Delaware American Government Bond Fund
Supplement to Prospectus dated September 29, 1999
The following replaces description of "Mortgage-backed securities" in the
"Securities we typically invest in" table:
Securities How we use them
Mortgage-backed securities: We may invest without limit in government-
Fixed-income securities related mortgage-backed securities.
that represent pools of
mortgages, with investors
receiving principal and We may also invest without limit in
interest payments as the privately issued mortgage-backed securities
underlying mortgage loans if they are 100% collateralized at the time
are paid back. Many are of issuance by securities issued or guaranteed
issued and guaranteed by the U.S. government, its agencies or
against default by the instrumentalities. However, these securities
U.S. government or its must be rated in one of the four highest
agencies or categories by a nationally recognized
instrumentalities, such statistical rating organization, such as
as the Federal Home Loan S&P or Moody's, at the time of purchase.
Mortgage Corporation, The privately issued securities that we
Federal National Mortgage invest in are either collateralized mortgage
Association and the obligations (CMOs) or real estate mortgage
Government National investment conduits (REMICs) rated in the
Mortgage Association. two highest grades by an NRSRO at the time of
Others are issued by purchase.
private financial
institutions, with some We may also invest in mortgage-backed
fully collateralized by securities that are not government securities
certificates issued and are not directly guaranteed by the
or guaranteed by the U.S. U.S. government in any way. They are secured
government or its agencies by the underlying collateral of the private
or instrumentalities. issuer. These include CMOs, REMICs and
commercial mortgage-backed securities. We
may invest in these securities only if they
are rated in the highest quality category
by an NRSRO. However, the Fund may not
invest more than 20% of net assets in
high quality non-government securities,
which includes these non-agency mortgage-
backed securities.
