DELAWARE GROUP GOVERNMENT FUND, 497, 1999-10-07

DELAWARE GROUP GOVERNMENT FUND
497, 1999-10-07

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<PAGE>

DELAWARE(SM)
INVESTMENTS
- -----------------
Philadelphia o London

Delaware American
Government Bond
Fund

(formerly U.S. Government Fund)

Class A o Class B o Class C

Prospectus September 29, 1999

Current Income Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.
<PAGE>

Table of contents

................................................................................
Fund profile page 2
Delaware American Government Bond Fund 2
................................................................................
How we manage the Fund page 5
Our investment strategies 5
The securities we typically invest in 6
The risks of investing in the Fund 8
................................................................................
Who manages the Fund page 9
Investment manager 9
Portfolio managers 9
Fund administration (Who's who) 10
................................................................................
About your account page 11
Investing in the Fund 11
Choosing a share class 11
How to reduce your sales charge 13
How to buy shares 14
Retirement plans 15
How to redeem shares 16
Account minimums 17
Special services 17
Dividends, distributions and taxes 19
Certain management considerations 19
................................................................................
Financial highlights page 20

1
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<PAGE>

Profile: Delaware American Government Bond Fund

What are the Fund's goals?
The Fund seeks high current income consistent with safety of principal by
investing primarily in debt obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Although the Fund will strive to
achieve its investment goal, there is no assurance that it will.

Who should invest in the Fund
o Investors with medium or long range goals.
o Investors looking for regular income from their investments.
o Investors looking for a bond investment to help balance their investments in
stocks or more aggressive securities.

Who should not invest in the Fund
o Investors with very short-term financial goals.
o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.
o Investors seeking long-term growth of capital.

You should keep in mind that an investment in the Fund is not a complete
investment program; it should be considered just one part of your total
financial plan. Be sure to discuss this Fund with your financial adviser to
determine whether it is an appropriate choice for you.

What are the Fund's main investment strategies? We invest primarily in U.S.
government securities including:

o U.S. Treasury bills, notes and bonds;

o other debt securities issued or unconditionally guaranteed by the U.S.
government or backed by the full faith and credit of the U.S. government;
and

o debt issued or guaranteed by U.S. government agencies or instrumentalities,
including debt obligations guaranteed by the Government National Mortgage
Association, also known as GNMA, Federal Home Loan Mortgage Corporation
(Freddie Mac) and Federal National Mortgage Association (Fannie Mae) and
other mortgage-backed securities.

We may also invest up to 20% of our net assets in high quality non-government
fixed-income securities.

What are the main risks of investing in the Fund? Investing in any mutual fund
involves risk, including the risk that you may lose part or all of the money you
invest. The price of Fund shares will increase and decrease according to changes
in the value of the Fund's investments. This Fund will be affected by changes in
bond prices, particularly as a result of changes in interest rates.
Mortgage-backed securities may experience increased pre-payments on the
underlying mortgages if interest rates decline, which may require the Fund to
reinvest in lower yielding securities. The Fund may also experience portfolio
turnover in excess of 100%, which could result in higher transaction costs and
tax liability for the Fund. For a more complete discussion of risk, please turn
to page 8.

An investment in the Fund is not a deposit of any bank and is not
insured or guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any
other government agency.

2
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<PAGE>

How has the Fund performed?

This bar chart and table can help you evaluate the risks of investing in the
Fund. We show how returns for the Fund's Class A shares have varied over the
past ten calendar years, as well as the average annual returns of all shares for
the one-, five- and 10-year or lifetime periods, if applicable. The Fund's past
performance is not necessarily an indication of how it will perform in the
future.

Year-by-year total return (Class A)

1998 7.08%
1997 8.45%
1996 2.82%
1995 13.71%
1994 -5.81%
1993 7.79%
1992 6.37%
1991 15.14%
1990 8.79
1989 11.41%

The Fund's Class A shares had a -2.45% year-to-date return as of June 30, 1999.
During the periods illustrated in this bar chart, Class A's highest quarterly
return was 6.47% for the quarter ended June 30, 1989 and its lowest quarterly
return was -3.78% for the quarter ended March 31, 1994.

The maximum Class A sales charge of 4.75%, which is normally deducted when you
purchase shares, is not reflected in the total returns above or in the bar
chart. If this fee were included, the returns would be less than those shown.
The average annual returns in the table shown below do include the sales charge.

Average annual returns for periods ending 12/31/98
<TABLE>
<CAPTION>

CLASS A B C Lehman Brothers
Government
(if redeemed)* (if redeemed)* Bond Index
(Inception 8/1/85) (Inception 5/2/94) (Inception 11/29/95)
<S> <C> <C> <C> <C>
- ---------------------------------------------------------------------------------------------------------------------
1 year 1.96% 2.34% 5.34% 9.85%
- ---------------------------------------------------------------------------------------------------------------------
5 years 4.03% N/A N/A 7.18%
- ---------------------------------------------------------------------------------------------------------------------
10 years or lifetime** 6.91% 5.43% 5.74% 9.17%
- ---------------------------------------------------------------------------------------------------------------------
</TABLE>

The table above shows the Fund's average annual returns over various time
periods compared to the performance of the Lehman Brothers Government Bond
Index. You should remember that unlike the Fund, the index is unmanaged and
doesn't reflect the costs of operating a mutual fund, such as the costs of
buying, selling and holding the securities.

*If redeemed at end of period shown. If shares were not redeemed, the returns
for Class B would be 6.34% and 5.76%, respectively, for the one-year and
lifetime periods. Returns for Class C would be 6.34% and 5.74%, respectively,
for the one-year and lifetime periods.
**Lifetime returns are shown if the Fund or Class existed for less than ten
years. The Lehman Brothers Government Bond Index return shown is for ten years.
The Index returns for Class B and Class C lifetime periods were 8.79% and 7.65%,
respectively. Maximum sales charges are included in the Fund returns in the
table.

3
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<PAGE>
Fund Profile (continued)

What are the Fund's fees and expenses?

Sales charges are fees paid directly from your investments when you buy or sell
shares of the Fund.

CLASS A B C
<S> <C> <C> <C>
- -------------------------------------------------------------------------------------------------

Maximum sales charge (load) imposed on
purchases as a percentage of offering price 4.75% none none
- -------------------------------------------------------------------------------------------------
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none(1) 4%(2) 1%(3)
- -------------------------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
reinvested dividends none none none
- -------------------------------------------------------------------------------------------------
Redemption fees none none none
- -------------------------------------------------------------------------------------------------
Annual fund operating expenses are deducted from
the Fund's assets.

Management fees(4) 0.55% 0.55% 0.55%
- -------------------------------------------------------------------------------------------------
Distribution and service (12b-1) fees 0.30%(5) 1.00% 1.00%
- -------------------------------------------------------------------------------------------------
Other expenses 0.37% 0.37% 0.37%
- -------------------------------------------------------------------------------------------------
Total operating expenses 1.22% 1.92% 1.92%
- -------------------------------------------------------------------------------------------------
</TABLE>

This example is intended to help you compare the cost of
investing in the Fund to the cost of investing in other mutual
funds with similar investment objectives. We show the
cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the
time shown.(6) This is an example only, and does not
represent future expenses, which may be greater or less than
those shown here.

<TABLE>
<CAPTION>
CLASS(7) A B B C C
(if redeemed) (if redeemed)
- -------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C> <C>
1 year $593 $195 $595 $195 $295
- -------------------------------------------------------------------------------------------------------
3 years $844 $603 $903 $603 $603
- -------------------------------------------------------------------------------------------------------
5 years $1,113 $1,037 $1,237 $1,037 $1,037
- -------------------------------------------------------------------------------------------------------
10 years $1,882 $2,061 $2,061 $2,243 $2,243
- -------------------------------------------------------------------------------------------------------
</TABLE>

(1) A purchase of Class A shares of $1 million or more may be made at net asset
value. However, if you buy the shares through a financial adviser who is
paid a commission, a contingent deferred sales charge will apply to certain
redemptions. Additional Class A purchase options that involve a contingent
deferred sales charge may be permitted from time to time and will be
disclosed in the prospectus if they are available.
(2) If you redeem Class B shares during the first two years after you buy them,
you will pay a contingent deferred sales charge of 4%, which declines to 3%
during the third and fourth years, 2% during the fifth year, 1% during the
sixth year, and 0% thereafter.
(3) Class C shares redeemed within one year of purchase are subject to a 1%
contingent deferred sales charge.
(4) The management fee has been restated to reflect a new management fee which
became effective on April 1, 1999.
(5) The Board of Trustees adopted a formula for calculating 12b-1 plan expenses
for the Fund's Class A shares that went into effect on June 1, 1992. Under
this formula, 12b-1 plan expenses will not be more than 0.30% or less than
0.10%.
(6) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.
(7) The Class B example reflects the conversion of Class B shares to Class A
shares after approximately eight years. Information for the ninth and tenth
years reflects expenses of the Class A shares.

4
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<PAGE>

How we manage the Fund

Our investment strategies
We analyze economic and market conditions, seeking to identify the securities or
market sectors that we think are the best investments for the Fund. Following
are descriptions of how the portfolio manager pursues the Fund's investment
goals.

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

The Fund invests in a mix of fixed-income securities, primarily those that are
issued or guaranteed by the U.S. government. The Fund may also invest a portion
of its assets in high-quality non-government securities. Through careful
selection of bonds, we strive to provide high current income with emphasis on
stability of principal.

We typically invest a significant portion of the Fund's assets in
mortgage-related securities. When selecting mortgage securities for the
portfolio we carefully evaluate them based on their income potential, but we
generally also look for mortgages with characteristics that reduce the
likelihood of prepayment by the homeowner. Such characteristics might include
low remaining balances, interest rates that are lower than current rates, or
failure to prepay in a previous period of low interest rates.

The weighted average maturity of the Fund will typically be between seven and 10
years. This is considered an intermediate range maturity. By keeping the average
maturity in this intermediate range, we aim to reduce the Fund's sensitivity to
changes in interest rates. When interest rates rise, prices of bonds and bond
funds generally decline and when interest rates decline, prices generally rise.
We believe intermediate-maturity bonds generally offer us attractive income
potential with lower price fluctuations than longer term bonds.

The Fund's investment objective - to seek high current income consistent with
safety of principal by investing primarily in debt obligations issued or
guaranteed by the U.S. government, its agencies or instrumentalities - is
non-fundamental. This means that the Board of Trustees may change the objective
without obtaining shareholder approval. If the objective were changed, we would
notify shareholders before the change in the objective became effective.

How to use this glossary
The glossary includes definitions of investment terms used throughout the
prospectus. If you would like to know the meaning of an investment term that is
not explained in the text please check the glossary.

Glossary A

Amortized cost
Amortized cost is a method used to value a fixed-income security that starts
with the face value of the security and then adds or subtracts from that value
depending on whether the purchase price was greater or less than the value of
the security at maturity. The amount greater or less than the par value is
divided equally over the time remaining until maturity.

Average maturity
An average of when the individual bonds and other debt securities held in a
portfolio will mature.

5
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<PAGE>

How we manage the Fund (continued)

The securities we typically invest in

Fixed-income securities offer the potential for greater income payments than
stocks, and also may provide capital appreciation.

<TABLE>
<CAPTION>
- --------------------------------------------------------- -----------------------------------------------------------------
Securities How we use them
- --------------------------------------------------------- -----------------------------------------------------------------
<S> <C>
Direct U.S. Treasury obligations: include Treasury bills, We may invest without limit in U.S. Treasury securities.
notes and bonds of varying maturities. U.S. Treasury
securities are backed by the "full faith and credit" of
the United States.
- --------------------------------------------------------- -----------------------------------------------------------------
Government agency obligations: securities issued or backed We may invest without limit in the debt securities of U.S.
by U.S. government agencies or government-sponsored government agencies or instrumentalities.
corporations such as the Federal Housing Authority or the
Export-Import Bank. These securities may or may not be
backed by the full faith and credit of the U.S.
government.
- --------------------------------------------------------- -----------------------------------------------------------------
Mortgage-backed securities: Fixed-income securities that There is no limit on government-related mortgage-backed
represent pools of mortgages, with investors receiving securities or on fully collateralized privately issued
principal and interest payments as the underlying mortgage mortgage-backed securities.
loans are paid back. Many are issued and guaranteed
against default by the U.S. government or its agencies or We may invest up to 20% of net assets in mortgage-backed
instrumentalities, such as the Federal Home Loan Mortgage securities issued by private companies only if they are
Corporation, Federal National Mortgage Association and the 100% collateralized at the time of issuance by securities
Government National Mortgage Association. Others are issued or guaranteed by the U.S. government, its agencies
issued by private financial institutions, and are fully or instrumentalities. However, these securities must be
collateralized by certificates issued or guaranteed by the rated in one of the four highest categories by nationally
U.S. government or its agencies or instrumentalities. recognized statistical rating organization, such as S&P or
Moody's, at the time of purchase. The privately issued
securities we invest in are either CMOs or REMICs rated in
the two highest grades by an NRSRO at the time of purchase
(see below).
- --------------------------------------------------------- -----------------------------------------------------------------
Collateralized mortgage obligations (CMOs): Privately See Mortgage-backed securities above.
issued mortgage-backed bonds whose underlying value is the
mortgages that are grouped into different pools according
to their maturity.
- --------------------------------------------------------- -----------------------------------------------------------------
Real estate mortgage investment conduits (REMICs): See Mortgage-backed securities above.
Privately issued mortgage-backed bonds whose underlying
value is a fixed pool of mortgages secured by an interest
in real property. Like CMOs, REMICs offer different pools.
- --------------------------------------------------------- -----------------------------------------------------------------
Asset-backed securities: Bonds or notes backed by accounts We invest only in asset-backed securities rated in the
receivables, including home equity, automobile or credit highest quality category by an NRSRO. In addition, our
loans. holdings of non-government securities (asset-backed securities,
corporate bonds, certificates of deposit and corporate
commercial paper) may not exceed 20% of the Fund's net assets.
- --------------------------------------------------------- -----------------------------------------------------------------
</TABLE>

B-C

Bond
A debt security, like an IOU, issued by a company, municipality or government
agency. In return for lending money to the issuer, a bond buyer generally
receives fixed periodic interest payments and repayment of the loan amount on a
specified maturity date. A bond's price changes prior to maturity and is
inversely related to current interest rates. When interest rates rise, bond
prices fall, and when interest rates fall, bond prices rise.

Bond ratings
Independent evaluations of creditworthiness, ranging from Aaa/AAA (highest
quality) to D (lowest quality). Bonds rated Baa/BBB or better are considered
investment grade. See also Nationally recognized statistical rating
organization.

Capital
The amount of money you invest.

6
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<PAGE>

Futures contracts are agreements for the purchase or sale Use of these strategies can increase the operating costs
of a security or a group of securities at a specified of the Fund and can lead to loss of principal.
price, on a specified date. Unlike an option, a futures
contract must be executed unless it is sold before the
settlement date.

Certain options and futures may be considered to be
derivative securities.
- --------------------------------------------------------- -----------------------------------------------------------------
Restricted securities: Privately placed securities whose We may invest in privately placed securities that are
resale is restricted under securities law. eligible for resale only among certain institutional
buyers without registration, including Rule 144A
Securities. Restricted securities that are determined to
be illiquid may not exceed the Fund's 10% limit on
illiquid securities, which is described below.
- --------------------------------------------------------- -----------------------------------------------------------------
Interest rate swaps agreements: In an interest rate swap, Interest rates swaps may be used to adjust the Fund's
the Fund receives payments from another party based on a sensitivity to interest rates by changing its duration. We
floating interest rate, in return for making payments based may also use interest rate swaps to hedge against changes
on a fixed interest rate. An interest rate swap can also in interest rates. Interest rate swaps will be considered
work in reverse with the Fund receiving payments based on a illiquid securities (see below).
fixed interest rate and making payments based on a
floating interest rate.
- --------------------------------------------------------- -----------------------------------------------------------------
Illiquid securities: Securities that do not have a ready We may invest up to 10% of total assets in illiquid
market, and cannot be easily sold within seven days at securities.
approximately the price that the Fund has valued them.
- --------------------------------------------------------- -----------------------------------------------------------------
</TABLE>

Please see the Statement of Additional Information for additional descriptions
on the securities listed in the table above.

Lending securities
The Fund may lend up to 25% of its assets to qualified brokers, dealers and
institutional investors for their use in securities transactions.

Borrowing from banks The Fund may borrow money as a temporary measure for
extraordinary purposes or to facilitate redemptions. To the extent that it does
so, the Fund may be unable to meet its investment objective.

Capital appreciation
An increase in the value of an investment.
<PAGE>

Capital gains distributions
Payments to mutual fund shareholders of profits (realized gains) from the sale
of a fund's portfolio securities. Usually paid once a year; may be either
short-term gains or long-term gains.

Commission
The fee an investor pays to a financial adviser for investment advice and help
in buying or selling mutual funds, stocks, bonds or other securities.

Compounding
Earnings on an investment's previous earnings.

Consumer Price Index (CPI)
Measurement of U.S. inflation; represents the price of a basket of commonly
purchased goods.

Contingent deferred sales charge (CDSC)
Fee charged by some mutual funds when shares are redeemed (sold back to the
fund) within a set number of years; an alternative method for investors to
compensate a financial adviser for advice and service, rather than an up-front
commission.

7
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<PAGE>
How we manage the Fund (continued)

The risks of investing in the Fund

Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in the Fund you should
carefully evaluate the risks. You should consider an investment in the Fund to
be a long-term investment that typically provides the best results when held for
a number of years. The following are the chief risks you assume when you invest
in the Delaware American Government Bond Fund. Please see the Statement of
Additional Information for further discussion of these risks and the other risks
not discussed here.

<TABLE>
<CAPTION>
- --------------------------------------------------------- -----------------------------------------------------------------
Risks How we strive to manage them
- --------------------------------------------------------- -----------------------------------------------------------------
<S> <C>
Interest rate risk is the risk that securities will Interest rate risk is the most significant risk for this
decrease in value if interest rates rise. The risk is Fund. In striving to manage this risk, we monitor economic
greater for bonds with longer maturities than for those conditions and the interest rate environment. We keep the
with shorter maturities. The success of an interest rate average maturity of the portfolio as short as is prudent,
swap strategy depends on how well the portfolio manager in keeping with our objective to provide high current
forecasts interest rate movements. Depending on the income.
actual movements of interest rates, the Fund could
experience a higher or lower return than anticipated. The Fund will not invest in interest rate swaps with maturities
For example, if the Fund holds interest rate swaps and of more than two years. Each business day we will calculate the
is required to make payments based on variable interest amount the Fund must pay for any swap it holds and will segregate
rates, it will be required to make increased payments if enough cash or other liquid securities to cover that amount the
interest rates rise, which will not necessarily be offset Fund must pay on the swap.
by the fixed-rate payments it is entitled to receive
under the swap agreement.
- --------------------------------------------------------- -----------------------------------------------------------------
Market risk is the risk that all or a majority of the We maintain a long-term investment approach and focus on
securities in a certain market - like the stock or bond high quality individual bonds that we believe can provide
market will decline in value because of factors such as a steady stream of income regardless of interim
economic conditions, future expectations or investor fluctuations in the bond market. We do not buy and sell
confidence. securities for short-term purposes.

We may hold a substantial part of the Fund's assets in
cash or cash equivalents as a temporary, defensive
strategy.
- --------------------------------------------------------- -----------------------------------------------------------------
Credit risk is the possibility that a bond's issuer By focusing primarily on U.S. Treasury securities and
(or an entity that insures the bond) will be unable to other securities that are backed by the U.S. government,
make timely payments of interest and principal. we minimize the possibility that any of the securities in
our portfolio will not pay interest or principal. U.S.
government securities are generally considered to be of
the highest quality.

When selecting non-government securities and the dealers with
whom we do interest rate swaps, we focus on those with high
quality ratings and do careful credit analysis before investing.
- --------------------------------------------------------- -----------------------------------------------------------------
Liquidity risk is the possibility that securities cannot U.S. Treasuries and other U.S. government debt securities
be readily sold within seven days at approximately the are typically the most liquid securities available.
price that the Fund has valued them. Therefore, liquidity risk is not a significant risk for
this Fund.

Swap agreements will be treated as illiquid securities, but most
swap dealers will be willing to repurchase interest rate swaps.
- --------------------------------------------------------- -----------------------------------------------------------------
Prepayment risk is the risk that the principal on a bond Prepayment risk can be a significant risk to this Fund
that the Fund owns will be prepaid prior to maturity at a because we may invest a large percentage of our holdings
time when interest rates are lower than what that bond was in mortgage securities. Homeowners or others who have
paying. The Fund would then have to reinvest that money at mortgages are more likely to prepay them when interest
a lower interest rate. rates are relatively low. In order to manage this risk,
when interest rates are low or when we anticipate that rates
will be declining, we look for mortgage securities that we
believe are less likely to be prepaid, such as those that
have interest rates lower than current rates or have low
remaining loan balances.
- --------------------------------------------------------- -----------------------------------------------------------------
Futures and options risk is the possibility that the Fund We will use options and futures for defensive purposes,
may experience a significant loss if it employs an options such as to protect gains in the portfolio without actually
or futures strategy related to a security or a market selling a security or to neutralize the impact of interest
index and that security or index moves in the opposite rate changes. We will not use futures and options for
direction from what the portfolio manager anticipated. speculative reasons or in an effort to enhance return.
Futures and options also involve additional expenses,
which could reduce any benefit or increase any loss to the
Fund from using the strategy.
- --------------------------------------------------------- -----------------------------------------------------------------
</TABLE>

C-F

Corporate bond
A debt security issued by a corporation. See Bond.

Depreciation
A decline in an investment's value.

Diversification
The process of spreading investments among a number of different securities,
asset classes or investment styles to reduce the risks of investing.

Dividend distribution
Payments to mutual fund shareholders of dividends passed along from the fund's
portfolio of securities.

Duration
A measurement of a fixed-income investment's price volatility. The larger the
number, the greater the likely price change for a given change in interest
rates.

8
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<PAGE>

Who manages the Fund

Investment manager

The Fund is managed by Delaware Management Company, a series of Delaware
Management Business Trust, which is an indirect, wholly owned subsidiary of
Delaware Management Holdings, Inc. Delaware Management Company makes investment
decisions for the Fund, manages the Fund's business affairs and provides daily
administrative services. For its services to the Fund, the manager was paid
0.58% of average daily net assets for the last fiscal year.

Portfolio managers

Paul A. Grillo has responsibility for making investment decisions for the Fund.
When making decisions for the Fund, Mr. Grillo regularly consults with H. Thomas
McMeekin.

Paul A. Grillo, Vice President/Portfolio Manager of the Fund, holds a BA in
Business Management from North Carolina State University and an MBA in Finance
from Pace University. Prior to joining Delaware Investments in 1993, Mr. Grillo
served as mortgage strategist and trader at the Dreyfus Corporation. He also
served as a mortgage strategist and portfolio manager for the Chemical
Investment Group and as financial analyst at Chemical Bank. Mr. Grillo is a CFA
charterholder. Mr. Grillo has been managing the Fund since February 21, 1997.

H. Thomas McMeekin, Executive Vice President and Chief Investment Officer, Fixed
Income, joined Delaware Investments in 1999. He has over 24 years of investment
management experience which includes serving as President of Lincoln Investment
Management, Inc., an affiliate of Delaware Investments. Mr. McMeekin holds a BA
in Economics from the University of Rochester and an MBA in Finance and
Accounting from Cornell University. He also completed the Advanced Management
Program at Harvard Business School.

Expense ratio
A mutual fund's total operating expenses, expressed as a percentage of its total
net assets. Operating expenses are the costs of running a mutual fund, including
management fees, offices, staff, equipment and expenses related to maintaining
the fund's portfolio of securities and distributing its shares. They are paid
from the fund's assets before any earnings are distributed to shareholders.

Financial adviser
Financial professional (e.g., broker, banker, accountant, planner or insurance
agent) who analyzes clients' finances and prepares personalized programs to meet
objectives.

Fixed-income securities
With fixed-income securities, the money you originally invested is paid back at
a pre-specified maturity date. These securities, which include government,
corporate or municipal bonds, as well as money market securities, typically pay
a fixed rate of return (often referred to as interest). See Bond.

9
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<PAGE>

Who's who?

This diagram shows the various organizations involved with managing,
administering, and servicing the Delaware Investments funds.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
Board of Trustees

Investment manager The Fund Custodian
Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245

Portfolio managers Distributor Service agent
(see page 9 for details) Delaware Distributors, L.P. Delaware Service Company, Inc.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103

Financial advisers

Shareholders
</TABLE>

Board of Trustees A mutual fund is governed by a Board of Trustees which has
oversight responsibility for the management of the fund's business affairs.
Trustees establish procedures and oversee and review the performance of the
investment manager, the distributor and others that perform services for the
fund. At least 40% of the Board of Trustees must be independent of the fund's
investment manager and distributor. These independent fund trustees, in
particular, are advocates for shareholder interests.

Investment manager An investment manager is a company responsible for selecting
portfolio investments consistent with the objective and policies stated in the
mutual fund's prospectus. The investment manager places portfolio orders with
broker/dealers and is responsible for obtaining the best overall execution of
those orders. A written contract between a mutual fund and its investment
manager specifies the services the manager performs. Most management contracts
provide for the manager to receive an annual fee based on a percentage of the
fund's average daily net assets. The manager is subject to numerous legal
restrictions, especially regarding transactions between itself and the funds it
advises.

Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and most funds place them with a qualified bank custodian who
segregates fund securities from other bank assets.

Distributor Most mutual funds continuously offer new shares to the public
through distributors who are regulated as broker-dealers and are subject to NASD
Regulation, Inc. (NASD) rules governing mutual fund sales practices.

Service agent Mutual fund companies employ service agents (sometimes called
transfer agents) to maintain records of shareholder accounts, calculate and
disburse dividends and capital gains and prepare and mail shareholder statements
and tax information, among other functions. Many service agents also provide
customer service to shareholders.

Financial advisers Financial advisers provide advice to their clients--analyzing
their financial objectives and recommending appropriate funds or other
investments. Financial advisers are compensated for their services, generally
through sales commissions, and through 12b-1 and/or service fees deducted from
the fund's assets.

Shareholders Like shareholders of other companies, mutual fund shareholders have
specific voting rights, including the right to elect trustees. Material changes
in the terms of a fund's management contract must be approved by a shareholder
vote, and funds seeking to change fundamental investment objectives or policies
must also seek shareholder approval.

G-N

Government securities
Securities issued by the U.S. government or its agencies. They include
Treasuries as well as agency-backed securities such as Fannie Maes.

<PAGE>

Inflation
The increase in the cost of goods and services over time. U.S. inflation is
frequently measured by changes in the Consumer Price Index (CPI).

Investment goal
The objective, such as long-term capital growth or high current income, that a
mutual fund pursues.

Lehman Brothers Government
Bond Index
An index composed of The Treasury Bond Index (all public obligations of the U.S.
Treasury, excluding flower bonds and foreign-targeted issues) and the Agency
Bond Index (all publicy issued debt of U.S. government agencies and
quasi-federal corporations, and corporate debt guaranteed by the U.S.
government).

10
- ----
<PAGE>

About your account

Investing in the Fund

You can choose from a number of share classes for the Fund. Because each share
class has a different combination of sales charges, fees, and other features,
you should consult your financial adviser to determine which class best suits
your investment goals and time frame.

Choosing a share class

Class A

o Class A shares have an up-front sales charge of up to 4.75% that you pay when
you buy the shares. The offering price for Class A shares includes the
front-end sales charge.

o If you invest $100,000 or more, your front-end sales charge will be reduced.

o You may qualify for other reduced sales charges, as described in "How to
reduce your sales charge," and under certain circumstances the sales charge
may be waived; please see the Statement of Additional Information.

o Class A shares are also subject to an annual 12b-1 fee no greater than 0.30%
of average daily net assets, which is lower than the 12b-1 fee for Class B and
Class C shares.

o Class A shares generally are not subject to a contingent deferred sales charge
except in the limited circumstances described in the table below.

Class A sales charges
<TABLE>
<CAPTION>

Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>

Less than $100,000 4.75% 4.93% 4.00%
- ---------------------------------------------------------------------------------------------------

$100,000 but
under $250,000 3.75% 3.84% 3.00%
- ---------------------------------------------------------------------------------------------------

$250,000 but
under $500,000 2.50% 2.60% 2.00%

- ---------------------------------------------------------------------------------------------------

$500,000 but
under $1 million 2.00% 2.05% 1.60%
- ---------------------------------------------------------------------------------------------------
</TABLE>
As shown below, there is no front-end sales charge when you purchase $1 million
or more of Class A shares. However, if your financial adviser is paid a
commission on your purchase, you may have to pay a limited contingent deferred
sales charge of 1% if you redeem these shares within the first year after your
purchase and 0.50% if you redeem them within the second year.

<TABLE>
<CAPTION>
Sales charge as % Sales charge as % of Dealer's commission as %
Amount of purchase of offering price amount invested of offering price
- ---------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
$1 million up to
$5 million none none 1.00%
- ---------------------------------------------------------------------------------------------------

Next $20 million
Up to $25 million none none 0.50%
- ---------------------------------------------------------------------------------------------------

Amount over $25 million none none 0.25%
- ---------------------------------------------------------------------------------------------------
</TABLE>

Management fee
The amount paid by a mutual fund to the investment adviser for management
services, expressed as an annual percentage of the fund's average daily net
assets.

Market capitalization
The value of a corporation determined by multiplying the current market price of
a share of common stock by the number of shares held by shareholders. A
corporation with one million shares outstanding and the market price per share
of $10 has a market capitalization of $10 million.

<PAGE>

Maturity
The length of time until a bond issuer must repay the underlying loan principal
to bondholders.

NASD Regulation, Inc. (NASD)
A self-regulating organization, consisting of brokerage firms (including
distributors of mutual funds), that is responsible for overseeing the actions of
its members.

11
----

<PAGE>
About your account (continued)

Class B

o Class B shares have no up-front sales charge, so the full amount of your
purchase is invested in the Fund. However, you will pay a contingent deferred
sales charge if you redeem your shares within six years after you buy them.

o If you redeem Class B shares during the two years after you buy them, the
shares will be subject to a contingent deferred sales charge of 4%. The
contingent deferred sales charge is 3% during the third and fourth years, 2%
during the fifth year, 1% during the sixth year, and 0% thereafter.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o For approximately eight years after you buy your Class B shares, they are
subject to annual 12b-1 fees no greater than 1% of average daily net assets,
of which 0.25% are service fees paid to the distributor, dealers or others for
providing services and maintaining accounts.

o Because of the higher 12b-1 fees, Class B shares have higher expenses and any
dividends paid on these shares are lower than dividends on Class A shares.

o Approximately eight years after you buy them, Class B shares automatically
convert into Class A shares with a 12b-1 fee of no more than 0.30%. Conversion
may occur as late as three months after the eighth anniversary of purchase,
during which time Class B's higher 12b-1 fees apply.

o You may purchase up to $250,000 of Class B shares at any one time. The
limitation on maximum purchases varies for retirement plans.

Class C

o Class C shares have no up-front sales charge, so the full amount of your
purchase is invested in the Fund. However, you will pay a contingent deferred
sales charge of 1% if you redeem your shares within 12 months after you buy
them.

o Under certain circumstances the contingent deferred sales charge may be
waived; please see the Statement of Additional Information.

o Class C shares are subject to an annual 12b-1 fee which may not be greater
than 1% of average daily net assets, of which 0.25% are service fees paid to
the distributor, dealers or others for providing services and maintaining
shareholder accounts.

o Because of the higher 12b-1 fees, Class C shares have higher expenses and pay
lower dividends than Class A shares.

o Unlike Class B shares, Class C shares do not automatically convert into
another class.

o You may purchase any amount less than $1,000,000 of Class C shares at any one
time. The limitation on maximum purchases varies for retirement plans.

Each share class of the Fund has adopted a separate 12b-1 plan that allows it to
pay distribution fees for the sales and distribution of its shares. Because
these fees are paid out of the Fund's assets on an ongoing basis, over time
these fees will increase the cost of your investment and may cost you more than
paying other types of sales charges.

N-S

Nationally recognized statistical
rating organization (NRSRO)
A company that assesses the credit quality of bonds, commercial paper, preferred
and common stocks and municipal short-term issues, rating the probability that
the issuer of the debt will meet the scheduled interest payments and repay the
principal. Ratings are published by such companies as Moody's Investors Service,
Inc. (Moody's), Standard & Poor's Ratings Group (S&P), Duff & Phelps, Inc.
(Duff), and Fitch IBCA, Inc. (Fitch).

Net asset value (NAV)
The daily dollar value of one mutual fund share. Equal to a fund's net assets
divided by the number of shares outstanding.

Preferred stock
Preferred stock has preference over common stock in the payment of dividends and
liquidation of assets. Preferred stocks also often pay dividends at a fixed
rate and are sometimes convertible into common stock.

12
- ----
<PAGE>

How to reduce your sales charge

We offer a number of ways to reduce or eliminate the sales charge on shares.
Please refer to the Statement of Additional Information for detailed information
and eligibility requirements. You can also get additional information from your
financial adviser. You or your financial adviser must notify us at the time you
purchase shares if you are eligible for any of these programs.
<TABLE>
<CAPTION>

Share class
Program How it works A B C
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
Letter of Intent Through a Letter of Intent you agree to X Although the Letter of
invest a certain amount in Delaware Intent and Rights of
Investment Funds (except money market Accumulation do not apply
funds with no sales charge) over a to the purchase of Class
13-month period to qualify for reduced B and C shares, you can
front-end sales charges. combine your purchase of
- -------------------------------------------------------------------------------- Class A shares with your
purchase of B and C
shares to fulfill your
Letter of Intent or
qualify for Rights of
Accumulation.

Rights of Accumulation You can combine your holdings or X
purchases of all funds in the Delaware
Investments family (except money market
funds with no sales charge) as well as
the holdings and purchases of your
spouse and children under 21 to qualify
for reduced front-end sales charges.
- ------------------------------------------------------------------------------------------------------------------------------------

Reinvestment of redeemed Up to 12 months after you redeem shares, For Class A, you For Class B, your Not available
shares you can reinvest the proceeds with no will not have to account will be
additional sales charge. pay an additional credited with the
front-end sales contingent deferred
charge. sales charge you
previously paid on
the amount you are
reinvesting. Your
schedule for
contingent deferred
sales charges and
conversion to Class
A will not start
over again; it will
pick up from the
point at which you
redeemed your
shares.
- ------------------------------------------------------------------------------------------------------------------------------------

SIMPLE IRA, SEP/IRA, These investment plans may qualify for X There is no reduction
SAR/SEP, Prototype Profit reduced sales charges by combining the in sales charges for
Sharing, Pension, 401(k), purchases of all members of the group. Class B or Class C
SIMPLE 401(k), 403(b)(7), Members of these groups may also qualify shares for group
and 457 Retirement Plans to purchase shares without a front-end purchases by
sales charge and a waiver of any retirement plans.
contingent deferred sales charges.

</TABLE>

Principal
Amount of money you invest (also called capital). Also refers to a bond's
original face value, due to be repaid at maturity.

Prospectus
The official offering document that describes a mutual fund, containing
information required by the SEC, such as investment objectives, policies,
services and fees.

Redeem
To cash in your shares by selling them back to the mutual fund.

Risk
Generally defined as variability of value; also credit risk, inflation risk,
currency and interest rate risk. Different investments involve different types
and degrees of risk.

Sales charge
Charge on the purchase or redemption of fund shares sold through financial
advisers. May vary with the amount invested. Typically used to compensate
advisers for advice and service provided.

13
----
<PAGE>

About your account (continued)

How to buy shares
[Graphic omitted]
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

[Graphic omitted]
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.

[Graphic omitted]
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014 12893 4013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us so we can assign you an account number.

[Graphic omitted]
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that under most circumstances you are allowed to exchange only
between like classes of shares. To open an account by exchange, call the
Shareholder Service Center at 800.523.1918.

[Graphic omitted]
Through automated shareholder services
You can purchase or exchange shares through Delaphone, our automated telephone
service, or through our web site, www.delawareinvestments.com. For more
information about how to sign up for these services, call our Shareholder
Service Center at 800.523.1918.

S-T

SEC (Securities and Exchange Commission)
Federal agency established by Congress to administer the laws governing the
securities industry, including mutual fund companies.

Share classes
Different classifications of shares; mutual fund share classes offer a variety
of sales charge choices.

Signature guarantee
Certification by a bank, brokerage firm or other financial institution that a
customer's signature is valid; signature guarantees can be provided by members
of the STAMP program.

Standard deviation
A measure of an investment's volatility; for mutual funds, measures how much a
fund's total return has typically varied from its historical average.

14
- ----
<PAGE>

How to buy shares (continued)

Once you have completed an application, you can open an account with an initial
investment of $1,000 and make additional investments at any time for as little
as $100. If you are buying shares in an IRA or Roth IRA, under the Uniform Gifts
to Minors Act or the Uniform Transfers to Minors Act; or through an Automatic
Investing Plan, the minimum purchase is $250, and you can make additional
investments of only $25. The minimum for an Education IRA is $500. The minimums
vary for retirement plans other than IRAs, Roth IRAs or Education IRAs.

The price you pay for shares will depend on when we receive your purchase order.
If we or an authorized agent receive your order before the close of trading on
the New York Stock Exchange (normally 4:00 p.m. Eastern time) on a business day,
you will pay that day's closing share price which is based on the Fund's net
asset value. If we receive your order after the close of trading, you will pay
the next business day's price. A business day is any day that the New York Stock
Exchange is open for business. We reserve the right to reject any purchase
order.

We determine the Fund's net asset value (NAV) per share at the close of trading
of the New York Stock Exchange each business day that the Exchange is open. We
calculate this value by adding the market value of all the securities and assets
in the Fund's portfolio, deducting all liabilities, and dividing the resulting
number by the number of shares outstanding. The result is the net asset value
per share. We price securities and other assets for which market quotations are
available at their market value. We price fixed-income securities on the basis
of valuations provided to us by an independent pricing service that uses methods
approved by the Board of Trustees. Any fixed-income securities that have a
maturity of less than 60 days we price at amortized cost. We price all other
securities at their fair market value using a method approved by the Board of
Trustees.

Retirement plans
In addition to being an appropriate investment for your Individual Retirement
Account (IRA), Roth IRA and Education IRA, shares in the Fund may be suitable
for group retirement plans. You may establish your IRA account even if you are
already a participant in an employer-sponsored retirement plan. For more
information on how shares in the Fund can play an important role in your
retirement planning or for details about group plans, please consult your
financial adviser, or call 800.523.1918.

Statement of Additional Information (SAI)
The document serving as "Part B" of a fund's prospectus that provides more
detailed information about the fund's organization, investments, policies and
risks.

Total return
An investment performance measurement, expressed as a percentage, based on the
combined earnings from dividends, capital gains and change in price over a given
period.

Treasury bills
Securities issued by the U.S. Treasury with maturities of one year or less.

Treasury bonds
Securities issued by the U.S. Treasury with maturities of 10 years or longer.

Treasury notes
Securities issued by the U.S. Treasury with maturities of one to 10 years.

15
----
<PAGE>

About your account (continued)

How to redeem shares

[Graphic omitted]
Through your financial adviser

Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

[Graphic omitted]
By mail

You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of more than
$50,000, you must include a signature guarantee for each owner. Signature
guarantees are also required when redemption proceeds are going to an address
other than the address of record on an account.

[Graphic omitted]
By telephone

You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.

[Graphic omitted]
By wire

You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. If you request a wire deposit, the First Union Bank fee (currently
$7.50) will be deducted from your proceeds. Bank information must be on file
before you request a wire redemption.

[Graphic omitted]
Through automated shareholder services

You can redeem shares through Delaphone, our automated telephone service, or
through our web site, www.delawareinvestments.com. For more information about
how to sign up for these services, call our Shareholder Service Center at
800.523.1918.

[Graphic omitted]
Through checkwriting

You may redeem shares by writing checks of $500 or more. Checks must be signed
by all owners of the account unless you indicate otherwise on your Investment
Application. The checkwriting feature is not available for retirement plans or
for Class B or Class C shares. Also, because dividends are declared daily, you
may not close your account by writing a check. When you write checks you are
subject to the regulations of First Union Bank and may be subject to a charge if
the check amount exceeds the value of your account.

U-V
Uniform Gift to Minors Act and Uniform Transfers to Minors Act
Federal and state laws that provide a simple way to transfer property to a minor
with special tax advantages.

Volatility
The tendency of an investment to go up or down in value by different magnitudes.
Investments that generally go up or down in value in relatively small amounts
are considered "low volatility" investments, whereas those investments that
generally go up or down in value in relatively large amounts are considered
"high volatility" investments.

16
- ----
<PAGE>

How to redeem shares
(continued)

If you hold your shares in certificates, you must submit the certificates with
your request to sell the shares. We recommend that you send your certificates by
certified mail.

When you send us a properly completed request to redeem or exchange shares
before the close of trading on the New York Stock Exchange (normally 4:00 p.m.
Eastern time), you will receive the net asset value as determined on the
business day we receive your request. We will deduct any applicable contingent
deferred sales charges. You may also have to pay taxes on the proceeds from your
sale of shares. We will send you a check, normally the next business day, but no
later than seven days after we receive your request to sell your shares. If you
purchased your shares by check, we will wait until your check has cleared, which
can take up to 15 days, before we send your redemption proceeds.

If you are required to pay a contingent deferred sales charge when you redeem
your shares, the amount subject to the fee will be based on the shares' net
asset value when you purchased them or their net asset value when you redeem
them, whichever is less. This arrangement assures that you will not pay a
contingent deferred sales charge on any increase in the value of your shares.
You also will not pay the charge on any shares acquired by reinvesting dividends
or capital gains. If you exchange shares of one fund for shares of another, you
do not pay a contingent deferred sales charge at the time of the exchange. If
you later redeem those shares, the purchase price for purposes of the contingent
deferred sales charge formula will be the price you paid for the original
shares--not the exchange price. The redemption price for purposes of this
formula will be the NAV of the shares you are actually redeeming.

Account minimums

If you redeem shares and your account balance falls below the required account
minimum of $1,000 ($250 for IRAs, Uniform Gift to Minors Act accounts or
accounts with automatic investing plans, $500 for Education IRAs) for three or
more consecutive months, you will have until the end of the current calendar
quarter to raise the balance to the minimum. If your account is not at the
minimum by the required time, you will be charged a $9 fee for that quarter and
each quarter after that until your account reaches the minimum balance. If your
account does not reach the minimum balance, the Fund may redeem your account
after 60 days' written notice to you.

Special services

To help make investing with us as easy as possible, and to help you build your
investments, we offer the following special services.

Automatic Investing Plan

The Automatic Investing Plan allows you to make regular monthly investments
directly from your checking account.

Direct Deposit

With Direct Deposit you can make additional investments through payroll
deductions, recurring government or private payments such as social security or
direct transfers from your bank account.

Wealth Builder Option

With the Wealth Builder Option you can arrange automatic monthly exchanges
between your shares in one or more Delaware Investments funds. Wealth Builder
exchanges are subject to the same rules as regular exchanges (see below) and
require a minimum monthly exchange of $100 per fund.

17
----
<PAGE>

About your account (continued)

Special services
(continued)

Dividend Reinvestment Plan

Through our Dividend Reinvestment Plan, you can have your distributions
reinvested in your account or the same share class in another fund in the
Delaware Investments family. The shares that you purchase through the Dividend
Reinvestment Plan are not subject to a front-end sales charge or to a contingent
deferred sales charge. Under most circumstances, you may reinvest dividends only
into like classes of shares.

Exchanges

You can exchange all or part of your shares for shares of the same class in
another Delaware Investments fund without paying a sales charge and without
paying a contingent deferred sales charge at the time of the exchange. However,
if you exchange shares from a money market fund that does not have a sales
charge you will pay any applicable sales charges on your new shares. When
exchanging Class B and Class C shares of one fund for the same class of shares
in other funds, your new shares will be subject to the same contingent deferred
sales charge as the shares you originally purchased. The holding period for the
CDSC will also remain the same, with the amount of time you held your original
shares being credited toward the holding period of your new shares. You don't
pay sales charges on shares that you acquired through the reinvestment of
dividends. You may have to pay taxes on your exchange. When you exchange shares,
you are purchasing shares in another fund so you should be sure to get a copy of
the fund's prospectus and read it carefully before buying shares through an
exchange.

MoneyLine(SM) On Demand Service

Through our MoneyLine(SM) On Demand Service, you or your financial adviser may
transfer money between your Fund account and your predesignated bank account by
telephone request. This service is not available for retirement plans, except
for purchases into IRAs. MoneyLine has a minimum transfer of $25 and a maximum
transfer of $50,000.

MoneyLine Direct Deposit Service

Through our MoneyLine Direct Deposit Service you can have $25 or more in
dividends and distributions deposited directly to your bank account. Delaware
Investments does not charge a fee for this service; however, your bank may
assess one. This service is not available for retirement plans.

Systematic Withdrawal Plan

Through our Systematic Withdrawal Plan you can arrange a regular monthly or
quarterly payment from your account made to you or someone you designate. If the
value of your account is $5,000 or more, you can make withdrawals of at least
$25 monthly, or $75 quarterly. You may also have your withdrawals deposited
directly to your bank account through our MoneyLine Direct Deposit Service.

18
- ----
<PAGE>

Dividends, distributions and taxes

Dividends, if any, are declared daily and paid monthly. Capital gains, if any,
are paid twice a year. We automatically reinvest all dividends and any capital
gains, unless you tell us otherwise.

Tax laws are subject to change, so we urge you to consult your tax adviser about
your particular tax situation and how it might be affected by current tax law.
The tax status of your dividends from the Fund is the same whether you reinvest
your dividends or receive them in cash. Distributions from the Fund's long-term
capital gains are taxable as capital gains, while distributions from short-term
capital gains and net investment income are generally taxable as ordinary
income. Any capital gains may be taxable at different rates depending on the
length of time the Fund held the assets. In addition, you may be subject to
state and local taxes on distributions.

We will send you a statement each year by January 31 detailing the amount and
nature of all dividends and capital gains that you were paid for the prior year.
Distributions declared in October, November or December but paid in January are
taxable as if they were paid in December.

Certain management considerations

Year 2000

As with other mutual funds, financial and business organizations and individuals
around the world, the Fund could be adversely affected if the computer systems
used by its service providers do not properly process and calculate date-related
information from and after January 1, 2000. This is commonly known as the "Year
2000 Problem." The Fund is taking steps to obtain satisfactory assurances that
its major service providers are taking steps reasonably designed to address the
Year 2000 Problem on the computer systems that the service providers use.
However, there can be no assurance that these steps will be sufficient to avoid
any adverse impact on the business of the Fund. The Year 2000 Problem may also
adversely affect the issuers of securities in which the Fund invests. The
portfolio managers and investment professionals of the Fund consider Year 2000
compliance in the securities selection and investment process. However, there
can be no guarantee that, even with their due diligence efforts, they will be
able to predict the effect of Year 2000 on any company or the performance of its
securities.

Investments by fund of funds

The Fund accepts investments from the series portfolios of Delaware Group
Foundation Funds, a fund of funds. From time to time, the Fund may experience
large investments or redemptions due to allocations or rebalancings by
Foundation Funds. While it is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on portfolio management.
For example, the Fund may be required to sell securities or invest cash at times
when it would not otherwise do so. These transactions could also have tax
consequences if sales of securities result in gains, and could also increase
transaction costs or portfolio turnover. The manager will monitor transactions
by Foundation Funds and will attempt to minimize any adverse effects on the Fund
and Foundation Funds as a result of these transactions.

19
----

<PAGE>
Financial highlights

The Financial highlights tables are intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the
Fund's annual report, which is available upon request by calling 800.523.1918.
<TABLE>
<CAPTION>

Class A

Year ended
Delaware American Government Bond Fund 7/31
1999 1998 1997 1996 1995
<S> <C> <C> <C> <C> <C>

Net asset value, beginning of period $7.720 $7.760 $7.590 $7.860 $8.000
Income (loss) from investment operations:
Net investment income 0.474 0.528 0.544 0.588 0.656
Net realized and unrealized gain (loss) on
investments and futures contracts (0.420) (0.040) 0.170 (0.270) (0.140)
-------- -------- -------- -------- --------
Total from investment operations 0.054 0.488 0.714 0.318 0.516
-------- -------- -------- -------- --------
Less dividends:
Dividends from net investment income (0.474) (0.528) (0.544) (0.588) (0.656)
-------- -------- -------- -------- --------
Total dividends (0.474) (0.528) (0.544) (0.588) (0.656)
-------- -------- -------- -------- --------
Net asset value, end of year $7.300 $7.720 $7.760 $7.590 $7.860
======== ======== ======== ======== ========
Total return(2) 0.59% 6.50% 9.77% 4.09% 6.82%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $114,027 $127,001 $138,844 $164,156 $206,083
Ratio of expenses to average net assets 1.25% 1.20% 1.16% 1.20% 1.24%
Ratio of net investment income to
average net assets 6.16% 6.80% 7.13% 7.55% 8.40%
Portfolio turnover 142% 119% 63% 81% 70%
</TABLE>

(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized.

(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 and does not reflect the impact of a sales charge.

How to read the Financial highlights

Net investment income
Net investment income includes dividend and interest income earned from the
Fund's investments; it is after expenses have been deducted.

Net realized and unrealized gain (loss) on investments and futures contracts
A realized gain on investments occurs when we sell an investment at a profit,
while a realized loss on investments occurs when we sell an investment at a
loss. When an investment increases or decreases in value but we do not sell it,
we record an unrealized gain or loss. The amount of realized gain per share that
we pay to shareholders is listed under "Less dividends-Dividends from net
investment income."

<PAGE>

Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.
<TABLE>
<CAPTION>
Class B Class C
Period
Year ended Year ended 11/29/95(1)
7/31 7/31 through
1999 1998 1997 1996 1995 1999 1998 1997 7/31/96
<S> <C> <C> <C> <C> <C> <C> <C> <C>

$7.720 $7.760 $7.590 $7.860 $8.000 $7.720 $7.760 $7.590 $7.950

0.421 0.474 0.490 0.533 0.601 0.422 0.474 0.491 0.348

(0.421) (0.040) 0.170 (0.270) (0.140) (0.422) (0.040) 0.170 (0.360)
------- ------- ------- ------ ------ ------ ------ ------ ------
0.000 0.434 0.660 0.263 0.461 0.000 0.434 0.661 (0.012)
------- ------- ------- ------ ------ ------ ------ ------ ------
(0.420) (0.474) (0.490) (0.533) (0.601) (0.420) (0.474) (0.491) (0.348)
------- ------- ------- ------ ------ ------ ------ ------ ------
(0.420) (0.474) (0.490) (0.533) (0.601) (0.420) (0.474) (0.491) (0.348)
------- ------- ------- ------ ------ ------ ------ ------ ------
$7.300 $7.720 $7.760 $7.590 $7.860 $7.300 $7.720 $7.760 $7.590
======= ======= ======= ====== ====== ====== ====== ====== ======
(0.11%) 5.76% 9.01% 3.36% 6.08% (0.11%) 5.76% 9.01% (0.17%)

$19,147 $13,642 $10,695 $9,754 $7,394 $4,077 $2,047 $1,308 $1,029
1.95% 1.90% 1.86% 1.90% 1.94% 1.95% 1.90% 1.86% 1.90%

5.46% 6.10% 6.43% 6.85% 7.66% 5.46% 6.10% 6.43% 6.85%
142% 119% 63% 81% 70% 142% 119% 63% 81%

</TABLE>
Total return
This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers, exclude front-end and contingent
deferred sales charges, and assume the shareholder has reinvested all dividends
and realized gains.

Net assets
Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities, that are attributable to that class of the Fund.

Ratio of expenses to average net assets
The expense ratio is the percentage of net assets that a fund pays annually for
operating expenses and management fees. These expenses include accounting and
administration expenses, services for shareholders, and similar expenses.

Ratio of net investment income to average net assets
We determine this ratio by dividing net investment income by average net assets.

Portfolio turnover rate
This figure tells you the amount of trading activity in a fund's portfolio. For
example, a fund with a 50% turnover has bought and sold half of the value of its
total investment portfolio during the stated period.

21
----
<PAGE>

Delaware American Government Bond Fund

Additional information about the Fund's investments is available in the Fund's
annual and semi-annual report to shareholders. In the Fund's shareholder report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the report period. You
can find more detailed information about the Fund in the current Statement of
Additional Information, which we have filed electronically with the Securities
and Exchange Commission (SEC) and which is legally a part of this prospectus. If
you want a free copy of the Statement of Additional Information, the annual or
semi-annual report, or if you have any questions about investing in this Fund,
you can write to us at 1818 Market Street, Philadelphia, PA 19103-3682, or call
toll-free 800.523.1918. You may also obtain additional information about the
Fund from your financial adviser.

You can find reports and other information about the Fund on the SEC web site
(http://www.sec.gov), or you can get copies of this information, after payment
of a duplicating fee, by writing to the Public Reference Section of the SEC,
Washington, D.C. 20549-6009. Information about the Fund, including its Statement
of Additional Information, can be reviewed and copied at the Securities and
Exchange Commission's Public Reference Room in Washington, D.C. You can get
information on the public reference room by calling the SEC at 1.800.SEC.0330.

Web site

www.delawareinvestments.com

E-mail

[email protected]

Shareholder Service Center

800.523.1918

Call the Shareholder Service Center Monday to Friday, 8 a.m. to 8 p.m.
Eastern time:

o For fund information; literature; price, yield and performance figures.

o For information on existing regular investment accounts and retirement plan
accounts including wire investments; wire redemptions; telephone redemptions
and telephone exchanges. Delaphone Service

800.362.FUND (800.362.3863)

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.

Investment Company Act file number: 811-4304

Delaware American Government Bond Fund Symbols

CUSIP NASDAQ
Class A 246094205 DEGGX
Class B 246094601 DEGBX
Class C 246094700 DUGCX

DELAWARE
INVESTMENTS
- -----------------
Philaselphia o London

P-023 [--] PP 9/99

<PAGE>

DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London

Delaware American
Government Bond
Fund

(formerly U.S. Government Fund)

Institutional Class

Prospectus September 29, 1999

Current Income Fund

The Securities and Exchange Commission has not approved or disapproved these
securities or passed upon the accuracy of this prospectus, and any
representation to the contrary is a criminal offense.

<PAGE>

Table of contents

- --------------------------------------------------------------------------------
Fund profile page 2
Delaware American Government Bond Fund 2
- --------------------------------------------------------------------------------
How we manage the Fund page 4
Our investment strategies 4
The securities we typically invest in 5
The risks of investing in the Fund 7
- --------------------------------------------------------------------------------
Who manages the Fund page 8
Investment manager 8
Portfolio managers 8
Fund administration (Who's who) 9
- --------------------------------------------------------------------------------
About your account page 10
Investing in the Fund 10
How to buy shares 11
How to redeem shares 13
Account minimums 14
Exchanges 14
Dividends, distributions and taxes 14
- --------------------------------------------------------------------------------
Certain management considerations page 15
- --------------------------------------------------------------------------------
Financial highlights page 16

<PAGE>

Profile: Delaware American Government Bond Fund

What are the Fund's goals?

The Fund seeks high current income consistent with safety of principal by
investing primarily in debt obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities. Although the Fund will
strive to achieve its investment goal, there is no assurance that it will.

Who should invest in the Fund

o Investors with medium or long range goals.

o Investors looking for regular income from their investments.

o Investors looking for a bond investment to help balance their
investments in stocks or more aggressive securities.

Who should not invest in the Fund

o Investors with very short-term financial goals.

o Investors who are unwilling to accept share prices that may fluctuate,
sometimes significantly, over the short term.

o Investors seeking long-term growth of capital.

What are the Fund's main investment strategies? We invest primarily in U.S.
government securities including:

o U.S. Treasury bills, notes and bonds;

o other debt securities issued or unconditionally guaranteed by the U.S.
government or backed by the full faith and credit of the U.S. government; and

We may also invest up to 20% of our net assets in high quality non-government
fixed-income securities.

An investment in the Fund is not a deposit of any bank and is not insured or
guaranteed by the Federal Deposit Insurance Corporation (FDIC) or any other
government agency.

<PAGE>

How has the Fund performed?
- --------------------------------------------------------------------------------

This bar chart and table can help you evaluate the potential risks of investing
in the Fund. We show how returns for the Fund's Institutional Class shares have
varied over the past ten calendar years, as well as the average annual returns
of all shares for the one-, five- and 10-year periods. The Institutional Class
commenced operations on June 1, 1992. Return information for the Institutional
Class for the periods prior to the time it commenced operations is calculated by
taking the performance of the Fund's Class A shares and eliminating all sales
and asset based charges that apply to Class A shares. The Fund's past
performance is not necessarily an indication of how it will perform in the
future.

Year-by-year total return (Institutional Class)

1998 7.40%
1997 8.76%
1996 3.12%
1995 14.40%
1994 -5.53%
1993 8.12%
1992 6.67%
1991 15.42%
1990 9.05%
1989 11.69%

As of June 30, 1999, the Fund's Institutional Class shares had a year-to-date
return of -2.30%. During the ten years illustrated in this bar chart, the
Institutional Class' highest quarterly return was 8.68% for the quarter ended
June 30, 1989 and its lowest quarterly return was -3.71% for the quarter ended
March 31, 1994.

Average annual returns for periods ending 12/31/98

Lehman Brothers
Government
Institutional Class Bond Index

1 year 7.40% 9.85%
5 years 5.35% 7.18%
10 years 7.72% 9.17%

What are the Fund's fees and expenses?
- --------------------------------------------------------------------------------

You do not pay sales charges directly from your investments when you buy or sell
shares of the Institutional Class.

Maximum sales charge (load) imposed on
purchases as a percentage of offering price none
- --------------------------------------------------------------------------------
Maximum contingent deferred sales charge (load)
as a percentage of original purchase price or
redemption price, whichever is lower none
- --------------------------------------------------------------------------------
Maximum sales charge (load) imposed on
reinvested dividends none
- --------------------------------------------------------------------------------
Redemption fees none
- --------------------------------------------------------------------------------
Exchange fees(1) none
- --------------------------------------------------------------------------------
Annual fund operating expenses are deducted from the Fund's assets.

Management fees 0.55%
- --------------------------------------------------------------------------------
Distribution and service (12b-1) fees none
- --------------------------------------------------------------------------------
Other expenses 0.37%
- --------------------------------------------------------------------------------
Total operating expenses 0.92%
- --------------------------------------------------------------------------------
This example is intended to help you compare the cost of investing in the Fund
to the cost of investing in other mutual funds with similar investment
objectives. We show the cumulative amount of Fund expenses on a hypothetical
investment of $10,000 with an annual 5% return over the time shown.(2) This is
an example only, and does not represent future expenses, which may be greater or
less than those shown here.

1 year $94
3 years $293
5 years $509
10 years $1,131

(1) Exchanges are subject to the requirements of each fund in the Delaware
Investments family. A front-end sales charge may apply if you exchange your
shares into a fund that has a front-end sales charge.
(2) The Fund's actual rate of return may be greater or less than the
hypothetical 5% return we use here. Also, this example assumes that the
Fund's total operating expenses remain unchanged in each of the periods we
show.

3
<PAGE>

How we manage the Fund

Our investment strategies

We analyze economic and market conditions, seeking to identify the securities or
market sectors that we think are the best investments for the Fund. Following
are descriptions of how the portfolio manager pursues the Fund's investment
goals.

We take a disciplined approach to investing, combining investment strategies and
risk management techniques that can help shareholders meet their goals.

How to use this glossary

The glossary includes definitions of investment terms used throughout the
prospectus. If you would like to know the meaning of an investment term that is
not explained in the text please check the glossary.

Glossary A-C Amortized cost Average maturity
---------------------------------------------------------------
Amortized cost is a method used to An average of when the
value a fixed-income security that individual bonds and
starts with the face value of the other debt securities
security and then adds or subtracts held in a portfolio will
from that value depending on whether mature.
the purchase price was greater or
less than the value of the security
at maturity. The amount greater or
less than the par value is divided
equally over the time remaining
until maturity.

<PAGE>

The securities we typically invest in

Fixed-income securities offer the potential for greater income payments than
stocks, and also may provide capital appreciation.

<TABLE>
<CAPTION>
- ------------------------------------------------------------------------------------------------------------------------------------
Securities How we use them
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Direct U.S. Treasury obligations: include Treasury bills, We may invest without limit in U.S. Treasury securities.
notes and bonds of varying maturities. U.S. Treasury
securities are backed by the "full faith and credit" of
the United States.
- ------------------------------------------------------------------------------------------------------------------------------------
Government agency obligations: securities issued or backed We may invest without limit in the debt securities of U.S.
by U.S. government agencies or government-sponsored government agencies or instrumentalities.
corporations such as the Federal Housing Authority or the
Export-Import Bank. These securities may or may not be backed
by the full faith and credit of the U.S. government.
- ------------------------------------------------------------------------------------------------------------------------------------
Mortgage-backed securities: Fixed-income securities that There is no limit on government-related mortgage-backed
represent pools of mortgages, with investors receiving principal securities or on fully collateralized privately issued
and interest payments as the underlying mortgage loans are paid mortgage-backed securities.
back. Many are issued and guaranteed against default by the U.S.
government or its agencies or instrumentalities, such as the We may invest up to 20% of net assets in mortgage-backed
Federal Home Loan Mortgage Corporation, Federal National securities issued by private companies only if they are 100%
Mortgage Association and the Government National Mortgage collateralized at the time of issuance by securities issued or
Association. Others are issued by private financial institutions, guaranteed by the U.S. government, its agencies or
and are fully collateralized by certificates issued or guaranteed instrumentalities. However, these securities must be rated in
by the U.S. government or its agencies or instrumentalities. one of the four highest categories by nationally recognized
statistical rating organization, such as S&P or Moody's, at
the time of purchase. The privately issued securities we
invest in are either CMOs or REMICs rated in the two highest
grades by an NRSRO at the time of purchase (see below).
- ------------------------------------------------------------------------------------------------------------------------------------
Collateralized mortgage obligations (CMOs): Privately issued See mortgage-backed securities above.
mortgage-backed bonds whose underlying value is the mortgages
that are grouped into different pools according to their
maturity.
- ------------------------------------------------------------------------------------------------------------------------------------
Real estate mortgage investment conduits (REMICs): Privately See mortgage-backed securities above.
issued mortgage-backed bonds whose underlying value is a fixed
pool of mortgages secured by an interest in real property.
Like CMOs, REMICs offer different pools.
- ------------------------------------------------------------------------------------------------------------------------------------
Asset-backed securities: Bonds or notes backed by accounts We invest only in asset-backed securities rated in the highest
receivables, including home equity, automobile or credit quality category by an NRSRO. In addition, our holdings of
loans. non-government securities (asset-backed securities, corporate
bonds, certificates of deposit and corporate commercial paper)
may not exceed 20% of the Fund's net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Corporate bonds: Debt obligations issued by a corporation. We may invest in corporate bonds that are rated A or above by
an NRSRO. Our total holdings of non-government securities,
including corporate bonds and certificates of deposit, may not
exceed 20% of net assets.
- ------------------------------------------------------------------------------------------------------------------------------------
Certificates of deposit and obligations of both U.S. and We may invest in certificates of deposit from banks that have
foreign banks: Interest paying debt instruments issued by a assets of at least one billion dollars. These securities are
bank. subjet to our 20% limit on non-government securities.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

Bond Bond ratings Capital
- ------------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A debt security, like an IOU, issued by a company, Independent evaluations of The amount of money
municipality or government agency. In return for creditworthiness, ranging from you invest.
lending money to the issuer, a bond buyer generally Aaa/AAA (highest quality) to D (lowest
receives fixed periodic interest payments and quality). Bonds rated Baa/BBB or
repayment of the loan amount on a specified maturity better are considered investment grade.
date. A bond's price changes prior to maturity and is See also Nationally recognized
inversely related to current interest rates. When statistical rating organization.
interest rates rise, bond prices fall, and when
interest rates fall, bond prices rise.
</TABLE>

5
<PAGE>

How we manage the Fund (continued)

- ------------------------------------------------------------------------------------------------------------------------------------
Repurchase agreements: An agreement between a buyer, such as Typically, we use repurchase agreements as a short-term
the Fund, and seller of securities in which the seller investment for our cash position. In order to enter into
agrees to buy the securities back within a specified time at these repurchase agreements, we must have collateral of at
the same price the buyer paid for them, plus an amount equal least 102% of the repurchase price.
to an agreed upon interest rate. Repurchase agreements are
often viewed as equivalent to cash.
- ------------------------------------------------------------------------------------------------------------------------------------
Options and futures: Options represent a right to buy or At times when we anticipate adverse conditions, we may want
sell a security or a group of securities at an agreed upon to protect gains on securities without actually selling
price at a future date. The purchaser of an option may or may them. We might use options or futures to neutralize the
not choose to go through with the transaction. effect of any price declines, without selling a bond or
bonds, or as a hedge against changes in interest rates.
Futures contracts are agreements for the purchase or sale of
a security or a group of securities at a specified price, on a Use of these strategies can increase the operating costs of
specified date. Unlike an option, a futures contract must be the Fund and can lead to loss of principal.
executed unless it is sold before the settlement date.

Certain options and futures may be considered to be
derivative securities.
- ------------------------------------------------------------------------------------------------------------------------------------
Restricted securities: Privately placed securities whose We may invest in privately placed securities that are
resale is restricted under securities law. eligible for resale only among certain institutional buyers
without registration, including Rule 144A Securities.
Restricted securities that are determined to be illiquid may
not exceed the Fund's 10% limit on illiquid securities,
which is described below.
- ------------------------------------------------------------------------------------------------------------------------------------
Interest rate swaps agreements: In an interest rate swap, the Interest rates swaps may be used to adjust the Fund's
Fund receives payments from another party based on a floating sensitivity to interest rates by changing its duration. We
interest rate, in return for making payments based on a fixed may also use interest rate swaps to hedge against changes in
interest rate. An interest rate swap can also work in interest rates. Interest rate swaps will be considered
reverse, with the Fund receiving payments based on a fixed illiquid securities (see below).
interest rate and making payments based on a floating
interest rate.
- ------------------------------------------------------------------------------------------------------------------------------------
Illiquid securities: Securities that do not have a ready We may invest up to 10% of total assets in illiquid
market, and cannot be easily sold within seven days at securities.
approximately the price that the Fund has valued them.
- ------------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

Please see the Statement of Additional Information for additional descriptions
on the securities listed in the table above.

Lending securities The Fund may lend up to 25% of its assets to qualified
brokers, dealers and institutional investors for their use in securities
transactions.

Portfolio turnover The Fund's annual portfolio turnover may exceed 100%. A
turnover rate of 100% would occur if the Fund sold and replaced securities
valued at 100% of its net assets within one year. High turnover can result in
increased transaction costs and tax liability for the Fund.
<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
Capital Consumer Price
| appreciation Capital gains distributions Compounding Index (CPI)
C-D |----------------------------------------------------------------------------------------------------------
| An increase in Payments to mutual fund Earnings on an Measurement of
the value of an shareholders of profits investment's U.S. inflation;
investment. (realized gains) from the sale previous earnings. represents the price
of a fund's portfolio securities. of a basket of
Usually paid once a year; may commonly
be either short-term gains or purchased goods.
long-term gains.
</TABLE>

<PAGE>

The risks of investing in the Fund

Investing in any mutual fund involves risk, including the risk that you may
receive little or no return on your investment, and the risk that you may lose
part or all of the money you invest. Before you invest in the Fund you should
carefully evaluate the risks. You should consider an investment in the Fund to
be a long-term investment that typically provides the best results when held for
a number of years. The following are the chief risks you assume when you invest
in Delaware American Government Fund. Please see the Statement of Additional
Information for further discussion of these risks and the other risks not
discussed here.

<TABLE>
<CAPTION>
- -------------------------------------------------------------------------------------------------------------------------------
Risks How we strive to manage them
- -------------------------------------------------------------------------------------------------------------------------------
<S> <C>
Interest rate risk is the risk that securities will decrease Interest rate risk is the most significant risk for this
in value if interest rates rise. The risk is greater for Fund. In striving to manage this risk, we monitor economic
bonds with longer maturities than for those with shorter conditions and the interest rate environment. We keep the
maturities. The success of an interest rate swap strategy average maturity of the portfolio as short as is prudent, in
depends on how well the portfolio manager forecasts interest keeping with our objective to provide high current income.
rate movements. Depending on the actual movements of
interest rates, the Fund could experience a higher or lower The Fund will not invest in interest rate swaps with maturities
return than anticipated. For example, if the Fund holds of more than two years. Each business day we will calculate the
interest rate swaps and is required to make payments based amount the Fund must pay for any swap it holds and will
on variable interest rates, it will be required to make segregate enough cash or other liquid securities to cover that
increased payments if interest rates rise, which will not amount the Fund must pay on the swap.
necessarily be offset by the fixed-rate payments it is
entitled to receive under the swap agreement.
- -------------------------------------------------------------------------------------------------------------------------------
Market risk is the risk that all or a majority of the We maintain a long-term investment approach and focus on
securities in a certain market - like the stock or bond high quality individual bonds that we believe can provide a
market will decline in value because of factors such as steady stream of income regardless of interim fluctuations
economic conditions, future expectations or investor in the bond market. We do not buy and sell securities for
confidence. short-term purposes.

We may hold a substantial part of the Fund's assets in cash
or cash equivalents as a temporary, defensive strategy.
- -------------------------------------------------------------------------------------------------------------------------------
Credit risk is the possibility that a bond's issuer (or an By focusing primarily on U.S. Treasury securities and other
entity that insures the bond) will be unable to make timely securities that are backed by the U.S. government, we
payments of interest and principal. minimize the possibility that any of the securities in our
portfolio will not pay interest or principal. U.S.
government securities are generally considered to be of the
highest quality.

When selecting non-government securities and the dealers
with whom we would do interest rate swaps, we focus on those
with high quality ratings and do careful credit analysis
before investing.
- -------------------------------------------------------------------------------------------------------------------------------
Liquidity risk is the possibility that securities cannot be U.S. Treasuries and other U.S. government debt securities
readily sold within seven days at approximately the price are typically the most liquid securities available.
that the Fund has valued them. Therefore, liquidity risk is not a significant risk for this
Fund.

Swap agreements will be treated as illiquid securities, but
most swap dealers will be willing to repurchase interest
rate swaps.
- -------------------------------------------------------------------------------------------------------------------------------
Prepayment risk is the risk that the principal on a bond Prepayment risk can be a significant risk to this Fund
that the Fund owns will be prepaid prior to maturity at a because we may invest a large percentage of our holdings in
time when interest rates are lower than what that bond was mortgage securities. Homeowners or others who have mortgages
paying. The Fund would then have to reinvest that money at a are more likely to prepay them when interest rates are
lower interest rate. relatively low. In order to manage this risk, when interest
rates are low or when we anticipate that rates will be
declining, we look for mortgage securities that we believe
are less likely to be prepaid, such as those that have
interest rates lower than current rates or have low
remaining loan balances.
- -------------------------------------------------------------------------------------------------------------------------------
Futures and options risk is the possibility that the Fund We will use options and futures for defensive purposes, such
may experience a significant loss if it employs an options as to protect gains in the portfolio without actually
or futures strategy related to a security or a market index selling a security or to neutralize the impact of interest
and that security or index moves in the opposite direction rate changes. We will not use futures and options for
from what the portfolio manager anticipated. Futures and speculative reasons or in an effort to enhance return.
options also involve additional expenses, which could reduce
any benefit or increase any loss to the Fund from using the
strategy.
- -------------------------------------------------------------------------------------------------------------------------------
</TABLE>

<PAGE>

<TABLE>
<CAPTION>
Dividend
Corporate bond Depreciation Diversification distribution Duration
- -------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C> <C>
A debt security issued A decline in an The process of Payments to A measurement of a
by a corporation. investment's value. spreading mutual fund fixed-income
See Bond. investments among a shareholders of investment's price
number of different dividends passed volatility. The larger the
securities, asset along from the number, the greater
classes or investment fund's portfolio the likely price change
styles to reduce the of securities. for a given change in
risks of investing. interest rates.
</TABLE>
7
<PAGE>

Who manages the Fund
- --------------------------------------------------------------------------------

Investment The Fund is managed by Delaware Management Company, a series of
manager Delaware Management Business Trust, which is an indirect, wholly
owned subsidiary of Delaware Management Holdings, Inc. Delaware
Management Company makes investment decisions for the Fund, manages
the Fund's business affairs and provides daily administrative
services. For its services to the Fund, the manager was paid 0.58%
of average daily net assets for the last fiscal year.

Portfolio Paul A. Grillo has responsibility for making investment decisions
managers for the Fund. When making decisions for the Fund, Mr. Grillo
regularly consults with H. Thomas McMeekin.

Paul A. Grillo, Vice President/Portfolio Manager of the Fund, holds
a BA in Business Management from North Carolina State University
and an MBA in Finance from Pace University. Prior to joining
Delaware Investments in 1993, Mr. Grillo served as mortgage
strategist and trader at the Dreyfus Corporation. He also served as
a mortgage strategist and portfolio manager for the Chemical
Investment Group and as financial analyst at Chemical Bank. Mr.
Grillo is a CFA charterholder. Mr. Grillo has been managing the
Fund since February 21, 1997.

H. Thomas McMeekin, Executive Vice President and Chief Investment
Officer, Fixed Income, joined Delaware Investments in 1999. He has
over 24 years of investment management experience which includes
serving as President of Lincoln Investment Management, Inc., an
affiliate of Delaware Investments. Mr. McMeekin holds a BA in
Economics from the University of Rochester and an MBA in Finance
and Accounting from Cornell University. He also completed the
Advanced Management Program at Harvard Business School.

<TABLE>
<CAPTION>
<S> <C> <C>
E-L | Expense ratio Fixed-income securities
|------------------------------------------------------------------------------------------------------------------------
| A mutual fund's total operating expenses, expressed as With fixed-income securities, the money you
a percentage of its total net assets. Operating expenses are originally invested is paid back at a pre-specified
the costs of running a mutual fund, including maturity date. These securities, which include
management fees, offices, staff, equipment and expenses government, corporate or municipal bonds, as
related to maintaining the fund's portfolio of securities well as money market securities, typically pay a
and distributing its shares. They are paid from the fund's fixed rate of return (often referred to as interest).
assets before any earnings are distributed to shareholders. See Bond.
</TABLE>

8
<PAGE>

Who's who? This diagram shows the various organizations involved
with managing, administering, and servicing the Delaware
Investments funds.
<TABLE>
<CAPTION>
<S> <C> <C> <C>
Board of Trustees

Investment manager The Fund Custodian
Delaware Management Company The Chase Manhattan Bank
One Commerce Square 4 Chase Metrotech Center
Philadelphia, PA 19103 Brooklyn, NY 11245

Portfolio managers Distributor Service agent
(see page 8 for details) Delaware Distributors, L.P. Delaware Service Company, Inc.
1818 Market Street 1818 Market Street
Philadelphia, PA 19103 Philadelphia, PA 19103

Shareholders
</TABLE>

Portfolio managers Portfolio managers are employed by the investment manager to
make investment decisions for individual portfolios on a day-to-day basis.

Custodian Mutual funds are legally required to protect their portfolio
securities and most funds place them with a qualified bank custodian who
segregates fund securities from other bank assets.

Government Lehman Brothers
securities Inflation Investment goal Government Bond Index
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Securities issued by the The increase in the The objective, such as An index composed of The Treasury Bond Index (all
U.S. government or its cost of goods and long-term capital public obligations of the U.S. Treasury, excluding
agencies. They include services over time. U.S. growth or high current flower bonds and foreign-targeted issues) and the
Treasuries as well as inflation is frequently income, that a mutual Agency Bond Index (all publicly issued debt of
agency-backed measured by changes fund pursues. U.S. government agencies and quasi-federal
securities such as in the Consumer Price corporations, and corporate debt guaranteed
Fannie Maes. Index (CPI). by the U.S. government).
</TABLE>

9
<PAGE>

About your account
- --------------------------------------------------------------------------------

Investing in the Fund

Institutional Class shares are available for purchase only by the following:

o retirement plans introduced by persons not associated with
brokers or dealers that are primarily engaged in the retail
securities business and rollover individual retirement
accounts from such plans;

o tax-exempt employee benefit plans of the manager or its
affiliates and securities dealer firms with a selling
agreement with the distributor;

o institutional advisory accounts of the manager, or its
affiliates and those having client relationships with Delaware
Investment Advisers, an affiliate of the manager, or its
affiliates and their corporate sponsors, as well as
subsidiaries and related employee benefit plans and rollover
individual retirement accounts from such institutional
advisory accounts;

o a bank, trust company and similar financial institution
investing for its own account or for the account of its trust
customers for whom such financial institution is exercising
investment discretion in purchasing shares of the Class,
except where the investment is part of a program that requires
payment to the financial institution of a Rule 12b-1 Plan fee;
and

o registered investment advisers investing on behalf of clients
that consist solely of institutions and high net-worth
individuals having at least $1,000,000 entrusted to the
adviser for investment purposes, but only if the adviser is
not affiliated or associated with a broker or dealer and
derives compensation for its services exclusively from its
clients for such advisory services.

<TABLE>
<CAPTION>
<S> <C> <C> <C>
M-N | Management fee Market capitalization Maturity
|-------------------------------------------------------------------------------------------------------------
| The amount paid by a The value of a corporation determined by The length of time until a
mutual fund to the multiplying the current market price of a bond issuer must repay
investment adviser for share of common stock by the number the underlying loan
management services, of shares held by shareholders. A principal to bondholders.
expressed as an annual corporation with one million shares
percentage of the fund's outstanding and the market price per
average daily net assets. share of $10 has a market capitalization
of $10 million.
</TABLE>

10
<PAGE>

How to buy shares

(Graph)
By mail
Complete an investment slip and mail it with your check, made payable to the
fund and class of shares you wish to purchase, to Delaware Investments, 1818
Market Street, Philadelphia, PA 19103-3682. If you are making an initial
purchase by mail, you must include a completed investment application (or an
appropriate retirement plan application if you are opening a retirement account)
with your check.

(Graph)
By wire
Ask your bank to wire the amount you want to invest to First Union Bank, ABA
#031201467, Bank Account number 2014128934013. Include your account number and
the name of the fund in which you want to invest. If you are making an initial
purchase by wire, you must call us at 800.510.4015 so we can assign you an
account number.

(Graph)
By exchange
You can exchange all or part of your investment in one or more funds in the
Delaware Investments family for shares of other funds in the family. Please keep
in mind, however, that you may not exchange your shares for Class B or Class C
shares. To open an account by exchange, call your Client Services Representative
at 800.510.4015.

(Graph)
Through your financial adviser
Your financial adviser can handle all the details of purchasing shares,
including opening an account. Your adviser may charge a separate fee for this
service.

<TABLE>
<CAPTION>
Nationally recognized statistical Net asset
NASD Regulation, Inc. (NASD) rating organization (NRSRO) value (NAV)
- --------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C>
A self-regulating organization, consisting A company that assesses the credit quality of bonds, The daily dollar
of brokerage firms (including distributors commercial paper, preferred and common stocks and value of one
of mutual funds), that is responsible for municipal short-term issues, rating the probability that mutual fund share.
overseeing the actions of its members. the issuer of the debt will meet the scheduled interest Equal to a fund's
payments and repay the principal. Ratings are published net assets divided
by such companies as Moody's Investors Service, Inc. by the number of
(Moody's), Standard & Poor's Ratings Group (S&P), Duff & shares outstanding.
Phelps, Inc. (Duff), and Fitch IBCA, Inc. (Fitch).
</TABLE>

11
<PAGE>

About your account (continued)

How to buy shares The price you pay for shares will depend on when we receive
(continued) your purchase order. If we or an authorized agent receive
your order before the close of trading on the New York Stock
Exchange (normally 4:00 p.m. Eastern time) on a business day,
you will pay that day's closing share price which is based on
the Fund's net asset value. If we receive your order after
the close of trading, you will pay the next business day's
price. A business day is any day that the New York Stock
Exchange is open for business. We reserve the right to reject
any purchase order.

We determine the funds net asset value (NAV) per share at the
close of trading of the New York Stock Exchange each business
day that the Exchange is open. We calculate this value by
adding the market value of all the securities and assets in
the Fund's portfolio, deducting all liabilities, and dividing
the resulting number by the number of shares outstanding. The
result is the net asset value per share. We price securities
and other assets for which market quotations are available at
their market value. We price fixed-income securities on the
basis of valuations provided to us by an independent pricing
service that uses methods approved by the Board of Trustees.
Any fixed-income securities that have a maturity of less than
60 days we price at amortized cost. We price all other
securities at fair market value using a method approved by
the Board of Trustees.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
P-S | Preferred stock Principal Prospectus Redeem
|----------------------------------------------------------------------------------------------------------------------------
| Preferred stock has preference over Amount of money you The official offering document To cash in your
common stock in the payment of invest (also called capital). that describes a mutual fund, shares by selling
dividends and liquidation of assets. Also refers to a bond's containing information them back to the
Preferred stocks also often pay original face value, due to required by the SEC, such as mutual fund.
dividends at a fixed rate and are be repaid at maturity. investment objectives, policies,
sometimes convertible into services and fees.
common stock.
</TABLE>

12
<PAGE>

How to redeem shares

(Graph)
By mail
You can redeem your shares (sell them back to the fund) by mail by writing to:
Delaware Investments, 1818 Market Street, Philadelphia, PA 19103-3682. All
owners of the account must sign the request, and for redemptions of more than
$50,000, you must include a signature guarantee for each owner. You can also fax
your written request to 215.255.8864. Signature guarantees are also required
when redemption proceeds are going to an address other than the address of
record on an account.

(Graph)
By telephone
You can redeem up to $50,000 of your shares by telephone. You may have the
proceeds sent to you by check, or, if you redeem at least $1,000 of shares, you
may have the proceeds sent directly to your bank by wire. Bank information must
be on file before you request a wire redemption.

(Graph)
By wire
You can redeem $1,000 or more of your shares and have the proceeds deposited
directly to your bank account the next business day after we receive your
request. Bank information must be on file before you request a wire redemption.

(Graph)
Through your financial adviser
Your financial adviser can handle all the details of redeeming your shares. Your
adviser may charge a separate fee for this service.

(Graph)
Through checkwriting
You may redeem shares by writing checks of $500 or more. Checks must be signed
by all owners of the account unless you indicate otherwise on your Investment
Application. The checkwriting feature is not available for retirement plans.
Also, because dividends are declared daily, you may not close your account by
writing a check. When you write checks you are subject to the regulations of
First Union Bank and may be subject to a charge if the check amount exceeds the
value of your account.

<TABLE>
<CAPTION>
SEC (Securities and
Risk Sales charge Exchange Commission) Share classes
- ----------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Generally defined as Charge on the purchase or Federal agency Different classifications of
variability of value; also redemption of fund shares established by Congress shares; mutual fund share
credit risk, inflation risk, sold through financial advisers. to administer the laws classes offer a variety of
currency and interest rate May vary with the amount governing the securities sales charge choices.
risk. Different investments invested. Typically used to industry, including
involve different types and compensate advisers for advice mutual fund companies.
degrees of risk. and service provided.

</TABLE>

13
<PAGE>

About your account (continued)

How to redeem shares If you hold your shares in certificates, you must submit
(continued) the certificates with your request to sell the shares.
We recommend that you send your certificates by
certified mail.

When you send us a properly completed request to redeem
or exchange shares, you will receive the net asset value
as determined on the business day we receive your
request. We will send you a check, normally the next
business day, but no later than seven days after we
receive your request to sell your shares. If you
purchased your shares by check, we will wait until your
check has cleared, which can take up to 15 days, before
we send your redemption proceeds.

Account minimums If you redeem shares and your account balance falls
below $250, the Fund may redeem your account after 60
days' written notice to you.

Exchanges You can exchange all or part of your shares for shares
of the same class in another Delaware Investments fund.
If you exchange shares to a fund that has a sales charge
you will pay any applicable sales charges on your new
shares. You don't pay sales charges on shares that are
acquired through the reinvestment of dividends. You may
have to pay taxes on your exchange. When you exchange
shares, you are purchasing shares in another fund so you
should be sure to get a copy of the fund's prospectus
and read it carefully before buying shares through an
exchange. You may not exchange your shares for Class B
and Class C shares of the funds in the Delaware
Investments family.

Dividends, Dividends, if any, are declared daily and paid monthly.
distributions Capital gains, if any, are paid twice a year. We
and taxes automatically reinvest all dividends and any capital
gains.

Tax laws are subject to change, so we urge you to
consult your tax adviser about your particular tax
situation and how it might be affected by current tax
law. The tax status of your dividends from the Fund is
the same whether you reinvest your dividends or receive
them in cash. Distributions from the Fund's long-term
capital gains are taxable as capital gains, while
distributions from short-term capital gains and net
investment income are generally taxable as ordinary
income. Any capital gains may be taxable at different
rates depending on the length of time the Fund held the
assets. In addition, you may be subject to state and
local taxes on distributions.

We will send you a statement each year by January 31
detailing the amount and nature of all dividends and
capital gains that you were paid for the prior year.
Distributions declared in October, November or December
but paid in January are taxable as if they were paid in
December.

<TABLE>
<CAPTION>
<S> <C> <C> <C> <C>
| Statement of Additional
S-V | Signature guarantee Standard deviation Information (SAI) Total return
| ---------------------------------------------------------------------------------------------------------------------------
| Certification by a bank, A measure of an The document serving as An investment
brokerage firm or other investment's volatility; "Part B" of a fund's performance measurement,
financial institution that a for mutual funds, prospectus that provides expressed as a percentage,
customer's signature is valid; measures how much a more detailed information based on the combined
signature guarantees can be fund's total return has about the fund's earnings from dividends,
provided by members of the typically varied from its organization, investments, capital gains and change in
STAMP program. historical average. policies and risks. price over a given period.
</TABLE>

<PAGE>

Certain management considerations
- --------------------------------------------------------------------------------
Year 2000 As with other mutual funds, financial and business organizations
and individuals around the world, the Fund could be adversely
affected if the computer systems used by its service providers
do not properly process and calculate date-related information
from and after January 1, 2000. This is commonly known as the
"Year 2000 Problem." The Fund is taking steps to obtain
satisfactory assurances that its major service providers are
taking steps reasonably designed to address the Year 2000
Problem on the computer systems that the service providers use.
However, there can be no assurance that these steps will be
sufficient to avoid any adverse impact on the business of the
Fund. The Year 2000 Problem may adversely affect the issue of
securities in which the Fund invests. The portfolio managers and
investment professionals of the Fund consider Year 2000 issues
in the securities selection and investment process. However,
there can be no guarantee that, even with their due diligence
efforts, they will be able to predict the affect of Year 2000 on
any company or the performance of its securities.

Investments by The Fund accepts investments from the series portfolios of
fund of funds Delaware Group Foundation Funds, a fund of funds. From time to
time, the Fund may experience large investments or redemptions
due to allocations or rebalancings by Foundation Funds. While it
is impossible to predict the overall impact of these
transactions over time, there could be adverse effects on
portfolio management. For example, the Fund may be required to
sell securities or invest cash at times when it would not
otherwise do so. These transactions could also have tax
consequences if sales of securities result in gains, and could
also increase transaction costs or portfolio turnover. The
manager will monitor transactions by Foundation Funds and will
attempt to minimize any adverse effects on the Fund and
Foundation Funds as a result of these transactions.

<TABLE>
<CAPTION>
Treasury bills Treasury bonds Treasury notes Volatility
- ---------------------------------------------------------------------------------------------------------------------------------
<S> <C> <C> <C>
Securities issued by Securities issued by Securities issued by The tendency of an investment to go up or down in
the U.S. Treasury the U.S. Treasury the U.S. Treasury value by different magnitudes. Investments that
with maturities of with maturities of with maturities of generally go up or down in value in relatively small
one year or less. 10 years or longer. one to 10 years. amounts are considered "low volatility" investments,
whereas those investments that generally go up or
down in value in relatively large amounts are
considered "high volatility" investments.
</TABLE>

15
<PAGE>

Financial highlights
- --------------------------------------------------------------------------------

The Financial highlights table is intended to help you understand the Fund's
financial performance. All "per share" information reflects financial results
for a single Fund share. This information has been audited by Ernst & Young LLP,
whose report, along with the Fund's financial statements, is included in the
Fund's annual report, which is available upon request by calling 800.523.1918.
<TABLE>
<CAPTION>
Institutional Class
- -----------------------------------------------------------------------------------------------------------------------
Year ended
Delaware American 7/31
Government Bond Fund 1999 1998 1997 1996 1995
.......................................................................................................................
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period $7.720 $7.760 $7.590 7.860 $8.000

Income (loss) from investment operations:

Net investment income 0.495 0.550 0.567 0.611 0.679

Net realized and unrealized gain (loss) on investments
and futures contracts (0.418) (0.040) 0.170 (0.270) (0.140)
------ ------ ------ ------ ------
Total from investment operations 0.077 0.510 0.737 0.341 0.539
------ ------ ------ ------ ------
Less dividends:

Dividends from net investment income (0.497) (0.550) (0.567) (0.611) (0.679)
------ ------ ------ ------ ------
Total dvidends (0.497) (0.550) (0.567) (0.611) (0.679)
------ ------ ------ ------ ------
Net asset value, end of year $7.300 $7.720 $7.760 $7.590 $7.860
====== ====== ====== ====== ======
Total return(1) 0.89% 6.80% 10.10% 4.39% 7.14%

Ratios and supplemental data:

Net assets, end of year (000 omitted) $30,883 $17,865 $12,053 $10,780 $8,316

Ratio of expenses to average net assets 0.95% 0.90% 0.86% 0.90% 0.94%

Ratio of net investment income to average net assets 6.46% 7.10% 7.43% 7.85% 8.66%

Portfolio turnover 142% 119% 63% 81% 70%
- -----------------------------------------------------------------------------------------------------------------------
</TABLE>

(1) 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.

16
<PAGE>

How to read the Financial highlights
- --------------------------------------------------------------------------------

Net investment income
Net investment income includes dividend and interest income earned from the
Fund's securities; it is after expenses have been deducted.

Net realized and unrealized gain (loss) on investments and futures contracts A
realized gain on investments occurs when we sell an investment at a profit,
while a realized loss on investments occurs when we sell an investment at a
loss. When an investment increases or decreases in value but we do not sell it,
we record an unrealized gain or loss. The amount of realized gain per share that
we pay to shareholders is listed under "Less dividends--Dividends from net
investment income."

Net asset value (NAV)
This is the value of a mutual fund share, calculated by dividing the net assets
by the number of shares outstanding.

Total return
This represents the rate that an investor would have earned or lost on an
investment in the Fund. In calculating this figure for the financial highlights
table, we include applicable fee waivers, and assume the shareholder has
reinvested all dividends and realized gains.

Net assets
Net assets represent the total value of all the assets in the Fund's portfolio,
less any liabilities that are attributable to that class of the Fund.

Ratio of net investment income to average net assets
We determine this ratio by dividing net investment income by average net assets.

17
<PAGE>

Delaware American Government Bond Fund

Additional information about the Fund's investments is available in the Fund's
annual and semi-annual report to shareholders. In the Fund's shareholder report,
you will find a discussion of the market conditions and investment strategies
that significantly affected the Fund's performance during the report period. You
can find more detailed information about the Funds in the current Statement of
Additional Information, which we have filed electronically with the Securities
and Exchange Commission (SEC) and which is legally a part of this prospectus. If
you want a free copy of the Statement of Additional Information, the annual or
semi-annual report, or if you have any questions about investing in this Fund,
you can write to us at 1818 Market Street, Philadelphia, PA 19103-3682, or call
toll-free 800.523.1918. You may also obtain additional information about the
Fund from your financial adviser.

Web site

www.delawareinvestments.com

E-mail

[email protected]

Client Services Representative

800.510.4015

o For convenient access to account information or current performance
information on all Delaware Investments Funds seven days a week, 24 hours a
day, use this Touch-Tone(R) service.

Investment Company Act file number: 811-4304

Delaware American Government Bond Fund Symbols
CUSIP NASDAQ
----- ------
Institutional Class 246094502 DUGIX

DELAWARE(SM)
INVESTMENTS
- ---------------------
Philadelphia o London