000 $1.0000
====== ======= =======
- ----------------------------------------------------------------------------------------------------
Total Return.......................................................... 7.23% 7.69% 6.20%
- ------------
- ----------------------------------------------------------------------------------------------------
Ratios/Supplemental Data
- ------------------------
Net Assets, End of Period (000's omitted)............................. $1,604 $1,638 $483
Ratio of Expenses to Average Daily Net Assets......................... 0.94% 1.46% 1.45%
Ratio of Net Investment Income to Average Daily Net Assets............ 6.99% 7.44% 6.44%
</TABLE>
- ------------
(1)March 29, 1988 was the date of the Class' initial public sale; ratios and
total return for this period have been annualized.
(2)Effective January 1, 1991, the Fund will attempt to maintain a constant
net asset value of $1.00 per share. The Fund accomplished this change by
effecting a ten-to-one stock split for shareholders of record on that date.
All figures prior to January 1, 1991 have been restated to reflect this
stock split.
4
<PAGE> 6
INVESTMENT OBJECTIVE AND POLICIES
As a money market fund, the Series' objective is to provide maximum current
income, while preserving principal and maintaining liquidity. The Series
seeks to do this by investing only in short-term securities issued or
guaranteed as to principal and interest by the U.S. government, its agencies
or instrumentalities, and repurchase agreements secured by such permitted
investments. All securities purchased by the Series mature within 13 months
from the date of purchase, although repurchase agreements may be
collateralized by securities maturing in more than 13 months. The Series
attempts to manage the portfolio to maintain a constant net asset value of
$1.00 per share. While the Series will make every effort to maintain a fixed
net asset value of $1.00 per share, there can be no assurance that this
objective will be achieved.
SUITABILITY
The Series is suited for investors who seek high yields along with easy
access to their money and stable principal value. Ownership of Series shares
also reduces the bookkeeping and administrative inconveniences of directly
purchasing money market securities.
Shares of the Class are offered for sale through brokers, financial
institutions and other entities which have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The Class may be suitable
for investors who desire the investment and administrative services offered
by such brokers and other entities.
INVESTMENT STRATEGY
The Series invests principally in short-term U.S. government securities in
order to achieve its objective. While there is no assurance this objective
can be achieved, the Series must follow certain policies that can only be
changed by shareholder approval.
Quality Restrictions
The Series limits its investments to those which the Board of Directors has
determined present minimal credit risks and are of high quality and which are
otherwise in accordance with the maturity, quality and diversification
conditions with which taxable money market funds must comply.
The Series' investments include direct obligations issued by the U.S.
Treasury which include bills, notes and bonds which differ from each other
principally in interest rates, maturities and dates of issuance. These
issues, plus some federal agency obligations, are guaranteed by the full
faith and credit of the U.S. government. Examples include Federal Housing
Administration, Farmers Home Administration, Government National Mortgage
Association and Export-Import Bank of the United States. Other federal agency
obligations only have the guarantee of the agency. Examples include Federal
Home Loan Banks, Federal Land Banks, Federal Home Loan Mortgage Corporation,
The Tennessee Valley Authority and the International Bank for Reconstruction
and Development. Although obligations of agencies and instrumentalities are
not direct obligations of the U.S. Treasury, payment of the interest and
principal on such obligations is generally backed directly or indirectly by
the U.S. government. This support can range from the backing of the full
faith and credit of the United States, to U.S. Treasury guarantees, or to the
backing solely of the issuing agency or instrumentality itself.
Maturity Restrictions
The Series maintains an average maturity of not more than 90 days. Also, it
does not purchase any instruments with an effective remaining maturity of
more than 13 months.
Investment Techniques
The Series intends to hold its investments until maturity, but may sell
them prior to maturity for a number of reasons. These reasons include: to
shorten or lengthen the average maturity, to increase the yield, to maintain
the quality of the portfolio or to maintain a stable share value.
The Series may invest up to 10% of its assets, together with any illiquid
investments, in fully-insured deposits maturing in 60 days or less from
members of the FDIC.
The Series may also use repurchase agreements which are at least 100%
collateralized by securities in which the Series can invest directly.
Repurchase agreements help the Series to invest cash on a short-term basis.
Under a repurchase agreement, the Series acquires ownership and possession of
a security, and the seller agrees to buy the security back at a specified
time and higher price. If the seller is unable to repurchase the security,
the Series could experience delays and losses in liquidating the securities.
To minimize this possibility, the Series considers the creditworthiness of
banks and dealers when entering into repurchase agreements.
The Series may borrow money as a temporary measure for extraordinary
purposes or to facilitate redemptions, but it does not presently intend to do
so.
Part B provides more information on the Series' investment policies and
restrictions.
5
<PAGE> 7
THE DELAWARE DIFFERENCE
PLANS AND SERVICES
The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.
SHAREHOLDER PHONE DIRECTORY
Investor Information Center
800-523-4640
(Philadelphia 215-988-1333)
Fund Information; Literature;
Price, Yield and Performance Figures
Shareholder Service Center
800-523-1918
(Philadelphia 215-988-1241)
Information on Existing Regular Investment
Accounts and Retirement Plan Accounts;
Wire Investments; Wire Liquidations;
Telephone Liquidations; Telephone Exchanges
Delaphone
800-362-FUND (800-362-3863)
Performance Information
You can call the Investor Information Center anytime to get current yield
information. Yield information is updated each weekday and is based on the
annualized yield over the past seven-day or longer period.
Shareholder Services
During business hours, you can call the Fund's Shareholder Service Center.
The representatives can answer any of your questions about your account, the
Series, the various service features and other funds in the Delaware Group.
Delaphone Service
Delaphone is an account inquiry service for investors with
Touch-Tone(R) phone service. It enables you to get information on your account
faster than the mailed statements and confirmations seven days a week,
24 hours a day.
Account Statements
A statement of account will be mailed each quarter summarizing all
transactions during the period. Accounts in which there has been activity
will receive a monthly statement confirming transactions for that period. You
should examine statements and confirmations immediately and promptly report
any discrepancy by calling the Shareholder Service Center.
Duplicate Confirmations
If your investment dealer is noted on your investment application, we will
send your dealer a duplicate confirmation. This makes it easier for your
investment dealer to help you manage your investments.
Tax Information
Each year, the Fund will mail you information on the tax status of your
dividends and distributions.
Dividend Reinvestment Plan
You can elect to have your distributions (capital gains and/or dividend
income) paid to you by check or reinvested in your account without a sales
charge or you may be permitted to reinvest your distributions in other funds
in the Delaware Group without a sales charge, subject to eligibility and
minimum purchase requirements set forth in each fund's prospectus. Dividends
on shares of the Class may not be invested in the Class B Shares that are
offered by certain other funds in the Delaware Group ("Class B Funds"). For
more information about reinvestments in shares of other funds in the Delaware
Group, call the Shareholder Service Center.
<PAGE> 8
Exchange Privilege
The Exchange Privilege permits shareholders to exchange all or part of
their Class shares into shares of the other funds in the Delaware Group,
subject to the eligibility and minimum purchase requirements set forth in
each fund's prospectus, including any applicable front-end sales charges.
Exchanges are not permitted between Class shares and the Class B Shares of
the Class B Funds. See Redemption and Exchange.
See Redemption and Exchange for additional information on exchanges.
Wealth Builder Option
You may be permitted to elect to have amounts in your account automatically
invested in other funds in the Delaware Group. Investments under this feature
are exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Class shares. See Redemption and Exchange.
Financial Information about the Series
Each fiscal year, you will receive an audited annual report and an unaudited
semi-annual report. These reports provide detailed information about the Series'
investments and performance. The Fund's fiscal year ends on December 31.
The Delaware Digest
You will receive newsletters covering topics of interest about your
investment alternatives and services from the Delaware Group.
6
<PAGE> 9
RETIREMENT PLANNING
The Class is also suitable for tax-deferred Retirement Plans. Prototype
Profit Sharing and Money Purchase Pension Plans are each subject to a
one-time fee of $200 per plan, or $300 for paired plans. No such fee is
charged for owner-only plans. All Prototype Profit Sharing and Money Purchase
Pension Plans are subject to an annual maintenance fee of $30 per participant
account. Each of the other Retirement Plans described below (other than
401(k) Defined Contribution Plans) is subject to an annual maintenance fee of
$15 for each participant's account, regardless of the number of funds
selected. Annual maintenance fees for 401(k) Defined Contribution Plans are
based on the number of participants in the Plan and the services selected by
the employer. Fees are quoted upon request. All of the fees noted above are
subject to change. Additional information about fees is contained in Part B.
The minimum initial investment for each Plan is $250; subsequent investments
must be at least $25.
Certain shareholder investment services available to non-retirement plan
shareholders may not be available to Retirement Plan shareholders. For
additional information on any of the Plans and Delaware's retirement
services, call the Shareholder Service Center or see Part B.
Individual Retirement Account ("IRA")
Individuals, even if they participate in an employer-sponsored retirement
plan, may establish their own retirement program. Contributions to an IRA may
be tax-deductible and earnings are tax-deferred. Under the Tax Reform Act of
1986, the tax deductibility of IRA contributions is restricted, and in some
cases eliminated, for individuals who participate in certain employer-sponsored
retirement plans and whose annual income exceeds certain limits. Existing
IRAs and future contributions up to the IRA maximums, whether deductible or
not, still earn on a tax-deferred basis.
Simplified Employee Pension Plan ("SEP/IRA")
A SEP/IRA may be established by an employer who wishes to sponsor a
tax-sheltered retirement program by making contributions on behalf of all
eligible employees.
Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")
Offers employers with 25 or fewer eligible employees the ability to
establish a SEP/IRA that permits salary deferral contributions. An employer
may also elect to make additional contributions to this Plan.
403(b)(7) Deferred Compensation Plan
Permits employees of public school systems or of certain types of
non-profit organizations to enter into a deferred compensation arrangement
for the purchase of Class shares.
457 Deferred Compensation Plan
Permits employees of state and local governments and certain other entities
to enter into a deferred compensation arrangement for the purchase of Class
shares.
Prototype Profit Sharing or Money Purchase Pension Plan
Offers self-employed individuals, partnerships and corporations a
tax-qualified plan which provides for the investment of contributions in
Class shares.
Prototype 401(k) Defined Contribution Plan
Permits employers to establish a tax-qualified plan based on salary
deferral contributions. An employer may elect to make profit sharing
contributions and/or matching contributions into the Plan.
7
<PAGE> 10
BUYING SHARES
The Distributor serves as the national distributor for the Series.
Shares of the Class may be purchased through brokers, financial
institutions and other entities that have a dealer agreement with the Fund's
Distributor or a service agreement with the Fund. The minimum for initial
investments is $1,000 and all subsequent investments must be at least $25.
All purchases are at net asset value. There is no sales charge.
Retirement Plans have other minimums. Refer to Part B or call the
Shareholder Service Center for more information on these Plans.
The Series makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer.
Investing through Your Investment Dealer
You can make a purchase through most investment dealers who, as part of the
service they provide, must transmit orders promptly. They may charge for this
service. If you want a dealer but do not have one, we can refer you to one.
Investing by Mail
1. Initial Purchases--An Investment Application must be completed, signed and
sent with a check payable to U.S. Government Money Fund Consultant Class,
to P.O. Box 7977, Philadelphia, PA 19101.
2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to U.S. Government Money Fund Consultant Class. Your
check should be identified with your name(s) and account number. An
investment slip (similar to a deposit slip) is provided at the bottom of
transaction confirmations and dividend statements that you will receive from
the Fund, and should be used when you are making additional purchases. You
can expedite processing by including an investment slip with your check when
making additional purchases. Your investment may be delayed if you send
additional purchases by certified mail.
Investing by Wire
You may purchase shares by requesting your bank to transmit funds by wire
to CoreStates Bank, N.A., ABA #031000011, account number 0114-2596 (include
your name(s) and your account number for the Series and class in which you
are investing).
1. Initial Purchases--Before you invest, telephone the Fund's Shareholder
Service Center to get an account number. If you do not call first, it may
delay processing your investment. In addition, you must promptly send your
Investment Application to U.S. Government Money Fund Consultant Class, to
P.O. Box 7977, Philadelphia, PA 19101.
2. Subsequent Purchases--You may make additional investments anytime by
wiring funds to CoreStates Bank, N.A., as described above. You should advise
the Fund's Shareholder Service Center by telephone of each wire you send.
If you want to wire investments to a Retirement Plan Account, call the
Shareholder Service Center for special wiring instructions.
Investing by Exchange
If you have an investment in another mutual fund in the Delaware Group, you
may write and authorize an exchange of part or all of your investment into
the Class. The Class B Shares of the Class B Funds may not be exchanged into
the Class. If you wish to open an account by exchange, call the Shareholder
Service Center for more information.
Additional Methods of Adding to Your Investment
Call the Shareholder Service Center for more information if you wish to use
the following services:
1. Direct Deposit
You may wish your employer or bank to make regular investments directly to
your account for you (for example: payroll deduction, pay by phone, annuity
payments). The Series also accepts preauthorized recurring government and
private payments by Electronic Fund Transfer, which avoids mail time and
check clearing holds on payments such as social security, federal salaries,
Railroad Retirement benefits, etc.
8
<PAGE> 11
2. Automatic Investing Plan
The Automatic Investing Plan enables you to make regular monthly
investments without writing or mailing checks. You may authorize the Fund to
transfer a designated amount monthly from your checking account to your Class
account. Many shareholders use this as an automatic savings plan for IRAs and
other purposes. Shareholders should allow a reasonable amount of time for
initial purchases and changes to these plans to become effective.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
* * *
Should investments by these two methods be reclaimed or returned for some
reason, the Fund has the right to liquidate your shares to reimburse the
government or transmitting bank. If there are insufficient funds in your
Class account, you are obligated to reimburse the Series.
Dividend Orders
Some shareholders want the dividends earned in one fund automatically
invested in another Delaware Group fund with a different investment
objective. For more information on the requirements of the other funds,
please call the Shareholder Service Center.
Purchase Price and Effective Date
The offering price (net asset value) of the Class is determined as of the
close of regular trading on the New York Stock Exchange (ordinarily, 4 p.m.,
Eastern time) on days when such exchange is open.
Investments by Federal Funds wire will be effective upon receipt. If the
wire is received after the time the offering price of shares is determined,
as noted above, it will be effective the next business day. If the investment
is made by check, the check must be converted to Federal Funds before your
purchase can be effective (normally one business day after receipt).
Your purchase begins earning dividends the next business day after becoming
effective. See Dividends and Distributions for additional information.
The Conditions of Your Purchase
The Fund reserves the right to reject any purchase or exchange. If a
purchase is cancelled because your check is returned unpaid, you are
responsible for any loss incurred. The Fund can redeem shares from your
account(s) to reimburse itself for any loss, and you may be restricted from
making future purchases in any of the funds in the Delaware Group. The Fund
reserves the right, upon 60 days' written notice, to redeem accounts that
remain under $1,000 as a result of redemptions. An investor making the minimum
initial investment will be subject to involuntary redemption if he or she
redeems any portion of his or her account.
U.S. Government Money Fund A Class
In addition to offering the U.S. Government Money Fund Consultant Class
shares, the Series offers the U.S. Government Money Fund A Class shares,
which are described in a separate prospectus. The U.S. Government Money Fund
A Class shares can be purchased directly from the Fund or its Distributor,
and have no front-end or contingent deferred sales charge or annual 12b-1
Plan expenses. In the event 12b-1 Plan payments are reinstituted under the
U.S. Government Money Fund Consultant Class' Plan, sales or service
compensation available in respect of such class may differ from that
available to the U.S. Government Money Fund Consultant Class shares. Both
classes of the Series' shares have a proportionate interest in the underlying
portfolio of securities of the Series. For the fiscal year ended December 31,
1994, the Total Operating Expenses incurred by the U.S. Government Money Fund
A Class, as a percentage of average daily net assets, were 1.26%. See Part B
for performance information about U.S. Government Money Fund A Class. To
obtain a prospectus which describes the U.S. Government Money Fund A Class,
contact the Distributor.
9
<PAGE> 12
REDEMPTION AND EXCHANGE
You can redeem or exchange your shares in a number of different ways. The
exchange service is useful if your investment requirements change and you
want an easy way to invest in tax-advantaged funds, equity funds or more
aggressive bond funds. Exchanges are subject to the eligibility and minimum
purchase requirements set forth in each fund's prospectus. Any applicable
front-end sales charge will apply to exchanges from money market funds, like
the Series, to other funds, except for exchanges from money market funds
involving assets that were previously invested in a fund with a front-end
sales charge and exchanges from a money market fund involving the reinvestment
of dividends. Class shares may not be exchanged for Class B Shares of any Class
B Fund. Shares acquired in an exchange must be registered in the state where
they are so purchased. You may want to call us for more information or consult
your financial adviser or investment dealer to discuss which funds in the
Delaware Group will best meet your changing objectives and the consequences of
any exchange transaction.
Your shares will be redeemed or exchanged based on the net asset value next
determined after we receive your request in good order. Redemption or exchange
requests received in good order after the time the offering price of shares is
determined, as noted above, will be processed on the next business day. See
Purchase Price and Effective Date under Buying Shares. Except as otherwise
noted below, for a redemption request to be in "good order," you must provide
your Class account number, account registration, and the total number of shares
or dollar amount of the transaction. Exchange instructions and redemption
requests must be signed by the record owner(s) exactly as the shares are
registered. With regard to exchanges, you must also provide the name of the
fund you want to receive the proceeds. You may request a redemption or an
exchange by calling the Fund at 800-523-1918 (in Philadelphia, 215-988-1241).
The Fund reserves the right to reject exchange requests at any time. The Fund
may suspend or terminate, or amend the terms of, the exchange privilege upon
60 days' written notice to shareholders.
The Fund will not honor check, telephone or wire redemptions for Class
shares recently purchased by check unless it is reasonably satisfied that the
purchase check has cleared, which may take up to 15 days from the purchase
date. The Fund may honor written redemption requests, but will not mail the
proceeds until it is reasonably satisfied the purchase check has cleared. You
can avoid this potential delay if you purchase shares by wiring Federal
Funds. You may call the Shareholder Service Center to determine if your funds
are available for redemption. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if
there has been a recent change to the shareholder's address of record.
Different redemption and exchange methods are outlined below. There is no
fee charged by the Fund or the Distributor for redeeming or exchanging your
shares, but such fees could be charged in the future. You may also have your
investment dealer arrange to have your shares redeemed or exchanged. Your
investment dealer may charge for this service.
All authorizations given by shareholders with respect to an account,
including selection of any of the features described below, shall continue in
effect until revoked or modified in writing and until such time as such
written revocation or modification has been received by the Fund or its
agent.
All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and
carefully read that fund's prospectus before buying shares in an exchange.
The prospectus contains more complete information about the fund, including
charges and expenses.
Class A Shares of the Delaware Group funds that carry a front-end sales
charge will be subject to a contingent deferred sales charge ("Limited CDSC")
upon redemption if the shares were purchased at net asset value without
payment of a front-end sales charge and if a dealer's commission was paid to
a financial adviser, except in certain limited instances. Such shares may be
exchanged for shares of the Class without the imposition of the Limited CDSC
at the time of the exchange. However, upon subsequent redemption from the
Class or after a subsequent exchange into a fund that is subject to the
Limited CDSC, such shares will be subject to the Limited CDSC imposed by the
original fund whose shares were initially exchanged into the Class.
Shareholders will be given credit for the period during which the Class
shares were held.
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<PAGE> 13
Checkwriting Feature
Checkwriting is a convenient access feature that allows you to earn
dividends until your check is presented to the Fund.
You can request special checks by marking the box on the Investment
Application. There is a one-time $5 charge for this service.
Checks must be drawn for $500 or more and, unless otherwise indicated on
the Investment Application or checkwriting authorization form, must be signed
by all owners of the account.
You will be subject to CoreStates Bank, N.A.'s rules and regulations
governing similar accounts. If the amount of the check is greater than the
value of the shares in your account, the check will be returned and you may
be subject to a charge.
You may request a stop payment on checks by providing the Fund with a
written authorization (oral requests will be accepted only if followed
promptly with a written authorization). Such requests will remain in effect
for six months unless renewed or cancelled. There will be a $5 charge per
check for each six-month period.
Checks paid will be returned to you semi-annually (January and July). If
you need a copy of a check prior to the regular mailing you may call the
Shareholder Service Center.
Since dividends are declared daily, you may not use the Checkwriting
Feature to close your account. (See Part B for additional information.)
Written Redemption
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your Class shares. The request must be signed by all
owners of the account or your investment dealer of record. For redemptions of
more than $50,000, or when the proceeds are not sent to the shareholder(s) at
the address of record, the Fund requires a signature by all owners of the
account and a signature guarantee for each owner. Each signature guarantee
must be supplied by an eligible guarantor institution. The Fund reserves the
right to reject a signature guarantee supplied by an eligible institution
based on its creditworthiness. The Fund may require further documentation
from corporations, executors, retirement plans, administrators, trustees or
guardians.
The redemption request is effective when it is received in good order.
Payment is normally mailed the next business day, but no later than seven
days, after receipt of the request. The Fund does not issue certificates for
shares unless you submit a specific request. If your shares are in
certificate form, the certificate must accompany your request and also be in
good order.
Written Exchange
You can also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your Class shares into another
mutual fund in the Delaware Group, subject to the same conditions and
limitations as other exchanges noted above.
Telephone Redemption and Exchange
To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge)
for you. If you choose to have your shares in certificate form, you can only
redeem or exchange by written request and you must return your certificates.
The Telephone Redemption service enabling you to have redemption proceeds
mailed to your address of record and the Telephone Exchange service, both of
which are described below, are automatically provided unless the Fund
receives written notice from the shareholder to the contrary. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund
by telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Fund nor the Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption
or exchange of Class shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone
are generally tape recorded, and a written confirmation will be provided for
all purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, the shareholder is acknowledging prior
receipt of a prospectus for the fund into which shares are being exchanged.
11
<PAGE> 14
Telephone Redemption--Check to Your Address of Record
The Telephone Redemption feature is a quick and easy method to redeem
shares. You or your investment dealer of record can have redemption proceeds
of $50,000 or less mailed to you at your record address. Checks will be
payable to the shareholder(s) of record and will normally be sent the next
business day, but no later than seven days, after receipt of the request.
This service is only available to individual, joint and individual
fiduciary-type accounts.
Telephone Redemption--Proceeds to Your Bank
Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, the Fund requires an Authorization Form with your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption. If you ask for a check, it will normally be mailed the next
business day, but no later than seven days, after receipt of your request to
your predesignated bank account. There are no fees for this method, but the
mail time may delay getting funds into your bank account. Simply call the
Fund's Shareholder Service Center prior to the time the offering price and
net asset value are determined, as noted above.
Telephone Exchange
The Telephone Exchange feature is a convenient and efficient way to adjust
your investment holdings as your liquidity requirements and investment
objectives change.
You or your investment dealer of record can exchange shares into any fund
in the Delaware Group under the same registration. Any such exchange is
subject to the same conditions and limitations as other exchanges noted
above. Telephone exchanges may be subject to limitations as to amounts or
frequency.
Systematic Withdrawal Plan
1. Regular Plans
This plan provides shareholders with a consistent monthly (or quarterly)
payment. This is particularly useful to shareholders living on fixed incomes,
since it provides them with a stable supplemental amount. With accounts of at
least $5,000, you may elect monthly withdrawals of $25 (quarterly $75) or
more. The Fund does not recommend any particular monthly amount, as each
shareholder's situation and needs vary. Payments are normally made by check.
In the alternative, you may elect to have your payments transferred from your
Series account to your predesignated bank account through the Delaware
Group's MoneyLine service. Your funds will normally be credited to your bank
account after two business days. There are no fees for this method. You can
initiate this service by completing an Authorization Agreement. If the name
and address on your bank account are not identical to the name and address on
your Series account, you must have your signature guaranteed. Please call the
Shareholder Service Center for additional information.
2. Retirement Plans
For shareholders eligible under the applicable Retirement Plan to receive
benefits in periodic payments, the Series' Systematic Withdrawal Plan
provides you with maximum flexibility. A number of formulas are available for
calculating your withdrawals, depending upon whether the distributions are
required or optional. Withdrawals must be for $25 or more; however, no
minimum account balance is required. The MoneyLine service described above is
not available with respect to Retirement Plans.
For more information on both of these plans, please call the Shareholder
Service Center.
Wealth Builder Option
Shareholders may elect to invest in other mutual funds in the Delaware
Group through our Wealth Builder Option. Under this automatic exchange
program, shareholders can authorize regular monthly amounts (minimum of $100
per fund) to be liquidated from their Class account and invested
automatically into one or more funds in the Delaware Group, subject to the
same conditions and limitations as other exchanges noted above. Shareholders
can also use the Wealth Builder Option to invest in the Class through regular
liquidations of shares in their accounts in other funds in the Delaware
Group, subject to the same conditions and limitations as other exchanges noted
above. See Investing by Exchange under Buying Shares. Shareholders can
terminate their participation at any time by written notice to the Fund.
This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, Profit Sharing and Money Purchase Pension Plans, 401(k)
Defined Contribution Plans, 403(b)(7) Deferred Compensation Plans or 457
Deferred Compensation Plans.
12
<PAGE> 15
DIVIDENDS AND DISTRIBUTIONS
The Fund declares a dividend to all Class shareholders of record at the
time the offering price of shares is determined. See Purchase Price and
Effective Date under Buying Shares. Thus, when redeeming shares, dividends
continue to accrue up to and including the date of redemption.
Purchases of Series shares by wire begin earning dividends when converted
into Federal Funds and available for investment, normally the next business
day after receipt. However, if the Fund is given prior notice of Federal
Funds wire and an acceptable written guarantee of timely receipt from an
investor satisfying the Fund's credit policies, the purchase will start
earning dividends on the date the wire is received. Purchases by check earn
dividends upon conversion to Federal Funds, normally one business day after
receipt.
The Series dividends are declared daily and paid monthly on the last day of
each month. Payment by check of cash dividends will ordinarily be mailed
within three business days after the payable date. Short-term capital gains
distributions, if any, may be paid with the daily dividend; otherwise, they
will be distributed annually during the first quarter following the close of
the fiscal year.
Each class of shares of the Series will share proportionately in the
investment income and expenses of the Series, except that until June 1, 1990
the Class incurred distribution fees under its 12b-1 Plan. The Board of
Directors of the Fund has suspended 12b-1 Plan payments from the Class to the
Distributor effective June 1, 1990. See Distribution (12b-1) and Service
under Management of the Fund. For the seven-day period ended December 31,
1994, the annualized current yield of the Class was 4.36% and the compounded
effective yield was 4.45%.
Both dividends and distributions will be automatically reinvested in your
account unless you elect otherwise. Any check in payment of dividends or
other distributions which cannot be delivered by the Post Office or which
remains uncashed for a period of more than one year may be reinvested in the
shareholder's account at the then-current net asset value and the dividend
option may be changed from cash to reinvest. If you elect to take your
dividends and distributions in cash and such dividends and distributions are
in an amount of $25 or more, you may elect the Delaware Group's MoneyLine
service to enable such payments to be transferred from your Series account to
your predesignated bank account. Your funds will normally be credited to your
bank account two business days after the payment date. There are no fees for
this method. See Systematic Withdrawal Plan under Redemption and Exchange for
information regarding authorization of this service. This service is not
available with respect to Retirement Plans. (See The Delaware Difference
section for additional information.)
During the fiscal year ended December 31, 1994, dividends totaling $0.0289
per share of the Class were paid from net investment income.
13
<PAGE> 16
TAXES
The Fund has qualified as a regulated investment company under Subchapter M
of the Internal Revenue Code (the "Code"). As such, the Fund will not be
subject to federal income tax, or to any excise tax, to the extent its
earnings are distributed as provided in the Code. Each Series of the Fund is
treated as a single tax entity for federal income tax purposes.
The Series intends to distribute substantially all of its net investment
income and net capital gains. Dividends from net investment income or net
short-term capital gains, if any, will be taxable to you as ordinary income,
whether received in cash or in additional shares. No portion of the Series'
distributions will be eligible for the dividends-received deduction for
corporations.
In addition to federal taxes, shareholders may be subject to state and
local taxes on distributions. Distributions of interest income and capital
gains realized from certain types of U.S. government securities may be exempt
from state and local personal income tax. You should consult your tax adviser
with respect to the tax status of distributions from the Series in your state
and locality. Shares of the Series are exempt from Pennsylvania county
personal property taxes.
Each year, the Fund will mail you information on the tax status of
dividends and distributions. Shareholders will receive each year information
as to the portion of distributions that came from U.S. government securities.
Of course, shareholders who are not subject to tax on their income would not
be required to pay tax on amounts distributed to them by the Series.
NET ASSET VALUE PER SHARE
The purchase and redemption price of the Series' shares is equal to the
Series' net asset value ("NAV") per share that is next computed after the
order is received. The NAV is computed as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when
such exchange is open.
The NAV per share is computed by adding the value of all securities and
other assets in the portfolio, deducting any liabilities (expenses and fees
are accrued daily) and dividing by the number of shares outstanding.
The Series' total net assets are determined by valuing the portfolio
securities at amortized cost. Under the direction of the Board of Directors,
certain procedures have been adopted to monitor the value of the Series'
securities and stabilize the price per share at $1.00. Prior to January 1,
1991, the portfolio of the Series was managed to maintain a fixed net asset
value of $10 per share. The Fund accomplished this change by effecting a
ten-to-one stock split for shareholders of record on that date.
See Part B for additional information.
14
<PAGE> 17
MANAGEMENT OF THE FUND
Directors
The business and affairs of the Fund are managed under the direction of its
Board of Directors. Part B contains additional information regarding the
directors and officers.
Investment Manager
The Manager furnishes investment management services to the Fund.
The Manager and its predecessors have been managing the funds in the
Delaware Group since 1938. On December 31, 1994, the Manager and its
affiliate, Delaware International Advisers Ltd., were supervising in the
aggregate more than $24 billion in assets in the various institutional
(approximately $15,546,416,000) and investment company (approximately
$9,253,901,000) accounts.
The Manager is an indirect, wholly-owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). By reason of its percentage ownership of DMH common
stock and through Voting Trust Agreements with certain other DMH
shareholders, Legend Capital Group, L.P. ("Legend") controls DMH and the
Manager. As General Partners of Legend, Leonard M. Harlan and John K. Castle
have the ability to direct the voting of more than a majority of the shares
of DMH common stock and thereby control the Manager.
On December 12, 1994, DMH entered into a merger agreement with Lincoln
National Corporation ("Lincoln National") and a newly-formed subsidiary of
Lincoln National. Pursuant to that agreement, the new subsidiary will be
merged with and into DMH. This merger will result in DMH becoming a
wholly-owned subsidiary of Lincoln National. The transaction is expected to
close in the early spring of 1995, subject to the receipt of all regulatory
approvals and satisfaction of conditions precedent to closing, including the
approval described below. Lincoln National, with headquarters in Fort Wayne,
Indiana, is a diversified organization with operations in many aspects of the
financial services industry, including insurance and investment management.
The Manager manages the Series' portfolio, makes investment decisions and
implements them. The Manager also pays the salaries of all the directors,
officers and employees of the Fund who are affiliated with the Manager. The
annual compensation paid by the Series for investment management services is
equal to 1\2 of 1% of average daily net assets of the Series, less a
proportionate share of all directors' fees paid to the unaffiliated directors
by the Series. Investment management fees paid by the Series were 0.46% of
average daily net assets for the fiscal year ended December 31, 1994.
Completion of the above-described merger transaction will result in an
assignment, and consequently a termination, of the existing investment
management agreement between the Manager and the Fund. Series shareholders
will be asked to vote on a new investment management agreement with the
Manager, to become effective at or about the time the transaction is to be
completed. It is not anticipated that there will be any changes in the
compensation or other material terms of the existing investment management
agreement, or in the personnel responsible for managing the Series, as a
result of the transaction. Details of the transaction are included in the
proxy materials furnished to shareholders entitled to vote at the shareholder
meeting called to consider the matter.
Portfolio Trading Practices
Portfolio trades are generally made on a net basis without brokerage
commissions. However, the price may include a mark-up or mark-down.
Banks, brokers or dealers are selected to execute the Series' portfolio
transactions.
The Manager uses its best efforts to obtain the best available price and
most favorable execution for portfolio transactions. Orders may be placed
with brokers or dealers who provide brokerage and research services to the
Manager or its advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the
Manager may consider a broker/dealer's sales of Series shares in placing
portfolio orders, and may place orders with broker/dealers that have agreed
to defray certain Series expenses such as custodian fees.
15
<PAGE> 18
Performance Information
From time to time, the Fund may publish the "yield" and "effective yield"
for the Class. Both yield figures are based on historical earnings and are
not intended to indicate future performance. The "yield" of the Class refers
to the income generated by an investment in the Class over a specified
seven-day period. This income is then "annualized," which means the amount of
income generated by the investment during that week is assumed to be
generated each week over a 52-week period and is shown as a percentage of the
investment. The "effective yield" is calculated in a similar manner but, when
annualized, the income earned by an investment in the Class is assumed to be
reinvested. The "effective yield" will be slightly higher than the "yield"
because of the compounding effect of this assumed reinvestment. The Fund may
also publish aggregate and average annual total return information concerning
the Class which will reflect the compounded rate of return of an investment
in the Class over a specified period of time and will assume the investment
of all distributions at net asset value. Yield fluctuates and is not
guaranteed. Past performance is not an indication of future results.
Distribution (12b-1) and Service
The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), serves as the national distributor
for the Fund under a Distribution Agreement dated June 1, 1992.
The Fund has adopted a distribution plan under Rule 12b-1 (the "Plan") for
the Class which permits the Series to pay the Distributor from Class assets a
monthly fee for its services and expenses in distributing and promoting sales
of Class shares. These expenses include preparing and distributing
advertisements, sales literature, and prospectuses and reports used for sales
purposes, compensating sales and marketing personnel, holding special
promotions for specified periods of time, and paying distribution and
maintenance fees to brokers, dealers and other entities which sell Class
shares. In connection with the promotion of Class shares, the Distributor
may, from time to time, pay to participate in dealer-sponsored seminars and
conferences, and reimburse dealers for expenses incurred in connection with
preapproved seminars, conferences and advertising. The Distributor may pay or
allow additional promotional incentives to dealers as part of preapproved
sales contests and/or to dealers who provide extra training and information
concerning the Class and increase sales of shares of the Class. In addition,
the Series may make payments from Class assets directly to others, such as
banks, who aid in the distribution of Class shares or provide services to the
Class, pursuant to service agreements with the Series. Registered
representatives of brokers, dealers or other entities, who have sold a
specified level of Delaware Group funds having a 12b-1 Plan were, prior to
June 1, 1990, paid a .25% continuing trail fee by the Distributor from 12b-1
Plan payments of the Class for assets maintained in the Class. Payment of
such fees has been suspended but may be reinstituted in the future with prior
approval of the Board of Directors.
The aggregate fees paid by the Series from Class assets to the Distributor
and others under the Plan may not exceed .30% of the Class' average daily net
assets in any year. The Class will not incur any distribution expenses beyond
this limit, which may not be increased without shareholder approval. The
Board of Directors previously had set the fee for the Class at .25% of
average daily net assets. The Distributor may, however, incur additional
expenses and make additional payments to dealers from its own resources to
promote the distribution of Class shares.
16
<PAGE> 19
The Plan does not apply to the U.S. Government Money Fund A Class of shares.
Those shares are not included in calculating the Plan's fees, and the Plan is
not used to assist in the distribution and marketing of U.S. Government Money
Fund A Class shares.
While Plan payments may not exceed .30% annually, the Plan does not limit
fees to amounts actually expended by the Distributor. It is therefore
possible that if a distribution fee were to be paid, the Distributor could
realize a profit in any particular year. However, the Distributor currently
expects that its distribution expenses will likely equal or exceed payments
to it under the Plan. The monthly fee paid to the Distributor is subject to
the review and approval of the Fund's unaffiliated directors who may reduce
the fee or terminate the Plan at any time. The Board of Directors has
suspended 12b-1 Plan payments from the Class to the Distributor effective
June 1, 1990. Such payments may be reinstituted in the future with prior
approval of the Board of Directors.
The staff of the Securities and Exchange Commission ("SEC") has proposed
amendments to Rule 12b-1 and other related regulations that could impact Rule
12b-1 Distribution Plans. The Fund intends to amend the Plan, if necessary,
to comply with any new rules or regulations the SEC may adopt with respect to
Rule 12b-1.
The NASD has adopted amendments to its Rules of Fair Practice relating to
investment company sales charges. The Fund and the Distributor intend to
operate in compliance with these rules.
The Transfer Agent, Delaware Service Company, Inc., serves as the
shareholder servicing, dividend disbursing and transfer agent for the Series
under an Agreement dated December 20, 1990. The directors annually review
service fees paid to the Transfer Agent.
The Distributor and the Transfer Agent are also indirect, wholly-owned
subsidiaries of DMH.
Expenses
The Series is responsible for all of its own expenses other than those
borne by the Manager under the Investment Management Agreement and those
borne by the Distributor under the Distribution Agreement. The ratio of
expenses to average daily net assets of the Class for the fiscal year ended
December 31, 1994 was 1.26%.
Shares
The U.S. Government Money Series is the original series of the Fund, which
is an open-end management investment company. The Series' portfolio of assets
is diversified for purposes of the Investment Company Act of 1940. Commonly
known as a mutual fund, the Fund was organized as a Pennsylvania business
trust in 1981 and was reorganized as a Maryland corporation in 1990. The Fund
currently has authorized capital of three billion shares of common stock. The
Series consists of one billion shares of common stock, with a $.001 par value
per share. The Series' shares have equal voting rights, except as noted
below, and are equal in all other respects.
Shares of each Series of the Fund will vote separately on any matter which
affects only that Series. Shares of the Series will have a priority over
shares of the Fund's other series in the assets and income of the U.S.
Government Money Series and will vote separately on any matter that affects
only this Series.
The Series also offers the U.S. Government Money Fund A Class which
represents a proportionate interest in the assets of the Series and has the
same voting and other rights and preferences as the Class, except that shares
of the U.S. Government Money Fund A Class are not subject to, and may not
vote on matters affecting, the Distribution Plan under Rule 12b-1 relating to
the Class.
All Fund shares have noncumulative voting rights which means that the
holders of more than 50% of the Fund's shares voting for the election of
directors can elect 100% of the directors if they choose to do so. Under
Maryland law, the Fund is not required, and does not intend, to hold annual
meetings of shareholders unless, under certain circumstances, it is required
to do so under the Investment Company Act of 1940. Shareholders of 10% or
more of the Fund's shares may request that a special meeting be called to
consider the removal of a director.
Prior to November 1992, the Class was known as the U.S. Government Money
Fund (Institutional) class.
17
<PAGE> 20
THIS PAGE INTENTIONALLY LEFT BLANK
<PAGE> 21
THE DELAWARE GROUP INCLUDES U.S.
22 DIFFERENT FUNDS WITH A WIDE Government
RANGE OF INVESTMENT OBJECTIVES. Money Fund
STOCK FUNDS, INCOME FUNDS, -----------------
TAX-FREE FUNDS, MONEY MARKET Consultant
FUNDS AND CLOSED-END EQUITY Class
FUNDS GIVE INVESTORS THE NO SALES CHARGE
ABILITY TO CREATE A PORTFOLIO
THAT FITS THEIR PERSONAL PROSPECTUS
FINANCIAL GOALS. FOR MORE FEBRUARY 28, 1995
INFORMATION CONTACT YOUR
FINANCIAL ADVISER OR CALL THE
DELAWARE GROUP AT 800-523-4640,
IN PHILADELPHIA 215-988-1333.
Investment Manager (Photo of George Washington
Delaware Management Company, Inc. Crossing the Delaware River)
One Commerce Square
Philadelphia, PA 19103
National Distributor
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103
Shareholder Servicing, WHILE THE SERIES WILL
Dividend Disbursing MAKE EVERY EFFORT TO
and Transfer Agent MAINTAIN A STABLE NET
Delaware Service Company, Inc. ASSET VALUE OF $1 PER
1818 Market Street SHARE, THERE IS NO
Philadelphia, PA 19103 ASSURANCE THAT THE SERIES
WILL BE ABLE TO DO SO.
Legal Counsel THE SERIES INVESTS PRIMARILY
Stradley, Ronon, Stevens & Young IN SECURITIES THAT ARE
One Commerce Square ISSUED OR GUARANTEED AS TO
Philadelphia, PA 19103 THE PROMPT PAYMENT OF
PRINCIPAL AND INTEREST BY
Independent Auditors THE U.S. GOVERNMENT, ITS
Ernst & Young LLP AGENCIES AND INSTRUMENTALITIES.
Two Commerce Square THE SHARES OF THE SERIES,
Philadelphia, PA 19103 HOWEVER, ARE NEITHER INSURED
NOR GUARANTEED BY THE U.S.
Custodian GOVERNMENT.
Morgan Guaranty Trust Company of New York
60 Wall Street
New York, NY 10260
DELAWARE
P-025-2/95-ALG GROUP
Printed in the U.S.A. ========
