DELAWARE GROUP EQUITY FUNDS IV INC, 485BPOS, 1997-11-26

DELAWARE GROUP EQUITY FUNDS IV INC
485BPOS, 1997-11-26

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<PAGE>

SECURITIES AND EXCHANGE COMMISSION
WASHINGTON, D.C. 20549

FORM N-1A

File No. 33-442
File No. 811-4413

REGISTRATION STATEMENT UNDER THE SECURITIES ACT OF 1933 [X]

Pre-Effective Amendment No.
----
Post-Effective Amendment No. 23 [X]
----

AND

REGISTRATION STATEMENT UNDER THE INVESTMENT COMPANY ACT OF 1940 [X]

Amendment No. 23
----

DELAWARE GROUP EQUITY FUNDS IV, INC.
(formerly Delaware Group DelCap Fund, Inc.)
- --------------------------------------------------------------------------------
(Exact Name of Registrant as Specified in Charter)

1818 Market Street, Philadelphia, Pennsylvania 19103
- --------------------------------------------------------------------------------
(Address of Principal Executive Offices) (Zip Code)

Registrant's Telephone Number, including Area Code: (215)255-2923
--------------

George M. Chamberlain, Jr., 1818 Market Street, Philadelphia, PA 19103
- --------------------------------------------------------------------------------
(Name and Address of Agent for Service)

Approximate Date of Public Offering: November 26, 1997
-----------------

It is proposed that this filing will become effective:

immediately upon filing pursuant to paragraph (b)
----

X on November 26, 1997 pursuant to paragraph (b)
----

60 days after filing pursuant to paragraph (a)(1)
----

on (date) pursuant to paragraph (a)(1)
----

75 days after filing pursuant to paragraph (a)(2)
----

on (date) pursuant to paragraph (a)(2) of Rule 485
----

Title of Securities Being Registered
------------------------------------
DelCap Fund A Class, DelCap Fund B Class, DelCap Fund C Class, DelCap Fund
Institutional Class, Capital Appreciation Fund A Class, Capital Appreciation
Fund B Class, Capital Appreciation Fund C Class, Capital Appreciation Fund
Institutional Class
<PAGE>

--- C O N T E N T S ---

This Post-Effective Amendment No. 23 to Registration File No. 33-442 includes
the following:

1. Facing Page

2. Contents Page

3. Cross-Reference Sheet

4. Part A - Prospectuses

5. Part B - Statement of Additional Information

6. Part C - Other Information

7. Signatures
<PAGE>

CROSS-REFERENCE SHEET
---------------------

PART A
------
<TABLE>
<CAPTION>

Location in
Item No. Description Prospectuses
- -------- ----------- ------------

DelCap Fund
A Class/ Institutional
B Class/ Class
C Class
<C> <S> <C> <C>
1 Cover Page...................................... Cover Page Cover Page

2 Synopsis........................................ Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses

3 Condensed Financial Information................. Financial Financial
Highlights Highlights

4 General Description of Registrant .............. Investment Investment
Objective and Objective and
Policies; Shares; Policies; Shares;
Other Investment Other Investment
Policies and Risk Policies and Risk
Considerations Considerations

5 Management of the Fund ......................... Management of Management of
the Fund the Fund

6 Capital Stock and Other Securities ............. The Delaware Dividends
Difference; and Distributions;
Dividends and Taxes; Shares
Distributions;
Taxes; Shares

7 Purchase of Securities Being Offered............ Cover Page; Cover Page;
How to Buy How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset Value
and Net Asset Per Share;
Value Per Share; Management of
Management of the Fund
the Fund

8 Redemption or Repurchase........................ How to Buy How to Buy
Shares; Shares;
Redemption Redemption
and Exchange and Exchange

9 Legal Proceedings............................... None None
</TABLE>

CROSS-REFERENCE SHEET
---------------------

PART A
------
(Continued)

Location in
Item No. Description Prospectuses
- -------- ----------- ------------

Capital Appreciation Fund
A Class/ Institutional
B Class/ Class
C Class
<C> <S> <C> <C>
1 Cover Page......................................... Cover Page Cover Page

2 Synopsis........................................... Synopsis; Synopsis;
Summary of Summary of
Expenses Expenses

3 Condensed Financial Information.................... Financial Financial
Highlights Highlights

4 General Description of Registrant ................. Investment Investment
Objective and Objective and
Policies; Shares; Policies; Shares;
Other Investment Other Investment
Policies and Policies and
Risk Risk
Considerations Considerations

5 Management of the Fund ............................ Management of Management of
the Fund the Fund

6 Capital Stock and Other Securities ................ The Delaware Dividends
Difference; and Distributions;
Dividends and Taxes; Shares
Distributions;
Taxes; Shares

7 Purchase of Securities Being Offered............... Cover Page; Cover Page;
How to Buy; How to Buy
Shares; Shares;
Calculation of Calculation of
Offering Price Net Asset Value
and Net Asset Per Share;
Value Per Share; Management of
Management of the Fund
the Fund

8 Redemption or Repurchase........................... How to Buy How to Buy
Shares; Shares;
Redemption Redemption
and Exchange and Exchange

9 Legal Proceedings.................................. None None
</TABLE>

CROSS REFERENCE SHEET
---------------------

PART B
------
<TABLE>
<CAPTION>

Location in Statement
Item No. Description of Additional Information
- -------- ----------- -------------------------
<S> <C> <C>

10 Cover Page......................................... Cover Page

11 Table of Contents.................................. Table of Contents

12 General Information and History.................... General Information

13 Investment Objectives and Policies................. Investment Policies and
Portfolio Techniques

14 Management of the Registrant....................... Officers and Directors

15 Control Persons and Principal Holders
of Securities...................................... Officers and Directors

16 Investment Advisory and Other Services............. Plans Under Rule 12b-1
for the Fund Classes
(under Purchasing Shares);
Investment Management
Agreements; Officers and
Directors; General
Information; Financial
Statements

17 Brokerage Allocation............................... Trading Practices and Brokerage

18 Capital Stock and Other Securities................. Capitalization and
Noncumulative Voting
(under General Information)

19 Purchase, Redemption and Pricing of Securities
Being Offered...................................... Purchasing Shares;
Determining Offering Price
and Net Asset Value;
Redemption and Repurchase;
Exchange Privilege

20 Tax Status......................................... Accounting and Tax
Issues; Distributions
and Taxes

21 Underwriters ...................................... Purchasing Shares

22 Calculation of Performance Data.................... Performance Information

23 Financial Statements............................... Financial Statements

</TABLE>

CROSS REFERENCE SHEET
---------------------

PART C
------

<TABLE>
<CAPTION>
Location in
Part C
-----------
<S> <C> <C>
24 Financial Statements and Exhibits.................. Item 24

25 Persons Controlled by or under Common
Control with Registrant............................ Item 25

26 Number of Holders of Securities.................... Item 26

27 Indemnification.................................... Item 27

28 Business and Other Connections of
Investment Adviser................................. Item 28

29 Principal Underwriters............................. Item 29

30 Location of Accounts and Records................... Item 30

31 Management Services................................ Item 31

32 Undertakings....................................... Item 32
</TABLE>
<PAGE>

Delcap Fund Prospectus
A Class/B Class/C Class
December 1, 1997
----------------

1818 MARKET STREET, PHILADELPHIA, PA 19103

FOR PROSPECTUS AND PERFORMANCE:

NATIONWIDE 800-523-4640

INFORMATION ON EXISTING ACCOUNTS:

(SHAREHOLDERS ONLY)

NATIONWIDE 800-523-1918

DEALER SERVICES:

(BROKER/DEALERS ONLY)

NATIONWIDE 800-362-7500

REPRESENTATIVES OF FINANCIAL INSTITUTIONS:

NATIONWIDE 800-659-2265

This Prospectus describes the DelCap Fund series (the "Fund") (formerly known
as Concept I Series) of Delaware Group Equity Funds IV, Inc. ("Equity Funds IV,
Inc.") (formerly known as Delaware Group DelCap Fund, Inc.), a professionally-
managed mutual fund of the series type. The investment objective of the Fund is
long-term capital growth. The strategy will be to invest primarily in common
stocks that, in the judgment of the Manager, are of superior quality and those
securities convertible into such common stocks.

The Fund currently offers three retail classes of shares: DelCap Fund A Class
("Class A Shares"), DelCap Fund B Class ("Class B Shares") and DelCap Fund C
Class ("Class C Shares") (individually, a "Class" and collectively, the
"Classes").

This Prospectus relates only to the Classes listed above and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Statement of Additional Information ("Part B" of
Equity Funds IV, Inc.'s registration statement) dated December 1, 1997, as it
may be amended from time to time, contains additional information about the
Fund and has been filed with the Securities and Exchange Commission. Part B is
incorporated by reference into this Prospectus and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address or by
calling the above numbers. The Fund's financial statements appear in its Annual
Report, which will accompany any response to requests for Part B.

The Fund also offers DelCap Fund Institutional Class, which is available for
purchase only by certain investors. A prospectus for DelCap Fund Institutional
Class can be obtained by writing to Delaware Distributors, L.P. at the above
address or by calling the above numbers.

THESE SECURITIES HAVE NOT BEEN APPROVED OR DISAPPROVED BY THE SECURITIES AND
EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION, NOR HAS THE SECURITIES
AND EXCHANGE COMMISSION OR ANY STATE SECURITIES COMMISSION PASSED UPON THE
ACCURACY OR ADEQUACY OF THIS PROSPECTUS. ANY REPRESENTATION TO THE CONTRARY IS
A CRIMINAL OFFENSE.

BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS. MUTUAL FUNDS
CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER, SHARES OF THE FUND ARE
NOT FDIC OR NCUSIF INSURED, ARE NOT GUARANTEED BY ANY BANK OR ANY CREDIT UNION,
ARE NOT OBLIGATIONS OF ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT
RISK, INCLUDING THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF
THE FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.

1
<PAGE>

Synopsis

INVESTMENT OBJECTIVE

The investment objective of the Fund is long-term capital growth. The strategy
will be to invest primarily in common stocks that, in the judgment of the
Manager, are of superior quality and those securities convertible into such
common stocks. For further details, see Investment Objective and Policies and
Other Investment Policies and Risk Considerations.

RISK FACTORS AND SPECIAL CONSIDERATIONS

1. Investments in equity securities of small to medium-sized companies in
which the Fund invests may present greater risks than investments in larger
capitalization companies, as the market prices of securities issued by smaller
companies tend to fluctuate, particularly in the short-term, and some smaller
company securities may be speculative. See Suitability under Investment
Objective and Policies, and Other Investment Policies and Risk Considerations.

2. The Fund may enter into options for hedging purposes to counterbalance
portfolio volatility. While the Fund does not engage in options for speculative
purposes, there are risks which result from use of these instruments by the
Fund, and the investor should review the descriptions of such in this
Prospectus. See Investment Strategy under Investment Objective and Policies,
and Other Investment Policies and Risk Considerations.

INVESTMENT MANAGER, DISTRIBUTOR AND SERVICE AGENT

Delaware Management Company, Inc. (the "Manager") furnishes investment
management services to the Fund, subject to the supervision and direction of
Equity Funds IV, Inc.'s Board of Directors. The Manager also provides
investment management services to certain of the other funds in the Delaware
Group. Delaware Distributors, L.P. (the "Distributor") is the national
distributor for the Fund and for all of the other mutual funds in the Delaware
Group. Delaware Service Company, Inc. (the "Transfer Agent") is the shareholder
servicing, dividend disbursing, accounting services and transfer agent for the
Fund and for all of the other mutual funds in the Delaware Group. See Summary
of Expenses and Management of the Fund for further information regarding the
Manager and fees payable under the Fund's Investment Management Agreement.

SALES CHARGES

The price of Class A Shares includes a maximum front-end sales charge of 4.75%
of the offering price, which, based on the net asset value per share of the
Class A Shares as of the end of Equity Funds IV, Inc.'s most recent fiscal
year, is equivalent to 4.99% of the amount invested. The front-end sales charge
is reduced on certain transactions of at least $100,000 but under $1,000,000.
For purchases of $1,000,000 or more, the front-end sales charge is eliminated
(subject to a CDSC of 1% if shares are redeemed within 12 months of purchase
and a dealer commission was paid in connection with such purchase). Class A
Shares are subject to annual 12b-1 Plan expenses for the life of the
investment.

The price of Class B Shares is equal to the net asset value per share. Class B
Shares are subject to a contingent deferred sales charge ("CDSC") of: (i) 4% if
shares are redeemed within two years of purchase; (ii) 3% if shares are
redeemed during the third or fourth year following purchase; (iii) 2% if shares
are redeemed during the fifth year following purchase; and (iv) 1% if shares
are redeemed during the sixth year following purchase. Class B Shares are
subject to annual 12b-1 Plan expenses for approximately eight years after
purchase.

The price of Class C Shares is equal to the net asset value per share. Class C
Shares are subject to a CDSC of 1% if shares are redeemed within 12 months of
purchase. Class C Shares are subject to annual 12b-1 Plan expenses for the life
of the investment.

See Classes of Shares and Distribution (12b-1) and Service under Management of
the Fund.

2
<PAGE>

PURCHASE AMOUNTS

Generally, the minimum initial investment in any Class is $1,000. Subsequent
investments must generally be at least $100.

Each purchase of Class B Shares is subject to a maximum purchase limitation of
$250,000. For Class C Shares, each purchase must be in an amount that is less
than $1,000,000. An investor may exceed these maximum purchase limitations for
Class B Shares and Class C Shares by making cumulative purchases over a period
of time. An investor should keep in mind, however, that reduced front-end sales
charges apply to investments of $100,000 or more in Class A Shares, and that
Class A Shares are subject to lower annual 12b-1 Plan expenses than Class B and
Class C Shares and generally are not subject to a CDSC. The minimum and maximum
purchase amounts for retirement plans may vary. See How to Buy Shares.

REDEMPTION AND EXCHANGE

Class A Shares of the Fund may be redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. Neither the
Fund nor the Distributor assesses a charge for redemptions or exchanges of
Class A Shares, except for certain redemptions of shares purchased at net asset
value, which may be subject to a CDSC if a dealer's commission was paid in
connection with such purchases. See Front-End Sales Charge Alternative--Class A
Shares under Classes of Shares.
Class B Shares and Class C Shares may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Fund
nor the Distributor assesses any charges other than the CDSC for redemptions or
exchanges of Class B or Class C Shares. There are certain limitations on an
investor's ability to exchange shares between the various classes of shares
that are offered. See Redemption and Exchange.

OPEN-END INVESTMENT COMPANY

Equity Funds IV, Inc., which was organized as a Maryland corporation in 1985,
is an open-end management investment company and the Fund's portfolio of assets
is diversified as defined by the Investment Company Act of 1940 (the "1940
Act"). See Shares under Management of the Fund.

3
<PAGE>

Summary of
Expenses

A general comparison of the sales arrangements and other expenses applicable
to Class A, Class B and Class C Shares follows:

<TABLE>
<CAPTION>
CLASS A CLASS B CLASS C
SHAREHOLDER TRANSACTION EXPENSES SHARES SHARES SHARES
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed on Purchases (as
a percentage of offering price)....................... 4.75% None None
Maximum Sales Charge Imposed on Reinvested
Dividends (as a percentage of offering price)......... None None None
Maximum Contingent Deferred Sales Charge (as a
percentage of original purchase price or
redemption proceeds, whichever is lower).............. None* 4.00%* 1.00%*
Redemption Fees......................................... None** None** None**

ANNUAL OPERATING EXPENSES CLASS A CLASS B CLASS C
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS) SHARES SHARES SHARES
- ------------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees......................................... 0.75% 0.75% 0.75%
12b-1 Plan Expenses (including service fees)............ 0.30%*** 1.00%*** 1.00%***
Other Operating Expenses................................ 0.31% 0.31% 0.31%
----- ----- -----
Total Operating Expenses ................ 1.36% 2.06% 2.06%
===== ===== =====
</TABLE>

*Class A purchases of $1 million or more may be made at net asset value.
However, if in connection with any such purchase a dealer commission is paid
to the financial adviser through whom such purchase is effected, a CDSC of 1%
will be imposed on certain redemptions within 12 months of purchase ("Limited
CDSC"). Class B Shares are subject to a CDSC of: (i) 4% if shares are
redeemed within two years of purchase; (ii) 3% if shares are redeemed during
the third or fourth year following purchase; (iii) 2% if shares are redeemed
during the fifth year following purchase; (iv) 1% if shares are redeemed
during the sixth year following purchase; and (v) 0% thereafter. Class C
Shares are subject to a CDSC of 1% if the shares are redeemed within 12
months of purchase. See Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption
and Exchange; Deferred Sales Charge Alternative--Class B Shares, Level Sales
Charge Alternative--Class C Shares and Contingent Deferred Sales Charge--
Class B Shares and Class C Shares under Classes of Shares.

**CoreStates Bank, N.A. currently charges $7.50 per redemption for redemptions
payable by wire.

***Class A Shares, Class B Shares and Class C Shares are subject to separate
12b-1 Plans. Long-term shareholders may pay more than the economic equivalent
of the maximum front-end sales charges permitted by rules of the National
Association of Securities Dealers, Inc. (the "NASD"). See Distribution
(12b-1) and Service under Management of the Fund.

Investors utilizing the Delaware Group Asset Planner asset allocation service
also typically incur an annual maintenance fee of $35 per Strategy. However,
effective November 1, 1996, the annual maintenance fee is waived until further
notice. Investors who utilize the Asset Planner for an Individual Retirement
Account ("IRA") will pay an annual IRA fee of $15 per Social Security number.
See Delaware Group Asset Planner in Part B.

For expense information about DelCap Fund Institutional Class, see the
separate prospectus relating to that class.

<TABLE>
<CAPTION>
ASSUMING REDEMPTION ASSUMING NO REDEMPTION
1 YEAR 3 YEARS 5 YEARS 10 YEARS 1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- -------- ------ ------- ------- --------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares $61/1/ $89 $118 $203 $61 $89 $118 $203
Class B Shares $61 $95 $131 $221/2/ $21 $65 $111 $221/2/
Class C Shares $31 $65 $111 $239 $21 $65 $111 $239
</TABLE>

/1/Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC, which has not
been reflected in this calculation, may be imposed on certain redemptions
within 12 months of purchase. See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange.

/2/At the end of approximately eight years after purchase, Class B Shares will
be automatically converted into Class A Shares. The example above assumes
conversion of Class B Shares at the end of the eighth year. However, the
conversion may occur as late as three months after the eighth anniversary of
purchase, during which time the higher 12b-1 Plan fees payable by Class B
Shares will continue to be assessed. The ten year expense numbers for Class B
Shares reflect the expenses of Class B Shares for year eight and the expenses
of Class A Shares for years nine and ten. See Automatic Conversion of Class B
Shares under Classes of Shares for a description of the automatic conversion
feature.

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.

The purpose of the above tables is to assist the investor in understanding the
various costs and expenses that an investor in each Class will bear directly or
indirectly.

4
<PAGE>

Financial
Highlights

The following financial highlights are derived from the financial statements of
Delaware Group Equity Funds IV, Inc.--DelCap Fund and have been audited by
Ernst & Young LLP, independent auditors. The data should be read in conjunction
with the financial statements, related notes, and the report of Ernst & Young
LLP, all of which are incorporated by reference into Part B. Further
information about the Fund's performance is contained in its Annual Report to
shareholders. A copy of the Fund's Annual Report (including the report of Ernst
& Young LLP) may be obtained from Equity Funds IV, Inc. upon request at no
charge.

<TABLE>
<CAPTION>
CLASS A SHARES
----------------------------------------------------------------------------------------------------
YEAR ENDED
9/30/97 9/30/96 9/30/95 9/30/94 9/30/93 9/30/92 9/30/91 9/30/90 9/30/89 9/30/88
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of Period..... $ 30.740 $ 28.870 $ 25.570 $ 26.080 $ 20.730 $ 21.470 $ 15.810 $ 19.060 $ 13.920 $ 14.930
INCOME FROM INVESTMENT
OPERATIONS
- ----------------------
Net Investment Income
(Loss)/1/ .............. (0.234) (0.208) (0.166) (0.218) (0.125) (0.059) 0.064 0.419 0.201 0.042
Net Gains (Losses) on
Securities
(both realized and
unrealized)............. 3.534 5.618 5.296 0.528 5.475 (0.651) 6.496 (3.219) 5.059 (0.357)
-------- -------- -------- -------- ---------- -------- -------- -------- -------- --------
Total From Investment
Operations............. 3.300 5.410 5.130 0.310 5.350 (0.710) 6.560 (2.800) 5.260 (0.315)
-------- -------- -------- -------- ---------- -------- -------- -------- -------- --------
LESS DIVIDENDS AND
DISTRIBUTIONS
- ------------------
Dividends from Net
Investment Income....... none none none none none (0.030) (0.410) (0.160) (0.120) (0.430)
Distributions from
Capital Gains........... (3.590) (3.540) (1.830) (0.820) none none (0.490) (0.290) none (0.265)
-------- -------- -------- -------- ---------- -------- -------- -------- -------- --------
Total Dividends and
Distributions.......... (3.590) (3.540) (1.830) (0.820) none (0.030) (0.900) (0.450) (0.120) (0.695)
-------- -------- -------- -------- ---------- -------- -------- -------- -------- --------
Net Asset Value, End of
Period.................. $ 30.450 $ 30.740 $ 28.870 $ 25.570 $ 26.080 $ 20.730 $ 21.470 $ 15.810 $ 19.060 $ 13.920
======== ======== ======== ======== ========== ======== ======== ======== ======== ========
- -------------------------------------------------------------------------------------------------------------------------------
TOTAL RETURN/2/ ........ 12.44% 21.09% 22.04% 1.17% 25.81% (3.32%) 43.25% (14.99%) 38.15% (2.26%)
- ------------
- -------------------------------------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL DATA
- ------------------------
Net Assets, End of
Period (000's omitted).. $770,207 $923,248 $888,571 $890,787 $1,057,358 $993,125 $512,356 $155,392 $138,589 $114,122
Ratio of Expenses to
Average Daily Net
Assets.................. 1.36% 1.35% 1.37% 1.35% 1.30% 1.39% 1.43% 1.41% 1.44% 1.55%
Ratio of Net Investment
Income (Loss) to Average
Daily Net Assets ....... (0.86%) (0.74%) (0.67%) (0.68%) (0.43%) (0.26%) 0.63% 2.61% 1.28% 0.31%
Portfolio Turnover
Rate.................... 105% 72% 51% 34% 51% 24% 33% 45% 42% 77%
Average Commission Rate
Paid/3/................. $ 0.0599 $ 0.0600 N/A N/A N/A N/A N/A N/A N/A N/A
</TABLE>
- ------------

/1/The per share information for the years ended 9/30/97, 9/30/96 and 9/30/95
were based on the average shares outstanding method.

/2/Does not reflect the maximum sales charge that is or was in effect nor the 1%
limited CDSC that would apply in the event of certain redemptions within 12
months of purchase.

/3/Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.

5
<PAGE>

<TABLE>
<CAPTION>
CLASS B SHARES CLASS C SHARES
------------------------------------ --------------------
PERIOD PERIOD
9/6/94/1/ YEAR 11/29/95/1/
YEAR ENDED THROUGH ENDED THROUGH
9/30/97 9/30/96 9/30/95 9/30/94 9/30/97 9/30/96
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period......... $30.300 $28.680 $25.560 $25.180 $30.570 $28.880
INCOME FROM
INVESTMENT
OPERATIONS
- -----------
Net Investment
Loss/2/ ....... (0.418) (0.400) (0.340) (0.008) (0.421) (0.359)
Net Gains on
Securities (both
realized and
unrealized).... 3.458 5.560 5.290 0.388 3.491 5.589
------- ------- ------- ------- ------- -------
Total From
Investment
Operations.... 3.040 5.160 4.950 0.380 3.070 5.230
------- ------- ------- ------- ------- -------
LESS DIVIDENDS
AND
DISTRIBUTIONS
- --------------
Dividends from
Net Investment
Income......... none none none none none none
Distributions
from Capital
Gains.......... (3.590) (3.540) (1.830) none (3.590) (3.540)
------- ------- ------- ------- ------- -------
Total Dividends
and
Distributions.. (3.590) (3.540) (1.830) none (3.590) (3.540)
------- ------- ------- ------- ------- -------
Net Asset Value,
End of Period.. $29.750 $30.300 $28.680 $25.560 $30.050 $30.570
======= ======= ======= ======= ======= =======
- ------------------------------------------------------------------------------
TOTAL
RETURN/3/...... 11.64% 20.27% 21.34% 1.51% 11.64% 20.38%
==============================================================================
RATIOS/SUPPLEMENTAL
DATA
- -------------------
Net Assets, End
of Period (000's
omitted)....... $20,706 $13,239 $ 2,710 $ 287 $ 3,385 $ 1,947
Ratio of Expenses
to Average Daily
Net Assets..... 2.06% 2.05% 2.07% 2.05% 2.06% 2.05%
Ratio of Net
Investment Loss
to Average Daily
Net Assets..... (1.56%) (1.44%) (1.37%) (1.38%) (1.56%) (1.44%)
Portfolio
Turnover Rate.. 105% 72% 51% 34% 105% 72%
Average Commission
Rate Paid/4/... $0.0599 $0.0600 N/A N/A $0.0599 $0.0600
</TABLE>
- ---------

/1/Date of initial public offering; ratios have been annualized; but total
return has not been annualized. Total return for this short of a time period
may not be representative of longer term results.

/2/The per share information for the years ended 9/30/97, 9/30/96 and 9/30/95
were based on the average shares outstanding method.

/3/Total return does not reflect the CDSC which varies from 1%-4% depending upon
the holding period for Class B Shares and 1% for Class C Shares for 12 months
from the date of purchase.

/4/Computed by dividing the total amount of commissions paid by the total number
of shares purchased and sold during the period for which there was a
commission charged.

6
<PAGE>

Investment Objective
And Policies

SUITABILITY

The Fund may be suitable for the patient investor interested in long-term
capital appreciation. Investors should be willing to accept the risks
associated with investments in equity securities.

While equity securities of small to medium-sized companies in which the Fund
invests may offer the potential for greater capital appreciation than
securities issued by larger companies, investments in securities of smaller
companies, some of which may be speculative, may present greater risks. The
prices of equity securities, especially of smaller companies, tend to fluctuate
in response to the condition of individual companies as well as general market
and economic conditions. Consequently, the Fund's net asset value will
fluctuate and an investment in the Fund may be inappropriate for the short-term
investor.

Ownership of Fund shares reduces the bookkeeping and administrative
inconvenience connected with direct purchases of the types of securities in
which the Fund invests.

Providing current income is not an objective of the Fund. Any income produced
is expected to be minimal. Investors should not consider a purchase of Fund
shares as equivalent to a complete investment program. The Delaware Group
includes a family of funds generally available through registered investment
dealers which may be used in concert to create a more complete investment
program.

INVESTMENT STRATEGY

The Fund will attempt to achieve its objective by exceeding the return of
common stocks as measured by the Standard & Poor's ("S&P") 500 Stock Index (the
"Index").

Securities purchased will be of companies whose earnings the Manager believes
will grow more rapidly than the average of those listed in the S&P 500 Stock
Index. The Manager's emphasis will be on the securities of companies that, in
its judgment, have the characteristics that will enable them to grow faster
than the economy as measured by the Index.

This judgment will be based on the financial strength of the company, the
expertise of its management, the growth potential of the company within its
industry and the growth potential of the industry itself.

The Manager will focus primarily on those securities of companies it believes
have established themselves within their industry while maintaining growth
potential. If the Manager believes that market conditions warrant, the Fund may
employ certain option strategies involving the activities and instruments
described below.

In investing for capital appreciation, the Fund may hold securities for any
period of time.

Should the market warrant a temporary, defensive approach, the Fund may also
invest in fixed-income obligations issued or guaranteed by the U.S. government,
its agencies or instrumentalities as well as corporate bonds of investment
quality rated Baa or above by Moody's Investors Service, Inc. or BBB or above
by S&P. (Appendix A in Part B describes these ratings.)

The Fund may write covered call options on individual issues as well as write
call options on stock indices. The Fund may also purchase put options on
individual issues and on stock indices. The Manager may employ these techniques
in an attempt to protect appreciation attained, to offset capital losses and to
take advantage of the liquidity available in the option markets. The ability to
hedge effectively using options on stock indices will depend, in part, on the
correlation between the composition of the index and the Fund's portfolio as
well as the price movement of individual securities. The Manager may also write
covered call options to achieve income to offset the cost of purchasing put
options.

While there is no limit on the amount of the Fund's assets which may be
invested in covered call options, the Fund will not invest more than 2% of its
net assets in put options.

For additional information about the Fund's investment policies and certain
risks associated with investments in certain types of securities, see Other
Investment Policies and Risk Considerations.

7
<PAGE>

The Delaware
Difference

PLANS AND SERVICES

The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.

SHAREHOLDER PHONE DIRECTORY

INVESTOR INFORMATION CENTER
800-523-4640
FUND INFORMATION; LITERATURE;

PRICE; YIELD AND PERFORMANCE FIGURES

SHAREHOLDER SERVICE CENTER
800-523-1918
INFORMATION ON EXISTING REGULAR INVESTMENT

ACCOUNTS AND RETIREMENT PLAN ACCOUNTS;
WIRE INVESTMENTS; WIRE LIQUIDATIONS;
TELEPHONE LIQUIDATIONS AND TELEPHONE EXCHANGES

DELAPHONE
800-362-FUND
(800-362-3863)

PERFORMANCE INFORMATION

You can call the Investor Information Center at any time for current
performance information. Current yield and total return information may also be
included in advertisements and information given to shareholders. Yields are
computed on an annualized basis over a 30-day period.

SHAREHOLDER SERVICES

During business hours, you can call the Delaware Group's Shareholder Service
Center. Our representatives can answer any questions about your account, the
Fund, various service features and other funds in the Delaware Group.

DELAPHONE SERVICE

Delaphone is an account inquiry service for investors with Touch-Tone(R) phone
service. It enables you to get information on your account faster than the
mailed statements and confirmations. Delaphone also provides current
performance information on the Fund, as well as other funds in the Delaware
Group. Delaphone is available seven days a week, 24 hours a day.

DIVIDEND PAYMENTS

Dividends, capital gains and other distributions, if any, are automatically
reinvested in your account, unless you elect to receive them in cash. You may
also elect to have the dividends earned in one fund automatically invested in
another Delaware Group fund with a different investment objective subject to
certain exceptions and limitations.

For more information, see Additional Methods of Adding to Your Investment--
Dividend Reinvestment Plan under How to Buy Shares or call the Shareholder
Service Center.

MONEYLINE(SM) SERVICES

Delaware Group offers the following services for fast and convenient transfer
of funds between your personal bank account and your Delaware Group fund
account:

1. MONEYLINE(SM) DIRECT DEPOSIT SERVICE

If you elect to have your dividends and distributions paid in cash and such
dividends and distributions are in an amount of $25 or more, you may choose the
MoneyLine(SM) Direct Deposit Service and have such payments transferred from
your Fund account to your predesignated bank account. See Dividends and
Distributions. In addition, you may elect to have your Systematic Withdrawal
Plan payments transferred from your Fund account to your predesignated bank
account through this service. See Systematic Withdrawal Plans under Redemption
and Exchange. This service is not available for certain retirement plans.

2. MONEYLINE(SM) ON DEMAND

You or your investment dealer may request purchases and redemptions of Fund
shares by using MoneyLine(SM) On Demand. When you authorize the Fund to accept
such requests from you or your investment dealer, funds will be withdrawn from
(for share purchases) or deposited to (for share redemptions) your
predesignated bank account. Your request will be processed the same day if you
call prior to 4 p.m., Eastern time. There is a $25 minimum and a $50,000
maximum limit for MoneyLine(SM) On Demand transactions. This service is not
available for retirement plans, except for purchases of shares by IRAs.

For each MoneyLine(SM) Service, it may take up to four business days for the
transactions to be completed.You can initiate either service by completing an
Account Services form. If the name and

8
<PAGE>

address on your designated bank account are not identical to the name and
address on your Fund account, you must have your signature guaranteed. The Fund
does not charge a fee for any MoneyLineSM Service; however, your bank may
charge a fee. Please call the Shareholder Service Center for additional
information about these services.

STATEMENTS AND CONFIRMATIONS

You will receive quarterly statements of your account summarizing all
transactions during the period. A confirmation statement will be sent following
all transactions other than those involving a reinvestment of dividends. You
should examine statements and confirmations immediately and promptly report any
discrepancy by calling the Shareholder Service Center.

DUPLICATE CONFIRMATIONS

If your financial adviser or investment dealer is noted on your investment
application, we will send a duplicate confirmation to him or her. This makes it
easier for your adviser to help you manage your investments.

TAX INFORMATION

Each year, Equity Funds IV, Inc. will mail to you information on the tax
status of your dividends and distributions.

RIGHT OF ACCUMULATION

With respect to Class A Shares, the Right of Accumulation feature allows you
to combine the value of your current holdings of Class A Shares, Class B Shares
and Class C Shares of the Fund with the dollar amount of new purchases of Class
A Shares of the Fund to qualify for a reduced front-end sales charge on such
purchases of Class A Shares. Under the COMBINED PURCHASES PRIVILEGE, you may
also include certain shares that you own in other funds in the Delaware Group.
See Classes of Shares.

LETTER OF INTENTION

The Letter of Intention feature permits you to obtain a reduced front-end
sales charge on purchases of Class A Shares by aggregating certain of your
purchases of Delaware Group fund shares over a 13-month period. See Classes of
Shares and Part B.

12-MONTH REINVESTMENT PRIVILEGE

The 12-Month Reinvestment Privilege permits you to reinvest proceeds from a
redemption of Class A Shares, within one year of the date of the redemption,
without paying a front-end sales charge. See Part B.

EXCHANGE PRIVILEGE

The Exchange Privilege permits you to exchange all or part of your shares into
shares of other funds in the Delaware Group, subject to certain exceptions and
limitations. For additional information on exchanges, see Investing by Exchange
under How to Buy Shares and Redemption and Exchange.

WEALTH BUILDER OPTION

You may elect to invest in the Fund through regular liquidations of shares in
your accounts in other funds in the Delaware Group. Investments under this
feature are exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Fund shares. See Additional Methods of Adding
to Your Investment--Wealth Builder Option and Investing by Exchange under How
to Buy Shares, and Redemption and Exchange.

FINANCIAL INFORMATION ABOUT THE FUND

Each fiscal year, you will receive an audited annual report and an unaudited
semi-annual report. These reports provide detailed information about the Fund's
investments and performance. Equity Funds IV, Inc.'s fiscal year ends on
September 30.

9
<PAGE>

Retirement Planning

An investment in the Fund may be suitable for tax-deferred retirement plans.
Among the retirement plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, SIMPLE IRAs, Simplified
Employee Pension Plans, Salary Reduction Simplified Employee Pension Plans, 457
Deferred Compensation Plans and 403(b)(7) Deferred Compensation Plans.

Retirement plans may be subject to plan establishment fees, annual maintenance
fees and/or other administrative or trustee fees. Fees are based upon the
number of participants in the plan as well as the services selected. Additional
information about fees is included in retirement plan materials. Fees are
quoted upon request.

Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase shares of DelCap Fund Institutional
Class. For additional information on any of the plans and Delaware's retirement
services, call the Shareholder Service Center or see Part B.

INDIVIDUAL RETIREMENT ACCOUNT ("IRA")

Individuals, even if they participate in an employer-sponsored retirement
plan, may be able to establish their own retirement program for investments in
each of the Classes. Contributions to an IRA may be tax-deductible and earnings
are tax-deferred. The tax deductibility of IRA contributions is restricted, and
in some cases eliminated, for individuals who participate in certain employer-
sponsored retirement plans and whose annual income exceeds certain limits.
Existing IRAs and future contributions up to the IRA maximums, whether
deductible or not, still earn on a tax-deferred basis.

SIMPLIFIED EMPLOYEE PENSION PLAN ("SEP/IRA")

A SEP/IRA may be established by an employer who wishes to sponsor a tax-
sheltered retirement program by making contributions on behalf of all eligible
employees. Each of the Classes is available for investment by a SEP/IRA.

SALARY REDUCTION SIMPLIFIED EMPLOYEE PENSION PLAN ("SAR/SEP")

Although new SAR/SEP plans may not be established after December 31, 1996,
existing plans may be maintained by employers having 25 or fewer employees. An
employer may elect to make additional contributions to such existing plans.

403(B)(7) DEFERRED COMPENSATION PLAN

Permits employees of public school systems or of certain types of non-profit
organizations to enter into a deferred compensation arrangement for the
purchase of shares of each of the Classes.

457 DEFERRED COMPENSATION PLAN

Permits employees of state and local governments and certain other entities to
enter into a deferred compensation arrangement for the purchase of shares of
each of the Classes.

PROTOTYPE PROFIT SHARING OR MONEY PURCHASE PENSION PLAN

Offers self-employed individuals, partnerships and corporations a tax-
qualified plan which provides for the investment of contributions in Class A
Shares or Class C Shares. Class B Shares are not available for purchase by such
plans.

PROTOTYPE 401(K) DEFINED CONTRIBUTION PLAN

Permits employers to establish a tax-qualified plan based on salary deferral
contributions for investment in Class A or Class C Shares. Class B Shares are
not available for purchase by such plans.

SIMPLE IRA

A SIMPLE IRA combines many of the features of an Individual Retirement Account
(IRA) and a 401(k) Plan but is easier to administer than a typical 401(k) Plan.
It requires employers to make contributions on behalf of their employees and
also has a salary deferral feature that permits employees to defer to a portion
of their salary into the plan on a pre-tax basis.

SIMPLE 401(K)

A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors are limited
to 100 employees and, in exchange for mandatory plan sponsor contributions,
discrimination testing is no longer required. Class B Shares are not available
for purchase by such plans.

The Limited CDSC is applicable to any redemptions of net asset value purchases
made on behalf of any group retirement plan on which a dealer's commission has
been paid only if such redemption is made pursuant to a withdrawal of the
entire plan from Delaware Group funds. See Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange.

10
<PAGE>

ALLIED PLANS

Class A Shares are available for purchase by participants in certain 401(k)
Defined Contribution Plans ("Allied Plans") which are made available under a
joint venture agreement between the Distributor and another institution through
which mutual funds are marketed and which allow investments in Class A Shares
of designated Delaware Group funds ("eligible Delaware Group fund shares"), as
well as shares of designated classes of non-Delaware Group funds ("eligible
non-Delaware Group fund shares"). Class B Shares and Class C Shares are not
eligible for purchase by Allied Plans.

With respect to purchases made in connection with an Allied Plan, the value of
eligible Delaware Group and eligible non-Delaware Group fund shares held by the
Allied Plan may be combined with the dollar amount of new purchases by that
Allied Plan to obtain a reduced front-end sales charge on additional purchases
of eligible Delaware Group fund shares. See Front-End Sales Charge
Alternative--Class A Shares under Classes of Shares.

Participants in Allied Plans may exchange all or part of their eligible
Delaware Group fund shares for other eligible Delaware Group fund shares or for
eligible non-Delaware Group fund shares at net asset value without payment of a
front-end sales charge. However, exchanges of eligible fund shares, both
Delaware Group and non-Delaware Group, which were not subject to a front-end
sales charge, will be subject to the applicable sales charge if exchanged for
eligible Delaware Group fund shares to which a sales charge applies. No sales
charge will apply if the eligible fund shares were previously acquired through
the exchange of eligible shares on which a sales charge was already paid or
through the reinvestment of dividends. See Investing by Exchange.

A dealer's commission may be payable on purchases of eligible Delaware Group
fund shares under an Allied Plan. In determining a financial adviser's
eligibility for a dealer's commission on net asset value purchases of eligible
Delaware Group fund shares in connection with Allied Plans, all participant
holdings in the Allied Plan will be aggregated. See Front-End Sales Charge
Alternative--Class A Shares under Classes of Shares.

The Limited CDSC is applicable to redemptions of net asset value purchases
from an Allied Plan on which a dealer's commission has been paid. Waivers of
the Limited CDSC, as described under Waiver of Limited Contingent Deferred
Sales Charge--Class A Shares under Redemption and Exchange, apply to
redemptions by participants in Allied Plans except in the case of exchanges
between eligible Delaware Group and non-Delaware Group fund shares. When
eligible Delaware Group fund shares are exchanged into eligible non-Delaware
Group fund shares, the Limited CDSC will be imposed at the time of the
exchange, unless the joint venture agreement specifies that the amount of the
Limited CDSC will be paid by the financial adviser or selling dealer. See
Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value under Redemption and Exchange.

11
<PAGE>

Classes
of Shares

ALTERNATIVE PURCHASE ARRANGEMENTS

Shares may be purchased at a price equal to the next determined net asset
value per share, subject to a sales charge which may be imposed, at the
election of the purchaser, at the time of the purchase for Class A Shares
("front-end sales charge alternative"), or on a contingent deferred basis for
Class B Shares ("deferred sales charge alternative") or Class C Shares ("level
sales charge alternative").

Class A Shares. An investor who elects the front-end sales charge alternative
acquires Class A Shares, which incur a sales charge when they are purchased,
but generally are not subject to any sales charge when they are redeemed. Class
A Shares are subject to annual 12b-1 Plan expenses of up to a maximum of 0.30%
of average daily net assets of such shares. Certain purchases of Class A Shares
qualify for reduced front-end sales charges. See Front-End Sales Charge
Alternative--Class A Shares, below. See also Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange and Distribution (12b-1) and Service under Management
of the Fund.

Class B Shares. An investor who elects the deferred sales charge alternative
acquires Class B Shares, which do not incur a front-end sales charge when they
are purchased, but are subject to a contingent deferred sales charge if they
are redeemed within six years of purchase. Class B Shares are subject to annual
12b-1 Plan expenses of up to a maximum of 1% (0.25% of which are service fees
to be paid to the Distributor, dealers or others for providing personal service
and/or maintaining shareholder accounts) of average daily net assets of such
shares for approximately eight years after purchase. Class B Shares permit all
of the investor's dollars to work from the time the investment is made. The
higher 12b-1 Plan expenses paid by Class B Shares will cause such shares to
have a higher expense ratio and to pay lower dividends than Class A Shares. At
the end of approximately eight years after purchase, Class B Shares will
automatically be converted into Class A Shares and, thereafter, for the
remainder of the life of the investment, the annual 12b-1 Plan fee of up to
0.30% for the Class A Shares will apply. See Automatic Conversion of Class B
Shares, below.

Class C Shares. An investor who elects the level sales charge alternative
acquires Class C Shares, which do not incur a front-end sales charge when they
are purchased, but are subject to a contingent deferred sales charge if they
are redeemed within 12 months of purchase. Class C Shares are subject to annual
12b-1 Plan expenses of up to a maximum of 1% (0.25% of which are service fees
to be paid to the Distributor, dealers or others for providing personal service
and/or maintaining shareholder accounts) of average daily net assets of such
shares for the life of the investment. The higher 12b-1 Plan expenses paid by
Class C Shares will cause such shares to have a higher expense ratio and to pay
lower dividends than Class A Shares. Unlike Class B Shares, Class C Shares do
not convert to another class.

The alternative purchase arrangements described above permit investors to
choose the method of purchasing shares that is most suitable given the amount
of their purchase, the length of time they expect to hold their shares and
other relevant circumstances. Investors should determine whether, given their
particular circumstances, it is more advantageous to purchase Class A Shares
and incur a front-end sales charge, purchase Class B Shares and have the entire
initial purchase amount invested in the Fund with their investment being
subject to a CDSC if they redeem shares within six years of purchase, or
purchase Class C Shares and have the entire initial purchase amount invested in
the Fund with their investment being subject to a CDSC if they redeem shares
within 12 months of purchase. In addition, investors should consider the level
of annual 12b-1 Plan expenses applicable to each Class. The higher 12b-1 Plan
expenses on Class B Shares and Class C Shares will be offset to the extent a
return is realized on the additional money initially invested upon the purchase
of such shares. However, there can be no assurance as to the return, if any,
that will be realized on such additional money. In addition, the effect of any
return earned on such additional money will diminish over time. In comparing
Class B Shares to Class C Shares, investors should also consider the duration
of the annual 12b-1 Plan expenses to which each of these classes is subject and
the desirability of an automatic conversion feature, which is available only
for Class B Shares.

12
<PAGE>

Prospective investors should refer to Appendix A--Investment Illustrations in
this Prospectus for an illustration of the potential effect that each of the
purchase options may have on a long-term shareholder's investment.

For the distribution and related services provided to, and the expenses borne
on behalf of, the Fund, the Distributor and others will be paid, in the case of
Class A Shares, from the proceeds of the front-end sales charge and 12b-1 Plan
fees and, in the case of Class B Shares and Class C Shares, from the proceeds
of the 12b-1 Plan fees and, if applicable, the CDSC incurred upon redemption.
Financial advisers may receive different compensation for selling Class A,
Class B and Class C Shares. Investors should understand that the purpose and
function of the respective 12b-1 Plans and the CDSCs applicable to Class B
Shares and Class C Shares are the same as those of the 12b-1 Plan and the
front-end sales charge applicable to Class A Shares in that such fees and
charges are used to finance the distribution of the respective Classes. See
Distribution (12b-1) and Service under Management of the Fund.

Dividends, if any, paid on Class A, Class B and Class C Shares will be
calculated in the same manner, at the same time, on the same day and will be in
the same amount, except that the additional amount of 12b-1 Plan expenses
relating to Class B Shares and Class C Shares will be borne exclusively by such
shares. See Calculation of Offering Price and Net Asset Value Per Share.

The NASD has adopted certain rules relating to investment company sales
charges. Equity Funds IV, Inc. and the Distributor intend to operate in
compliance with these rules.

13
<PAGE>

FRONT-END SALES CHARGE ALTERNATIVE--
CLASS A SHARES

Class A Shares may be purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.

Purchases of $100,000 or more carry a reduced front-end sales charge as shown
in the following table.

DELCAP FUND A CLASS
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>
Front-End Sales Dealer's
Charge as % of Commission***
Offering Amount as % of
Amount of Purchase Price Invested** Offering Price
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Less than $100,000 4.75% 4.99% 4.00%
$100,000 but under $250,000 3.75 3.91 3.00
$250,000 but under $500,000 2.50 2.56 2.00
$500,000 but under $1,000,000* 2.00 2.04 1.60
</TABLE>
*There is no front-end sales charge on purchases of Class A Shares of $1
million or more but, under certain limited circumstances, a 1% Limited CDSC
may apply upon redemption of such shares.
**Based upon the net asset value per share of the Class A Shares as of the end
of Equity Funds IV, Inc.'s most recent fiscal year.
***Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.

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

The Fund must be notified when a sale takes place which would qualify for the
reduced front-end sales charge on the basis of previous or current purchases.
The reduced front-end sales charge will be granted upon confirmation of the
shareholder's holdings by the Fund. Such reduced front-end sales charges are
not retroactive.

From time to time, upon written notice to all of its dealers, the Distributor
may hold special promotions for specified periods during which the Distributor
may reallow to dealers up to the full amount of the front-end sales charge
shown above. In addition, certain dealers who enter into an agreement to
provide extra training and information on Delaware Group products and services
and who increase sales of Delaware Group funds may receive an additional
commission of up to 0.15% of the offering price. Dealers who receive 90% or
more of the sales charge may be deemed to be underwriters under the Securities
Act of 1933.

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

For initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are made in accordance with the following schedule:

<TABLE>
<CAPTION>
DEALER'S COMMISSION
-------------------
AMOUNT OF PURCHASE (as a percentage of amount purchased)
- ------------------
<S> <C>
Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25
</TABLE>

In determining a financial adviser's eligibility for the dealer's commission,
purchases of Class A Shares of other Delaware Group funds as to which a Limited
CDSC applies may be aggregated with those of Class A Shares of the Fund.
Financial advisers also may be eligible for a dealer's commission in connection
with certain purchases made under a Letter of Intention or pursuant to an
investor's Right of Accumulation. Financial advisers should contact the
Distributor concerning the applicability and calculation of the dealer's
commission in the case of combined purchases.

An exchange from other Delaware Group funds will not qualify for payment of
the dealer's commission, unless a dealer's commission or similar payment has
not been previously paid on the assets being exchanged. The schedule and
program for payment of the dealer's commission are subject to change or
termination at any time by the Distributor at its discretion.

Redemptions of Class A Shares purchased at net asset value may result in the
imposition of a Limited CDSC if the dealer's commission described above was
paid in connection with the purchase of those shares. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.

14
<PAGE>

COMBINED PURCHASES PRIVILEGE

By combining your holdings of Class A Shares with your holdings of Class B
Shares and/or Class C Shares of the Fund and shares of the other funds in the
Delaware Group, except as noted below, you can reduce the front-end sales
charges on any additional purchases of Class A Shares. Shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products may be combined with other Delaware Group fund holdings. In
addition, assets held by investment advisory clients of the Manager or its
affiliates in a stable value account may be combined with other Delaware Group
fund holdings. Shares of other funds that do not carry a front-end sales charge
or CDSC may not be included unless they were acquired through an exchange from
a Delaware Group fund that does carry a front-end sales charge or CDSC.

It also permits you to use these combinations under a Letter of Intention. A
Letter of Intention allows you to make purchases over a 13-month period and
qualify the entire purchase for a reduction in front-end sales charges on Class
A Shares.

Combined purchases of $1,000,000 or more, including certain purchases made at
net asset value pursuant to a Right of Accumulation or under a Letter of
Intention, may result in the payment of a dealer's commission and the
applicability of a Limited CDSC. Investors should consult their financial
advisers or the Shareholder Service Center about the operation of these
features. See Front-End Sales Charge Alternative--Class A Shares, above.

BUYING CLASS A SHARES AT NET ASSET VALUE

Class A Shares of the Fund may be purchased at net asset value under the
Delaware Group Dividend Reinvestment Plan and, under certain circumstances, the
Exchange Privilege and the 12-Month Reinvestment Privilege. See The Delaware
Difference and Redemption and Exchange for additional information.

Purchases of Class A Shares may be made at net asset value by current and
former officers, directors and employees (and members of their families) of the
Manager, any affiliate, any of the funds in the Delaware Group, certain of
their agents and registered representatives and employees of authorized
investment dealers and by employee benefit plans for such entities. Individual
purchases, including those in retirement accounts, must be for accounts in the
name of the individual or a qualifying family member.

Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within 12
months after the registered representative changes employment, if the purchase
is funded by proceeds from an investment where a front-end sales charge,
contingent deferred sales charge or other sales charge has been assessed.
Purchases of Class A Shares may also be made at net asset value by bank
employees who provide services in connection with agreements between the bank
and unaffiliated brokers or dealers concerning sales of shares of Delaware
Group funds. Purchases of Class A Shares at net asset value may also be made by
bank sponsored retirement plans that are no longer eligible to purchase
Institutional Class Shares as a result of a change in the distribution
arrangements. Officers, directors and key employees of institutional clients of
the Manager or any of its affiliates may purchase Class A Shares at net asset
value. Moreover, purchases may be effected at net asset value for the benefit
of the clients of brokers, dealers and registered investment advisers
affiliated with a broker or dealer, if such broker, dealer or investment
adviser has entered into an agreement with the Distributor providing
specifically for the purchase of Class A Shares in connection with special
investment products, such as wrap accounts or similar fee based programs.

Purchases of Class A Shares at net asset value may also be made by the
following institutions investing for the account of their trust customers if
they are not eligible to purchase shares of the Institutional Class of the
Fund; and any group retirement plan (excluding defined benefit pension plans),
or such plans of the same employer, for which plan participant records are
maintained on the Delaware Investment & Retirement Services, Inc. ("DIRSI")
proprietary record keeping system that (i) has in excess of $500,000 of plan
assets invested in Class A Shares of Delaware Group funds and any stable value
account available to investment advisory clients of the Manager or its
affiliates, or (ii) is sponsored by an employer that has at any point after May
1, 1997 had more than 100 employees while such plan has held Class A Shares of
a Delaware Group fund and such employer has properly represented to DIRSI in
writing that it has the requisite number of employees and has received written
confirmation back from DIRSI.

Investments in Class A Shares made by plan level and/or participant retirement
accounts that are for the purpose of repaying a loan taken from such accounts
will be made at net asset value. Loan repayments made to a Delaware Group
account in connection with loans originated from accounts previously maintained
by another investment firm will also be invested at net asset value.

15
<PAGE>

Investors in Delaware-Voyageur Unit Investment Trusts may reinvest monthly
dividend checks and/or repayment of invested capital into Class A Shares of any
of the funds in the Delaware Group at net asset value.

The Fund must be notified in advance that an investment qualifies for purchase
at net asset value.

GROUP INVESTMENT PLANS

Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE 401(k),
Profit Sharing, Money Purchase Pension, 401(k) Defined Contribution Plans, and
403(b)(7) and 457 Deferred Compensation Plans) may benefit from the reduced
front-end sales charges available on Class A Shares, based on total plan
assets. If a company has more than one plan investing in the Delaware Group of
funds, then the total amount invested in all plans will be aggregated to
determine the applicable front-end sales charge reduction on each purchase,
both initial and subsequent, if, at the time of each such purchase, the company
notifies the Fund that it qualifies for the reduction. Employees participating
in such Group Investment Plans may also combine the investments held in their
plan account to determine the front-end sales charge applicable to purchases in
non-retirement Delaware Group investment accounts if, at the time of each such
purchase, they notify the Fund that they are eligible to combine purchase
amounts held in their plan account.

For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.

For other retirement plans and special services, see Retirement Planning.

DEFERRED SALES CHARGE ALTERNATIVE--CLASS B SHARES

Class B Shares may be purchased at net asset value without a front-end sales
charge and, as a result, the full amount of the investor's purchase payment
will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class B Shares at the time of
purchase from its own assets in an amount equal to no more than 4% of the
dollar amount purchased. In addition, from time to time, upon written notice to
all of its dealers, the Distributor may hold special promotions for specified
periods during which the Distributor may pay additional compensation to dealers
or brokers for selling Class B Shares at the time of purchase. As discussed
below, however, Class B Shares are subject to annual 12b-1 Plan expenses and,
if redeemed within six years of purchase, a CDSC.

Proceeds from the CDSC and the annual 12b-1 Plan fees are paid to the
Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class B Shares. These
payments support the compensation paid to dealers or brokers for selling Class
B Shares. Payments to the Distributor and others under the Class B 12b-1 Plan
may be in an amount equal to no more than 1% annually. The combination of the
CDSC and the proceeds of the 12b-1 Plan fees makes it possible for the Fund to
sell Class B Shares without deducting a front-end sales charge at the time of
purchase.

Holders of Class B Shares who exercise the exchange privilege described below
will continue to be subject to the CDSC schedule for Class B Shares described
in this Prospectus, even after the exchange. Such CDSC schedule may be higher
than the CDSC schedule for Class B Shares acquired as a result of the exchange.
See Redemption and Exchange.

AUTOMATIC CONVERSION OF CLASS B SHARES

Class B Shares, other than shares acquired through reinvestment of dividends,
held for eight years after purchase are eligible for automatic conversion into
Class A Shares. Conversions of Class B Shares into Class A Shares will occur
only four times in any calendar year, on the last business day of the second
full week of March, June, September and December (each, a "Conversion Date").
If the eighth anniversary after a purchase of Class B Shares falls on a
Conversion Date, an investor's Class B Shares will be converted on that date.
If the eighth anniversary occurs between Conversion Dates, an investor's Class
B Shares will be converted on the next Conversion Date after such anniversary.
Consequently, if a shareholder's eighth anniversary falls on the day after a
Conversion Date, that shareholder will have to hold Class B Shares for as long
as three additional months after the eighth anniversary of purchase before the
shares will automatically convert into Class A Shares.

Class B Shares of a fund acquired through a reinvestment of dividends will
convert to the corresponding Class A Shares of that fund (or, in the case of
Delaware Group Cash Reserve, Inc., the Delaware Cash Reserve Consultant Class)
pro-rata with Class B Shares of that fund not acquired through dividend
reinvestment.

All such automatic conversions of Class B Shares will constitute tax-free
exchanges for federal income tax purposes. See Taxes.

16
<PAGE>

LEVEL SALES CHARGE ALTERNATIVE--CLASS C SHARES

Class C Shares may be purchased at net asset value without a front-end sales
charge and, as a result, the full amount of the investor's purchase payment
will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class C Shares at the time of
purchase from its own assets in an amount equal to no more than 1% of the
dollar amount purchased. As discussed below, Class C Shares are subject to
annual 12b-1 Plan expenses and, if redeemed within 12 months of purchase, a
CDSC.

Holders of Class C Shares who exercise the exchange privilege described below
will continue to be subject to the CDSC schedule for the Class C Shares as
described in this Prospectus. See Redemption and Exchange.

CONTINGENT DEFERRED SALES CHARGE--CLASS B SHARES AND CLASS C SHARES

Class B Shares redeemed within six years of purchase may be subject to a CDSC
at the rates set forth below and Class C Shares redeemed within 12 months of
purchase may be subject to a CDSC of 1%. CDSCs are charged as a percentage of
the dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the net asset value at the time of purchase of the
shares being redeemed or the net asset value of those shares at the time of
redemption. No CDSC will be imposed on increases in net asset value above the
initial purchase price, nor will a CDSC be assessed on redemptions of shares
acquired through reinvestments of dividends or capital gains distributions.

For purposes of this formula, the "net asset value at the time of purchase"
will be the net asset value at purchase of the Class B Shares or the Class C
Shares of the Fund, even if those shares are later exchanged for shares of
another Delaware Group fund. In the event of an exchange of the shares, the
"net asset value of such shares at the time of redemption" will be the net
asset value of the shares that were acquired in the exchange.

The following table sets forth the rates of the CDSC for the Class B Shares of
the Fund:

<TABLE>
<CAPTION>
CONTINGENT DEFERRED
SALES CHARGE (AS A
PERCENTAGE OF
DOLLAR AMOUNT
YEARAFTER PURCHASE MADE SUBJECT TO CHARGE)
- ------------------------ -------------------
<S> <C>
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
</TABLE>

During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares. See Automatic Conversion of Class B Shares, above. Investors are
reminded that Class A Shares into which Class B Shares will convert are subject
to ongoing annual 12b-1 Plan expenses of up to a maximum of 0.30% of average
daily net assets of such shares.

In determining whether a CDSC applies to a redemption of Class B Shares, it
will be assumed that shares held for more than six years are redeemed first,
followed by shares acquired through the reinvestment of dividends or
distributions, and finally by shares held longest during the six-year period.
With respect to Class C Shares, it will be assumed that shares held for more
than 12 months are redeemed first followed by shares acquired through the
reinvestment of dividends or distributions, and finally by shares held for 12
months or less.

All investments made during a calendar month, regardless of what day of the
month the investment occurred, will age one month on the last day of that month
and each subsequent month.

The CDSC is waived on certain redemptions of Class B Shares and Class C
Shares. See Waiver of Contingent Deferred Sales Charge--Class B Shares and
Class C Shares under Redemption and Exchange.

OTHER PAYMENTS TO DEALERS--CLASS A, CLASS B AND CLASS C SHARES

From time to time at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of the Classes exceed certain limits, as
set by the Distributor, may receive from the Distributor an additional payment
of up to 0.25% of the dollar amount of such sales. The Distributor may also
provide additional promotional incentives or payments to dealers that sell
shares of the Delaware Group of funds. In some instances, these incentives or
payments may be offered only to certain dealers who maintain, have sold or may
sell certain amounts of shares.

17
<PAGE>

Subject to pending amendments to the NASD's Conduct Rules, in connection with
the promotion of Delaware Group fund shares, the Distributor may, from time to
time, pay to participate in dealer-sponsored seminars and conferences,
reimburse dealers for expenses incurred in connection with preapproved
seminars, conferences and advertising and may, from time to time, pay or allow
additional promotional incentives to dealers, which shall include non-cash
concessions, such as certain luxury merchandise or a trip to or attendance at a
business or investment seminar at a luxury resort, as part of preapproved sales
contests. Payment of non-cash compensation to dealers is currently under review
by the NASD and the Securities and Exchange Commission. It is likely that the
NASD's Conduct Rules will be amended such that the ability of the Distributor
to pay non-cash compensation as described above will be restricted in some
fashion. The Distributor intends to comply with the NASD's Conduct Rules as
they may be amended.

DELCAP FUND INSTITUTIONAL CLASS

In addition to offering the Class A, Class B and Class C Shares, the Fund also
offers DelCap Fund Institutional Class, which is described in a separate
prospectus and is available for purchase only by certain investors. DelCap Fund
Institutional Class shares generally are distributed directly by the
Distributor and do not have a front-end sales charge, a CDSC or a Limited CDSC,
and are not subject to 12b-1 Plan distribution expenses. To obtain the
prospectus that describes DelCap Fund Institutional Class, contact the
Distributor by writing to the address or by calling the telephone number listed
on the back cover of this Prospectus.

18
<PAGE>

How to Buy Shares

PURCHASE AMOUNTS

Generally, the minimum initial purchase is $1,000 for Class A Shares, Class B
Shares and Class C Shares. Subsequent purchases of shares of any Class
generally must be $100 or more. For purchases under a Uniform Gifts to Minors
Act or Uniform Transfers to Minors Act or through an Automatic Investing Plan,
there is a minimum initial purchase of $250 and a minimum subsequent purchase
of $25. Minimum purchase requirements do not apply to retirement plans other
than IRAs for which there is a minimum initial purchase of $250, and a minimum
subsequent purchase of $25, regardless of which Class is selected.

There is a maximum purchase limitation of $250,000 on each purchase of Class B
Shares. For Class C Shares, each purchase must be in an amount that is less
than $1,000,000. An investor may exceed these maximum purchase limitations by
making cumulative purchases over a period of time. In doing so, an investor
should keep in mind that reduced front-end sales charges are available on
investments of $100,000 or more in Class A Shares, and that Class A Shares (i)
are subject to lower annual 12b-1 Plan expenses than Class B Shares and Class C
Shares and (ii) generally are not subject to a CDSC. For retirement plans, the
maximum purchase limitations apply only to the initial purchase of Class B
Shares or Class C Shares by the plan.

INVESTING THROUGH YOUR INVESTMENT DEALER

You can make a purchase of shares of the Fund through most investment dealers
who, as part of the service they provide, must transmit orders promptly. They
may charge for this service. If you want a dealer but do not have one, the
Delaware Group can refer you to one.

INVESTING BY MAIL

1. Initial Purchases--An Investment Application or, in the case of a
retirement account, an appropriate retirement plan application, must be
completed, signed and sent with a check payable to DelCap Fund A Class, DelCap
Fund B Class or DelCap Fund C Class, to Delaware Group at 1818 Market Street,
Philadelphia, PA 19103.

2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to the specific Fund and Class selected. Your check
should be identified with your name(s) and account number. An investment slip
(similar to a deposit slip) is provided at the bottom of transaction
confirmations and dividend statements that you will receive from Equity Funds
IV, Inc. Use of this investment slip can help expedite processing of your check
when making additional purchases. Your investment may be delayed if you send
additional purchases by certified mail.

INVESTING BY WIRE

You may purchase shares by requesting your bank to transmit funds by wire to
CoreStates Bank, N.A., ABA #031000011, account number 1412893401 (include your
name(s) and your account number for the Class in which you are investing).

1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement account, an appropriate retirement
plan application, to the specific Class selected, to Delaware Group at 1818
Market Street, Philadelphia, PA 19103.

2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You should advise the
Shareholder Service Center by telephone of each wire you send.

If you want to wire investments to a retirement plan account, call the
Shareholder Service Center for special wiring instructions.

INVESTING BY EXCHANGE

If you have an investment in another mutual fund in the Delaware Group, you
may write and authorize an exchange of part or all of your investment into
shares of the Fund. If you wish to open an account by exchange, call the
Shareholder Service Center for more information. All exchanges are subject to
the eligibility and minimum purchase requirements set forth in each fund's
prospectus. See Redemption and Exchange for more complete information
concerning your exchange privileges.

19
<PAGE>

Holders of Class A Shares may exchange all or part of their shares for certain
of the shares of other funds in the Delaware Group, including other Class A
Shares, but may not exchange their Class A Shares for Class B Shares or Class C
Shares of the Fund or of any other fund in the Delaware Group. Holders of Class
B Shares of the Fund are permitted to exchange all or part of their Class B
Shares only into Class B Shares of other Delaware Group funds. Similarly,
holders of Class C Shares of the Fund are permitted to exchange all or part of
their Class C Shares only into Class C Shares of other Delaware Group funds.
See Appendix B--Classes Offered for a list of Delaware Group funds and the
classes they offer. Class B Shares of the Fund and Class C Shares of the Fund
acquired by exchange will continue to carry the CDSC and, in the case of Class
B Shares, the automatic conversion schedule of the fund from which the exchange
is made. The holding period of Class B Shares of the Fund acquired by exchange
will be added to that of the shares that were exchanged for purposes of
determining the time of the automatic conversion into Class A Shares of the
Fund.

Permissible exchanges into Class A Shares of the Fund will be made without a
front-end sales charge, except for exchanges of shares that were not previously
subject to a front-end sales charge (unless such shares were acquired through
the reinvestment of dividends). Permissible exchanges into Class B Shares or
Class C Shares of the Fund will be made without the imposition of a CDSC by the
fund from which the exchange is being made at the time of the exchange.

See Allied Plans under Retirement Planning for information on exchanges by
participants in an Allied Plan.

ADDITIONAL METHODS OF ADDING TO YOUR INVESTMENT

Call the Shareholder Service Center for more information if you wish to use
the following services:

1. Automatic Investing Plan

THE AUTOMATIC INVESTING PLAN ENABLES YOU TO MAKE REGULAR MONTHLY INVESTMENTS
WITHOUT WRITING OR MAILING CHECKS. You may authorize Equity Funds IV, Inc. to
transfer a designated amount monthly from your checking account to your Fund
account. Many shareholders use this as an automatic savings plan. Shareholders
should allow a reasonable amount of time for initial purchases and changes to
these plans to become effective.

This option is not available to participants in the following plans: SAR/SEP,
SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase Pension
Plans, 401(k) Defined Contribution Plans, or 403(b)(7) and 457 Deferred
Compensation Plans.

2. Direct Deposit

YOU MAY HAVE YOUR EMPLOYER OR BANK MAKE REGULAR INVESTMENTS DIRECTLY TO YOUR
ACCOUNT FOR YOU (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad
Retirement benefits, etc.

* * *

Should investments through an automatic investing plan or by direct deposit be
reclaimed or returned for some reason, Equity Funds IV, Inc. has the right to
liquidate your shares to reimburse the government or transmitting bank. If
there are insufficient funds in your account, you are obligated to reimburse
the Fund.

3. MoneyLine(SM) On Demand

Through the MoneyLine(SM) On Demand service, you or your investment dealer may
call the Fund to request a transfer of funds from your predesignated bank
account to your Fund account. See MoneyLine(SM) Services under The Delaware
Difference for additional information about this service.

4. Wealth Builder Option

You can use our Wealth Builder Option to invest in the Fund through regular
liquidations of shares in your accounts in other funds in the Delaware Group.
You may also elect to invest in other mutual funds in the Delaware Group
through the Wealth Builder Option through regular liquidations of shares in
your Fund account.

Under this automatic exchange program, you can authorize regular monthly
amounts (minimum of $100 per fund) to be liquidated from your account in one or
more funds in the Delaware Group and invested automatically into any other
account in a Delaware Group mutual fund that you may specify. If in connection
with the election of the Wealth Builder Option, you wish to open a new account
to receive the automatic investment, such new account must meet the minimum
initial purchase requirements described in the prospectus of the fund that you
select. All investments under this option are exchanges and are therefore
subject to the same conditions and limitations as other exchanges noted above.
You can terminate your participation in Wealth Builder at any time by giving
written notice to the fund from which the exchanges are made. See Redemption
and Exchange.

20
<PAGE>

5. Dividend Reinvestment Plan

You can elect to have your distributions (capital gains and/or dividend
income) paid to you by check or reinvested in your Fund account. Or, you may
invest your distributions in certain other funds in the Delaware Group, subject
to the exceptions noted below as well as the eligibility and minimum purchase
requirements set forth in each fund's prospectus.

Reinvestments of distributions into Class A Shares of the Fund or of other
Delaware Group funds are made without a front-end sales charge. Reinvestments
of distributions into Class B Shares of the Fund or of other Delaware Group
funds or into Class C Shares of the Fund or of other Delaware Group funds are
also made without any sales charge and will not be subject to a CDSC if later
redeemed. See Automatic Conversion of Class B Shares under Classes of Shares
for information concerning the automatic conversion of Class B Shares acquired
by reinvesting dividends.

Holders of Class A Shares of the Fund may not reinvest their distributions
into Class B Shares or Class C Shares of any fund in the Delaware Group,
including the Fund. Holders of Class B Shares of the Fund may reinvest their
distributions only into Class B Shares of the funds in the Delaware Group which
offer that class of shares. Similarly, holders of Class C Shares of the Fund
may reinvest their distributions only into Class C Shares of the funds in the
Delaware Group which offer that class of shares. See Appendix B--Classes
Offered for a list of the funds offering those classes of shares. For more
information about reinvestments, call the Shareholder Service Center.

Capital gains and/or dividend distributions for participants in the following
retirement plans are automatically reinvested into the same Delaware Group fund
in which their investments are held: SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE
401(k), Profit Sharing and Money Purchase Pension Plans, 401(k) Defined
Contribution Plans, or 403(b)(7) or 457 Deferred Compensation Plans.

PURCHASE PRICE AND EFFECTIVE DATE

The offering price and net asset value of the Class A, Class B and Class C
Shares are determined as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.

The effective date of a purchase is the date the order is received by the
Fund, its agent or designee. The effective date of a direct purchase is the day
your wire, electronic transfer or check is received, unless it is received
after the time the offering price or net asset value of shares is determined,
as noted above. Purchase orders received after such time will be effective the
next business day.

THE CONDITIONS OF YOUR PURCHASE

The Fund reserves the right to reject any purchase order. If a purchase is
canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional
bank charges for clearance and currency conversion.

The Fund also reserves the right, following shareholder notification, to
charge a service fee on non-retirement accounts that, as a result of a
redemption, have remained below the minimum stated account balance for a period
of three or more consecutive months. Holders of such accounts may be notified
of their insufficient account balance and advised that they have until the end
of the current calendar quarter to raise their balance to the stated minimum.
If the account has not reached the minimum balance requirement by that time,
the Fund will charge a $9 fee for that quarter and each subsequent calendar
quarter until the account is brought up to the minimum balance. The service fee
will be deducted from the account during the first week of each calendar
quarter for the previous quarter, and will be used to help defray the cost of
maintaining low-balance accounts. No fees will be charged without proper
notice, and no CDSC will apply to such assessments.

The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under the minimum initial purchase
amount as a result of redemptions. An investor making the minimum initial
investment may be subject to involuntary redemption without the imposition of a
CDSC or Limited CDSC if he or she redeems any portion of his or her account.

21
<PAGE>

Redemption
and Exchange

YOU CAN REDEEM OR EXCHANGE YOUR SHARES IN A NUMBER OF DIFFERENT WAYS. The
exchange service is useful if your investment requirements change and you want
an easy way to invest in other equity funds, tax-advantaged funds, bond funds
or money market funds. This service is also useful if you are anticipating a
major expenditure and want to move a portion of your investment into a fund
that has the checkwriting feature. Exchanges are subject to the requirements of
each fund and all exchanges of shares constitute taxable events. See Taxes.
Further, in order for an exchange to be processed, shares of the fund being
acquired must be registered in the state where the acquiring shareholder
resides. You may want to consult your financial adviser or investment dealer to
discuss which funds in the Delaware Group will best meet your changing
objectives, and the consequences of any exchange transaction. You may also call
the Delaware Group directly for fund information.

Your shares will be redeemed or exchanged at a price based on the net asset
value next determined after the Fund receives your request in good order,
subject, in the case of a redemption, to any applicable CDSC or Limited CDSC.
For example, redemption or exchange requests received in good order after the
time the offering price and net asset value of shares are determined will be
processed on the next business day. See Purchase Price and Effective Date under
How to Buy Shares. A shareholder submitting a redemption request may indicate
that he or she wishes to receive redemption proceeds of a specific dollar
amount. In the case of such a request, and in the case of certain redemptions
from retirement plan accounts, the Fund will redeem the number of shares
necessary to deduct the applicable CDSC in the case of Class B and Class C
Shares, and, if applicable, the Limited CDSC in the case of Class A Shares and
tender to the shareholder the requested amount, assuming the shareholder holds
enough shares in his or her account for the redemption to be processed in this
manner. Otherwise, the amount tendered to the shareholder upon redemption will
be reduced by the amount of the applicable CDSC or Limited CDSC. Redemption
proceeds will be distributed promptly, as described below, but not later than
seven days after receipt of a redemption request.

Except as noted below, for a redemption request to be in "good order," you
must provide your account number, account registration, and the total number of
shares or dollar amount of the transaction. For exchange requests, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may request a redemption or
an exchange by calling the Shareholder Service Center at 800-523-1918. The Fund
may suspend, terminate, or amend the terms of the exchange privilege upon 60
days' written notice to shareholders.

The Fund will process written and telephone redemption requests to the extent
that the purchase orders for the shares being redeemed have already settled.
The Fund will honor redemption requests as to shares for which a check was
tendered as payment, but the Fund will not mail the proceeds until it is
reasonably satisfied that the check has cleared, which may take up to 15 days
from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if
there has been a recent change to the shareholder's address of record.

There is no front-end sales charge or fee for exchanges made between shares of
funds which both carry a front-end sales charge. Any applicable front-end sales
charge will apply to exchanges from shares of funds not subject to a front-end
sales charge, except for exchanges involving assets that were previously
invested in a fund with a front-end sales charge and/or exchanges involving the
reinvestment of dividends.

22
<PAGE>

Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for shares of other funds in the Delaware Group (in each
case, "New Shares") in a permitted exchange, will not be subject to a CDSC that
might otherwise be due upon redemption of the Original Shares. However, such
shareholders will continue to be subject to the CDSC and, in the case of Class
B Shares, the automatic conversion schedule of the Original Shares as described
in this Prospectus and any CDSC assessed upon redemption will be charged by the
fund from which the Original Shares were exchanged. In an exchange of Class B
Shares from the Fund, the Fund's CDSC schedule may be higher than the CDSC
schedule relating to the New Shares acquired as a result of the exchange. For
purposes of computing the CDSC that may be payable upon a disposition of the
New Shares, the period of time that an investor held the Original Shares is
added to the period of time that an investor held the New Shares. With respect
to Class B Shares, the automatic conversion schedule of the Original Shares may
be longer than that of the New Shares. Consequently, an investment in New
Shares by exchange may subject an investor to the higher 12b-1 fees applicable
to Class B Shares of the Fund for a longer period of time than if the
investment in New Shares were made directly.

Various redemption and exchange methods are outlined below. Except for the
CDSC applicable to certain redemptions of Class B and Class C Shares and the
Limited CDSC applicable to certain redemptions of Class A Shares purchased at
net asset value, there is no fee charged by the Fund or the Distributor for
redeeming or exchanging your shares, but such fees could be charged in the
future. You may have your investment dealer arrange to have your shares
redeemed or exchanged. Your investment dealer may charge for this service.

All authorizations given by shareholders, including selection of any of the
features described below, shall continue in effect until such time as a written
revocation or modification has been received by the Fund or its agent.

WRITTEN REDEMPTION

You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares. The request must be signed by all owners of
the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied
by an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.

Payment is normally mailed the next business day after receipt of your
redemption request. If your Class A Shares are in certificate form, the
certificate(s) must accompany your request and also be in good order.
Certificates are issued for Class A Shares only if a shareholder submits a
specific request. Certificates are not issued for Class B Shares or Class C
Shares.

WRITTEN EXCHANGE

You may also write to the Fund (at 1818 Market Street, Philadelphia, PA 19103)
to request an exchange of any or all of your shares into another mutual fund in
the Delaware Group, subject to the same conditions and limitations as other
exchanges noted above.

TELEPHONE REDEMPTION AND EXCHANGE

To get the added convenience of the telephone redemption and exchange methods,
you must have the Transfer Agent hold your shares (without charge) for you. If
you choose to have your Class A Shares in certificate form, you may redeem or
exchange only by written request and you must return your certificates.

23
<PAGE>

Neither the Fund nor its Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption
or exchange of Fund shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.

TELEPHONE REDEMPTION--CHECK TO YOUR ADDRESS OF RECORD

THE TELEPHONE REDEMPTION FEATURE IS A QUICK AND EASY METHOD TO REDEEM SHARES.
You or your investment dealer of record can have redemption proceeds of $50,000
or less mailed to you at your address of record. Checks will be payable to the
shareholder(s) of record. Payment is normally mailed the next business day
after receipt of the redemption request. This service is only available to
individual, joint and individual fiduciary-type accounts.

TELEPHONE REDEMPTION--PROCEEDS TO YOUR BANK

Redemption proceeds of $1,000 or more can be transferred to your predesignated
bank account by wire or by check. You should authorize this service when you
open your account. If you change your predesignated bank account, you must
complete an Authorization Form and have your signature guaranteed. For your
protection, your authorization must be on file. If you request a wire, your
funds will normally be sent the next business day. CoreStates Bank, N.A.'s fee
(currently $7.50) will be deducted from your redemption proceeds. If you ask
for a check, it will normally be mailed the next business day after receipt of
your redemption request to your predesignated bank account. There are no
separate fees for this redemption method, but the mail time may delay getting
funds into your bank account. Simply call the Shareholder Service Center prior
to the time the offering price and net asset value are determined, as noted
above.

MONEYLINE(SM) ON DEMAND

Through the MoneyLine(SM) On Demand service, you or your investment dealer may
call the Fund to request a transfer of funds from your Fund account to your
predesignated bank account. See MoneyLine(SM) Services under The Delaware
Difference for additional information about this service.

TELEPHONE EXCHANGE

The Telephone Exchange feature is a convenient and efficient way to adjust
your investment holdings as your liquidity requirements and investment
objectives change. You or your investment dealer of record can exchange your
shares into other funds in the Delaware Group under the same registration,
subject to the same conditions and limitations as other exchanges noted above.
As with the written exchange service, telephone exchanges are subject to the
requirements of each fund, as described above. Telephone exchanges may be
subject to limitations as to amounts or frequency.

SYSTEMATIC WITHDRAWAL PLANS

1. Regular Plans

This plan provides shareholders with a consistent monthly (or quarterly)
payment. THIS IS PARTICULARLY USEFUL TO SHAREHOLDERS LIVING ON FIXED INCOMES,
SINCE IT CAN PROVIDE THEM WITH A STABLE SUPPLEMENTAL AMOUNT. With accounts of
at least $5,000, you may elect monthly withdrawals of $25 (quarterly $75) or
more. The Fund does not recommend any particular monthly amount, as each
shareholder's situation and needs vary. Payments are normally made by check. In
the alternative, you may elect to have your payments transferred from your Fund
account to your predesignated bank account through the MoneyLine(SM) Direct
Deposit Service. Your funds will normally be credited to your bank account up
to four business days after the payment date. There are no separate fees for
this redemption method. See MoneyLine(SM) Services under The Delaware Difference
for more information about this service.

2. Retirement Plans

For shareholders eligible under the applicable retirement plan to receive
benefits in periodic payments, the Systematic Withdrawal Plan provides you with
maximum flexibility. A number of formulas are available for calculating your
withdrawals depending upon whether the distributions are required or optional.
Withdrawals must be for $25 or more; however, no minimum account balance is
required. The MoneyLine(SM) Direct Deposit Service described above is not
available for certain retirement plans.

* * *

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<PAGE>

Shareholders should not purchase additional shares while participating in a
Systematic Withdrawal Plan.
Redemptions of Class A Shares via a Systematic Withdrawal Plan may be subject
to a Limited CDSC if the original purchase was made at net asset value within
the 12 months prior to the withdrawal and a dealer's commission was paid on
that purchase. See Contingent Deferred Sales Charge for Certain Redemptions of
Class A Shares Purchased at Net Asset Value, below.

The applicable CDSC for Class B Shares and Class C Shares redeemed via a
Systematic Withdrawal Plan will be waived if, on the date that the Plan is
established, the annual amount selected to be withdrawn is less than 12% of the
account balance. If the annual amount selected to be withdrawn exceeds 12% of
the account balance on the date that the Systematic Withdrawal Plan is
established, all redemptions under the Plan will be subject to the applicable
CDSC. Whether a waiver of the CDSC is available or not, the first shares to be
redeemed for each Systematic Withdrawal Plan payment will be those not subject
to a CDSC because they have either satisfied the required holding period or
were acquired through the reinvestment of distributions. The 12% annual limit
will be reset on the date that any Systematic Withdrawal Plan is modified (for
example, a change in the amount selected to be withdrawn or the frequency or
date of withdrawals), based on the balance in the account on that date. See
Waiver of Contingent Deferred Sales Charge--Class B and Class C Shares, below.

CONTINGENT DEFERRED SALES CHARGE FOR CERTAIN REDEMPTIONS OF CLASS A SHARES
PURCHASED AT NET ASSET VALUE

A Limited CDSC will be imposed on certain redemptions of Class A Shares (or
shares into which such Class A Shares are exchanged) made within 12 months of
purchase, if such purchases were made at net asset value and triggered the
payment by the Distributor of the dealer's commission previously described. See
Classes of Shares.

The Limited CDSC will be paid to the Distributor and will be equal to the
lesser of 1% of: (1) the net asset value at the time of purchase of the Class A
Shares being redeemed; or (2) the net asset value of such Class A Shares at the
time of redemption. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of the Class A Shares
even if those shares are later exchanged for shares of another Delaware Group
fund and, in the event of an exchange of Class A Shares, the "net asset value
of such shares at the time of redemption" will be the net asset value of the
shares acquired in the exchange.

Redemptions of such Class A Shares held for more than 12 months will not be
subjected to the Limited CDSC and an exchange of such Class A Shares into
another Delaware Group fund will not trigger the imposition of the Limited CDSC
at the time of such exchange. The period a shareholder owns shares into which
Class A Shares are exchanged will count towards satisfying the 12-month holding
period. The Limited CDSC is assessed if such 12-month period is not satisfied
irrespective of whether the redemption triggering its payment is of Class A
Shares of the Fund or Class A Shares acquired in the exchange.

In determining whether a Limited CDSC is payable, it will be assumed that
shares not subject to the Limited CDSC are the first redeemed followed by other
shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of what day of the month the
investment occurred, will age one month on the last day of that month and each
subsequent month.

WAIVER OF LIMITED CONTINGENT DEFERRED SALES CHARGE--CLASS A SHARES

The Limited CDSC for Class A Shares on which a dealer's commission has been
paid will be waived in the following instances: (i) redemptions that result
from the Fund's right to liquidate a shareholder's account if the aggregate net
asset value of the shares held in the account is less than the then-effective
minimum account size; (ii) distributions to participants from a retirement plan
qualified under section 401(a) or 401(k) of the Internal Revenue Code of 1986,
as amended (the "Code"), or due to death of a participant in such a plan; (iii)
redemptions pursuant to the direction of a participant or beneficiary of a
retirement plan qualified under section 401(a) or 401(k) of the Code with
respect to that retirement plan; (iv) periodic distributions from an IRA,
SIMPLE IRA, or 403(b)(7) or 457 Deferred Compensation Plan due to death,
disability, or attainment of age 59 1/2, and IRA distributions qualifying under
Section 72(t) of the Internal Revenue Code; (v) returns of excess contributions
to an IRA; (vi) distributions by other employee benefit plans to pay benefits;
(vii) distributions described in (ii), (iv), and (vi) above pursuant to a
systematic withdrawal plan; and (viii) redemptions by the classes of
shareholders who are permitted to purchase shares at net asset value,
regardless of the size of the purchase (see Buying Class A Shares at Net Asset
Value under Classes of Shares).

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<PAGE>

WAIVER OF CONTINGENT DEFERRED SALES CHARGE--CLASS B AND CLASS C SHARES

The CDSC is waived on certain redemptions of Class B Shares in connection with
the following redemptions: (i) redemptions that result from the Fund's right to
liquidate a shareholder's account if the aggregate net asset value of the
shares held in the account is less than the then-effective minimum account
size; (ii) returns of excess contributions to an IRA, SIMPLE IRA, SEP/IRA or
403(b)(7) or 457 Deferred Compensation Plans; (iii) periodic distributions from
an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, 403(b)(7) or 457 Deferred Compensation
Plan, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; and (iv) distributions from an account if the redemption results
from the death of all registered owners of the account (in the case of accounts
established under the Uniform Gifts to Minors or Uniform Transfers to Minors
Acts or trust accounts, the waiver applies upon the death of all beneficial
owners) or a total and permanent disability (as defined in Section 72 of the
Code) of all registered owners occurring after the purchase of the shares being
redeemed.

The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in
the account is less than the then-effective minimum account size; (ii) returns
of excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution plan; (iii) periodic distributions from a 403(b)(7) or 457
Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing Plan,
Money Purchase Plan, 401(k) Defined Contribution Plan upon attainment of age 70
1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; (iv) distributions from a 403(b)(7) Deferred Compensation Plan,
457 Deferred Compensation Plan, Profit Sharing Plan, or 401(k) Defined
Contribution Plan, under hardship provisions of the plan; (v) distributions
from a 403(b)(7) Deferred Compensation Plan, 457 Deferred Compensation Plan,
Profit Sharing Plan, Money Purchase Pension Plan or a 401(k) Defined
Contribution Plan upon attainment of normal retirement age under the plan or
upon separation from service; (vi) periodic distributions from an IRA or SIMPLE
IRA on or after attainment of age 59; and (vii) distributions from an account
if the redemption results from the death of all registered owners of the
account (in the case of accounts established under the Uniform Gifts to Minors
or Uniform Transfers to Minors Acts or trust accounts, the waiver applies upon
the death of all beneficial owners) or a total and permanent disability (as
defined in Section 72 of the Code) of all registered owners occurring after the
purchase of the shares being redeemed.

In addition, the CDSC will be waived on Class B and Class C Shares redeemed in
accordance with a Systematic Withdrawal Plan if the annual amount selected to
be withdrawn under the Plan does not exceed 12% of the value of the account on
the date that the Systematic Withdrawal Plan was established or modified.

26
<PAGE>

Dividends and
Distributions

Each class of the Fund will share proportionately in the investment income and
expenses of the Fund, except that the per share dividends from net investment
income on Class A Shares, Class B Shares and Class C Shares will vary due to
the expenses under the 12b-1 Plan applicable to each Class. Generally, the
dividends per share on Class B Shares and Class C Shares can be expected to be
lower than the dividends per share on Class A Shares because the expenses under
the 12b-1 Plans relating to Class B and Class C Shares will be higher than the
expenses under the 12b-1 Plan relating to Class A Shares. See Distribution
(12b-1) and Service under Management of the Fund.

Both dividends and distributions, if any, are automatically reinvested in your
account at net asset value unless you elect otherwise. Any check in payment of
dividends or other distributions which cannot be delivered by the United States
Post Office or which remains uncashed for a period of more than one year may be
reinvested in your account at the then-current net asset value and the dividend
option may be changed from cash to reinvest. If you elect to take your
dividends and distributions in cash and such dividends and distributions are in
an amount of $25 or more, you may choose the MoneyLineSM Direct Deposit Service
and have such payments transferred from your Fund account to your predesignated
bank account. This service is not available for retirement plans. See
MoneyLineSM Services under The Delaware Difference for more information about
this service.

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<PAGE>

Taxes

The tax discussion set forth below is included for general information only.
Investors should consult their own tax advisers concerning the federal, state,
local or foreign tax consequences of an investment in the Fund.

On August 5, 1997, President Clinton signed into law the Taxpayer Relief Act
of 1997 (the "1997 Act"). This new law makes sweeping changes in the Internal
Revenue Code (the "Code"). Because many of these changes are complex, and only
indirectly affect the Fund and its distributions to you, they are discussed in
Part B. Changes in the treatment of capital gains, however, are discussed in
this section.

The Fund intends to distribute substantially all of its net investment income
and net capital gains, if any. Dividends from net investment income or net
short-term capital gains will be taxable to those investors who are subject to
income taxes as ordinary income, whether received in cash or in additional
shares. For corporate investors, dividends from net investment income will
generally qualify in part for the corporate dividends-received deduction. The
portion of dividends paid by the Fund that so qualifies will be designated each
year in a notice from Equity Funds IV, Inc. to the Fund's shareholders. For the
fiscal year ended September 30, 1997, no portion of the Fund's dividends from
net investment income qualified for the dividends-received deduction to
corporations.

Distributions paid by the Fund from long-term capital gains, whether received
in cash or in additional shares, are taxable to those investors who are subject
to income taxes as long-term capital gains, regardless of the length of time an
investor has owned shares in the Fund. The Fund does not seek to realize any
particular amount of capital gains during a year; rather, realized gains are a
by-product of Fund management activities. Consequently, capital gains
distributions may be expected to vary considerably from year to year. Also, for
those investors subject to tax, if purchases of shares in the Fund are made
shortly before the record date for a dividend or capital gains distribution, a
portion of the investment will be returned as a taxable distribution.

THE TREATMENT OF CAPITAL GAIN DISTRIBUTIONS UNDER THE TAXPAYER RELIEF ACT OF
1997

The 1997 Act creates a category of long-term capital gain for individuals that
will be taxed at new lower tax rates. For investors who are in the 28% or
higher federal income tax brackets, these gains will be taxed at a minimum of
20%. For investors who are in the 15% federal income tax bracket, these gains
will be taxed at a maximum of 10%. Capital gain distributions will qualify for
these new maximum tax rates, depending on when the Fund's securities were sold
and how long they were held by the Fund before they were sold. Investors who
want more information on holding periods and other qualifying rules relating to
these new rates should review the expanded discussion in Part B, or should
contact their own tax advisers.

Equity Funds IV, Inc. will advise you in its annual information reporting at
calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.

Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record on a specified date in one of those months, but which, for
operational reasons, may not be paid to the shareholder until the following
January, will be treated for tax purposes as if paid by the Fund and received
by the shareholder on December 31 of the year declared.

The sale of shares of the Fund is a taxable event and may result in a capital
gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund and any other funds in the Delaware Group. Any loss incurred on a sale
or exchange of Fund shares that had been held for six months or less will be
treated as a long-term capital loss to the extent of capital gain dividends
received with respect to such shares. All or a portion of the sales charge
incurred in acquiring Fund shares will be excluded from the federal tax basis
of any of such shares sold or exchanged within 90 days of their purchase (for
purposes of determining gain or loss upon sale of such shares) if the sale
proceeds are reinvested in the Fund or in another fund in the Delaware Group of
funds and a sales charge that would otherwise apply to the reinvestment is
reduced or eliminated. Any portion of such sales charge excluded from the tax
basis of the shares sold will be added to the tax basis of the shares acquired
in the reinvestment.

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<PAGE>

The automatic conversion of Class B Shares into Class A Shares at the end of
approximately eight years after purchase will be tax-free for federal tax
purposes. See Automatic Conversion of Class B Shares under Classes of Shares.

Each year, Equity Funds IV, Inc. will mail to you information on the tax
status of the Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income, if any,
that is derived from U.S. government securities that are exempt from state
income tax. Of course, shareholders who are not subject to tax on their income
would not be required to pay tax on amounts distributed to them by the Fund.

Equity Funds IV, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your
proper Taxpayer Identification Number and by certifying that you are not
subject to backup withholding.

See Accounting and Tax Issues and Distributions and Taxes in Part B for
additional information on tax matters relating to the Fund and its
shareholders.

29
<PAGE>

Calculation of Offering Price and Net Asset Value Per Share

The net asset value ("NAV") per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any liabilities
(expenses and fees are accrued daily) and dividing by the number of shares
outstanding. Portfolio securities for which market quotations are available are
priced at market value. Foreign securities expressed in foreign currency values
will be converted into U.S. dollar values at the mean between the currencies'
bid and offered quotations. Short-term investments having a maturity of less
than 60 days are valued at amortized cost, which approximates market value. All
other securities are valued at their fair value as determined in good faith and
in a method approved by Equity Funds IV, Inc.'s Board of Directors.

Class A Shares are purchased at the offering price per share, while Class B
Shares and Class C Shares are purchased at the NAV per share. The offering
price per share of Class A Shares consists of the NAV per share next computed
after the order is received, plus any applicable front-end sales charges.

The offering price and NAV are computed as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the

Exchange is open.

The net asset values of all outstanding shares of each class of the Fund will
be computed on a pro-rata basis for each outstanding share based on the
proportionate participation in the Fund represented by the value of shares of
that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that DelCap Fund Institutional Class will not incur any of the expenses
under the Fund's 12b-1 Plans and Class A, Class B and Class C Shares alone will
bear the 12b-1 Plan expenses payable under their respective Plans. Due to the
specific distribution expenses and other costs that will be allocable to each
class, the NAV per share of each class of the Fund will vary.

30
<PAGE>

Management of the Fund

DIRECTORS

The business and affairs of Equity Funds IV, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding the directors and officers.

INVESTMENT MANAGER

The Manager furnishes investment management services to the Fund.

The Manager is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a wholly
owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. DMH and the Manager are now indirect, wholly owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. In connection with the merger, a new
Investment Management Agreement between Equity Funds IV, Inc. on behalf of the
Fund and the Manager was executed following shareholder approval.

The Manager manages the Fund's portfolio and makes investment decisions for
the Fund, which are implemented by the Fund's Trading Department. The Manager
also administers Equity Funds IV, Inc.'s affairs and pays the salaries of all
the directors, officers and employees of Equity Funds IV, Inc. who are
affiliated with the Manager. For these services, the Manager is paid an annual
fee of 3/4 of 1% of the average daily net assets of the Fund, less the Fund's
proportionate share of all directors' fees paid to the unaffiliated directors
by Equity Funds IV, Inc. The Fund's fee is higher than that paid by many other
funds and may be higher or lower than that paid by funds with comparable
investment objectives. Investment management fees paid by the Fund for the
fiscal year ended September 30, 1997 were 0.75% of its average daily net
assets. The directors of Equity Funds IV, Inc. annually review fees paid to the
Manager.

Gerald S. Frey, Vice President/Senior Portfolio Manager of the Fund, has had
primary responsibility for making day-to-day investment decisions for the Fund
since March 1997. Mr. Frey was a co-manager for the Fund from June 1996 to
March 1997. Mr. Frey has over 20 years' experience in the money management
business and holds a BA in Economics from Bloomsburg University and attended
Wilkes College and New York University. Prior to joining the Delaware Group in
1996, he was a Senior Director with Morgan Grenfell Capital Management in New
York for approximately nine years.

31
<PAGE>

In making investment decisions for the Fund, Mr. Frey regularly consultswith
Wayne A. Stork, Marshall T. Bassett, John A. Heffern and Lori Wachs. Mr. Stork,
Chairman of Delaware Management Company, Inc. and Equity Funds IV, Inc.'s Board
of Directors, is a graduate of Brown University and attended New York
University's Graduate School of Business Administration. Mr. Stork joined the
Delaware Group in 1962 and has served in various executive capacities at
different times within the Delaware organization. Marshall T. Bassett, Vice
President, joined Delaware in 1997. In his most recent position, he served as
Vice President in Morgan Stanley Asset Management's Emerging Growth Group,
where he analyzed small growth companies. Prior to that, he was a trust officer
at Sovran Bank and Trust Company. He received his bachelor's degree and MBA
from Duke University. John A. Heffern, Vice President, holds a bachelor's
degree and an MBA from the University of North Carolina at Chapel Hill. He
joined Delaware in 1997. Previously, he was a Senior Vice President, Equity
Research at NatWest Securities Corporation's Specialty Finance Services unit.
Prior to that, he was a Principal and Senior Regional Bank Analyst at Alex.
Brown & Sons. Ms. Wachs is an Assistant Vice President. She joined the Delaware
Group in 1992 from Goldman Sachs, where she was an equity analyst for two
years. She is a graduate of the University of Pennsylvania's Wharton School,
where she majored in Finance and Oriental studies.

PORTFOLIO TRADING PRACTICES

The Fund normally will not invest for short-term trading purposes. However,
the Fund may sell securities without regard to the length of time they have
been held. The degree of portfolio activity will affect brokerage costs of the
Fund and may affect taxes payable by the Fund's shareholders. Given the Fund's
investment objective, its annual portfolio turnover rate may exceed 100%. A
turnover rate of 100% would occur, for example, if all the investments in the
Fund's portfolio at the beginning of the year were replaced by the end of the
year. The turnover rate also may be affected by cash requirements for
redemptions and repurchases of Fund shares.

The Fund uses its best efforts to obtain the best available price and most
favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager
or its advisory clients. These services may be used by the Manager in servicing
any of its accounts. Subject to best price and execution, the Fund may consider
a broker/dealer's sales of shares of funds in the Delaware Group of funds in
placing portfolio orders and may place orders with broker/dealers that have
agreed to defray certain expenses of such funds, such as custodian fees.

PERFORMANCE INFORMATION

From time to time, the Fund may quote the total return performance of the
Classes in advertising and other types of literature.

Total return will be based on a hypothetical $1,000 investment, reflecting the
reinvestment of all distributions at net asset value and: (i) in the case of
Class A Shares, the impact of the maximum front-end sales charge at the
beginning of each specified period; and (ii) in the case of Class B Shares and
Class C Shares, the deduction of any applicable CDSC at the end of the relevant
period. Each presentation will include the average annual total return for one-
, five- and ten-year or life-of fund periods, as relevant. The Fund may also
advertise aggregate and average total return information concerning a Class
over additional periods of time. In addition, the Fund may present total return
information that does not reflect the deduction of the maximum front-end sales
charge or any applicable CDSC. In this case, such total return information
would be more favorable than total return information that includes deductions
of the maximum front-end sales charge or any applicable CDSC.
Because securities prices fluctuate, investment results of the Classes will
fluctuate over time and past performance should not be considered a guarantee
of future results.

DISTRIBUTION (12B-1) AND SERVICE

The Distributor, Delaware Distributors, L.P., serves as the national
distributor of the Fund's shares under a Distribution Agreement with Equity
Funds IV, Inc. dated as of April 3, 1995, as amended on November 29, 1995.
Equity Funds IV, Inc. has adopted a separate distribution plan under Rule 12b-
1 for each of the Class A Shares, Class B Shares and Class C Shares (the
"Plans"). The Plans permit the Fund to pay the Distributor from the assets of
the respective Classes a monthly fee for the Distributor's services and
expenses in distributing and promoting sales of shares.

32
<PAGE>

These expenses include, among other things, preparing and distributing
advertisements, sales literature, and prospectuses and reports used for sales
purposes, compensating sales and marketing personnel, holding special
promotions for specified periods of time, and paying distribution and
maintenance fees to brokers, dealers and others. In connection with the
promotion of shares of the Classes, the Distributor may, from time to time, pay
to participate in dealer-sponsored seminars and conferences, and reimburse
dealers for expenses incurred in connection with preapproved seminars,
conferences and advertising. The Distributor may pay or allow additional
promotional incentives to dealers as part of preapproved sales contests and/or
to dealers provide extra training and information concerning a Class and
increase sales of the Class. In addition, the Fund may make payments from the
12b-1 Plan fees of the respective Class directly to others, such as banks, who
aid in the distribution of Class shares or provide services in respect of a
Class, pursuant to service agreements with Equity Funds IV, Inc.

The 12b-1 Plan expenses relating to each of the Class B Shares and the Class C
Shares are also used to pay the Distributor for advancing the commission costs
to dealers with respect to the initial sale of such shares.

The aggregate fees paid by the Fund from the assets of the respective Classes
to the Distributor and others under the Plans may not exceed (i) 0.30% of the
Class A Shares' average daily net assets in any year, and (ii) 1% (0.25% of
which are fees to be paid by the Fund to the Distributor, dealers and others,
for providing personal service and/or maintaining shareholder accounts) of each
of the Class B Shares' and the Class C Shares' average daily net assets in any
year. The Fund's Class A, Class B and Class C Shares will not incur any
distribution expenses beyond these limits, which may not be increased without
shareholder approval.

While payments pursuant to the Plans may not exceed 0.30% annually with
respect to the Class A Shares, and 1% annually with respect to each of the
Class B Shares and the Class C Shares, the Plans do not limit fees to amounts
actually expended by the Distributor. It is therefore possible that the
Distributor may realize a profit in any particular year. However, the
Distributor currently expects that its distribution expenses will likely equal
or exceed payments to it under the Plans. The Distributor may, however, incur
such additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly
fees paid to the Distributor under the Plans are subject to the review and
approval of Equity Funds IV, Inc.'s unaffiliated directors, who may reduce the
fees or terminate the Plans at any time.

Equity Funds IV, Inc.'s Plans do not apply to DelCap Fund Institutional Class.
Those shares are not included in calculating the Plans' fees, and the Plans are
not used to assist in the distribution and marketing of DelCap Fund
Institutional Class.

The directors annually review fees paid to the Distributor and the Transfer
Agent. The Distributor and the Transfer Agent are also indirect, wholly owned
subsidiaries of DMH.

EXPENSES

The Fund is responsible for all of its own expenses other than those borne by
the Manager under the Investment Management Agreement and those borne by the
Distributor under the Distribution Agreement. The ratio of expenses to average
daily net assets for the fiscal year ended September 30, 1997 was 1.36% for
Class A Shares, 2.06% for Class B Shares and 2.06% for Class C Shares. The
expense ratio of each Class reflects the impact of its 12b-1 Plan.

Equity Funds IV, Inc. is an open-end management investment company. The Fund's
portfolio of assets is diversified as defined by the 1940 Act. In addition to
the Fund, Equity Funds IV, Inc. currently offers one other series of shares,
the Capital Appreciation Fund. Commonly known as a mutual fund, Equity Funds
IV, Inc. was organized as a Maryland corporation in September 1985.

Equity Funds IV, Inc. shares have a par value of $.01, equal voting rights,
except as noted below, and are equal in all other respects. All Fund shares
have noncumulative voting rights which means that the holders of more than 50%
of Equity Funds IV, Inc.'s shares voting for the election of directors can
elect 100% of the directors if they choose to do so. Under Maryland law, Equity
Funds IV, Inc. is not required, and does not intend, to hold annual meetings of
shareholders unless, under certain circumstances, it is required to do so under
the 1940 Act. Shareholders of 10% or more of Equity Funds IV, Inc.'s
outstanding shares may request that a special meeting be called to consider the
removal of a director.

33
<PAGE>

In addition to Class A Shares, Class B Shares and Class C Shares, the Fund
also offers DelCap Fund Institutional Class shares. Shares of each class
represent proportionate interests in the assets of the Fund and have the same
voting and other rights and preferences as the other classes of the Fund,
except that shares of DelCap Fund Institutional Class are not subject to, and
may not vote on matters affecting, the Distribution Plans under Rule 12b-1
relating to the Class A, Class B and Class C Shares. Similarly, as a general
matter, holders of Class A Shares, Class B Shares and Class C Shares may vote
only on matters affecting the 12b-1 Plan that relates to the class of shares
that they hold. However, the Class B Shares may vote on any proposal to
increase materially the fees to be paid by the Fund under the Rule 12b-1 Plan
relating to the Class A Shares.

Prior to November 29, 1996, Delaware Group Equity Funds IV, Inc. offered a
single series of shares, the Concept I Series, which was known and did business
as DelCap Fund. Also on November 29, 1996, the name of Delaware Group DelCap
Fund, Inc. changed to Delaware Group Equity Funds IV, Inc.

34
<PAGE>

Other Investment Policies and Risk Considerations

SMALL TO MEDIUM-SIZED COMPANIES

The Fund invests its assets in equity securities of small to medium-sized
companies. These stocks have historically been more volatile in price than
larger capitalization stocks, such as those included in the Standard & Poor's
500 Index. This is because, among other things, smaller companies have a lower
degree of liquidity and tend to have a greater sensitivity to changing economic
conditions. These companies may have narrow product lines, markets or financial
resources, or may depend on a limited management group. In addition, these
companies are typically subject to a greater degree of changes in their
earnings and prospects. The companies' securities may trade less frequently and
have a smaller trading volume. The securities may be traded only in the over-
the-counter markets or on a regional securities exchange. In addition to
exhibiting greater volatility, smaller capitalization securities may, to some
degree, fluctuate independently of the stocks of larger capitalization
companies. For example, the stocks of smaller capitalization companies may
decline in price as the price of larger company stocks rise, or vice versa.

FOREIGN SECURITIES

The Fund may invest up to 25% of its assets in foreign securities. Foreign
markets may be more volatile than U.S. markets. Such investments involve
sovereign risk in addition to the normal risks associated with American
securities. These risks include political risks, foreign taxes and exchange
controls and currency fluctuations. For example, foreign portfolio investments
may fluctuate in value due to changes in currency rates (i.e., the value of
foreign investments would increase with a fall in the value of the dollar, and
decrease with a rise in the value of the dollar) and control regulations apart
from market fluctuations. The Fund may also experience delays in foreign
securities settlement.

AMERICAN DEPOSITORY RECEIPTS

The Fund may make foreign investments through the purchase and sale of
sponsored or unsponsored American Depository Receipts ("ADRs"). ADRs are
receipts typically issued by a U.S. bank or trust company which evidence
ownership of underlying securities issued by a foreign corporation. "Sponsored"
ADRs are issued jointly by the issuer of the underlying security and a
depository, whereas "unsponsored" ADRs are issued without participation of the
issuer of the deposited security. Holders of unsponsored ADRs generally bear
all the costs of such facilities and the depository of an unsponsored facility
frequently is under no obligation to distribute shareholder communications
received from the issuer of the deposited security or to pass through voting
rights to the holders of such receipts in respect of the deposited securities.
Therefore, there may not be a correlation between information concerning the
issuer of the security and the market value of an unsponsored ADR.

RULE 144A SECURITIES

The Fund may invest in restricted securities, including securities eligible
for resale without registration pursuant to Rule 144A ("Rule 144A Securities")
under the Securities Act of 1933. Rule 144A permits many privately placed and
legally restricted securities to be freely traded among certain institutional
buyers such as the Fund. The Fund may invest no more than 10% of the value of
its net assets in illiquid securities.

While maintaining oversight, the Board of Directors has delegated to the
Manager the day-to-day function of determining whether or not individual Rule
144A Securities are liquid for purposes of the Fund's 10% limitation on
investments in illiquid assets. The Board has instructed the Manager to
consider the following factors in determining the liquidity of a Rule 144A
Security: (i) the frequency of trades and trading volume for the security; (ii)
whether at least three dealers are willing to purchase or sell the security and
the number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; (iv) the nature of the security and the nature
of the marketplace trades (e.g., the time needed to dispose of the security,
the method of soliciting offers, and the mechanics of transfer).

35
<PAGE>

If the Manager determines that a Rule 144A Security which was previously
determined to be liquid is no longer liquid and, as a result, the Fund's
holdings of illiquid securities exceed the Fund's 10% limit on investments in
such securities, the Manager will determine what action to take to ensure that
the Fund continues to adhere to such limitation.

PORTFOLIO LOAN TRANSACTIONS

The Fund may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.

The major risk to which the Fund would be exposed on a loan transaction is the
risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, the Fund will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to
be received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.

REPURCHASE AGREEMENTS

The Fund may also use repurchase agreements that are at least 100%
collateralized by securities in which the Fund can invest directly. Repurchase
agreements help the Fund to invest cash on a temporary basis. The Fund may
invest cash balances in joint repurchase agreements with other Delaware Group
funds. Under a repurchase agreement, the Fund acquires ownership and possession
of a security, and the seller agrees to buy the security back at a specified
time and higher price. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities and the Fund could
incur a loss. That loss, if any, would be the difference between the repurchase
price and the market value of the security. To minimize those possibilities,
the Fund may enter into repurchase agreements with banks and broker/dealers
deemed by the Manager to be creditworthy under guidelines approved by the Board
of Directors and those which the Manager, under such guidelines, determines to
present minimal credit risks and which are of high quality.

BORROWING

The Fund is permitted under certain circumstances to borrow money. Investment
securities will not normally be purchased while the Fund has an outstanding
borrowing.

CALL OPTIONS

WRITING A COVERED CALL OPTION ON SECURITIES

A covered call option obligates the Fund to sell one of its securities for an
agreed price up to an agreed date. When the Fund writes a call, it receives a
premium and agrees to sell the callable securities to a purchaser of a
corresponding call during the call period (usually, not more than nine months)
at a fixed price regardless of market price changes during the call period. The
advantage is that the Fund receives premium income for the limited purpose of
offsetting the costs of purchasing put options or offsetting any capital loss
or decline in the market value of the security. However, if the Manager's
forecast is wrong, the Fund may not fully participate in the market
appreciation if the security's price rises.

WRITING A CALL OPTION ON STOCK INDICES

Writing a call option on stock indices is similar to the writing of a call
option on an individual stock. Stock indices used will include, but not be
limited to, the S&P 500, the S&P 100 and the S&P Over-The-Counter ("OTC") 250.

PUT OPTIONS
PURCHASING A PUT OPTION

A put option gives the Fund the right to sell one of its securities for an
agreed price up to an agreed date. The advantage is that the Fund can be
protected should the market value of the security decline. However, the Fund
must pay a premium for this right whether or not the put option is exercised.

PURCHASING A PUT OPTION ON STOCK INDICES

Purchasing a protective put option on stock indices is similar to the purchase
of protective puts on an individual stock. Indices used will include, but not
be limited to, the S&P 100 and the S&P OTC 250.

CLOSING TRANSACTIONS

Closing transactions essentially let the Fund offset a put option or covered
call option prior to its exercise or expiration. If the Fund cannot effect a
closing transaction, it may have to hold a security it would otherwise sell or
deliver a security it might want to hold.

Part B describes certain of these investment policies and risk considerations.
Part B sets forth other investment policies, risk considerations and more
specific investment restrictions.

36
<PAGE>

Appendix A-- Investment Illustrations

ILLUSTRATIONS OF HYPOTHETICAL RETURNS IMPACT ON INVESTMENTS BASED ON PURCHASE
OPTIONS
$10,000 PURCHASE

<TABLE>
<CAPTION>
SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4
NO REDEMPTION REDEEM 1ST YEAR REDEEM 3RD YEAR REDEEM 5TH YEAR
------------------------- ----------------------- ----------------------- -----------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
YEAR ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000 9,525 10,000 10,000 9,525 10,000 10,000
1 10,478 10,930 10,930 10,478 10,530 10,830+ 10,478 10,930 10,930 10,478 10,930 10,930
2 11,525 11,946 11,946 11,525 11,946 11,946 11,525 11,946 11,946
3 12,678 13,058 13,058 12,678 12,758 13,058+ 12,678 13,058 13,058
4 13,946 14,272 14,272 13,946 14,272 14,272
5 15,340 15,599 15,599 15,340 15,399 15,599+
6 16,874 17,050 17,050
7 18,562 18,636 18,636
8 20,418+ 20,369 20,369
9 22,459 22,405* 22,263
10 24,705 24,646* 24,333
</TABLE>
*This assumes that Class B Shares were converted to Class A Shares at the end
of the eighth year.

$250,000 PURCHASE
<TABLE>
<CAPTION>
SCENARIO 1 SCENARIO 2 SCENARIO 3 SCENARIO 4
NO REDEMPTION REDEEM 1ST YEAR REDEEM 3RD YEAR REDEEM 5TH YEAR
------------------------- ----------------------- ----------------------- ------------------------
CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C CLASS A CLASS B CLASS C
YEAR ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000 243,750 250,000 250,000 243,750 250,000 250,000
1 268,125 273,250 273,250 268,125 263,250 270,750+ 268,125 273,250 273,250 268,125 273,250 273,250
2 294,938 298,662 298,662 294,938 298,662 298,662 294,938 298,662 298,662
3 324,431 326,438 326,438 324,431 318,938 326,438+ 324,431 326,438 326,438
4 356,874+ 356,797 356,797 356,874+ 356,797 356,797
5 392,562 389,979 389,979 392,562 384,979 389,979
6 431,818 426,247 426,247
7 475,000 465,888 465,888
8 522,500 509,215 509,215
9 574,750 560,137* 556,572
10 632,225 616,150* 608,333
</TABLE>
*This assumes that Class B Shares were converted to Class A Shares at the end
of the eighth year.

Assumes a hypothetical return for Class A of 10% per year, a hypothetical
return for Class B of 9.3% for years 1-8 and 10% for years 9-10, and a
hypothetical return for Class C of 9.3% per year. Hypothetical returns vary due
to the different expense structures for each Class and do not represent actual
performance.

Class A purchase subject to appropriate sales charge breakpoint (4.75% @
$10,000; 3.75% @ $100,000; 2.50% @ $250,000).

Class B purchase assessed appropriate CDSC upon redemption (4%-4%-3%-3%-2%-1%
in years 1-2-3-4-5-6).

Class C purchase assessed 1% CDSC upon redemption in year 1.

Figures marked "+" identify which Class offers the greater return potential
based on investment amount, the holding period and the expense structure of
each Class.

37
<PAGE>

Appendix B-- Classes Offered
<TABLE>
<CAPTION>
A CLASS B CLASS C CLASS CONSULTANT CLASS
------- ------- ------- ----------------
<S> <C> <C> <C> <C>
GROWTH OF CAPITAL
Aggressive Growth Fund x x x --
Trend Fund x x x --
DelCap Fund x x x --
Small Cap Value Fund x x x --
U.S. Growth Fund x x x --
Growth Stock Fund x x x --
Tax-Efficient Equity Fund x x x --
TOTAL RETURN
Blue Chip Fund x x x --
Quantum Fund x x x --
Devon Fund x x x --
Decatur Total Return Fund x x x --
Decatur Income Fund x x x --
Delaware Fund x x x --
REIT Fund x x x --
INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund x x x --
New Pacific Fund x x x --
Overseas Equity Fund x x x --
International Equity Fund x x x --
Global Assets Fund x x x --
Global Bond Fund x x x --
CURRENT INCOME
Delchester Fund x x x --
Strategic Income Fund x x x --
U.S. Government Fund x x x --
Delaware-Voyageur US Government
Securities Fund x x x --
Limited-Term Government Fund x x x --
TAX PREFERRED INCOME
National High Yield Municipal Bond
Fund x x x --
Tax-Free USA Fund x x x --
Tax-Free Insured Fund x x x --
Tax-Free USA Intermediate Fund x x x --
Delaware-Voyageur Tax-Free Arizona
Insured Fund x x x --
Delaware-Voyageur Tax-Free Arizona
Fund x x x --
Delaware-Voyageur Tax-Free California
Insured Fund x x x --
Delaware-Voyageur Tax-Free California
Fund x x x --
Delaware-Voyageur Tax-Free Colorado
Fund x x x --
Delaware-Voyageur Tax-Free Florida
Insured Fund x x x --
Delaware-Voyageur Tax-Free Florida
Intermediate Fund x x x --
Delaware-Voyageur Tax-Free Florida
Fund x x x --
Delaware-Voyageur Tax-Free Idaho Fund x x x --
Delaware-Voyageur Tax-Free Iowa Fund x x x --
Delaware-Voyageur Tax-Free Kansas Fund x x x --
</TABLE>

<PAGE>

Appendix B-- Classes Offered--(Con't)

<TABLE>
<CAPTION>
A CLASS B CLASS C CLASS CONSULTANT CLASS
------- ------- ------- ----------------
<S> <C> <C> <C> <C>
Delaware-Voyageur Minnesota High Yield
Municipal Bond Fund x x x --
Delaware-Voyageur Minnesota Insured
Fund x x x --
Delaware-Voyageur Tax-Free Minnesota
Intermediate Fund x x x --
Delaware-Voyageur Tax-Free Minnesota
Fund x x x --
Delaware-Voyageur Tax-Free Missouri
Insured Fund x x x --
Tax-Free New Jersey Fund x x x --
Delaware-Voyageur Tax-Free New Mexico
Fund x x x --
Delaware-Voyageur Tax-Free New York
Fund x x x --
Delaware-Voyageur Tax-Free North
Dakota Fund x x x --
Tax-Free Ohio Fund x x x --
Delaware-Voyageur Tax-Free Oregon
Insured Fund x x x --
Tax-Free Pennsylvania Fund x x x --
Delaware-Voyageur Tax-Free Utah Fund x x x --
Delaware-Voyageur Tax-Free Washington
Insured Fund x x x --
Delaware-Voyageur Tax-Free Wisconsin
Fund x x x --
MONEY MARKET FUNDS
Delaware Cash Reserve x x x x
U.S. Government Money Fund x -- -- x
Tax-Free Money Fund x -- -- x
</TABLE>

39
<PAGE>

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

The Delaware Group includes funds with a wide range of investment objectives.
Stock funds, income funds, national and state-specific tax-exempt funds, money
market funds, global and international funds and closed-end funds give
investors the ability to create a portfolio that fits their personal financial
goals. For more information, contact your financial adviser or call Delaware
Group at 800-523-4640.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

[LOGO PRINTED ON RECYCLED PAPER APPEARS HERE]
Printed in the U.S.A. on recycled paper.

P-016[--] RRD11/97
<PAGE>

PROSPECTUS

DELCAP FUND DECEMBER 1, 1997
INSTITUTIONAL
--------------------------------------------------------
1818 MARKET STREET, PHILADELPHIA, PA 19103

FOR MORE INFORMATION ABOUT THE DELCAP FUND INSTITUTIONAL CLASS CALL DELAWARE
GROUP AT 800-828-5052.

This PROSPECTUS describes the DelCap Fund series (the "Fund") (formerly known
as Concept I Series), of Delaware Group Equity Funds IV, Inc. ("Equity Funds
IV, Inc.") (formerly known as Delaware Group DelCap Fund, Inc.), a
professionally-managed mutual fund of the series type. The investment objective
of the Fund is long-term capital growth. The strategy will be to invest
primarily in common stocks that, in the judgment of the Manager, are of
superior quality and those securities convertible into such common stocks.

The Fund currently offers one institutional class: the DelCap Fund
Institutional Class (the "Class").

This PROSPECTUS relates only to the Class and sets forth information that you
should read and consider before you invest. Please retain it for future
reference. The Fund's STATEMENT OF ADDITIONAL INFORMATION ("PART B" of Equity
Funds IV, Inc.'s registration statement), dated December 1, 1997, as it may be
amended from time to time, contains additional information about the Fund and
has been filed with the Securities and Exchange Commission. PART B is
incorporated by reference into this PROSPECTUS and is available, without
charge, by writing to Delaware Distributors, L.P. at the above address or by
calling the above number. The Fund's financial statements appear in its ANNUAL
REPORT, which will accompany any response to requests for PART B.
The Fund also offers DelCap Fund A Class, DelCap Fund B Class and DelCap Fund
C Class. Shares of these classes are subject to sales charges and other
expenses, which may affect performance. A prospectus for these classes can be
obtained by writing to Delaware Distributors, L.P. at the above address or by
calling 800-523-4640.

TABLE OF CONTENTS
<TABLE>
<S> <C>
COVER PAGE....................... 1
SYNOPSIS......................... 2
SUMMARY OF EXPENSES.............. 3
FINANCIAL HIGHLIGHTS............. 4
INVESTMENT OBJECTIVE AND POLICIES
SUITABILITY..................... 5
INVESTMENT STRATEGY............. 5
CLASSES OF SHARES................ 6
</TABLE>
<TABLE>
<S> <C>
HOW TO BUY SHARES...................................................... 7
REDEMPTION AND EXCHANGE................................................ 8
DIVIDENDS AND DISTRIBUTIONS............................................ 10
TAXES.................................................................. 10
CALCULATION OF NET ASSET VALUE PER SHARE............................... 11
MANAGEMENT OF THE FUND................................................. 12
OTHER INVESTMENT POLICIES
AND RISK CONSIDERATIONS............................................... 14
</TABLE>

BE SURE TO CONSULT YOUR FINANCIAL ADVISER WHEN MAKING INVESTMENTS.
MUTUAL FUNDS CAN BE A VALUABLE PART OF YOUR FINANCIAL PLAN; HOWEVER,
SHARES OF THE FUND ARE NOT FDIC OR NCUSIF INSURED, ARE NOT
GUARANTEED BY ANY BANK OR ANY CREDIT UNION, ARE NOT OBLIGATIONS OF
ANY BANK OR ANY CREDIT UNION, AND INVOLVE INVESTMENT RISK, INCLUDING
THE POSSIBLE LOSS OF THE PRINCIPAL AMOUNT INVESTED. SHARES OF THE
FUND ARE NOT BANK OR CREDIT UNION DEPOSITS.

1
<PAGE>

SYNOPSIS

INVESTMENT OBJECTIVE

The investment objective of the Fund is long-term capital growth. The strategy
will be to invest primarily in common stocks that, in the judgment of the
Manager, are of superior quality and those securities convertible into such
common stocks. For further details, see INVESTMENT OBJECTIVE AND POLICIES and
OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS.

RISK FACTORS AND SPECIAL CONSIDERATIONS

OBJECTIVE AND POLICIES.

2. The Fund may enter into options for hedging purposes to counterbalance
portfolio volatility. While the Fund does not engage in options for speculative
purposes, there are risks which result from use of these instruments by the
Fund, and the investor should review the descriptions of such in this
Prospectus. See INVESTMENT STRATEGY under INVESTMENT OBJECTIVE AND POLICIES,
and OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS.

INVESTMENT MANAGER, DISTRIBUTOR AND SERVICE AGENT

Delaware Management Company, Inc. (the "Manager") furnishes investment
management services to the Fund, subject to the supervision and direction of
Equity Funds IV, Inc.'s Board of Directors. The Manager also provides
investment management services to certain of the other funds in the Delaware
Group. Delaware Distributors, L.P. (the "Distributor") is the national
distributor for the Fund and for all of the other mutual funds in the Delaware
Group. Delaware Service Company, Inc. (the "Transfer Agent") is the shareholder
servicing, dividend disbursing, accounting services and transfer agent for the
Fund and for all of the other mutual funds in the Delaware Group. See SUMMARY
OF EXPENSES and MANAGEMENT OF THE FUND for further information regarding the
Manager and fees payable under the Fund's Investment Management Agreement.

PURCHASE PRICE

Shares of the Class offered by this PROSPECTUS are available at net asset
value, without a front-end or contingent deferred sales charge, and are not
subject to distribution fees under a Rule 12b-1 distribution plan. See CLASSES
OF SHARES.

REDEMPTION AND EXCHANGE

Shares of the Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See REDEMPTION
AND EXCHANGE.

OPEN-END INVESTMENT COMPANY

Equity Funds IV, Inc., which was organized as a Maryland corporation in 1985,
is an open-end management investment company. The Fund's portfolio of assets is
diversified as defined by the Investment Company Act of 1940 (the "1940 Act").
See SHARES under MANAGEMENT OF THE FUND.

2
<PAGE>

SUMMARY OF EXPENSES

SHAREHOLDER TRANSACTION EXPENSES
- ---------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)................................. None
Maximum Sales Charge Imposed on Reinvested Dividends
(as a percentage of offering price)................................. None
Exchange Fees........................................................ None*
</TABLE>
<TABLE>
<CAPTION>
ANNUAL OPERATING EXPENSES
(AS A PERCENTAGE OF AVERAGE DAILY NET ASSETS)
- ---------------------------------------------------------------------------
<S> <C>
Management Fees...................................................... 0.75%
12b-1 Fees........................................................... None
Other Operating Expenses............................................. 0.31%
-----
Total Operating Expenses............................................ 1.06%
=====
</TABLE>

*Exchanges are subject to the requirements of each fund and a front-end sales
charge may apply.

For expense information about the DelCap Fund A Class, B Class and C Class,
see the separate prospectus relating to those classes.
The following example illustrates the expenses that an investor would pay on a
$1,000 investment over various time periods, assuming (1) a 5% annual rate of
return, and (2) redemption at the end of each time period.

<TABLE>
<CAPTION>
1 YEAR 3 YEARS 5 YEARS 10 YEARS
------ ------- ------- --------
<S> <C> <C> <C>
$11 $34 $58 $129
</TABLE>

THIS EXAMPLE SHOULD NOT BE CONSIDERED A REPRESENTATION OF PAST OR FUTURE
EXPENSES OR PERFORMANCE. ACTUAL EXPENSES MAY BE GREATER OR LESS THAN THOSE
SHOWN.

The purpose of the above tables is to assist the investor in understanding the
various costs and expenses that an investor in the Class will bear directly or
indirectly.

3
<PAGE>

FINANCIAL HIGHLIGHTS

The following financial highlights are derived from the financial statements of
Delaware Group Equity Funds IV, Inc.--DelCap Fund and have been audited by
Ernst & Young LLP, independent auditors. The data should be read in conjunction
with the financial statements, related notes, and the report of Ernst & Young
LLP, all of which are incorporated by reference into PART B. Further
information about the Fund's performance is contained in its ANNUAL REPORT to
shareholders. A copy of the Fund's ANNUAL REPORT (including the report of Ernst
& Young LLP) may be obtained from Equity Funds IV, Inc. upon request at no
charge.
- --------------------------------------------------------------------------------

<TABLE>
<CAPTION>
INSTITUTIONAL CLASS SHARES
--------------------------------------------------
PERIOD
11/9/92/1/
YEAR ENDED THROUGH
9/30/97 9/30/96 9/30/95 9/30/94 9/30/93
<S> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $31.160 $29.130 $25.710 $26.140 $22.000
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment
Income
(Loss)/3/....... (0.152) (0.123) (0.091) (0.080) (0.027)
Net Gains
(Losses) on
Securities
(both realized
and
unrealized)..... 3.592 5.693 5.341 0.470 4.167
-------- -------- -------- -------- -------
Total From
Investment
Operations...... 3.440 5.570 5.250 0.390 4.140
-------- -------- -------- -------- -------
LESS DIVIDENDS
AND
DISTRIBUTIONS
Dividends from
Net Investment
Income.......... none none none none none
Distributions
from Capital
Gains........... (3.590) (3.540) (1.830) (0.820) none
-------- -------- -------- -------- -------
Total Dividends
and
Distributions... (3.590) (3.540) (1.830) (0.820) none
-------- -------- -------- -------- -------
Net Asset Value,
End of Period... $ 31.010 $31.160 $29.130 $25.710 $26.140
======== ======== ======== ======== =======
- -------------------------------------------------------------------------
TOTAL RETURN.... 12.75% 21.44% 22.45% 1.48% 21.31%
- -------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End
of Period (000's
omitted)........ $131,319 $178,197 $129,378 $110,126 $85,588
Ratio of
Expenses to
Average Daily
Net Assets...... 1.06% 1.05% 1.07% 1.05% 1.02%
Ratio of Net
Investment
Income (Loss) to
Average Daily
Net Assets...... (0.56%) (0.44%) (0.37%) (0.38%) (0.15%)
Portfolio
Turnover Rate... 105% 72% 51% 34% 51%
Average
Commission Rate
Paid/5/......... $ 0.0599 $ 0.0600 N/A N/A N/A

<CAPTION>
INSTITUTIONAL CLASS SHARES
-----------------------------------------------------------------------------

YEAR ENDED
9/30/93/2/ 9/30/92/2/ 9/30/91/2/ 9/30/90/2/ 9/30/89/2/ 9/30/88/2/
<S> <C> <C> <C> <C> <C> <C>
Net Asset Value,
Beginning of
Period.......... $20.730 $21.470 $15.810 $19.060 $13.920 $14.930
INCOME FROM
INVESTMENT
OPERATIONS
Net Investment
Income
(Loss)/3/....... (0.125) (0.059) 0.064 0.419 0.201 0.042
Net Gains
(Losses) on
Securities
(both realized
and
unrealized)..... 5.475 (0.651) 6.496 (3.219) 5.059 (0.357)
---------- -------- --------- -------- -------- --------
Total From
Investment
Operations...... 5.350 (0.710) 6.560 (2.800) 5.260 (0.315)
---------- -------- --------- -------- -------- --------
LESS DIVIDENDS
AND
DISTRIBUTIONS
Dividends from
Net Investment
Income.......... none (0.030) (0.410) (0.160) (0.120) (0.430)
Distributions
from Capital
Gains........... none none (0.490) (0.290) none (0.265)
---------- -------- --------- -------- -------- --------
Total Dividends
and
Distributions... none (0.030) (0.900) (0.450) (0.120) (0.695)
---------- -------- --------- -------- -------- --------
Net Asset Value,
End of Period... $26.080 $20.730 $21.470 $15.810 $19.060 $13.920
========== ======== ========= ======== ======== ========
- --------------------------------------------------------------------------------------------------
TOTAL RETURN.... 25.81%/4/ (3.32%)/4/ 43.25%/4/ (14.99%)/4/ 38.15%/4/ (2.26%)/4/
- --------------------------------------------------------------------------------------------------
RATIOS/SUPPLEMENTAL
DATA
Net Assets, End
of Period (000's
omitted)........ $1,057,358 $993,125 $ 512,356 $155,392 $138,589 $114,122
Ratio of
Expenses to
Average Daily
Net Assets...... 1.30% 1.39% 1.43% 1.41% 1.44% 1.55%
Ratio of Net
Investment
Income (Loss) to
Average Daily
Net Assets...... (0.43%) (0.26%) 0.63% 2.61% 1.28% 0.31%
Portfolio
Turnover Rate... 51% 24% 33% 45% 42% 77%
Average
Commission Rate
Paid/5/......... N/A N/A N/A N/A N/A N/A
</TABLE>
- ----------

/1/Date of initial public offering of the DelCap Fund Institutional Class;
ratios and total return for this period have been annualized.

/2/Data are derived from data of the DelCap Fund A Class and reflect the impact
of Rule 12b-1 distribution expenses paid by the DelCap Fund A Class. DelCap
Fund Institutional Class shares are not subject to Rule 12b-1 distribution
expenses and per share data for periods beginning on and after November 9,
1992 will not reflect the deduction of such expenses.

/3/The per share information for the years ended 9/30/97, 9/30/96 and 9/30/95
were based on the average shares outstanding method.

/4/Total return data is derived from performance of the DelCap Fund A Class, but
does not reflect the maximum sales charge that is or was in effect nor the 1%
limited contingent deferred sales charge that would apply in the event of
certain redemptions within 12 months of purchase.

/5/Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

4
<PAGE>

INVESTMENT OBJECTIVE
AND POLICIES

SUITABILITY
The Fund may be suitable for the patient investor interested in long-term
capital appreciation. Investors should be willing to accept the risks
associated with investments in equity securities.
While equity securities of small to medium-sized companies in which the Fund
invests may offer the potential for greater capital appreciation than
securities issued by larger companies, investments in securities of smaller
companies, some of which may be speculative, may present greater risks. The
prices of equity securities, especially of smaller companies, tend to fluctuate
in response to the condition of individual companies as well as general market
and economic conditions. Consequently, the Fund's net asset value will
fluctuate and an investment in the Fund may be inappropriate for the short-term
investor.
Ownership of Fund shares reduces the bookkeeping and administrative
inconvenience connected with direct purchases of the types of securities in
which the Fund invests.
Providing current income is not an objective of the Fund. Any income produced
is expected to be minimal. Investors should not consider a purchase of Fund
shares as equivalent to a complete investment program. The Delaware Group
includes a family of funds generally available through registered investment
dealers which may be used in concert to create a more complete investment
program.

INVESTMENT STRATEGY

The Fund will attempt to achieve its objective by exceeding the return of
common stocks as measured by the Standard & Poor's ("S&P") 500 Stock Index (the
"Index").
Securities purchased will be of companies whose earnings the Manager believes
will grow more rapidly than the average of those listed in the S&P 500 Stock
Index. The Manager's emphasis will be on the securities of companies that, in
its judgment, have the characteristics that will enable them to grow faster
than the economy as measured by the Index.
This judgment will be based on the financial strength of the company, the
expertise of its management, the growth potential of the company within its
industry and the growth potential of the industry itself.
The Manager will focus primarily on those securities of companies it believes
have established themselves within their industry while maintaining growth
potential. If the Manager believes that market conditions warrant, the Fund may
employ certain option strategies involving the activities and instruments
described below.
In investing for capital appreciation, the Fund may hold securities for any
period of time.

While management believes its objective may best be attained by investing in
common stocks, the Fund may also invest in other securities including, but not
limited to, convertible securities, warrants, preferred stocks, bonds and
foreign securities.
Should the market warrant a temporary, defensive approach, the Fund may also
invest in fixed-income obligations issued or guaranteed by the U.S. government,
its agencies or instrumentalities as well as corporate bonds of investment
quality rated Baa or above by Moody's Investors Service, Inc. or BBB or above
by S&P. (APPENDIX A in PART B describes these ratings.)

5
<PAGE>

While there is no limit on the amount of the Fund's assets which may be
invested in covered call options, the Fund will not invest more than 2% of its
net assets in put options.

Although the Fund will constantly strive to attain its investment objective of
long-term capital growth, there can be no assurance that it will be attained.
The investment objective of the Fund may not be changed without shareholder
approval.
For additional information about the Fund's investment policies and certain
risks associated with investments in certain types of securities, see OTHER
INVESTMENT POLICIES AND RISK CONSIDERATIONS.

CLASSES OF SHARES

The Distributor serves as the national distributor for the Fund. Shares of the
Class may be purchased directly by contacting the Fund or its agent or through
authorized investment dealers. All purchases of shares of the Class are at net
asset value. There is no front-end or contingent deferred sales charge.
INVESTMENT INSTRUCTIONS GIVEN ON BEHALF OF PARTICIPANTS IN AN EMPLOYER-
SPONSORED RETIREMENT PLAN ARE MADE IN ACCORDANCE WITH DIRECTIONS PROVIDED BY
THE EMPLOYER. EMPLOYEES CONSIDERING PURCHASING SHARES OF THE CLASS AS PART OF
THEIR RETIREMENT PROGRAM SHOULD CONTACT THEIR EMPLOYER FOR DETAILS.

Shares of the Class are available for purchase only by: (a) 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; (b) tax-exempt employee benefit plans of the Manager
or its affiliates and securities dealer firms with a selling agreement with the
Distributor; (c) institutional advisory accounts of the Manager or its
affiliates and those having client relationships with Delaware Investment
Advisers, a division 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; (d) 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 (e)
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.

6
<PAGE>

DELCAP FUND A CLASS, DELCAP FUND B CLASS
AND DELCAP FUND C CLASS

In addition to offering DelCap Fund Institutional Class, the Fund also offers
DelCap Fund A Class, DelCap Fund B Class and DelCap Fund C Class, which are
described in a separate prospectus. Shares of DelCap Fund A Class, DelCap Fund
B Class and DelCap Fund C Class may be purchased through authorized investment
dealers or directly by contacting the Fund or its Distributor. The DelCap Fund
A Class carries a front-end sales charge and has annual 12b-1 expenses equal to
a maximum of 0.30%. The maximum front-end sales charge as a percentage of the
offering price is 4.75% and is reduced on certain transactions of $100,000 or
more. The DelCap Fund B Class and DelCap Fund C Class have no front-end sales
charge but are subject to annual 12b-1 expenses equal to a maximum of 1%.
Shares of DelCap Fund B Class and DelCap Fund C Class and certain shares of
DelCap Fund A Class may be subject to a contingent deferred sales charge upon
redemption. To obtain a prospectus relating to such classes, contact the
Distributor by writing to the address or by calling the phone numbers listed on
the back cover of this PROSPECTUS.
HOW TO BUY SHARES

The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Class.

INVESTING DIRECTLY BY MAIL
1. INITIAL PURCHASES--An Investment Application or, in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to DelCap Fund Institutional Class, to Delaware
Group at 1818 Market Street, Philadelphia, PA 19103.
2. SUBSEQUENT PURCHASES--Additional purchases may be made at any time by
mailing a check payable to DelCap Fund Institutional Class. Your check should
be identified with your name(s) and account number.

INVESTING DIRECTLY BY WIRE
You may purchase shares by requesting your bank to transmit funds by wire to
CoreStates Bank, N.A., ABA #031000011, account number 1412893401 (include your
name(s) and your account number).
1. INITIAL PURCHASES--Before you invest, telephone the Fund's Client Services
Department at 800-828-5052 to get an account number. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application or, in the case of a retirement account, an
appropriate retirement plan application, to DelCap Fund Institutional Class, to
Delaware Group at 1818 Market Street, Philadelphia, PA 19103.
2. SUBSEQUENT PURCHASES--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your Client
Services Representative by telephone at 800-828-5052 prior to sending your
wire.

7
<PAGE>

INVESTING BY EXCHANGE

If you have an investment in another mutual fund in the Delaware Group and you
qualify to purchase shares of the Class, you may write and authorize an
exchange of part or all of your investment into the Fund. However, shares of
DelCap Fund B Class and DelCap Fund C Class and Class B Shares and Class C
Shares of the other funds in the Delaware Group offering such a class of shares
may not be exchanged into the Class. If you wish to open an account by
exchange, call your Client Services Representative at 800-828-5052 for more
information. See REDEMPTION AND EXCHANGE for more complete information
concerning your exchange privileges.

INVESTING THROUGH YOUR INVESTMENT DEALER
You can make a purchase of Fund shares through most investment dealers who, as
part of the service they provide, must transmit orders promptly. They may
charge for this service.

PURCHASE PRICE AND EFFECTIVE DATE
The purchase price (net asset value) is determined as of the close of regular
trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on
days when the Exchange is open.

The effective date of a purchase is the date the order is received by the
Fund, its agent or designee. The effective date of a direct purchase is the day
your wire, electronic transfer or check is received, unless it is received
after the time the share price is determined, as noted above. Purchase orders
received after such time will be effective the next business day.

THE CONDITIONS OF YOUR PURCHASE
The Fund reserves the right to reject any purchase order. If a purchase is
canceled because your check is returned unpaid, you are responsible for any
loss incurred. The Fund can redeem shares from your account(s) to reimburse
itself for any loss, and you may be restricted from making future purchases in
any of the funds in the Delaware Group. The Fund reserves the right to reject
purchase orders paid by third-party checks or checks that are not drawn on a
domestic branch of a United States financial institution. If a check drawn on a
foreign financial institution is accepted, you may be subject to additional
bank charges for clearance and currency conversion.
The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of
redemptions.
REDEMPTION AND EXCHANGE

REDEMPTION AND EXCHANGE REQUESTS MADE ON BEHALF OF PARTICIPANTS IN AN
EMPLOYER-SPONSORED RETIREMENT PLAN ARE MADE IN ACCORDANCE WITH DIRECTIONS
PROVIDED BY THE EMPLOYER. EMPLOYEES SHOULD THEREFORE CONTACT THEIR EMPLOYER FOR
DETAILS.

Your shares will be redeemed or exchanged based on the net asset value next
determined after the Fund receives your request in good order. For example,
redemption and exchange requests received in good order after the time the net
asset value of shares is determined will be processed on the next business day.
See PURCHASE PRICE AND EFFECTIVE DATE under HOW TO BUY SHARES. Except as
otherwise noted below, for a redemption request to be in "good order," you must
provide your account number, account registration, and the total number of
shares or dollar amount of the transaction. With regard to exchanges, you must
also provide the name of the fund in which you want to invest the proceeds.
Exchange instructions and redemption requests must be signed by the record
owner(s) exactly as the shares are registered. You may also request a
redemption or an exchange by calling the Fund at 800-828-5052. Redemption
proceeds will be distributed promptly, as described below, but not later than
seven days after receipt of a redemption request.
All exchanges involve a purchase of shares of the fund into which the exchange
is made. As with any purchase, an investor should obtain and carefully read
that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses.
The Fund will process written and telephone redemption requests to the extent
that the purchase orders for the shares being redeemed have already settled.
The Fund will honor redemption requests as to shares for which a check was
tendered as payment, but the Fund will not mail the proceeds until it is
reasonably satisfied that the check has cleared, which may take up to 15 days
from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if
there has been a recent change to the shareholder's address of record.

8
<PAGE>

Shares of the Class may be exchanged into any other Delaware Group mutual
fund, provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of the
fund being acquired are in a state where that fund is registered. If exchanges
are made into other shares that are eligible for purchase only by those
permitted to purchase shares of the Class, such exchange will be exchanged at
net asset value. Shares of the Class may not be exchanged into Class B Shares
or Class C Shares of the funds in the Delaware Group. The Fund may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders.

Various redemption and exchange methods are outlined below. No fee is charged
by the Fund or the Distributor for redeeming or exchanging your shares
although, in the case of an exchange, a sales charge may apply. You may also
have your investment dealer arrange to have your shares redeemed or exchanged.
Your investment dealer may charge for this service.

WRITTEN REDEMPTION AND EXCHANGE
You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares or to request an exchange of any or all your
shares into another mutual fund in the Delaware Group, subject to the same
conditions and limitations as other exchanges noted above. The request must be
signed by all owners of the account or your investment dealer of record.
For redemptions of more than $50,000, or when the proceeds are not sent to the
shareholder(s) at the address of record, the Fund requires a signature by all
owners of the account and may require a signature guarantee. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.

Payment is normally mailed the next business day after receipt of your
redemption request. Certificates are issued for shares only if you submit a
specific request. If your shares are in certificate form, the certificate(s)
must accompany your request and also be in good order.
You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.

TELEPHONE REDEMPTION AND EXCHANGE
To get the added convenience of the telephone redemption and exchange methods,
you must have the Transfer Agent hold your shares (without charge) for you. If
you choose to have your shares in certificate form, you may redeem or exchange
only by written request and you must return your certificates.

The Telephone Redemption--Check to Your Address of Record service and the
Telephone Exchange service, both of which are described below, are
automatically provided unless you notify the Fund in writing that you do not
wish to have such services available with respect to your account. The Fund
reserves the right to modify, terminate or suspend these procedures upon 60
days' written notice to shareholders. It may be difficult to reach the Fund by
telephone during periods when market or economic conditions lead to an
unusually large volume of telephone requests.
Neither the Fund nor its Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption
or exchange of Fund shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be
provided for all purchase, exchange and redemption transactions initiated by
telephone. By exchanging shares by telephone, you are acknowledging prior
receipt of a prospectus for the fund into which your shares are being
exchanged.

9
<PAGE>

TELEPHONE REDEMPTION--CHECK TO YOUR ADDRESS OF RECORD
You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your record address. Checks will be payable to
the shareholder(s) of record. Payment is normally mailed the next business day
after receipt of the redemption request.

TELEPHONE REDEMPTION--PROCEEDS TO YOUR BANK
Redemption proceeds of $1,000 or more can be transferred to your predesignated
bank account by wire or by check. You should authorize this service when you
open your account. If you change your predesignated bank account, you must
submit a written authorization and you may need to have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day. If you
ask for a check, it will normally be mailed the next business day after receipt
of your redemption request to your predesignated bank account. There are no
fees for this redemption method, but the mail time may delay getting funds into
your bank account. Simply call your Client Services Representative prior to the
time the net asset value is determined, as noted above.

TELEPHONE EXCHANGE
You or your investment dealer of record can exchange shares into any fund in
the Delaware Group under the same registration. As with the written exchange
service, telephone exchanges are subject to the same conditions and limitations
as other exchanges noted above. Telephone exchanges may be subject to
limitations as to amounts or frequency.

DIVIDENDS AND DISTRIBUTIONS

The Fund will make payments from net investment income and net realized
securities profits, if any, twice a year. The first payment normally will be
made during the first quarter following the end of Equity Funds IV, Inc.'s
fiscal year. The second payment would be made near the end of the calendar year
to comply with certain requirements of the Internal Revenue Code (the "Code").
Both dividends and distributions, if any, are automatically reinvested in your
account at net asset value.
Each class of the Fund will share proportionately in the investment income and
expenses of the Fund, except that the Class will not incur distribution fees
under the 12b-1 Plans which apply to DelCap Fund A Class, DelCap Fund B Class
and DelCap Fund C Class.

TAXES

On August 5, 1997, President Clinton signed into law the Taxpayer Relief Act
of 1997 (the "1997 Act"). This new law makes sweeping changes in the Internal
Revenue Code (the "Code"). Because many of these changes are complex, and only
indirectly affect the Fund and its distributions to you, they are discussed in
PART B. Changes in the treatment of capital gains, however, are discussed in
this section.

The Fund has qualified, and intends to continue to qualify, as a regulated
investment company under Subchapter M of the Code. As such, the Fund will not
be subject to federal income tax, or to any excise tax, to the extent its
earnings are distributed as provided in the Code and it satisfies certain other
requirements relating to the sources of its income and diversification of its
assets.
The Fund intends to distribute substantially all of its net investment income
and net capital gains, if any. Dividends from net investment income or net
short-term capital gains will be taxable to those investors who are subject to
income taxes as ordinary income, even though received in additional shares. For
corporate investors, dividends from net investment income will generally
qualify in part for the corporate dividends-received deduction. The portion of
dividends paid by the Fund that so qualifies will be

10
<PAGE>

designated each year in a notice from Equity Funds IV, Inc. to the Fund's
shareholders. For the fiscal year ended September 30, 1997, no portion of the
Fund's dividends from net investment income qualified for the dividends-
received deduction to corporations.

Distributions paid by the Fund from long-term capital gains, received in
additional shares, are taxable to those investors who are subject to income
taxes as long-term capital gains, regardless of the length of time an investor
has owned shares in the Fund. The Fund does not seek to realize any particular
amount of capital gains during a year; rather, realized gains are a by-product
of Fund management activities. Consequently, capital gains distributions may be
expected to vary considerably from year to year. Also, for those investors
subject to tax, if purchases of shares in the Fund are made shortly before the
record date for a dividend or capital gains distribution, a portion of the
investment will be returned as a taxable distribution.

THE TREATMENT OF CAPITAL GAIN DISTRIBUTIONS UNDER THE TAXPAYER RELIEF ACT OF
1997

Equity Funds IV, Inc. will advise you in its annual information reporting at
calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.
Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November, or December to shareholders
of record on a specified date in one of those months, but which, for
operational reasons, may not be paid to the shareholder until the following
January, will be treated for tax purposes as if paid by the Fund and received
by the shareholder on December 31 of the calendar year in which they are
declared.
The sale of shares of the Fund is a taxable event and may result in a capital
gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund any other fund in the Delaware Group. Any loss incurred on a sale or
exchange of Fund shares that had been held for six months or less will be
treated as a long-term capital loss to the extent of capital gain dividends
received with respect to such shares.

In addition to the federal taxes described above, shareholders may or may not
be subject to various state and local taxes. For example, distributions of
interest income and capital gains realized from certain types of U.S.
government securities may be exempt from state personal income taxes. Because
investors' state and local taxes may be different than the federal taxes
described above, investors should consult their own tax advisers.
Each year, Equity Funds IV, Inc. will mail to you information on the tax
status of the Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income, if any,
that is derived from U.S. government securities that are exempt from state
income tax. Of course, shareholders who are not subject to tax on their income
would not be required to pay tax on amounts distributed to them by the Fund.

CALCULATION OF NET ASSET
VALUE PER SHARE

The purchase and redemption price of Class shares is the net asset value
("NAV") per share of Class shares next computed after the order is received.
The NAV is computed as of the close of regular trading on the New York Stock
Exchange (ordinarily, 4 p.m., Eastern time) on days when the Exchange is open.

11
<PAGE>

The NAV is computed by adding the value of all securities and other assets in
the portfolio, deducting any liabilities (expenses and fees are accrued daily)
and dividing by the number of shares outstanding. Portfolio securities for
which market quotations are available are priced at market value. Foreign
securities expressed in foreign currency values will be converted into U.S.
dollar values at the mean between the currencies' bid and offered quotations.
Short-term investments having a maturity of less than 60 days are valued at
amortized cost, which approximates market value. All other securities are
valued at their fair value as determined in good faith and in a method approved
by Equity Funds IV, Inc.'s Board of Directors.
The net asset values of all outstanding shares of each class of the Fund will
be computed on a pro-rata basis for each outstanding share based on the
proportionate participation in the Fund represented by the value of shares of
that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Class will not incur any of the expenses under the Fund's 12b-1
Plans and DelCap Fund A, B and C Classes alone will bear the 12b-1 Plan fees
payable under their respective Plans. Due to the specific distribution expenses
and other costs that will be allocable to each class, the NAV per share of each
class of the Fund will vary.

MANAGEMENT OF THE FUND

DIRECTORS
The business and affairs of Equity Funds IV, Inc. are managed under the
direction of its Board of Directors. PART B contains additional information
regarding Equity Funds IV, Inc.'s directors and officers.

INVESTMENT MANAGER
The Manager furnishes investment management services to the Fund.

The Manager and its predecessors have been managing the funds in the Delaware
Group since 1938. On September 30, 1997, the Manager and its affiliates within
the Delaware Group, including Delaware International Advisers Ltd., were
managing in the aggregate more than $39 billion in assets in the various
institutional or separately managed (approximately $23,433,860,000) and
investment company (approximately $16,283,306,000) accounts.
The Manager is an indirect, wholly owned subsidiary of Delaware Management
Holdings, Inc. ("DMH"). On April 3, 1995, a merger between DMH and a wholly
owned subsidiary of Lincoln National Corporation ("Lincoln National") was
completed. DMH and the Manager are now indirect, wholly owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management. In connection with the merger, a new
Investment Management Agreement between Equity Funds IV, Inc. on behalf of the
Fund and the Manager was executed following shareholder approval.

The Manager manages the Fund's portfolio and makes investment decisions for
the Fund, which are implemented by the Fund's Trading Department. The Manager
also administers Equity Funds IV, Inc.'s affairs and pays the salaries of all
the directors, officers and employees of Equity Funds IV, Inc. who are
affiliated with the Manager. For these services, the Manager is paid an annual
fee of 3/4 of 1% of the average daily net assets of the Fund, less the Fund's
proportionate share of all directors' fees paid to unaffiliated directors by
Equity Funds IV, Inc. The Fund's fee is higher than that paid by many other
funds. The fee may be higher or lower than that paid by funds with comparable
investment objectives. Investment management fees paid by the Fund for the
fiscal year ended September 30, 1997 were 0.75% of average daily net assets.
The directors of Equity Funds IV, Inc. annually review fees paid to the
Manager.

12
<PAGE>

Brown University and attended New York University's Graduate School of Business
Administration. Mr. Stork joined the Delaware Group in 1962 and has served in
various executive capacities at different times within the Delaware
organization. Marshall T. Bassett, Vice President, joined Delaware in 1997. In
his most recent position, he served as Vice President in Morgan Stanley Asset
Management's Emerging Growth Group, where he analyzed small growth companies.
Prior to that, he was a trust officer at Sovran Bank and Trust Company. He
received his bachelor's degree and MBA from Duke University. John A. Heffern,
Vice President, holds a bachelor's degree and an MBA from the University of
North Carolina at Chapel Hill. He joined Delaware in 1997. Previously, he was a
Senior Vice President, Equity Research at NatWest Securities Corporation's
Specialty Finance Services unit. Prior to that, he was a Principal and Senior
Regional Bank Analyst at Alex. Brown & Sons. Ms. Wachs is an Assistant Vice
President. She joined the Delaware Group in 1992 from Goldman Sachs, where she
was an equity analyst for two years. She is a graduate of the University of
Pennsylvania's Wharton School, where she majored in Finance and Oriental
studies.

PORTFOLIO TRADING PRACTICES
The Fund normally will not invest for short-term trading purposes. However,
the Fund may sell securities without regard to the length of time they have
been held. The degree of portfolio activity will affect brokerage costs of the
Fund and may affect taxes payable by the Fund's shareholders. Given the Fund's
investment objective, its annual portfolio turnover rate may exceed 100%. A
turnover rate of 100% would occur if all the investments in the Fund's
portfolio at the beginning of the year were replaced by the end of the year.
The turnover rate also may be affected by cash requirements for redemptions and
repurchases of Fund shares.

The Fund uses its best efforts to obtain the best available price and most
favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager
or to its advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the Fund
may consider a broker/dealer's sales of shares of funds in the Delaware Group
of funds in placing portfolio orders and may place orders with broker/dealers
that have agreed to defray Fund expenses of such funds, such as custodian fees.

PERFORMANCE INFORMATION
From time to time, the Fund may quote total return performance of the Class in
advertising and other types of literature.

Total return will be based on a hypothetical $1,000 investment, reflecting the
reinvestment of all distributions at net asset value. Each presentation will
include the average annual total return for one-, five- and ten-year or life-
of-fund periods, as relevant. The Fund may also advertise aggregate and average
total return information concerning the Class over additional periods of time.

Because securities prices fluctuate, investment results of the Class will
fluctuate over time and past performance should not be considered a guarantee
of future results.

STATEMENTS AND CONFIRMATIONS

FINANCIAL INFORMATION ABOUT THE FUND
Each fiscal year, you will receive an audited annual report and an unaudited
semi-annual report. These reports provide detailed information about the Fund's
investments and performance. Equity Funds IV, Inc.'s fiscal year ends on
September 30.

DISTRIBUTION AND SERVICE
The Distributor, Delaware Distributors, L.P., serves as the national
distributor of the Fund's shares under a Distribution Agreement with Equity
Funds IV, Inc. dated April 3, 1995, as amended on November 29, 1995. The
Distributor bears all of the costs of promotion and distribution.
The Transfer Agent, Delaware Service Company, Inc., serves as the shareholder
servicing, dividend disbursing and transfer agent for the Fund under an amended
and restated agreement dated as of November 29, 1996. The Transfer Agent also
provides accounting services to the

13
<PAGE>

Fund pursuant to the terms of a separate Fund Accounting Agreement. Certain
recordkeeping and other shareholder services that otherwise would be performed
by the Transfer Agent may be performed by certain other entities and the
Transfer Agent may elect to enter into an agreement to pay such other entities
for those services. In addition, participant account maintenance fees may be
assessed for certain recordkeeping provided as part of retirement plan and
administration service packages. These fees are based on the number of
participants in the plan and the various services selected. Fees will be quoted
upon request and are subject to change.

The directors annually review fees paid to the Distributor and the Transfer
Agent. The Distributor and the Transfer Agent are also indirect, wholly owned
subsidiaries of DMH.

EXPENSES

The Fund is responsible for all of its own expenses other than those borne by
the Manager under the Investment Management Agreement and those borne by the
Distributor under the Distribution Agreement. For the fiscal year ended
September 30, 1997, the ratio of operating expenses to average daily net assets
for the Class was 1.06%.

SHARES
Equity Funds IV, Inc. is an open-end management investment company. The Fund's
portfolio of assets is diversified as defined by the 1940 Act. Commonly known
as a mutual fund, Equity Funds IV, Inc. was organized as a Maryland corporation
in September 1985. In addition to the Fund, Equity Funds IV, Inc. presently
offers one other series of shares, the Capital Appreciation Fund series.
Equity Funds IV, Inc.'s shares have a par value of $.01, equal voting rights,
except as noted below, and are equal in all other respects. Equity Funds IV,
Inc.'s shares have noncumulative voting rights which means that the holders of
more than 50% of Equity Funds IV, Inc.'s shares voting for the election of
directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Equity Funds IV, Inc. is not required, and does not intend, to
hold annual meetings of shareholders unless, under certain circumstances, it is
required to do so under the 1940 Act. Shareholders of 10% or more of Equity
Funds IV, Inc.'s outstanding shares may request that a special meeting be
called to consider the removal of a director.

In addition to the Class, the Fund also offers DelCap Fund A Class, DelCap
Fund B Class and DelCap Fund C Class. Shares of each class represent
proportionate interests in the assets of the Fund and have the same voting and
other rights and preferences as the other classes of the Fund except that
shares of the Class are not subject to, and may not vote on matters affecting,
the Distribution Plans under Rule 12b-1 relating to DelCap Fund A Class, DelCap
Fund B Class and DelCap Fund C Class.

OTHER INVESTMENT POLICIES
AND RISK CONSIDERATIONS

SMALL TO MEDIUM-SIZED COMPANIES

FOREIGN SECURITIES
The Fund may invest up to 25% of its assets in foreign securities. Foreign
markets may be more volatile than U.S. markets. Such investments involve
sovereign risk in addition to the normal risks associated with American

14
<PAGE>

securities. These risks include political risks, foreign taxes and exchange
controls and currency fluctuations. For example, foreign portfolio investments
may fluctuate in value due to changes in currency rates (i.e., the value of
foreign investments would increase with a fall in the value of the dollar, and
decrease with a rise in the value of the dollar) and control regulations apart
from market fluctuations. The Fund may also experience delays in foreign
securities settlement.

AMERICAN DEPOSITORY RECEIPTS

RULE 144A SECURITIES
The Fund may invest in restricted securities, including securities eligible
for resale without registration pursuant to Rule 144A ("Rule 144A Securities")
under the Securities Act of 1933. Rule 144A permits many privately placed and
legally restricted securities to be freely traded among certain institutional
buyers such as the Fund. The Fund may invest no more than 10% of the value of
its net assets in illiquid securities.
While maintaining oversight, the Board of Directors has delegated to the
Manager the day-to-day function of determining whether or not individual Rule
144A Securities are liquid for purposes of the Fund's 10% limitation on
investments in illiquid assets. The Board has instructed the Manager to
consider the following factors in determining the liquidity of a Rule 144A
Security: (i) the frequency of trades and trading volume for the security; (ii)
whether at least three dealers are willing to purchase or sell the security and
the number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; (iv) the nature of the security and the nature
of the marketplace trades (e.g., the time needed to dispose of the security,
the method of soliciting offers, and the mechanics of transfer).
If the Manager determines that a Rule 144A Security which was previously
determined to be liquid is no longer liquid and, as a result, the Fund's
holdings of illiquid securities exceed the Fund's 10% limit on investments in
such securities, the Manager will determine what action to take to ensure that
the Fund continues to adhere to such limitation.

PORTFOLIO LOAN TRANSACTIONS
The Fund may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.
The major risk to which the Fund would be exposed on a loan transaction is the
risk that the borrower would go bankrupt at a time when the value of the
security goes up. Therefore, the Fund will only enter into loan arrangements
after a review of all pertinent facts by the Manager, subject to overall
supervision by the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to
be received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.

REPURCHASE AGREEMENTS

* * *

15
<PAGE>

BORROWING

The Fund is permitted under certain circumstances to borrow money. Investment
securities will not normally be purchased while the Fund has outstanding
borrowing.

CALL OPTIONS

WRITING COVERED CALL OPTIONS
A covered call option obligates the Fund to sell one of its securities for an
agreed price up to an agreed date. The advantage is that the Fund receives
premium income, which may offset any decline in market value of the security.
However, if the Manager's forecast is wrong, the Fund may not fully participate
in the market appreciation if the security's price rises.

WRITING A CALL OPTION ON STOCK INDICES

PUT OPTIONS

PURCHASING A PUT OPTION
A put option gives the Fund the right to sell one of its securities for an
agreed price up to an agreed date. The advantage is that the Fund can be
protected should the market value of the security decline. However, the Fund
must pay a premium for this right whether or not the put option is exercised.

PURCHASING A PUT OPTION ON STOCK INDICES
Purchasing a protective put option on stock indices is similar to the purchase
of protective puts on an individual stock. Indices used will include, but not
be limited to, the S&P 100 and the S&P OTC 250.

CLOSING TRANSACTIONS
Closing transactions essentially let the Fund offset a put option or covered
call option prior to its exercise or expiration. If the Fund cannot effect a
closing transaction, it may have to hold a security it would otherwise sell or
deliver a security it might want to hold.

Part B describes certain of these investment policies and risk considerations.
PART B sets forth other investment policies, risk considerations and more
specific investment restrictions.

16
<PAGE>

For more information, contact Delaware Group
at 800-828-5052.

INVESTMENT MANAGER

Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens
& Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

P-045[--] RRD11/97

--------------------
DELCAP FUND
INSTITUTIONAL
--------------------

Prospectus

December 1, 1997

DELAWARE

GROUP
------------

Philadelphia . London

[LOGO OF PRINTED ON RECYCLED PAPER APPEARS HERE]
<PAGE>

CAPITAL APPRECIATION FUND A CLASS SHARES
CAPITAL APPRECIATION FUND B CLASS SHARES PROSPECTUS
CAPITAL APPRECIATION FUND C CLASS SHARES DECEMBER 1, 1997

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

1818 Market Street, Philadelphia, PA 19103

For Prospectus and Performance:
Nationwide 800-523-4640

Information on Existing Accounts:
(SHAREHOLDERS ONLY)
Nationwide 800-523-1918

Dealer Services:
(BROKER/DEALERS ONLY)
Nationwide 800-362-7500

Representatives of Financial Institutions:
Nationwide 800-659-2265

This Prospectus describes the Capital Appreciation Fund series (the "Fund")
of Delaware Group Equity Funds IV, Inc. ("Equity Funds IV, Inc."), a
professionally-managed mutual fund of the series type. The investment objective
of the Fund is to seek capital appreciation. The Fund will attempt to achieve
its objective by investing primarily in equity securities of small to medium-
sized companies expected to grow over time and, to a lesser extent, in equity
securities of larger, more well established companies presenting growth
potential.

The Fund currently offers three retail classes of shares: Capital
Appreciation Fund A Class ("Class A Shares"), Capital Appreciation Fund B Class
("Class B Shares") and Capital Appreciation Fund C Class ("Class C Shares")
(individually, a "Class" and collectively, the "Classes").

This Prospectus relates only to the Classes listed above and sets forth
information that you should read and consider before you invest. Please retain
it for future reference. The Statement of Additional Information ("Part B" of
Equity Funds IV, Inc.'s registration statement), dated December 1, 1997, as it
may be amended from time to time, contains additional information about the Fund
and has been filed with the Securities and Exchange Commission. Part B is
incorporated by reference into this Prospectus and is available, without charge,
by writing to Delaware Distributors, L.P. at the above address or by calling the
above numbers.

The Fund also offers Capital Appreciation Fund Institutional Class, which
is available for purchase only by certain investors. A prospectus for Capital
Appreciation Fund Institutional Class can be obtained by writing to Delaware
Distributors, L.P. at the above address or by calling the above numbers.

-1-
<PAGE>

TABLE OF CONTENTS

Cover Page Redemption and Exchange
Synopsis Dividends and Distributions
Summary of Expenses Taxes
Financial Highlights Calculation of Offering Price and
Investment Objective and Policies Net Asset Value Per Share
Suitability and Certain Risk Factors Management of the Fund
Investment Strategy Other Investment Policies and
The Delaware Difference Risk Considerations
Plans and Services Appendix A--Investment
Retirement Planning Illustrations
Classes of Shares Appendix B--Classes Offered
How to Buy Shares

-2-
<PAGE>

SYNOPSIS

Investment Objective

The investment objective of the Fund is to seek capital appreciation. The
Fund will attempt to achieve its objective by investing primarily in equity
securities of small to medium-sized companies expected to grow over time and, to
a lesser extent, in equity securities of larger, more well established companies
presenting growth potential. See Investment Objective and Policies and Other
Investment Policies and Risk Considerations.

Risk Factors and Special Considerations

1. Investments in equity securities of small to medium-sized companies
may present greater risks than investments in larger capitalization companies,
as the market prices of securities issued by smaller companies tend to
fluctuate, particularly in the short-term and, some smaller company securities
may be speculative. See Suitability and Certain Risk Factors under Investment
Objective and Policies, and Other Investment Policies and Risk Considerations.

2. The Fund may enter into options and futures transactions for hedging
purposes and, among other reasons, to attempt to counterbalance portfolio
volatility. While the Fund does not engage in options and futures for
speculative purposes, there are risks that result from the use of these
instruments. See Futures Contracts and Options under Other Investment Policies
and Risk Considerations.

3. The Fund may invest up to 20% of its total assets directly in
securities of foreign issuers denominated in foreign currencies. Consequently,
the Fund may be affected by changes in currency exchange rates and controls and
may incur costs in connection with conversions between currencies. To hedge the
currency risks associated with investments in securities of foreign companies
denominated in foreign currencies and to expedite settlement of portfolio
transactions, the Fund may enter into certain foreign currency transactions.
These activities pose special risks which do not typically arise in connection
with investments denominated in U.S. dollars. See Foreign Securities, Futures
Contracts and Foreign Currency Transactions under Other Investment Policies and
Risk Considerations.

Investment Manager, Distributor and Service Agent

Delaware Management Company, Inc. (the "Manager") furnishes investment
management services to the Fund, subject to the supervision and direction of
Equity Funds IV, Inc.'s Board of Directors. The Manager also provides
investment management services to certain other funds in the Delaware Group.
Delaware Distributors, L.P. (the "Distributor") is the national distributor for
the Fund and for all of the other mutual funds in the Delaware Group. Delaware
Service Company, Inc. (the "Transfer Agent") is the shareholder servicing,
dividend disbursing, accounting services and transfer agent for the Fund and for
all of the other mutual funds in the Delaware Group. See Summary of Expenses
and Management of the Fund for further information regarding the Manager and
fees payable under the Fund's Investment Management Agreement.

Sales Charges

The price of Class A Shares includes a maximum front-end sales charge of
4.75% of the offering price, which is equivalent to 5.02% of the amount
invested. The front-end sales charge is reduced on certain transactions of at
least $100,000 but under $1,000,000. For purchases of $1,000,000 or more, the
front-end sales charge is eliminated (subject to a CDSC of 1% if shares are
redeemed within 12 months of purchase and a dealer commission was paid in
connection with such purchase ). Class A Shares are subject to annual 12b-1
Plan expenses for the life of the investment.

-3-
<PAGE>

The price of Class B Shares is equal to the net asset value per share.
Class B Shares are subject to a contingent deferred sales charge ("CDSC") of:
(i) 4% if shares are redeemed within two years of purchase; (ii) 3% if shares
are redeemed during the third or fourth year following purchase; (iii) 2% if
shares are redeemed during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following purchase. Class B Shares
are subject to annual 12b-1 Plan expenses for approximately eight years after
purchase.

The price of Class C Shares is equal to the net asset value per share.
Class C Shares are subject to a CDSC of 1% if shares are redeemed within 12
months of purchase. Class C Shares are subject to annual 12b-1 Plan expenses
for the life of the investment.

See Classes of Shares and Distribution (12b-1) and Service under Management
of the Fund.

Purchase Amounts

Generally, the minimum initial investment in any Class is $1,000.
Subsequent investments must generally be at least $100.

Each purchase of Class B Shares is subject to a maximum purchase limitation
of $250,000. For Class C Shares, each purchase must be in an amount that is
less than $1,000,000. An investor may exceed these maximum purchase limitations
for Class B Shares and Class C Shares by making cumulative purchases over a
period of time. An investor should keep in mind, however, that reduced front-
end sales charges apply to investments of $100,000 or more in Class A Shares,
and that Class A Shares are subject to lower annual 12b-1 Plan expenses than
Class B and Class C Shares and generally are not subject to a CDSC. The minimum
and maximum purchase amounts for retirement plans may vary. See How to Buy
Shares.

Redemption and Exchange

Class B Shares and Class C Shares may be redeemed or exchanged at the net
asset value calculated after receipt of the redemption or exchange request
subject, in the case of redemptions, to any applicable CDSC. Neither the Fund
nor the Distributor assesses any charges other than the CDSC for redemptions or
exchanges of Class B or Class C Shares. There are certain limitations on an
investor's ability to exchange shares between the various classes of shares that
are offered. See Redemption and Exchange.

Open-End Investment Company

Equity Funds IV, Inc., which was organized as a Maryland corporation in
1985, is an open-end management investment company and the Fund's portfolio of
assets is diversified as defined by the Investment Company Act of 1940 (the
"1940 Act"). See Shares under Management of the Fund.

-4-
<PAGE>

SUMMARY OF EXPENSES

A general comparison of the sales arrangements and other expenses
applicable to Class A, Class B and Class C Shares follows:

Class A Class B Class C
Shareholder Transaction Expenses Shares Shares Shares
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Maximum Sales Charge Imposed
on Purchases (as a percentage
of offering price).............. 4.75% None None

Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)... None None None

Maximum Contingent Deferred Sales
Charge (as a percentage of
original purchase price or
redemption proceeds,
as applicable).................. None* 4.00%* 1.00%*

Redemption Fees.................... None** None** None**

Annual Operating Expenses
(as a percentage of Class A Class B Class C
average daily net assets) Shares Shares Shares
- --------------------------------------------------------------------------------
<S> <C> <C> <C>
Management Fees
(after voluntary waivers)..... 0.10% 0.10% 0.10%

12b-1 Plan Expenses
(including service fees)
(after voluntary waivers)..... 0.00%+ 0.00%+ 0.00%+

Other Operating Expenses......... 0.65% 0.65% 0.65%
----- ----- -----

Total Operating Expenses++
(after voluntary waivers)... 0.75% 0.75% 0.75%
====== ====== ======
</TABLE>

-5-
<PAGE>

(ii) 3% if shares are redeemed during the third or fourth year following
purchase; (iii) 2% if shares are redeemed during the fifth year following
purchase; (iv) 1% if shares are redeemed during the sixth year following
purchase; and (v) 0% thereafter. Class C Shares are subject to a CDSC of 1% if
the shares are redeemed within 12 months of purchase. See Contingent Deferred
Sales Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange; Deferred Sales Charge Alternative -Class B
Shares, Level Sales Charge Alternative - Class C Shares and Contingent Deferred
Sales Charge - Class B Shares and Class C Shares under Classes of Shares.

**CoreStates Bank, N.A. currently charges $7.50 per redemption for redemptions
payable by wire.

+Class A Shares, Class B Shares and Class C Shares are subject to separate 12b-1
Plans. Long-term shareholders may pay more than the economic equivalent of the
maximum front-end sales charges permitted by rules of the National Association
of Securities Dealers, Inc. (the "NASD"). The Distributor has elected
voluntarily to waive its right to receive 12b-1 Plan fees (including service
fees) from the commencement of the public offering of the Classes through May
31, 1998. In the absence of those waivers, 12b-1 expenses would equal 0.30% for
Class A Shares and 1.00% for each of the Class B and Class C Shares. See
Distribution (12b-1) and Service under Management of the Fund.

++As noted above, the Distributor has elected voluntarily to waive 12b-1 Plan
fees through May 31, 1998. Also, the Manager has elected voluntarily to waive
that portion, if any, of the annual management fees payable by the Capital
Appreciation Fund and to pay certain expenses of the Fund to the extent
necessary to ensure that the "Total Operating Expenses" of each Class of the
Fund, excluding each such Class' 12b-1 fees, do not exceed 0.75%, during the
commencement of the public offering of the Classes through May 31, 1998. If the
voluntary expense waivers were not in effect by the Distributor and the Manager,
the "Total Operating Expenses", as a percentage of average daily net assets,
would be 1.70%, 2.40%, and 2.40%, respectively, for the Class A Shares, the
Class B Shares and the Class C Shares, reflecting management fees of 0.75%.

Investors utilizing the Delaware Group Asset Planner asset allocation
service also typically incur an annual maintenance fee of $35 per Strategy.
However, effective November 1, 1996, the annual maintenance fee is waived until
further notice. Investors who utilize the Asset Planner for an Individual
Retirement Account ("IRA") will pay an annual IRA fee of $15 per Social Security
number. See Delaware Group Asset Planner in Part B.

For expense information about Capital Appreciation Fund Institutional
Class, see the separate prospectus relating to that class.

-6-
<PAGE>

The following example illustrates the expenses that an investor would pay
on a $1,000 investment over various time periods, assuming (1) a 5% annual rate
of return, (2) redemption and no redemption at the end of each time period and
(3) for Class B Shares and Class C Shares, payment of a CDSC at the time of
redemption, if applicable. The following example assumes the voluntary waiver
of the management fee by the Manager and of the 12b-1 Plan fees by the
Distributor as discussed in this Prospectus.

Assuming Redemption Assuming No Redemption
1 year 3 years 5 years 10 years 1 year 3 years 5 years 10 years
--------- ------- ------- ----------- ------ ------- ------- -----------
<S> <C> <C> <C> <C> <C> <C> <C> <C>
Class A Shares $55(1) $70 $87 $136 $55 $70 $87 $136

Class B Shares $48 $54 $62 $ 93(2) $ 8 $24 $42 $ 93(2)

Class C Shares $18 $24 $42 $ 93 $ 8 $24 $42 $ 93
</TABLE>
(1) Generally, no redemption charge is assessed upon redemption of Class A
Shares. Under certain circumstances, however, a Limited CDSC, which has
not been reflected in this calculation, may be imposed on certain
redemptions within 12 months of purchase. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset
Value under Redemption and Exchange.

(2) At the end of approximately eight years after purchase, Class B Shares will
be automatically converted into Class A Shares. The example above assumes
conversion of Class B Shares at the end of the eighth year. However, the
conversion may occur as late as three months after the eighth anniversary
of purchase, during which time the higher 12b-1 Plan fees payable by Class
B Shares will continue to be assessed. The ten year expense numbers for
Class B Shares reflect the expenses of Class B Shares for year eight and
the expenses of Class A Shares for years nine and ten. See Automatic
Conversion of Class B Shares under Classes of Shares for a description of
the automatic conversion feature.

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.

The purpose of the above tables is to assist the investor in understanding
the various costs and expenses that an investor in each Class will bear directly
or indirectly.

-7-
<PAGE>

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

FINANCIAL HIGHLIGHTS

The following financial highlights are derived from the financial statements of
Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund and have been
audited by Ernst & Young LLP, independent auditors. The data should be read in
conjunction with the financial statements, related notes, and the report of
Ernst & Young LLP, all of which are incorporated by reference into Part B.
Further information about the Fund's performance is contained in its Annual
Report to shareholders. A copy of the Fund's Annual Report (including the report
of Ernst & Young LLP) may be obtained from Equity Funds IV, Inc. upon request at
no charge. Information regarding Class B Shares and Class C Shares has not been
included in the following table because such shares were not offered to the
public prior to the date of this Prospectus.

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

-8-
<PAGE>

Capital
Appreciation
Fund A Class
Period
12/2/96(1)
through
9/30/97
--------
<S> <C>
Net Asset Value, Beginning of Period..................... $ 8.500

Income From Investment Operations
- ---------------------------------
Net Investment Income.................................... 0.067
Net Gain on Securities
(both realized and unrealized)......................... 1.601
--------
Total From Investment Operations.................... 1.668
--------

Less Dividends and Distributions
- --------------------------------
Dividends from Net Investment Income..................... (0.008)
Distributions from Capital Gains......................... none
--------
Total Dividends and Distributions..................... (0.008)
--------

Net Asset Value, End of Period........................... $ 10.160
========

Total Return............................................. 19.64%(2)(3)

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period (000's omitted)............... $8
Ratio of Expenses to Average Daily Net Assets........... 0.75%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation........................... 1.70%
Ratio of Net Investment Income to Average
Daily Net Assets...................................... 0.91%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation........................... (0.03%)
Portfolio Turnover Rate................................. 84%
Average Commission Rate Paid (4)........................ $0.0594
</TABLE>

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

(2) Does not reflect maximum sales charge of 4.75%, nor the 1% Limited CDSC that
would apply in the event of certain redemptions within 12 months of purchase
for Class A Shares.

(3) Total return reflects the expense limitations and waivers of 12b-1 Plan fees
referenced under Summary of Expenses.

(4) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

-9-
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

The investment objective of the Fund is to seek capital appreciation. It
seeks to achieve that objective by investing, under normal market conditions,
primarily in equity securities of small to mid-sized companies that the Manager
believes exhibit growth potential that significantly exceeds the average
anticipated growth rate of companies included in the Standard & Poor's 500 Index
("S&P 500"). Small to medium-sized companies generally are those having a
current equity market capitalization of less than $3 billion.

SUITABILITY AND CERTAIN RISK FACTORS
The Fund may be suitable for the patient investor interested in capital
appreciation. Investors should be willing to accept the risks associated with
investments in equity securities issued by domestic and foreign issuers.

While equity securities of small to medium-sized companies may offer the
potential for greater capital appreciation than securities issued by larger
companies, investments in securities of smaller companies, some of which may be
speculative, may present greater risks. The prices of equity securities,
especially of smaller companies, tend to fluctuate in response to the condition
of individual companies as well as general market and economic conditions.
Consequently, the Fund's net asset value will fluctuate and an investment in the
Fund may be inappropriate for the short-term investor.

In addition, investments in securities issued by foreign companies involve
special risks, including those associated with currency fluctuations, as well as
political, economic and social circumstances that may be different from and more
volatile than those present in the U.S. market.

As a result, the Fund of course can not assure a specific rate of return or
that the Fund's principal will be protected. Through cautious selection and
supervision of Fund investments, however, the Manager will strive to achieve the
Fund's objective.

The Fund is designed for capital appreciation; providing current income is
not a goal of the Fund. Any income produced, therefore, is expected to be
minimal. Investors should not consider an investment in the Fund as equivalent
to a complete investment program. The Delaware Group includes a family of funds
generally available through registered investment dealers which may be used in
concert to create a more complete investment program.

INVESTMENT STRATEGY

The Fund also invests in equity securities of larger capitalization companies
that the Manager believes present greater than average growth potential compared
to other S&P 500 companies.

Common stock generally is the principal kind of equity security in which the
Fund invests. The Fund, however, may invest any portion of its assets in any
type of equity security available in the marketplace, including without
limitation, preferred stock, warrants and equity and debt securities convertible
into common stock. See Other Investment Policies and Risks Considerations and
Part B.

The Fund may enter into options and futures transactions for hedging purposes
and, among other reasons, to attempt to counterbalance portfolio volatility.
See Futures Contracts and Options under Other Investment Policies and Risk
Considerations.

-10-
<PAGE>

Up to 20% of the Fund's total assets may be invested directly in equity
securities of foreign companies or indirectly in foreign securities through
investments in American, Global or European Depositary Receipts. In connection
with its investments in foreign securities, the Fund may hold foreign currency
directly and, to hedge the currency risk associated with securities denominated
in foreign currencies, may enter into currency futures transactions and forward
foreign currency transactions. See Foreign Securities, Depositary Receipts,
Foreign Currency Transactions and Futures Contracts under Other Investment
Policies and Risk Considerations.

Should the market warrant a temporary defensive approach, the Fund may invest
all or a substantial part of its assets in fixed-income securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, as well as
short-term debt, other money-market instruments or corporate bonds rated
investment grade (i.e., rated Baa or above by Moody's Investors Service, Inc.
("Moody's") or BBB or above by Standard & Poor's Ratings Group ("S&P")) or, if
unrated, instruments determined to be of comparable quality by the Manager. The
Fund may also invest in these instruments pending investment in equity
securities appropriate for the Fund of proceeds from new sales of Fund shares
from proceeds of the sale of the Fund's portfolio securities or to maintain
sufficient cash to meet redemptions. See Appendix A of Part B for a description
of those ratings.

The Fund will constantly strive to achieve its investment objective of
capital appreciation and, in investing to do so, may hold securities for any
period of time. There can be no assurance, however, that the Fund will achieve
its investment objective. That investment objective may be changed without
shareholder approval.

For additional information on the Fund's investment policies and certain
risks associated with investments in certain types of securities, see Other
Investment Policies and Risk Considerations.

-11-
<PAGE>

THE DELAWARE DIFFERENCE

PLANS AND SERVICES

The Delaware Difference is our commitment to provide you with superior
information and quality service on your investments in the Delaware Group of
funds.

SHAREHOLDER PHONE DIRECTORY

Investor Information Center
800-523-4640

Fund Information; Literature Price; Yield and Performance Figures

Shareholder Service Center
800-523-1918

Information on Existing Regular Investment Accounts and Retirement Plan
Accounts; Wire Investments; Wire Liquidations; Telephone Liquidations and
Telephone Exchanges

Delaphone
800-362-FUND
(800-362-3863)

Performance Information

You can call the Investor Information Center at any time for current yield
information. Current yield and total return information may also be included in
advertisements and information given to shareholders. Yields are computed on an
annualized basis over a 30-day period.

Shareholder Services

Delaphone Service

Delaphone is an account inquiry service for investors with Touch-Tone(R)
phone service. It enables you to get information on your account faster than
the mailed statements and confirmations. Delaphone also provides current
performance information on the Fund, as well as other funds in the Delaware
Group. Delaphone is available seven days a week, 24 hours a day.

Dividend Payments

Dividends, capital gains and other distributions are, if any, automatically
reinvested in your account. You may also elect to have the dividends earned in
one fund automatically invested in another Delaware Group fund with a different
investment objective, subject to certain exceptions and limitations.

For more information, see Additional Methods of Adding to Your Investment -
Dividend Reinvestment Plan under How to Buy Shares or call the Shareholder
Service Center.

-12-
<PAGE>

Statements and Confirmations

Duplicate Confirmations

Tax Information

Each year, Equity Funds IV, Inc. will mail to you information on the tax
status of your dividends and distributions.

Right of Accumulation

With respect to Class A Shares, the Right of Accumulation feature allows you
to combine the value of your current holdings of Class A Shares, Class B Shares
and Class C Shares of the Fund with the dollar amount of new purchases of Class
A Shares of the Fund to qualify for a reduced front-end sales charge on such
purchases of Class A Shares. Under the Combined Purchases Privilege, you may
also include certain shares that you own in other funds in the Delaware Group.
See Classes of Shares.

Letter of Intention

12-Month Reinvestment Privilege

Exchange Privilege

The Exchange Privilege permits shareholders to exchange all or part of their
shares into shares of other funds in the Delaware Group, subject to certain
exceptions and limitations. For additional information on exchanges, see
Investing by Exchange under How to Buy Shares and Redemption and Exchange.

Wealth Builder Option

You may elect to invest in the Fund through regular liquidations of shares in
your accounts in other funds in the Delaware Group. Investments under this
feature are exchanges and are therefore subject to the same conditions and
limitations as other exchanges of Fund shares. See Additional Methods of Adding
to Your Investment - Wealth Builder Option and Investing by Exchange under How
to Buy Shares, and Redemption and Exchange.

Financial Information about the Fund

-13-
<PAGE>

RETIREMENT PLANNING

Retirement plans may be subject to plan establishment fees, annual
maintenance fees and/or other administrative or trustee fees. Fees are based
upon the number of participants in the plan as well as the services selected.
Additional information about fees is included in retirement plan materials.
Fees are quoted upon request.

Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase shares of Capital Appreciation Fund
Institutional Class. For additional information on any of the plans and
Delaware's retirement services, call the Shareholder Service Center or see Part
B.

Individual Retirement Account ("IRA")

Simplified Employee Pension Plan ("SEP/IRA")

Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")

Although new SAR/SEP plans may not be established after December 31, 1996,
existing plans maybe maintained by employers having 25 or fewer employees. An
employer may elect to make additional contributions to such existing plans.

403(b)(7) Deferred Compensation Plan

Permits employees of public school systems or of certain types of non-profit
organizations to enter into a deferred compensation arrangement for the purchase
of shares of each of the Classes.

457 Deferred Compensation Plan

Permits employees of state and local governments and certain other entities
to enter into a deferred compensation arrangement for the purchase of shares of
each of the Classes.

-14-
<PAGE>

Prototype Profit Sharing or Money Purchase Pension Plan

Prototype 401(k) Defined Contribution Plan

Permits employers to establish a tax-qualified plan based on salary deferral
contributions for investment in Class A or Class C Shares. Class B Shares are
not available for purchase by these plans.

SIMPLE IRA

A SIMPLE IRA combines many of the features of an IRA and a 401(k) Plan but is
easier to administer than a typical 401(k) Plan. It requires employers to make
contributions on behalf of their employees and also has a salary deferral
feature that permits employees to defer to a portion of their salary into the
plan on a pre-tax basis.

SIMPLE 401(k)

A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors are
limited to 100 employees and, in exchange for mandatory plan sponsor
contributions, discrimination testing is no longer required. Class B Shares are
not available for purchase by these plans.

The Limited CDSC is applicable to any redemptions of net asset value
purchases made on behalf of any group retirement plan on which a dealer's
commission has been paid only if such redemption is made pursuant to a
withdrawal of the entire plan from Delaware Group funds. See Contingent
Deferred Sales Charge for Certain Redemptions of Class A Shares Purchased at Net
Asset Value under Redemption and Exchange.

Allied Plans

Class A Shares are available for purchase by participants in certain 401(k)
Defined Contribution Plans ("Allied Plans") which are made available under a
joint venture agreement between the Distributor and another institution through
which mutual funds are marketed and which allow investments in Class A Shares of
designated Delaware Group funds ("eligible Delaware Group fund shares"), as well
as shares of designated classes of non-Delaware Group funds ("eligible non-
Delaware Group fund shares"). Class B Shares and Class C Shares are not
eligible for purchase by Allied Plans.

With respect to purchases made in connection with an Allied Plan, the value
of eligible Delaware Group and eligible non-Delaware Group fund shares held by
the Allied Plan may be combined with the dollar amount of new purchases by that
Allied Plan to obtain a reduced front-end sales charge on additional purchases
of eligible Delaware Group fund shares. See Front-End Sales Charge Alternative
- - Class A Shares under Classes of Shares.

-15-
<PAGE>

The Limited CDSC is applicable to redemptions of net asset value purchases
from an Allied Plan on which a dealer's commission has been paid. Waivers of
the Limited CDSC, as described under Waiver of Limited Contingent Deferred Sales
Charge - Class A Shares under Redemption and Exchange, apply to redemptions by
participants in Allied Plans except in the case of exchanges between eligible
Delaware Group and non-Delaware Group fund shares. When eligible Delaware Group
fund shares are exchanged into eligible non-Delaware Group fund shares, the
Limited CDSC will be imposed at the time of the exchange, unless the joint
venture agreement specifies that the amount of the Limited CDSC will be paid by
the financial adviser or selling dealer. See Contingent Deferred Sales Charge
for Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange.

-16-
<PAGE>

CLASSES OF SHARES

Alternative Purchase Arrangements

Shares may be purchased at a price equal to the next determined net asset
value per share, subject to a sales charge which may be imposed, at the election
of the purchaser, at the time of the purchase for Class A Shares ("front-end
sales charge alternative"), or on a contingent deferred basis for Class B Shares
("deferred sales charge alternative") or Class C Shares ("level sales charge
alternative").

Class A Shares. An investor who elects the front-end sales charge
alternative acquires Class A Shares, which incur a sales charge when they are
purchased, but generally are not subject to any sales charge when they are
redeemed. Absent any applicable fee waiver, Class A Shares are subject to
annual 12b-1 Plan expenses of up to a maximum of 0.30% of average daily net
assets of such shares. Certain purchases of Class A Shares qualify for reduced
front-end sales charges. See Front-End Sales Charge Alternative - Class A
Shares, below. See also Contingent Deferred Sales Charge for Certain Redemptions
of Class A Shares Purchased at Net Asset Value under Redemption and Exchange and
Distribution (12b-1) and Service under Management of the Fund.

Class B Shares. An investor who elects the deferred sales charge alternative
acquires Class B Shares, which do not incur a front-end sales charge when they
are purchased, but are subject to a contingent deferred sales charge if they are
redeemed within six years of purchase. Absent any applicable fee waiver, Class
B Shares are subject to annual 12b-1 Plan expenses of up to a maximum of 1%
(0.25% of which are service fees to be paid to the Distributor, dealers or
others for providing personal service and/or maintaining shareholder accounts)
of average daily net assets of such shares for approximately eight years after
purchase. Class B Shares permit all of the investor's dollars to work from the
time the investment is made. If no waiver of 12b-1 fees is in effect, the
higher 12b-1 Plan expenses paid by Class B Shares will cause such shares to have
a higher expense ratio and to pay lower dividends than Class A Shares. At the
end of approximately eight years after purchase, Class B Shares will
automatically be converted into Class A Shares and, thereafter, for the
remainder of the life of the investment, the annual 12b-1 Plan fees of up to
0.30% for the Class A Shares will apply. See Automatic Conversion of Class B
Shares, below.

Class C Shares. An investor who elects the level sales charge alternative
acquires Class C Shares, which do not incur a front-end sales charge when they
are purchased, but are subject to a contingent deferred sales charge if they are
redeemed within 12 months of purchase. Absent any applicable fee waiver, Class
C Shares are subject to annual 12b-1 Plan expenses of up to a maximum of 1%
(0.25% of which are service fees to be paid to the Distributor, dealers or
others for providing personal service and/or maintaining shareholder accounts)
of average daily net assets of such shares for the life of the investment. If
no waiver of 12b-1 fees is in effect, the higher 12b-1 Plan expenses paid by
Class C Shares will cause such shares to have a higher expense ratio and to pay
lower dividends than Class A Shares. Unlike Class B Shares, Class C Shares do
not convert to another class.

-17-
<PAGE>

Plan expenses applicable to each Class. If no waiver of 12b-1 fees is in
effect, the higher 12b-1 Plan expenses on Class B Shares and Class C Shares will
be offset to the extent a return is realized on the additional money initially
invested upon the purchase of such shares. However, there can be no assurance
as to the return, if any, that will be realized on such additional money. In
addition, the effect of any return earned on such additional money will diminish
over time. In comparing Class B Shares to Class C Shares, investors should also
consider the duration of the annual 12b-1 Plan expenses to which each of the
classes is subject and the desirability of an automatic conversion feature,
which is available only for Class B Shares.

For the distribution and related services provided to, and the expenses borne
on behalf of, the Fund, absent any applicable fee waiver, the Distributor and
others will be paid, in the case of the Class A Shares, from the proceeds of the
front-end sales charge and 12b-1 Plan fees and, in the case of the Class B
Shares and the Class C Shares, from the proceeds of the 12b-1 Plan fees and, if
applicable, the CDSC incurred upon redemption. Financial advisers may receive
different compensation for selling Class A, Class B and Class C Shares.
Investors should understand that the purpose and function of the respective 12b-
1 Plans and the CDSCs applicable to Class B Shares and Class C Shares are the
same as those of the 12b-1 Plan and the front-end sales charge applicable to
Class A Shares in that such fees and charges are used to finance the
distribution of the respective Classes. See Distribution (12b-1) and Service
under Management of the Fund.

Dividends, if any, paid on Class A, Class B and Class C Shares will be
calculated in the same manner, at the same time, on the same day and will be in
the same amount, except that, when assessed, the additional amount of 12b-1 Plan
expenses relating to Class B Shares and Class C Shares will be borne exclusively
by such shares. See Calculation of Offering Price and Net Asset Value Per
Share.

The NASD has adopted certain rules relating to investment company sales
charges. Equity Funds IV, Inc. and the Distributor intend to operate in
compliance with these rules.

Front-End Sales Charge Alternative - Class A Shares

Class A Shares may be purchased at the offering price, which reflects a
maximum front-end sales charge of 4.75%. See Calculation of Offering Price and
Net Asset Value Per Share.

Purchases of $100,000 or more carry a reduced front-end sales charge as shown
in the following table.

-18-
<PAGE>

Capital Appreciation Fund A Class
- --------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge Commission***
as % of as % of
Offering Amount Offering
Amount of Purchase Price Invested** Price
- --------------------------------------------------------------------------------
<TABLE>
<CAPTION>

<S> <C> <C> <C>
Less than $100,000 4.75% 5.02% 4.00%

$100,000 but
under $250,000 3.75 3.94 3.00

$250,000 but
under $500,000 2.50 2.56 2.00

$500,000 but
under $1,000,000* 2.00 2.07 1.60
</TABLE>

* There is no front-end sales charge on purchases of Class A Shares of $1
million or more but, under certain limited circumstances, a 1% Limited CDSC
may apply upon redemption of such shares.

** Based upon the net asset value per share of the Class A Shares as of the end
of Equity Funds IV, Inc.'s most recent fiscal year.

*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.

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

The Fund must be notified when a sale takes place which would qualify for
the reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by the Fund. Such reduced front-
end sales charges are not retroactive.

From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which
the Distributor may reallow to dealers up to the full amount of the front-
end sales charge shown above. In addition, certain dealers who enter into an
agreement to provide extra training and information on Delaware Group
products and services and who increase sales of Delaware Group funds may
receive an additional commission of up to 0.15% of the offering price.
Dealers who receive 90% or more of the sales charge may be deemed to be
underwriters under the Securities Act of 1933.

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

-19-
<PAGE>

Dealer's Commission
-------------------
(as a percentage of
Amount of Purchase amount purchased)
------------------

<S> <C>
Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25
</TABLE>

In determining a financial adviser's eligibility for the dealer's commission,
purchases of Class A Shares of other Delaware Group funds as to which a Limited
CDSC applies may be aggregated with those of the Class A Shares of the Fund.
Financial advisers also may be eligible for a dealer's commission in connection
with certain purchases made under a Letter of Intention or pursuant to an
investor's Right of Accumulation. Financial advisers should contact the
Distributor concerning the applicability and calculation of the dealer's
commission in the case of combined purchases.

An exchange from other Delaware Group funds will not qualify for payment of
the dealer's commission, unless a dealer's commission or similar payment has not
been previously paid on the assets being exchanged. The schedule and program for
payment of the dealer's commission are subject to change or termination at any
time by the Distributor at its discretion.

Redemptions of Class A Shares purchased at net asset value may result in the
imposition of a Limited CDSC if the dealer's commission described above was paid
in connection with the purchase of those shares. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange.

Combined Purchases Privilege

By combining your holdings of Class A Shares with your holdings of Class B
Shares and/or Class C Shares of the Fund and shares of the other funds in the
Delaware Group, except as noted below, you can reduce the front-end sales
charges on any additional purchases of Class A Shares. Shares of Delaware Group
Premium Fund, Inc. beneficially owned in connection with ownership of variable
insurance products may be combined with other Delaware Group fund holdings. In
addition, assets held by investment advisory clients of the Manager or its
affiliates in a stable value account may be combined with other Delaware Group
fund holdings. Shares of other funds that do not carry a front-end sales charge
or CDSC may not be included unless they were acquired through an exchange from a
Delaware Group fund that does carry a front-end sales charge or CDSC.

This privilege permits you to combine your purchases and holdings with those
of your spouse, your children under 21 and any trust, fiduciary or retirement
account for the benefit of such family members. It also permits you to use these
combinations under a Letter of Intention. A Letter of Intention allows you to
make purchases over a 13-month period and qualify the entire purchase for a
reduction in front-end sales charges on Class A Shares.

-20-
<PAGE>

Buying Class A Shares at Net Asset Value

Purchases of Class A Shares may be made at net asset value by current and
former officers, directors and employees (and members of their families) of the
Manager, any affiliate, any of the funds in the Delaware Group, certain of their
agents and registered representatives and employees of authorized investment
dealers and by employee benefit plans for such entities. Individual purchases,
including those in retirement accounts, must be for accounts in the name of the
individual or a qualifying family member.

Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within 12
months after the registered representative changes employment, if the purchase
is funded by proceeds from an investment where a front-end sales charge,
contingent deferred sales charge or other sales charge has been assessed.
Purchases of Class A Shares may also be made at net asset value by bank
employees who provide services in connection with agreements between the bank
and unaffiliated brokers or dealers concerning sales of shares of Delaware Group
funds. Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with special investment products, such as wrap
accounts or similar fee based programs.

Purchases of Class A Shares at net asset value may also be made by the
following institutions investing for the account of their trust customers if
they are not eligible to purchase shares of the Institutional Class of the fund;
and any group retirement plan (excluding defined benefit pension plans), or such
plans of the same employer, for which plan participant records are maintained on
the Delaware Investment & Retirement Services, Inc. ("DIRSI") proprietary record
keeping system that (i) has in excess of $500,000 of plan assets invested in
Class A Shares of Delaware Group funds and any stable value account available to
investment advisory clients of the Manager or its affiliates, or (ii) is
sponsored by an employer that has at any point after May 1, 1997 had more than
100 employees while such plan has held Class A Shares of a Delaware Group fund
and such employer has properly represented to DIRSI in writing that it has the
requisite number of employees and has received written confirmation back from
DIRSI.

Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.

-21-
<PAGE>

The Fund must be notified in advance that an investment qualifies for
purchase at net asset value.

Group Investment Plans

Group Investment Plans (e.g., SEP/IRA, SAR/SEP, SIMPLE IRA, SIMPLE 401(k),
Profit Sharing and Money Purchase Pension Plans, 401(k) Defined Contribution
Plans, and 403(b)(7) and 457 Deferred Compensation Plans) may benefit from the
reduced front-end sales charges available on Class A Shares based on total plan
assets. If a company has more than one plan investing in the Delaware Group of
funds, then the total amount invested in all plans will be aggregated to
determine the applicable front-end sales charge reduction on each purchase, both
initial and subsequent, if, at the time of each such purchase, the company
notifies the Fund that it qualifies for the reduction. Employees participating
in such Group Investment Plans may also combine the investments held in their
plan account to determine the front-end sales charge applicable to purchases in
non-retirement Delaware Group investment accounts if, at the time of each such
purchase, they notify the Fund that they are eligible to combine purchase
amounts held in their plan account.

For additional information on retirement plans, including plan forms,
applications, minimum investments and any applicable account maintenance fees,
contact your investment dealer or the Distributor.

For other retirement plans and special services, see Retirement Planning.

Deferred Sales Charge Alternative - Class B Shares

Class B Shares may be purchased at net asset value without a front-end sales
charge and, as a result, the full amount of the investor's purchase payment will
be invested in Fund shares. The Distributor currently anticipates compensating
dealers or brokers for selling Class B Shares at the time of purchase from its
own assets in an amount equal to no more than 4% of the dollar amount purchased.
In addition, from time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which the
Distributor may pay additional compensation to dealers or brokers for selling
Class B Shares at the time of purchase. As discussed below, however, absent any
applicable fee waiver, Class B Shares are subject to annual 12b-1 Plan expenses
and, if redeemed within six years of purchase, a CDSC.

Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid to
the Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class B Shares. These
payments support the compensation paid to dealers or brokers for selling Class B
Shares. Payments to the Distributor and others under the Class B 12b-1 Plan may
be in an amount equal to no more than 1% annually. The combination of the CDSC
and the proceeds of the 12b-1 Plan fees makes it possible for the Fund to sell
Class B Shares without deducting a front-end sales charge at the time of
purchase.

Holders of Class B Shares who exercise the exchange privilege described below
will continue to be subject to the CDSC schedule for the Class B Shares
described in this Prospectus, even after the exchange. Such CDSC schedule may
be higher than the CDSC schedule for the Class B Shares acquired as a result of
the exchange. See Redemption and Exchange.

Automatic Conversion of Class B Shares

-22-
<PAGE>

Class B Shares, other than shares acquired through reinvestment of dividends,
held for eight years after purchase are eligible for automatic conversion into
Class A Shares. Conversions of Class B Shares into Class A Shares will occur
only four times in any calendar year, on the last business day of the second
full week of March, June, September and December (each, a "Conversion Date").
If the eighth anniversary after a purchase of Class B Shares falls on a
Conversion Date, an investor's Class B Shares will be converted on that date.
If the eighth anniversary occurs between Conversion Dates, an investor's Class B
Shares will be converted on the next Conversion Date after such anniversary.
Consequently, if a shareholder's eighth anniversary falls on the day after a
Conversion Date, that shareholder will have to hold Class B Shares for as long
as three additional months after the eighth anniversary of purchase before the
shares will automatically convert into Class A Shares.

All such automatic conversions of Class B Shares will constitute tax-free
exchanges for federal income tax purposes. See Taxes.

Level Sales Charge Alternative - Class C Shares

Class C Shares may be purchased at net asset value without a front-end sales
charge and, as a result, the full amount of the investor's purchase payment
will be invested in Fund shares. The Distributor currently anticipates
compensating dealers or brokers for selling Class C Shares at the time of
purchase from its own assets in an amount equal to no more than 1% of the dollar
amount purchased. As discussed below, absent any applicable fee waiver, Class C
Shares are subject to annual 12b-1 Plan expenses and, if redeemed within 12
months of purchase, a CDSC.

Proceeds from the CDSC and the annual 12b-1 Plan fees, if any, are paid to
the Distributor and others for providing distribution and related services, and
bearing related expenses, in connection with the sale of Class C Shares. These
payments support the compensation paid to dealers or brokers for selling Class C
Shares. Payments to the Distributor and others under the Class C 12b-1 Plan may
be in an amount equal to no more than 1% annually.

Contingent Deferred Sales Charge - Class B Shares and Class C Shares

Class B Shares redeemed within six years of purchase may be subject to a CDSC
at the rates set forth below and Class C Shares redeemed within 12 months of
purchase may be subject to a CDSC of 1%. CDSCs are charged as a percentage of
the dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the net asset value at the time of purchase of the shares
being redeemed or the net asset value of those shares at the time of redemption.
No CDSC will be imposed on increases in net asset value above the initial
purchase price, nor will a CDSC be assessed on redemptions of shares acquired
through reinvestments of dividends or capital gains distributions.

For purposes of this formula, the "net asset value at the time of purchase"
will be the net asset value at purchase of the Class B Shares or the Class C
Shares of the Fund, even if those shares are later exchanged for shares of
another Delaware Group fund. In the event of an exchange of the shares, the
"net asset value of such shares at the time of redemption" will be the net asset
value of the shares that were acquired in the exchange.

-23-
<PAGE>

The following table sets forth the rates of the CDSC for the Class B Shares
of the Fund:
<TABLE>
<CAPTION>

Contingent Deferred
Sales Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
------------------------ ------------------
<S> <C>
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
</TABLE>
During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares will still be subject to the
annual 12b-1 Plan expenses of up to 1% of average daily net assets of those
shares, absent any applicable fee waiver. See Automatic Conversion of Class B
Shares, above. Investors are reminded that Class A Shares into which Class B
Shares will convert are subject to ongoing annual 12b-1 Plan expenses of up to a
maximum of 0.30% of average daily net assets of such shares.

All investments made during a calendar month, regardless of what day of the
month the investment occurred, will age one month on the last day of that month
and each subsequent month.

The CDSC is waived on certain redemptions of Class B Shares and Class C
Shares. See Waiver of Contingent Deferred Sales Charge - Class B Shares and
Class C Shares under Redemption and Exchange.

Other Payments to Dealers -- Class A, Class B and Class C Shares

Subject to pending amendments to the NASD's Conduct Rules, in connection with
the promotion of Delaware Group fund shares, the Distributor may, from time to
time, pay to participate in dealer-sponsored seminars and conferences, reimburse
dealers for expenses incurred in connection with preapproved seminars,
conferences and advertising and may, from time to time, pay or allow additional
promotional incentives to dealers, which shall include non-cash concessions,
such as certain luxury merchandise or a trip to or attendance at a business or
investment seminar at a luxury resort, as part of preapproved sales contests.
Payment of non-cash compensation to dealers is currently under review by the
NASD and the Securities and Exchange

-24-
<PAGE>

Commission. It is likely that the NASD's Conduct Rules will be amended such that
the ability of the Distributor to pay non-cash compensation as described above
will be restricted in some fashion. The Distributor intends to comply with the
NASD's Conduct Rules as they may be amended.

Capital Appreciation Fund Institutional Class

In addition to offering Class A, Class B and Class C Shares, the Fund also
offers Capital Appreciation Fund Institutional Class, which is described in a
separate prospectus and is available for purchase only by certain investors.
Capital Appreciation Fund Institutional Class shares generally are distributed
directly by the Distributor and do not have a front-end sales charge, a CDSC or
a Limited CDSC, and are not subject to 12b-1 Plan distribution expenses. To
obtain the prospectus that describes Capital Appreciation Fund Institutional
Class, contact the Distributor by writing to the address or by calling the
telephone number listed on the back cover of this Prospectus.

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HOW TO BUY SHARES

Purchase Amounts

Generally, the minimum initial purchase is $1,000 for Class A Shares, Class B
Shares and Class C Shares. Subsequent purchases of shares of any Class generally
must be $100 or more. For purchases under a Uniform Gifts to Minors Act or
Uniform Transfers to Minors Act or through an Automatic Investing Plan, there is
a minimum initial purchase of $250 and a minimum subsequent purchase of $25.
Minimum purchase requirements do not apply to retirement plans other than IRAs,
for which there is a minimum initial purchase of $250, and a minimum subsequent
purchase of $25, regardless of which Class is selected.

There is a maximum purchase limitation of $250,000 on each purchase of Class
B Shares. For Class C Shares, each purchase must be in an amount that is less
than $1,000,000. An investor may exceed these maximum purchase limitations by
making cumulative purchases over a period of time. In doing so, an investor
should keep in mind that reduced front-end sales charges are available on
investments of $100,000 or more in Class A Shares, and that Class A Shares (i)
are subject to lower annual 12b-1 Plan expenses than Class B Shares and Class C
Shares and (ii) generally are not subject to a CDSC. For retirement plans, the
maximum purchase limitations apply only to the initial purchase of Class B
Shares or Class C Shares by the plan.

Investing through Your Investment Dealer

Investing by Mail

1. Initial Purchases--An Investment Application or, in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to Capital Appreciation Fund A Class, Capital
Appreciation Fund B Class or Capital Appreciation Fund C Class, to Delaware
Group at 1818 Market Street, Philadelphia, PA 19103.

2. Subsequent Purchases--Additional purchases may be made at any time by mailing
a check payable to the specific Fund and Class selected. Your check should be
identified with your name(s) and account number. An investment slip (similar to
a deposit slip) is provided at the bottom of transaction confirmations and
dividend statements that you will receive from Equity Funds IV, Inc. Use of
this investment slip can help expedite processing of your check when making
additional purchases. Your investment may be delayed if you send additional
purchases by certified mail.

Investing by Wire

1. Initial Purchases--Before you invest, telephone the Shareholder Service
Center to get an account number. If you do not call first, processing of your
investment may be delayed. In addition, you must promptly send your Investment
Application or, in the case of a retirement account, an appropriate retirement
plan application, to the specific Fund and Class selected, to Delaware Group at
1818 Market Street, Philadelphia, PA 19103.

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<PAGE>

If you want to wire investments to a retirement plan account, call the
Shareholder Service Center for special wiring instructions.

Investing by Exchange

Holders of Class A Shares may exchange all or part of their shares for
certain of the shares of other funds in the Delaware Group, including other
Class A Shares, but may not exchange their Class A Shares for Class B Shares or
Class C Shares of the Fund or of any other fund in the Delaware Group. Holders
of Class B Shares of the Fund are permitted to exchange all or part of their
Class B Shares only into Class B Shares of other Delaware Group funds.
Similarly, holders of Class C Shares of the Fund are permitted to exchange all
or part of their Class C Shares only into Class C Shares of other Delaware Group
funds. See Appendix B--Classes Offered for a list of Delaware Group funds and
the classes they offer. Class B Shares of the Fund and Class C Shares of the
Fund acquired by exchange will continue to carry the CDSC and, in the case of
Class B Shares, the automatic conversion schedule of the fund from which the
exchange is made. The holding period of Class B Shares of the Fund acquired by
exchange will be added to that of the shares that were exchanged for purposes of
determining the time of the automatic conversion into Class A Shares of the
Fund.

See Allied Plans under Retirement Planning for information on exchanges by
participants in an Allied Plan.

Additional Methods of Adding to Your Investment

Call the Shareholder Service Center for more information if you wish to use
the following services:

1. Automatic Investing Plan

The Automatic Investing Plan enables you to make regular monthly investments
without writing or mailing checks. You may authorize Equity Funds IV, Inc. to
transfer a designated amount monthly from your checking account to your account.
Many shareholders use this as an automatic savings plan. Shareholders should
allow a reasonable amount of time for initial purchases and changes to these
plans to become effective.

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<PAGE>

2. Direct Deposit

You may have your employer or bank make regular investments directly to your
Fund account for you (for example: payroll deduction, pay by phone, annuity
payments). The Fund also accepts preauthorized recurring government and private
payments by Electronic Fund Transfer, which avoids mail time and check clearing
holds on payments such as social security, federal salaries, Railroad Retirement
benefits, etc.

* * *

Should investments through an automatic investing plan or by direct deposit
be reclaimed or returned for some reason, Equity Funds IV, Inc. has the right to
liquidate your shares to reimburse the government or transmitting bank. If
there are insufficient funds in your account, you are obligated to reimburse the
Fund.

3. Wealth Builder Option

You can use our Wealth Builder Option to invest in the Fund through regular
liquidations of shares in your accounts in other funds in the Delaware Group.
You may also elect to invest in other mutual funds in the Delaware Group through
the Wealth Builder Option through regular liquidations of shares in your Fund
account.

Under this automatic exchange program, you can authorize regular monthly
amounts (minimum of $100 per fund) to be liquidated from your account in one or
more funds in the Delaware Group and invested automatically into any other
account in a Delaware Group mutual funds that you may specify. If in connection
with the election of the Wealth Builder Option, you wish to open a new account
to receive the automatic investment, such new account must meet the minimum
initial purchase requirements described in the prospectus of the fund that you
select. All investments under this option are exchanges and are therefore
subject to the same conditions and limitations as other exchanges noted above.
You can terminate your participation in Wealth Builder at any time by giving
written notice to the fund from which the exchanges are made. See Redemption
and Exchange.

4. Dividend Reinvestment Plan

You can elect to have your distributions (capital gains and/or dividend
income) reinvested in your Fund account or invested in certain other funds in
the Delaware Group, subject to the exceptions noted below as well as the
eligibility and minimum purchase requirements set forth in each fund's
prospectus.

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Purchase Price and Effective Date

The effective date of a purchase is the date the order is received by the
Fund, its agent or designee. The effective date of a direct purchase is the day
your wire, electronic transfer or check is received unless it is received after
the time the offering price or net asset value of shares is determined, as noted
above. Purchase orders received after such time will be effective the next
business day.

The Conditions of Your Purchase

The Fund reserves the right to reject any purchase order. If a purchase is
canceled because your check is returned unpaid, you are responsible for any loss
incurred. The Fund can redeem shares from your account(s) to reimburse itself
for any loss, and you may be restricted from making future purchases in any of
the funds in the Delaware Group. The Fund reserves the right to reject purchase
orders paid by third-party checks or checks that are not drawn on a domestic
branch of a United States financial institution. If a check drawn on a foreign
financial institution is accepted, you may be subject to additional bank charges
for clearance and currency conversion.

The Fund also reserves the right, following shareholder notification, to
charge a service fee on non-retirement accounts that, as a result of a
redemption, have remained below the minimum stated account balance for a period
of three or more consecutive months. Holders of such accounts may be notified of
their insufficient account balance and advised that they have until the end of
the current calendar quarter to raise their balance to the stated minimum. If
the account has not reached the minimum balance requirement by that time, the
Fund will charge a $9 fee for that quarter and each subsequent calendar quarter
until the account is brought up to the minimum balance. The service fee will be
deducted from the account during the first week of each calendar quarter for the
previous quarter, and will be used to help defray the cost of maintaining low-
balance accounts. No fees will be charged without proper notice, and no CDSC
will apply to such assessments.

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REDEMPTION AND EXCHANGE

You can redeem or exchange your shares in a number of different ways. The
exchange service is useful if your investment requirements change and you want
an easy way to invest in other bond funds, equity funds, tax-advantaged funds or
money market funds. This service is also useful if you are anticipating a major
expenditure and want to move a portion of your investment into a fund that has
the checkwriting feature. Exchanges are subject to the requirements of each fund
and all exchanges of shares constitute taxable events. See Taxes. Further, in
order for an exchange to be processed, shares of the fund being acquired must be
registered in the state where the acquiring shareholder resides. You may want
to consult your financial adviser or investment dealer to discuss which funds in
the Delaware Group will best meet your changing objectives, and the consequences
of any exchange transaction. You may also call the Delaware Group directly for
fund information.

The Fund will process written and telephone redemption requests to the extent
that the purchase orders for the shares being redeemed have already settled.
The Fund will honor redemption requests as to shares for which a check was
tendered as payment, but the Fund will not mail or wire the proceeds until it is
reasonably satisfied that the check has cleared, which may take up to 15 days
from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if there
has been a recent change to the shareholder's address of record.

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<PAGE>

There is no front-end sales charge or fee for exchanges made between shares
of funds which both carry a front-end sales charge. Any applicable front-end
sales charge will apply to exchanges from shares of funds not subject to a
front-end sales charge, except for exchanges involving assets that were
previously invested in a fund with a front-end sales charge and/or exchanges
involving the reinvestment of dividends.

Holders of Class B Shares or Class C Shares that exchange their shares
("Original Shares") for shares of other funds in the Delaware Group (in each
case, "New Shares") in a permitted exchange, will not be subject to a CDSC that
might otherwise be due upon redemption of the Original Shares. However, such
shareholders will continue to be subject to the CDSC and, in the case of Class B
Shares, the automatic conversion schedule of the Original Shares as described in
this Prospectus and any CDSC assessed upon redemption will be charged by the
fund from which the Original Shares were exchanged. In an exchange of Class B
Shares from the Fund, the Fund's CDSC schedule may be higher than the CDSC
schedule relating to the New Shares acquired as a result of the exchange. For
purposes of computing the CDSC that may be payable upon a disposition of the New
Shares, the period of time that an investor held the Original Shares is added to
the period of time that an investor held the New Shares. With respect to Class
B Shares, the automatic conversion schedule of the Original Shares may be longer
than that of the New Shares. Consequently, an investment in New Shares by
exchange may subject an investor, absent any applicable fee waiver, to the
higher 12b-1 fees applicable to Class B Shares of the Fund for a longer period
of time than if the investment in New Shares were made directly.

Written Redemption

You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares. The request must be signed by all owners of
the account or your investment dealer of record. For redemptions of more than
$50,000, or when the proceeds are not sent to the shareholder(s) at the address
of record, the Fund requires a signature by all owners of the account and a
signature guarantee for each owner. Each signature guarantee must be supplied by
an eligible guarantor institution. The Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. The Fund may require further documentation from corporations,
executors, retirement plans, administrators, trustees or guardians.

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<PAGE>

Written Exchange

You may also write to the Fund (at 1818 Market Street, Philadelphia, PA
19103) to request an exchange of any or all of your shares into another mutual
fund in the Delaware Group, subject to the same conditions and limitations as
other exchanges noted above.

Telephone Redemption and Exchange

To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your Class A Shares in certificate form, you may
redeem or exchange only by written request and you must return your
certificates.

Neither the Fund nor its Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption or
exchange of Fund shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Instructions received by telephone are
generally tape recorded, and a written confirmation will be provided for all
purchase, exchange and redemption transactions initiated by telephone. By
exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.

Telephone Redemption--Check to Your Address of Record

The Telephone Redemption feature is a quick and easy method to redeem shares.
You or your investment dealer of record can have redemption proceeds of $50,000
or less mailed to you at your address of record. Checks will be payable to the
shareholder(s) of record. Payment is normally mailed the next business day
after receipt of the redemption request. This service is only available to
individual, joint and individual fiduciary-type accounts.

Telephone Redemption--Proceeds to Your Bank

Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must complete an Authorization Form and have your signature
guaranteed. For your protection, your authorization must be on file. If you
request a wire, your funds will normally be sent the next business day.
CoreStates Bank, N.A.'s fee (currently $7.50) will be deducted from your
redemption proceeds. If you ask for a check, it will normally be mailed the next
business day after receipt of your request to your predesignated bank account.
There are no separate fees for this redemption method, but the mail time may
delay getting funds into your bank account. Simply call the Shareholder Service
Center prior to the time the offering price and net asset value are determined,
as noted above.

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Telephone Exchange

Contingent Deferred Sales Charge for Certain Redemptions of Class A Shares
Purchased at Net Asset Value

The Limited CDSC will be paid to the Distributor and will be equal to the
lesser of 1% of: (1) the net asset value at the time of purchase of the Class A
Shares being redeemed; or (2) the net asset value of such Class A Shares at the
time of redemption. For purposes of this formula, the "net asset value at the
time of purchase" will be the net asset value at purchase of the Class A Shares
even if those shares are later exchanged for shares of another Delaware Group
fund and, in the event of an exchange of Class A Shares, the "net asset value of
such shares at the time of redemption" will be the net asset value of the shares
acquired in the exchange.

In determining whether a Limited CDSC is payable, it will be assumed that
shares not subject to the Limited CDSC are the first redeemed followed by other
shares held for the longest period of time. The Limited CDSC will not be
imposed upon shares representing reinvested dividends or capital gains
distributions, or upon amounts representing share appreciation. All investments
made during a calendar month, regardless of what day of the month the investment
occurred, will age one month on the last day of that month and each subsequent
month.

Waiver of Limited Contingent Deferred Sales Charge - Class A Shares

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<PAGE>

age 59 1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; (v) returns of excess contributions to an IRA; (vi) distributions
by other employee benefit plans to pay benefits; (vii) distributions described
in (ii), (iv), and (vi) above pursuant to a systematic withdrawal plan; and
(viii) redemptions by the classes of shareholders who are permitted to purchase
shares at net asset value, regardless of the size of the purchase (see Buying
Class A Shares at Net Asset Value under Classes of Shares).

Waiver of Contingent Deferred Sales Charge - Class B and Class C Shares

The CDSC is waived on certain redemptions of Class B Shares in connection
with the following redemptions: (i) redemptions that result from the Fund's
right to liquidate a shareholder's account if the aggregate net asset value of
the shares held in the account is less than the then-effective minimum account
size; (ii) returns of excess contributions to an IRA, SIMPLE IRA, SEP/IRA or
403(b)(7) or 457 Deferred Compensation Plans; (iii) periodic distributions from
an IRA, SIMPLE IRA, SAR/SEP, SEP/IRA, 403(b)(7) or 457 Deferred Compensation
Plan, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; and (iv) distributions from an account if the redemption results
from the death of all registered owners of the account (in the case of accounts
established under the Uniform Gifts to Minors or Uniform Transfers to Minors
Acts or trust accounts, the waiver applies upon the death of all beneficial
owners) or a total and permanent disability (as defined in Section 72 of the
Code) of all registered owners occurring after the purchase of the shares being
redeemed.

The CDSC on Class C Shares is waived in connection with the following
redemptions: (i) redemptions that result from the Fund's right to liquidate a
shareholder's account if the aggregate net asset value of the shares held in the
account is less than the then-effective minimum account size; (ii) returns of
excess contributions to an IRA, SIMPLE IRA, 403(b)(7) or 457 Deferred
Compensation Plan, Profit Sharing Plan, Money Purchase Pension Plan, or 401(k)
Defined Contribution plan; (iii) periodic distributions from a 403(b)(7) or 457
Deferred Compensation Plan upon attainment of age 59 1/2, Profit Sharing Plan,
Money Purchase Plan, 401(k) Defined Contribution Plan upon attainment of age 70
1/2, and IRA distributions qualifying under Section 72(t) of the Internal
Revenue Code; (iv) distributions from a 403(b)(7) Deferred Compensation Plan,
457 Deferred Compensation Plan, Profit Sharing Plan, or 401(k) Defined
Contribution Plan, under hardship provisions of the plan; (v) distributions from
a 403(b)(7) Deferred Compensation Plan, 457 Deferred Compensation Plan, Profit
Sharing Plan, Money Purchase Pension Plan or a 401(k) Defined Contribution Plan
upon attainment of normal retirement age under the plan or upon separation from
service; (vi) periodic distributions from an IRA or SIMPLE IRA on or after
attainment of age 59; and (vii) distributions from an account if the redemption
results from the death of all registered owners of the account (in the case of
accounts established under the Uniform Gifts to Minors or Uniform Transfers to
Minors Acts or trust accounts, the waiver applies upon the death of all
beneficial owners) or a total and permanent disability (as defined in Section 72
of the Code) of all registered owners occurring after the purchase of the shares
being redeemed.

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DIVIDENDS AND DISTRIBUTIONS

Each Class of the Fund will share proportionately in the investment income
and expenses of the Fund, except that, absent any applicable fee waiver, the per
share dividends from net investment income on Class A Shares, Class B Shares and
Class C Shares will vary due to the expenses under the 12b-1 Plan applicable to
each Class. Generally, except in the absence of a waiver, the dividends per
share on Class B Shares and Class C Shares can be expected to be lower than the
dividends per share on Class A Shares because the expenses under the 12b-1 Plans
relating to Class B and Class C Shares will be higher than the expenses under
the 12b-1 Plan relating to Class A Shares. See Distribution (12b-1) and Service
under Management of the Fund.

Both dividends and distributions, if any, are automatically reinvested in
your account at net asset value.

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TAXES

On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Internal Revenue Code (the "Code"). Because many of these changes are complex,
and only indirectly affect the Fund and its distributions to you, they are
discussed in Part B. Changes in the treatment of capital gains, however, are
discussed in this section.

The Fund intends to distribute substantially all of its net investment income
and net capital gains, if any. Dividends from net investment income or net
short-term capital gains will be taxable to those investors who are subject to
income taxes as ordinary income, whether received in cash or in additional
shares. For corporate investors, dividends from net investment income will
generally qualify in part for the corporate dividends-received deduction. The
portion of dividends paid by the Fund that so qualifies will be designated each
year in a notice from Equity Funds IV, Inc. to the Fund's shareholders. For the
fiscal year ended September 30, 1997, 27.90% of the Fund's dividends from net
investment income qualified for the dividends-received deduction to
corporations.

THE TREATMENT OF CAPITAL GAIN DISTRIBUTIONS UNDER THE TAXPAYER RELIEF ACT OF
1997
The 1997 Act creates a category of long-term capital gain for individuals
that will be taxed at new lower tax rates. For investors who are in the 28% or
higher federal income tax brackets, these gains will be taxed at a minimum of
20%. For investors who are in the 15% federal income tax bracket, these gains
will be taxed at a maximum of 10%. Capital gain distributions will qualify for
these new maximum tax rates, depending on when the Fund's securities were sold
and how long they were held by the Fund before they were sold. Investors who
want more information on holding periods and other qualifying rules relating to
these new rates should review the expanded discussion in Part B, or should
contact their own tax advisers.

Equity Funds IV, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.

Although dividends generally will be treated as distributed when paid,
dividends which are declared in October, November or December to shareholders of
record on a specified date in one of those months, but which, for operational
reasons, may not be paid to the shareholder until the following January, will be
treated for tax purposes as if paid by the Fund and received by the shareholder
on December 31 of the calendar year in which they are declared.

The sale of shares of the Fund is a taxable event and may result in a capital
gain or loss to shareholders subject to tax. Capital gain or loss may be
realized from an ordinary redemption of shares or an exchange of shares between
the Fund any other fund in the Delaware Group. Any loss incurred on a sale or
exchange of Fund shares that had been held for six months or less will be
treated as a long-term capital loss to the extent of capital gain dividends
received with respect to such shares. All or a portion of the sales charge
incurred in acquiring Fund shares will be excluded from the federal tax basis of
any of such shares sold or exchanged within 90 days of their purchase (for
purposes of determining gain or loss upon the sale of such shares) if the sale
proceeds are reinvested in the Fund or in another fund in the Delaware Group of
funds and a sales charge that would otherwise apply to the reinvestment is
reduced or eliminated. Any portion of such sales charge excluded from the tax
basis of the shares sold will be added to the tax basis of the shares acquired
in the reinvestment.

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<PAGE>

Each year, Equity Funds IV, Inc. will mail to you information on the tax
status of the Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income that is
derived from U.S. government securities that are exempt from state income tax.
Of course, shareholders who are not subject to tax on their income would not be
required to pay tax on amounts distributed to them by the Fund.

Equity Funds IV, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.

See Accounting and Tax Issues and Taxes in Part B for additional information
on tax matters relating to the Fund and its shareholders.

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CALCULATION OF OFFERING PRICE AND NET ASSET VALUE PER SHARE

The net asset value ("NAV") per share is computed by adding the value of all
securities and other assets in the portfolio, deducting any liabilities
(expenses and fees are accrued daily) and dividing by the number of shares
outstanding. Equity securities for which market quotations are available are
priced at market value. Foreign securities expressed in foreign currency values
will be converted into U.S. dollar values at the mean between the currencies'
bid and offered quotations. Debt securities are priced at fair value by an
independent pricing service using methods approved by Equity Funds IV, Inc.'s
Board of Directors. Short-term investments having a maturity of less than 60
days are valued at amortized cost, which approximates market value. All other
securities are valued at their fair value as determined in good faith and in a
method approved by Equity Funds IV, Inc.'s Board of Directors.

The offering price and NAV are computed as of the close of regular trading on
the New York Stock Exchange (ordinarily, 4 p.m., Eastern time) on days when the
Exchange is open.

The net asset values of all outstanding shares of each class of the Fund will
be computed on a pro-rata basis for each outstanding share based on the
proportionate participation in the Fund represented by the value of shares of
that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Capital Appreciation Fund Institutional Class will not incur any
of the expenses under the Fund's 12b-1 Plans and the Class A, Class B and Class
C Shares alone will bear the 12b-1 Plan expenses, if any, payable under their
respective Plans. Due to the specific distribution expenses and other costs
that will be allocated to each class, the NAV per share of each class of the
Fund will vary.

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MANAGEMENT OF THE FUND

Directors

The business and affairs of Equity Funds IV, Inc. are managed under the
direction of its Board of Directors. Part B contains additional information
regarding Equity Funds IV, Inc.'s directors and officers.

Investment Manager

The Manager furnishes investment management services to the Fund.

The Manager and its predecessors have been managing the funds in the Delaware
Group since 1938. On September 30, 1997, the Manager and its affiliates in the
Delaware Group, including Delaware International Advisers Ltd., were managing
in the aggregate more than $39 billion in assets in the various institutional or
separately managed (approximately $23,433,860,000) and investment company
(approximately $16,283,306,000) accounts.

The Manager manages the Fund's portfolio and makes investment decisions for
the Fund, which are implemented by the Fund's Trading Department. The Manager
also administers Equity Funds IV, Inc.'s affairs and pays the salaries of all
the directors, officers and employees of Equity Funds IV, Inc. who are
affiliated with the Manager. For these services, the Manager is paid an annual
fee equal to 0.75% on the first $500 million of average daily net assets, 0.725%
on the next $500 million and 0.70% on the average daily net assets in excess of
$1 billion. Investment management fees incurred by the Fund for the fiscal year
ended September 30, 1997 were 0.75% (annualized) of its average daily net assets
and 0.10% (annualized) of average daily net assets was paid due to the voluntary
waiver of fees by the Manager. The directors of Equity Funds IV, Inc. annually
review fees paid to the Manager.

Gerald S. Frey, Vice President/Senior Portfolio Manager of the Fund, has had
primary responsibility for making day-to-day investment decisions for the Fund
since March 1997. Mr. Frey was a co-manager of the Fund from June 1996 to March
1997. Mr. Frey has over 20 years' experience in the money management business
and holds a BA in Economics from Bloomsburg University and attended Wilkes
College and New York University. Prior to joining the Delaware Group in 1996,
he was a Senior Director with Morgan Grenfell Capital Management in New York for
approximately nine years.

Robert L. Arnold, Vice President/Portfolio Manager for the Fund, has had
primary responsibility for making investment decisions for the large cap equity
portion of the Fund since March 1997. Prior to this responsibility, he was a
financial analyst in the Delaware Group focusing on the financial services
industry including banks, thrifts, insurance companies and consumer finance
companies. He holds a BS from Carnegie Mellon University and earned an MBA
from the University of Chicago. He began his investment career as a management
consultant with Arthur Young in Philadelphia. Prior to joining Delaware Group
in March 1992, Mr. Arnold was a planning analyst with Chemical Bank in New York.

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<PAGE>

In making investment decisions for the Fund, Mr. Frey regularly consults with
Wayne A. Stork, Marshall T. Bassett, John A. Heffern and Lori Wachs. Mr. Stork,
Chairman of Delaware Management Company, Inc. and Equity Funds IV, Inc.'s Board
of Directors, is a graduate of Brown University and attended New York
University's Graduate School of Business Administration. Mr. Stork joined the
Delaware Group in 1962 and has served in various executive capacities at
different times within the Delaware organization. Marshall T. Bassett, Vice
President, joined Delaware in 1997. In his most recent position, he served as
Vice President in Morgan Stanley Asset Management's Emerging Growth Group, where
he analyzed small growth companies. Prior to that, he was a trust officer at
Sovran Bank and Trust Company. He received his bachelor's degree and MBA from
Duke University. John A. Heffern, Vice President, holds a bachelor's degree and
an MBA from the University of North Carolina at Chapel Hill. He joined Delaware
in 1997. Previously, he was a Senior Vice President, Equity Research at NatWest
Securities Corporation's Specialty Finance Services unit. Prior to that, he was
a Principal and Senior Regional Bank Analyst at Alex. Brown & Sons. Ms. Wachs
is an Assistant Vice President. She joined the Delaware Group in 1992 from
Goldman Sachs, where she was an equity analyst for two years. She is a graduate
of the University of Pennsylvania's Wharton School, where she majored in Finance
and Oriental studies.

Portfolio Trading Practices

The Fund normally will not invest for short-term trading purposes. However,
the Fund may sell securities without regard to the length of time they have been
held. The degree of portfolio activity will affect brokerage costs of the Fund
and may affect taxes payable by the Fund's shareholders. Given the Fund's
investment objective, its annual portfolio turnover rate is not expected to
exceed 100%. A turnover rate of 100% would occur, for example, if all the
investments in the Fund's portfolio at the beginning of the year were replaced
by the end of the year. The turnover rate may also be affected by cash
requirements for redemption and repurchases of Fund shares.

The Manager uses its best efforts to obtain the best available price and most
favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager or
to their advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the Manager
may consider a broker/dealer's sales of the shares of the funds in the Delaware
Group of funds in placing portfolio orders and may place orders with
broker/dealers that have agreed to defray certain expenses of such funds, such
as custodian fees.

Performance Information
From time to time, the Fund may quote total return performance of the Classes
in advertising and other types of literature.

Total return will be based on a hypothetical $1,000 investment, reflecting
the reinvestment of all distributions at net asset value and: (i) in the case
of Class A Shares, the impact of the maximum front-end sales charge at the
beginning of each specified period; and (ii) in the case of Class B Shares and
Class C Shares, the deduction of any applicable CDSC at the end of the relevant
period. Each presentation will include the average annual total return for one-
, five- and ten-year or life-of-fund periods, as relevant. The Fund may also
advertise aggregate and average total return information concerning a Class over
additional periods of time. In addition, the Fund may present total return
information that does not reflect the deduction of the maximum front-end sales
charge or any applicable CDSC. In this case, such total return information
would be more favorable than total return information that includes the
deductions of the maximum front-end sales charge or any applicable CDSC.

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<PAGE>

Because securities prices fluctuate, investment results of the Classes will
fluctuate over time and past performance should not be considered a guarantee of
future results.

Distribution (12b-1) and Service

The Distributor, Delaware Distributors, L.P., serves as the national
distributor of the Fund's shares under a Distribution Agreement with Equity
Funds IV, Inc. dated as of November 29, 1996.

Equity Funds IV, Inc. has adopted a separate distribution plan under Rule
12b-1 for each of the Class A Shares, Class B Shares and Class C Shares (the
"Plans"). The Plans permit the Fund to pay the Distributor from the assets of
the respective Classes a monthly fee for the Distributor's services and expenses
in distributing and promoting sales of shares.

These expenses include, among other things, preparing and distributing
advertisements, sales literature, and prospectuses and reports used for sales
purposes, compensating sales and marketing personnel, holding special promotions
for specified periods of time, and paying distribution and maintenance fees to
brokers, dealers and others. In connection with the promotion of shares of the
Classes, the Distributor may, from time to time, pay to participate in dealer-
sponsored seminars and conferences, and reimburse dealers for expenses incurred
in connection with preapproved seminars, conferences, and advertising. The
Distributor may pay or allow additional promotional incentives to dealers as
part of preapproved sales contests and/or to dealers who provide extra training
and information concerning a Class and increase sales of the Class. In
addition, the Fund may make payments from the 12b-1 Plan fees of the respective
Class directly to others, such as banks, who aid in the distribution of Class
shares or provide services in respect of a Class, pursuant to service agreements
with Equity Funds IV, Inc. The Distributor has elected voluntarily to waive its
right to receive 12b-1 fees (including service fees) from the commencement of
the public offering of the Classes through May 31, 1998.

The 12b-1 Plans applicable to Class B Shares and Class C Shares are designed
to permit an investor to purchase these shares through dealers or brokers
without paying a front-end sales charge while enabling the Distributor to
compensate dealers and brokers for the sale of such shares.

Absent any applicable fee waiver, the aggregate fees paid by the Fund from
the assets of the respective Classes to the Distributor and others under the
Plans may not exceed (i) 0.30% of the Class A Shares' average daily net assets
in any year, and (ii) 1% (0.25% of which are service fees to be paid to the
Distributor, dealers and others for providing personal service and/or
maintaining shareholder accounts) of each of the Class B Shares' and Class C
Shares' average daily net assets in any year. The Fund's Class A, Class B and
Class C Shares will not incur any distribution expenses beyond these limits,
which may not be increased without shareholder approval.

While payments, if any, pursuant to the Plans may not exceed 0.30% annually
with respect to the Class A Shares, and 1% annually with respect to each of the
Class B Shares and the Class C Shares, the Plans do not limit fees to amounts
actually expended by the Distributor. It is therefore possible that the
Distributor may realize a profit in any particular year. However, the
Distributor currently expects that its distribution expenses will likely equal
or exceed payments to it under the Plans. The Distributor may, however, incur
such additional expenses and make additional payments to dealers from its own
resources to promote the distribution of shares of the Classes. The monthly
fees paid to the Distributor are subject to the review and approval of Equity
Funds IV, Inc.'s unaffiliated directors, who may reduce the fees or terminate
the Plans at any time.

-41-
<PAGE>

Equity Funds IV, Inc.'s Plans do not apply to the Capital Appreciation Fund
Institutional Class of shares. Those shares are not included in calculating the
Plans' fees, and the Plans are not used to assist in the distribution and
marketing of the Capital Appreciation Fund Institutional Class shares.

The Transfer Agent, Delaware Service Company, Inc., serves as the shareholder
servicing, dividend disbursing and transfer agent for Equity Funds IV, Inc.
under an amended and restated agreement dated as of November 29, 1996. Delaware
Service Company, Inc. also provides accounting services to the Fund pursuant to
the terms of a separate Fund Accounting Agreement.

The directors annually review fees paid to the Distributor and the Transfer
Agent. The Distributor and the Transfer Agent are also indirect, wholly owned
subsidiaries of DMH.

Expenses

The Fund is responsible for all of its own expenses other than those borne by
the Manager under the Investment Management Agreement and those borne by the
Distributor under the Distribution Agreement. The expense ratio of each Class
will reflect the impact of its 12b-1 Plan. For the fiscal year ended September
30, 1997, the ratio of expenses to average daily net assets for Class A Shares
was 0.75%, which reflects the voluntary waiver of fees by the Manager and the
voluntary waiver of the 12b-1 fee by the Distributor. The Class B Shares and
Class C Shares have not commenced operations as of September 30, 1997.

Shares
Equity Funds IV, Inc. is an open-end management investment company, commonly
known as a mutual fund, and the Fund's portfolio of assets is diversified as
defined by the 1940 Act. Equity Funds IV, Inc. was organized as a Maryland
corporation in September 1985. In addition to the Fund, Equity Funds IV, Inc.
currently offers one other series of shares, the DelCap Fund series.

Equity Funds IV, Inc. shares have a par value of $.01, equal voting rights,
except as noted below, and are equal in all other respects. All Fund shares
have noncumulative voting rights which means that the holders of more than 50%
of Equity Funds IV, Inc.'s shares voting for the election of directors can elect
100% of the directors if they choose to do so. Under Maryland law, Equity Funds
IV, Inc. is not required, and does not intend, to hold annual meetings of
shareholders unless, under certain circumstances, it is required to do so under
the 1940 Act. Shareholders of 10% or more of Equity Funds IV, Inc.'s shares may
request that a special meeting be called to consider the removal of a director.

In addition to Class A Shares, Class B Shares and Class C Shares, the Fund
also offers Capital Appreciation Fund Institutional Class. Shares of each class
represent proportionate interests in the assets of the Fund and have the same
voting and other rights and preferences as the other classes of the Fund, except
that shares of Capital Appreciation Fund Institutional Class are not subject to,
and may not vote on matters affecting, the Distribution Plans under Rule 12b-1
relating to Class A, Class B and Class C Shares. Similarly, as a general
matter, the shareholders of Class A Shares, Class B Shares and Class C Shares
may vote only on matters affecting the 12b-1 Plan that relates to the class of
shares that they hold. However, Class B Shares may vote on any proposal to
increase materially the fees to be paid by the Fund under the Rule 12b-1 Plan
relating to Class A Shares.

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<PAGE>

Lincoln National Corporation Employees' Retirement Trust (the "Trust") made
an investment in the Fund. As of October 31, 1997, the Trust owned 99.99% of the
outstanding shares of the Fund, however, the Trust owned no outstanding shares
of Class A, Class B or Class C of the Fund. Subject to certain limited
exceptions, there would be no limitation on the Trust's ability to redeem its
shares of the Fund and it may elect to do so at any time.

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<PAGE>

OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS

Small to Medium-Sized Companies

The Fund invests its assets in equity securities of small to medium-sized
companies. These stocks have historically been more volatile in price than
larger capitalization stocks, such as those included in the Standard & Poor's
500 Index. This is because, among other things, smaller companies have a lower
degree of liquidity and tend to have a greater sensitivity to changing economic
conditions. These companies may have narrow product lines, markets or financial
resources, or may depend on a limited management group. In addition, these
companies are typically subject to a greater degree of changes in their earnings
and prospects. The companies' securities may trade less frequently and have a
smaller trading volume. The securities may be traded only in the over-the-
counter markets or on a regional securities exchange. In addition to exhibiting
greater volatility, smaller capitalization securities may, to some degree,
fluctuate independently of the stocks of larger capitalization companies. For
example, the stocks of smaller capitalization companies may decline in price as
the price of larger company stocks rise, or vice versa.

Foreign Securities

The Fund may invest up to 20% of its total assets in foreign securities.
Foreign markets may be more volatile than U.S. markets. Such investments
involve sovereign risk in addition to the normal risks associated with
securities of U.S. issuers. These risks include political risks, foreign taxes
and exchange controls and currency fluctuations. For example, foreign portfolio
investments may fluctuate in value due to changes in currency rates (i.e., other
things being equal, the value of foreign investments would increase with a fall
in the value of the dollar, and decrease with a rise in the value of the dollar)
and control regulations apart from market fluctuations. The Fund may also
experience delays in foreign securities settlement. The Fund currently intends
to limit its investments in foreign securities to those issued by entities in
developed countries.

Depositary Receipts

The Fund may make foreign investments through the purchase and sale of
sponsored or unsponsored American, European and Global Depositary Receipts
("Depositary Receipts"). Depositary Receipts are receipts typically issued by a
U.S. or foreign bank or trust company which evidence ownership of underlying
securities issued by a foreign corporation. "Sponsored" Depositary Receipts are
issued jointly by the issuer of the underlying security and a depository,
whereas "unsponsored" Depositary Receipts are issued without participation of
the issuer of the deposited security. Holders of unsponsored Depositary
Receipts generally bear all the costs of such facilities and the depository of
an unsponsored facility frequently is under no obligation to distribute
shareholder communications received from the issuer of the deposited security or
to pass through voting rights to the holders of such receipts in respect of the
deposited securities. Therefore, there may not be a correlation between
information concerning the issuer of the security and the market value of an
unsponsored Depositary Receipt.

Restricted and Illiquid Securities

The Fund may invest in restricted securities, including privately placed
securities, some of which may be eligible for resale without registration
pursuant to Rule 144A ("Rule 144A Securities") under the Securities Act of 1933.
Rule 144A permits many privately placed and legally restricted securities to be
freely traded among certain institutional buyers such as the Fund. The Fund may
invest no more than 15% of the value of its net assets in illiquid securities.

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<PAGE>

While maintaining oversight, the Board of Directors has delegated to the
Manager the day-to-day function of determining whether or not individual Rule
144A Securities are liquid for purposes of the Fund's 15% limitation on
investments in illiquid assets. The Board has instructed the Manager to
consider the following factors in determining the liquidity of a Rule 144A
Security: (i) the frequency of trades and trading volume for the security; (ii)
whether at least three dealers are willing to purchase or sell the security and
the number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; and (iv) the nature of the security and the
nature of the marketplace trades (e.g., the time needed to dispose of the
security, the method of soliciting offers, and the mechanics of transfer).

If the Manager determines that a Rule 144A Security which was previously
determined to be liquid is no longer liquid and, as a result, the Fund's
holdings of illiquid securities exceed the Fund's 15% limit on investments in
such securities, the Manager will determine what action to take to ensure that
the Fund continues to adhere to such limitation.

Investment Company Securities

Any investments that the Fund makes in either closed-end or open-end
investment companies are limited by the 1940 Act, and involve an indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. Under the 1940 Act's current limitations, the Fund may
not (1) own more than 3% of the voting stock of another investment company; (2)
invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. If the Fund elects to limit its
investment in other investment companies to closed-end investment companies, the
3% limitation described above is increased to 10%. These percentage limitations
also apply to the Fund's investments in unregistered investment companies.

Repurchase Agreements

The Fund may also use repurchase agreements that are at least 100%
collateralized by securities in which the Funds can invest directly. Repurchase
agreements help the Fund to invest short-term cash reserves or may be used by
the Fund if a temporary defensive posture is deemed appropriate. The Fund may
invest cash balances in joint repurchase agreements with other Delaware Group
funds. Under a repurchase agreement, the Fund acquires ownership and possession
of a security, and the seller agrees to buy the security back at a specified
time and higher price. If the seller is unable to repurchase the security, the
Fund could experience delays in liquidating the securities and the Fund could
incur a loss. That loss, if any, would be the difference between the repurchase
price and the market value of the security. To minimize those possibilities,
the Fund may enter into repurchase agreements with banks and broker/dealers
deemed by the Manager to be creditworthy under guidelines approved by the Board
of Directors and to those which the Manager, under such guidelines, determines
to present minimal credit risks and which are of high quality.

When-Issued and Delayed Delivery Securities

The Fund may purchase securities on a when-issued or delayed delivery basis.
In such transactions, securities are purchased with payment and delivery taking
place in the future in order to secure what is considered to be an advantageous
price at the time of the transaction. Delivery of and payment for these
securities may take as long as a month or more after the date of the purchase
commitment. The Fund will maintain with its custodian bank a separate account
with a segregated portfolio of liquid securities in an amount at least equal to
these commitments. The payment obligation that will be received are each fixed
at the time the Fund enters into the commitment. Thus, it is possible that the
market value at the time of settlement could be higher or lower than the
purchase price.

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<PAGE>

REITs

The Fund may purchase shares of real estate investment trusts ("REITs").
REITs are pooled investment vehicles which invest primarily in income-producing
real estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have appreciated
in value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive income from the collection of interest payments. Like
investment companies such as Equity Funds IV, Inc., REITs are not taxed on
income distributed to shareholders provided they comply with several
requirements in the Internal Revenue Code. REITs are subject to substantial
cash flow dependency, defaults by borrowers, self-liquidation, and the risk of
failing to qualify for tax-free pass-through of income under the Internal
Revenue Code, and/or to maintain exemptions from the 1940 Act.

Borrowing

The Fund is permitted under certain circumstances to borrow money.
Investment securities will not normally be purchased while the Fund has an
outstanding borrowing.

Portfolio Loan Transactions

The Fund may loan up to 25% of its assets to qualified broker/dealers or
institutional investors. The major risk to which the Fund would be exposed on a
loan transaction is the risk that the borrower would go bankrupt at a time when
the value of the security goes up. Therefore, the Fund will only enter into
loan arrangements after a review of all pertinent facts by the Manager, subject
to overall supervision by the Board of Directors, including the creditworthiness
of the borrowing broker, dealer or institution and then only if the
consideration to be received from such loans would justify the risk.
Creditworthiness will be monitored on an ongoing basis by the Manager.

Foreign Currency Transactions

Although the Fund values its assets daily in terms of U.S. dollars, it does
not intend to convert its holdings of foreign currencies into U.S. dollars on a
daily basis. The Fund will, however, from time to time, purchase or sell
foreign currencies and/or engage in forward foreign currency transactions in
order to expedite settlement of portfolio transactions and to minimize currency
value fluctuations. The Fund may conduct its foreign currency exchange
transactions on a spot (i.e., cash) basis at the spot rate prevailing in the
foreign currency exchange market or through entering into contracts to purchase
or sell foreign currencies at a future date (i.e., a "forward foreign currency"
contract or "forward" contract). A forward contract involves an obligation to
purchase or sell a specific currency at a future date, which may be any fixed
number of days from the date of the contract, agreed upon by the parties, at a
price set at the time of the contract. The Fund will convert currency on a spot
basis from time to time, and investors should be aware of the costs of currency
conversion.

The Fund may enter into forward contracts to "lock in" the price of a
security it has agreed to purchase or sell, in terms of U.S. dollars or other
currencies in which the transaction will be consummated. By entering into a
forward contract for the purchase or sale, for a fixed amount of U.S. dollars or
foreign currency, of the amount of foreign currency involved in the underlying
security transaction, the Fund will be able to protect itself against a possible
loss resulting from an adverse change in currency exchange rates during the
period between the date the security is purchased or sold and the date on which
payment is made or received.

When the Manager believes that the currency of a particular country may
suffer a significant decline against the U.S. dollar or against another
currency, the Fund may enter into a forward foreign currency contract

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<PAGE>

to sell, for a fixed amount of U.S. dollars or other appropriate currency, the
amount of foreign currency approximating the value of some or all of the Fund's
securities denominated in such foreign currency.

The Fund will not enter into forward contracts or maintain a net exposure to
such contracts where the consummation of the contracts would obligate the Fund
to deliver an amount of foreign currency in excess of the value of the Fund's
securities or other assets denominated in that currency.

As the maturity of a forward contract, the Fund may either sell the portfolio
security and make delivery of the foreign currency, or it may retain the
security and terminate its contractual obligation to deliver the foreign
currency by purchasing an "offsetting" contract with the same currency trader
obligating it to purchase, on the same maturity date, the same amount of the
foreign currency. The Fund may realize a gain or loss from currency
transactions.

The Fund also may purchase and write put and call options on foreign
currencies (traded on U.S. and foreign exchanges or over-the-counter) for
hedging purposes to protect against declines in the U.S. dollar cost of foreign
securities held by the Fund and against increases in the U.S. dollar cost of
such securities to be acquired. Call options on foreign currency written by the
Fund will be covered, which means that the Fund will own the underlying foreign
currency. With respect to put options on foreign currency written by the Fund,
the Fund will establish a segregated account with its custodian bank consisting
of cash, U.S. Government securities or other high-grade liquid debt securities
in an amount equal to the amount the Fund will be required to pay upon exercise
of the put.

As in the case of other kinds of options, the writing of an option on foreign
currency will constitute only a partial hedge, up to the amount of the premium
received, and the Fund could be required to purchase or sell foreign currencies
at disadvantageous exchange rates, thereby incurring losses. The purchase of an
option on foreign currency may constitute an effective hedge against
fluctuations in exchange rates, although, in the event of rate movements adverse
to the Fund's position, the Fund may forfeit the entire amount of the premium
plus related transaction costs.

Futures Contracts

The Fund may enter into futures contracts on stocks, stock indices and
foreign currencies, and purchase or sell options on such futures contracts.
These activities will not be entered into for speculative purposes, but rather
for hedging purposes and to facilitate the ability to quickly deploy into the
stock market the Fund's positions in cash, short-term debt securities and other
money market instruments, at times when the Fund's assets are not fully invested
in equity securities. Such positions will generally be eliminated when it
becomes possible to invest in securities that are appropriate for the Fund.

A futures contract is a bilateral agreement providing for the purchase and
sale of a specified type and amount of a financial instrument, or for the making
and acceptance of a cash settlement, at a stated time in the future for a fixed
price. By its terms, a futures contract provides for a specified settlement
date on which the securities underlying the contract are delivered, or in the
case of securities index futures contracts, the difference between the price at
which the contract was entered into and the contract's closing value is settled
between the purchaser and seller in cash. Futures contracts differ from options
in that they are bilateral agreements, with both the purchaser and the seller
equally obligated to complete the transaction. In addition, futures contracts
call for settlement only on the expiration date, and cannot be "exercised" at
any other time during their term.

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<PAGE>

The purchase or sale of a futures contract also differs from the purchase or
sale of a security or the purchase of an option in that no purchase price is
paid or received. Instead, an amount of cash or cash equivalents, which varies
but may be as low as 5% or less of the value of the contract, must be deposited
with the broker as "initial margin" as a good faith deposit. This amount is
generally maintained in a segregated account at the custodian bank. Subsequent
payments to and from the broker, referred to as "variation margin," are made on
a daily basis as the value of the index or instrument underlying the futures
contract fluctuates, making positions in the futures contracts more or less
valuable, a process known as "marking to the market."

Purchases or sales of stock index futures contracts are used for hedging
purposes to attempt to protect the Fund's current or intended investments from
broad fluctuations in stock prices. For example, the Fund may sell stock index
futures contracts in anticipation of or during a market decline to attempt to
offset the decrease in market value of the Fund's securities portfolio that
might otherwise result. If such decline occurs, the loss in value of portfolio
securities may be offset, in whole or part, by gains on the futures position.
When the Fund is not fully invested in the securities market and anticipates a
significant market advance, it may purchase stock index futures contracts in
order to gain rapid market exposure that may, in part or entirely, offset
increases in the cost of securities that the Fund intends to purchase. As such
purchases are made, the corresponding positions in stock index futures contracts
will be closed out.

The Fund may purchase and sell foreign currency futures contracts for hedging
purposes to attempt to protect its current or intended investments denominated
in foreign currencies from fluctuations in currency exchange rates. Such
fluctuations could reduce the dollar value of portfolio securities denominated
in foreign currencies, or increase the cost of foreign-denominated securities to
be acquired, even if the value of such securities in the currencies in which
they are denominated remains constant. The Fund may sell futures contracts on a
foreign currency, for example, when it holds securities denominated in such
currency and it anticipates a decline in the value of such currency relative to
the dollar. In the event such decline occurs, the resulting adverse effect on
the value of foreign-denominated securities may be offset, in whole or in part,
by gains on the futures contracts. However, if the value of the foreign
currency increases relative to the dollar, the Fund's loss on the foreign
currency futures contract may or may not be offset by an increase in the value
of the securities because a decline in the price of the security stated in terms
of the foreign currency may be greater than the increase in value as a result of
the change in exchange rates.

Conversely, the Fund could protect against a rise in the dollar cost of
foreign-denominated securities to be acquired by purchasing futures contracts on
the relevant currency, which could offset, in whole or in part, the increased
cost of such securities resulting from a rise in the dollar value of the
underlying currencies. When the Fund purchases futures contracts under such
circumstances, however, and the price of securities to be acquired instead
declines as a result of appreciation of the dollar, the Fund will sustain losses
on its futures position which could reduce or eliminate the benefits of the
reduced cost of portfolio securities to be acquired.

The Fund may also purchase and write options on the types of futures
contracts in which the Fund may invest, and enter into related closing
transactions. Options on futures are similar to options on securities, as
described below, except that options on futures give the purchaser the right, in
return for the premium paid, to assume a position in a futures contract, rather
than to actually purchase or sell the futures contract, at a specified exercise
price at any time during the period of the option. In the event that an option
written by the Fund is exercised, the Fund will be subject to all the risks
associated with the trading of futures contracts, such as payment of variation
margin deposits. In addition, the writer of an option on a futures contract,
unlike the holder, is subject to initial and variation margin requirements on
the option position.

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<PAGE>

At any time prior to the expiration of a futures contract, a trader may elect
to close out its position by taking an opposite position on the contract market
on which the position was entered into, subject to the availability of a
secondary market, which will operate to terminate the initial position.
Likewise, a position in an option on a futures contract may be terminated by the
purchaser or seller prior to expiration by effecting a closing purchase or sale
transaction, subject to availability of a secondary market, which is the
purchase or sale of an option of the same series (i.e., the same exercise price
and expiration date) as the option previously purchased or sold. The Fund may
realize a profit or a loss when closing out a futures contract or an option on a
futures contract.

To the extent that interest or exchange rates or securities prices move in an
unexpected direction, the Fund may not achieve the anticipated benefits of
investing in futures contracts and options thereon, or may realize a loss. To
the extent that the Fund purchases an option on a futures contract and fails to
exercise the option prior to the exercise date, it will suffer a loss of the
premium paid. Further, the possible lack of a secondary market could prevent
the Fund from closing out its positions relating to futures. See Part B for a
further discussion of this investment technique.

Options

The Fund may write covered call options on individual issues as well as write
call options on stock indices. The Fund may also purchase put options on
individual issues and on stock indices. The Manager will employ these
techniques in an attempt to protect appreciation attained, to offset capital
losses and to take advantage of the liquidity available in the option markets.
The ability to hedge effectively using options on stock indices will depend, in
part, on the correlation between the composition of the index and the Fund's
portfolio as well as the price movement of individual securities. The Manager
may also write covered call options to achieve income to offset the cost of
purchasing put options.

While there is no limit on the amount of the Fund's assets which may be
invested in covered call options, the Fund will not invest more than 2% of its
net assets in put options. The Fund will only use Exchange-traded options.

Call Options

Writing a Covered Call Option on Securities - A covered call option obligates
the Fund to sell one of its securities for an agreed price up to an agreed date.
When the Fund writes a call, it receives a premium and agrees to sell the
callable securities to a purchaser of a corresponding call during the call
period (usually, not more than nine months) at a fixed price regardless of
market price changes during the call period. The advantage is that the Fund
receives premium income for the limited purpose of offsetting the costs of
purchasing put options or offsetting any capital loss or decline in the market
value of the security. However, if the Manager's forecast is wrong, the Fund
may not fully participate in the market appreciation if the security's price
rises.

Writing a Call Option on Stock Indices - Writing a call option on stock
indices is similar to the writing of a call option on an individual stock.
Stock indices used will include, but not be limited to, the S&P 500, the S&P 100
and the S&P Over-The-Counter ("OTC") 250.

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<PAGE>

Put Options

Purchasing a Put Option - A put option gives the Fund the right to sell one
of its securities for an agreed price up to an agreed date. The advantage is
that the Fund can be protected should the market value of the security decline.
However, the Fund must pay a premium whether or not the put option is exercised.

Purchasing a Put Option on Stock Indices - Purchasing a protective put option
on stock indices is similar to the purchase of protective puts on an individual
stock. Indices used will include, but not be limited to, the S&P 500, the S&P
100 and the S&P OTC 250.

Closing Transactions - Closing transactions essentially let the Fund offset a
put option or covered call option prior to its exercise or expiration. If the
Fund cannot effect a closing transaction, it may have to hold a security it
would otherwise sell or deliver a security it might want to hold.

Part B describes certain of these investment policies and risk
considerations. Part B sets forth other investment policies, risk
considerations and more specific investment restrictions.

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<PAGE>

APPENDIX A - INVESTMENT ILLUSTRATIONS
Illustrations of Hypothetical Returns on Investments Based on Purchase Options
$10,000 Purchase

<TABLE>
<CAPTION>
Scenario 1 Scenario 2
No Redemption Redeem 1st Year
--------------------------------- ---------------------------------
Year Class A Class B Class C Class A Class B Class C
---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000
1 10,478 10,930 10,930 10,478 10,530 10,830+
2 11,525 11,946 11,946
3 12,678 13,058 13,058
4 13,946 14,272 14,272
5 15,340 15,599 15,599
6 16,874 17,050 17,050
7 18,562 18,636 18,636
8 20,418+ 20,369 20,369
9 22,459 22,405* 22,263
10 24,705 24,646* 24,333
</TABLE>

<TABLE>
<CAPTION>
$250,000 Purchase

Scenario 1 Scenario 2
No Redemption Redeem 1st Year
--------------------------------- ----------------------------------
Year Class A Class B Class C Class A Class B Class C
---- ------- ------- ------- -------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000
1 268,125 273,250 273,250 268,125 263,250 270,750+
2 294,938 298,662 298,662
3 324,431 326,438 326,438
4 356,874+ 356,797 356,797
5 392,562 389,979 389,979
6 431,818 426,247 426,247
7 475,000 465,888 465,888
8 522,500 509,215 509,215
9 574,750 560,137* 556,572
10 632,225 616,150* 608,333
</TABLE>

<TABLE>
<CAPTION>
Scenario 3 Scenario 4
Redeem 3rd Year Redeem 5th Year
----------------------------------- ----------------------------------
Year Class A Class B Class C Class A Class B Class C
---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 9,525 10,000 10,000 9,525 10,000 10,000
1 10,478 10,930 10,930 10,478 10,930 10,930
2 11,525 11,946 11,946 11,525 11,946 11,946
3 12,678 12,758 13,058+ 12,678 13,058 13,058
4 13,946 14,272 14,272
5 15,340 15,399 15,599+
6
7
8
9
10
</TABLE>

*This assumes that Class B Shares were converted to Class A Shares at the end
of the eighth year.

<TABLE>
<CAPTION>
$250,000 Purchase

Scenario 3 Scenario 4
Redeem 3rd Year Redeem 5th Year
------------------------------------- ------------------------------------
Year Class A Class B Class C Class A Class B Class C
---- ------- ------- ------- ------- ------- -------
<S> <C> <C> <C> <C> <C> <C>
0 243,750 250,000 250,000 243,750 250,000 250,000
1 268,125 273,250 273,250 268,125 273,250 273,250
2 294,938 298,662 298,662 294,938 298,662 298,662
3 324,431 318,938 326,438+ 324,431 326,438 326,438
4 356,874+ 356,797 356,797
5 392,562 384,979 389,979
6
7
8
9
10
</TABLE>

*This assumes that Class B Shares were converted to Class A Shares at the end
of the eighth year.

Illustrations do not reflect any applicable waiver of 12b-1 fees. If such fee
waivers were reflected, the illustrations represented above would be different.

Assumes a hypothetical return for Class A of 10% per year, a hypothetical return
for Class B of 9.3% for years 1-8 and 10% for years 9-10, and a hypothetical
return for Class C of 9.3% per year. Hypothetical returns vary due to the
different expense structures for each Class and do not represent actual
performance.

Class A purchase subject to appropriate sales charge breakpoint (4.75% @
$10,000; 3.75% @ $100,000; 2.50% @ $250,000).

Class B purchase assessed appropriate CDSC upon redemption (4%-4%-3%-3%-2%-1% in
years 1-2-3-4-5-6).

Class C purchase assessed 1% CDSC upon redemption in year 1.

Figures marked "+" identify which Class offers the greater return potential
based on investment amount, the holding period and the expense structure of each
Class.

-51-
<PAGE>

APPENDIX B -- CLASSES OFFERED

Growth of Capital A Class B Class C Class Consultant Class
<S> <C> <C> <C> <C>
Aggressive Growth Fund x x x -
Trend Fund x x x -
DelCap Fund x x x -
Small Cap Value Fund x x x -
U.S. Growth Fund x x x -
Growth Stock Fund x x x -
Tax-Efficient Equity Fund x x x -

Total Return
Blue Chip Fund x x x -
Quantum Fund x x x -
Devon Fund x x x -
Decatur Total Return Fund x x x -
Decatur Income Fund x x x -
Delaware Fund
REIT Fund x x x -

International Diversification
Emerging Markets Fund x x x -
New Pacific Fund x x x -
Overseas Equity Fund x x x -
International Equity Fund x x x -
Global Assets Fund x x x -
Global Bond Fund x x x -

Current Income
Delchester Fund x x x -
Strategic Income Fund x x x -
U.S. Government Fund x x x -
Delaware-Voyageur US Government
Securities Fund x x x -
Limited-Term Government Fund x x x -
</TABLE>

-52-
<PAGE>

APPENDIX B--CLASSES OFFERED - (CON'T)

Tax Preferred Income A Class B Class C Class Consultant Class
<S> <C> <C> <C> <C>
National High Yield Municipal Bond Fund x x x -
Tax-Free USA Fund x x x -
Tax-Free Insured Fund x x x -
Tax-Free USA Intermediate Fund x x x -
Delaware-Voyageur Tax-Free Arizona Insured Fund x x x -
Delaware-Voyageur Tax-Free Arizona Fund x x x -
Delaware-Voyageur Tax-Free California Insured Fund x x x -
Delaware-Voyageur Tax-Free California Fund x x x -
Delaware-Voyageur Tax-Free Colorado Fund x x x -
Delaware-Voyageur Tax-Free Florida Insured Fund x x x -
Delaware-Voyageur Tax-Free Florida Intermediate Fund x x x -
Delaware-Voyageur Tax-Free Florida Fund x x x -
Delaware-Voyageur Tax-Free Idaho Fund x x x -
Delaware-Voyageur Tax-Free Iowa Fund x x x -
Delaware-Voyageur Tax-Free Kansas Fund x x x -
Delaware-Voyageur Minnesota High Yield Municipal Bond Fund x x x -
Delaware-Voyageur Minnesota Insured Fund x x x -
Delaware-Voyageur Tax-Free Minnesota Intermediate Fund x x x -
Delaware-Voyageur Tax-Free Minnesota Fund x x x -
Delaware-Voyageur Tax-Free Missouri Insured Fund x x x -
Tax-Free New Jersey Fund x x x -
Delaware-Voyageur Tax-Free New Mexico Fund x x x -
Delaware-Voyageur Tax-Free New York Fund x x x -
Delaware-Voyageur Tax-Free North Dakota Fund x x x -
Tax-Free Ohio Fund x x x -
Delaware-Voyageur Tax-Free Oregon Insured Fund x x x -
Tax-Free Pennsylvania Fund x x x -
Delaware-Voyageur Tax-Free Utah Fund x x x -
Delaware-Voyageur Tax-Free Washington Insured Fund x x x -
Delaware-Voyageur Tax-Free Wisconsin Fund x x x -

<CAPTION>
Money Market Funds
<S> <C> <C> <C> <C>
Delaware Cash Reserve x x x x
U.S. Government Money Fund x - - x
Tax-Free Money Fund x - - x
</TABLE>

-53-
<PAGE>

The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific tax-exempt
funds, money market funds, global and international funds and closed-end funds
give investors the ability to create a portfolio that fits their personal
financial goals. For more information, contact your financial adviser or call
Delaware Group at 800-523-4640.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

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

CAPITAL APPRECIATION FUND

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

A CLASS
B CLASS
C CLASS
- --------------------------------------------------------------------------------

PROSPECTUS

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

DECEMBER 1, 1997

DELAWARE
GROUP
<PAGE>

CAPITAL APPRECIATION FUND PROSPECTUS
INSTITUTIONAL CLASS SHARES DECEMBER 1, 1997

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

1818 Market Street, Philadelphia, PA 19103

For more information about
Capital Appreciation Fund Institutional Class
call the Delaware Group at 800-828-5052.

This Prospectus describes the Capital Appreciation Fund series (the "Fund")
of Delaware Group Equity Funds IV, Inc. ("Equity Funds IV, Inc."), a
professionally-managed mutual fund of the series type. The investment objective
of the Fund is capital appreciation. The Fund will attempt to achieve its
objective by investing primarily in equity securities of small to medium-sized
companies expected to grow over time and, to a lesser extent, in equity
securities of larger, more well established companies presenting growth
potential.

The Fund currently offers one institutional class: the Capital Appreciation
Fund Institutional Class (the "Class").

This Prospectus relates only to the Class and sets forth information that
you should read and consider before you invest. Please retain it for future
reference. The Statement of Additional Information ("Part B" of Equity Funds IV,
Inc.'s registration statement), dated December 1, 1997, as it may be amended
from time to time, contains additional information about the Fund and has been
filed with the Securities and Exchange Commission. Part B is incorporated by
reference into this Prospectus and is available, without charge, by writing to
Delaware Distributors, L.P. at the above address or by calling the above number.

The Fund also offers Capital Appreciation Fund A Class, Capital
Appreciation Fund B Class and Capital Appreciation Fund C Class. Shares of these
classes are subject to sales charges and other expenses, which may affect their
performance. A prospectus for these classes can be obtained by writing to
Delaware Distributors, L.P. at the above address or by calling 800-523-4640.

-1-
<PAGE>

TABLE OF CONTENTS

<TABLE>

<S> <C>
Cover Page Redemption and Exchange
Synopsis Dividends and Distributions
Summary of Expenses Taxes
Financial Highlights Calculation of Net Asset Value
Investment Objective and Policies Per Share
Suitability and Certain Risk Factors Management of the Fund
Investment Strategy Other Investment Policies and
Classes of Shares Risk Considerations
How to Buy Shares
</TABLE>

-2-
<PAGE>

SYNOPSIS

Investment Objective

Risk Factors and Special Considerations

1. Investments in equity securities of small to medium-sized companies
may present greater risks than investments in larger capitalization companies,
as the market prices of securities issued by smaller companies tend to
fluctuate, particularly in the short-term, and some smaller company securities
may be speculative. See Suitability and Certain Risk Factors under Investment
Objective and Policies.

Investment Manager, Distributor and Service Agent

Delaware Management Company, Inc. (the "Manager") furnishes investment
management services to the Fund, subject to the supervision and direction of
Equity Funds IV, Inc.'s Board of Directors. The Manager also provides investment
management services to certain other funds in the Delaware Group. Delaware
Distributors, L.P. (the "Distributor") is the national distributor for the Fund
and for all of the other mutual funds in the Delaware Group. Delaware Service
Company, Inc. (the "Transfer Agent") is the shareholder servicing, dividend
disbursing, accounting services and transfer agent for the Fund and for all of
the other mutual funds in the Delaware Group. See Summary of Expenses and
Management of the Fund for further information regarding the Manager and fees
payable under the Fund's Investment Management Agreement.

Purchase Price

Shares of the Class offered by this Prospectus are available at net asset
value, without a front-end or contingent deferred sales charge, and are not
subject to distribution fees under a Rule 12b-1 distribution plan. See Classes
of Shares.

-3-
<PAGE>

Redemption and Exchange

Shares of the Class are redeemed or exchanged at the net asset value
calculated after receipt of the redemption or exchange request. See Redemption
and Exchange.

Open-End Investment Company

Equity Funds IV, Inc., which was organized as a Maryland corporation in
1985, is an open-end management investment company. The Fund's portfolio of
assets is diversified as defined by the Investment Company Act of 1940 (the
"1940 Act"). See Shares under Management of the Fund.

-4-
<PAGE>

SUMMARY OF EXPENSES

Shareholder Transaction Expenses
- --------------------------------------------------------------------------------
<S> <C>
Maximum Sales Charge Imposed on Purchases
(as a percentage of offering price)................. None

Maximum Sales Charge Imposed on
Reinvested Dividends (as a
percentage of offering price)....................... None

Exchange Fees......................................... None*

Annual Operating Expenses
(as a percentage of average daily net assets)
- --------------------------------------------------------------------------------
Management Fees (after voluntary waivers)............. 0.10%

12b-1 Fees............................................ None

Other Operating Expenses.............................. 0.65%
-----

Total Operating Expenses +
(after voluntary waivers)................... 0.75%
=====
</TABLE>

*Exchanges are subject to the requirements of each fund and a front-end sales
charge may apply.

+The Manager has elected voluntarily to waive that portion, if any, of the
annual management fees payable by the Capital Appreciation Fund and to pay
certain expenses of the Fund to the extent necessary to ensure that the "Total
Operating Expenses" of the Class do not exceed 0.75% during the commencement of
the public offering of the Class through May 31, 1998. If the voluntary expense
waivers were not in effect, the "Total Operating Expenses," as a percentage of
average daily net assets, would be 1.40% for the Capital Appreciation Fund
Institutional Class, reflecting management fees of 0.75%.

For expense information about Capital Appreciation Fund A Class, Capital
Appreciation Fund B Class and Capital Appreciation Fund C Class, see the
separate prospectus relating to those classes.

-5-
<PAGE>

The following example illustrates the expenses that an investor would pay on a
$1,000 investment over various time periods, assuming (1) a 5% annual rate of
return, and (2) redemption at the end of each time period. The following example
assumes the voluntary waiver of the management fee by the Manager as discussed
in this Prospectus.

<TABLE>

<S> <C> <C> <C>
1 year 3 years 5 years 10 years
------ ------- ------- --------
$8 $24 $42 $93
</TABLE>

This example should not be considered a representation of past or future
expenses or performance. Actual expenses may be greater or less than those
shown.

The purpose of the above tables is to assist the investor in understanding the
various costs and expenses that an investor in the Class will bear directly or
indirectly.

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

FINANCIAL HIGHLIGHTS

The following financial highlights are derived from the financial statements of
Delaware Group Equity Funds IV, Inc.- Capital Appreciation Fund and have been
audited by Ernst & Young LLP, independent auditors. The data should be read in
conjunction with the financial statements, related notes, and the report of
Ernst & Young LLP, all of which are incorporated by reference into Part B.
Further information about the Fund's performance is contained in its Annual
Report to shareholders. A copy of the Fund's Annual Report (including the report
of Ernst & Young LLP) may be obtained from Equity Funds IV, Inc. upon request at
no charge.

-6-
<PAGE>

<TABLE>
<CAPTION>
Capital Appreciation
Fund
Institutional
Class
----------------
Period
12/2/96(1)
through
9/30/97
--------
<S> <C>
Net Asset Value, Beginning of Period.......................... $ 8.500

Income From Investment Operations
- ---------------------------------
Net Investment Income......................................... 0.067
Net Gain on Securities
(both realized and unrealized)................................ 1.601
--------
Total From Investment Operations........................... 1.668
--------

Less Dividends and Distributions
- --------------------------------
Dividends from Net Investment Income.......................... (0.008)
Distributions from Capital Gains.............................. none
Total Dividends and Distributions.......................... (0.008)
--------

Net Asset Value, End of Period................................ $ 10.160
========

Total Return.................................................. 19.64%(2)
- ------------

Ratios/Supplemental Data
- ------------------------

Net Assets, End of Period (000's omitted)..................... $2,393
Ratio of Expenses to Average Daily Net Assets................. 0.75%
Ratio of Expenses to Average Daily Net Assets
Prior to Expense Limitation................................. 1.40%
Ratio of Net Investment Income to Average
Daily Net Assets............................................ 0.91%
Ratio of Net Investment Income to Average Daily Net Assets
Prior to Expense Limitation................................. 0.27%
Portfolio Turnover Rate....................................... 84%
Average Commission Rate Paid (3).............................. $0.0594
</TABLE>

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

(1) Date of initial public offering; ratios have been annualized but total
return has not been annualized. Total return for this short of a time
period may not be representative of longer term results.
(2) Total return reflects the expense limitations referenced under Summary of
Expenses in the Prospectus.
(3) Computed by dividing the total amount of commissions paid by the total
number of shares purchased and sold during the period for which there was a
commission charged.

-7-
<PAGE>

INVESTMENT OBJECTIVE AND POLICIES

SUITABILITY AND CERTAIN RISK FACTORS

The Fund may be suitable for the patient investor interested in capital
appreciation. Investors should be willing to accept the risks associated with
investments in equity securities issued by domestic and foreign issuers.

INVESTMENT STRATEGY

The Fund also invests in equity securities of larger capitalization
companies that the Manager believes present greater than average growth
potential compared to other S&P 500 companies.

Common stock generally is the principal kind of equity security in which
the Fund invests. The Fund, however, may invest any portion of its assets in any
type of equity security available in the marketplace, including without
limitation, preferred stock, warrants and equity and debt securities convertible
into common stock. See Other Investment Policies and Risks Considerations and
Part B.

The Fund may enter into options and futures transactions for hedging
purposes and, among other reasons, to attempt to counterbalance portfolio
volatility. See Futures Contracts and Options under Other Investment Policies
and Risk Considerations.

-8-
<PAGE>

Should the market warrant a temporary defensive approach, the Fund may invest
all or a substantial part of its assets in fixed-income securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities, as well as
short-term debt, other money-market instruments or corporate bonds rated
investment grade (i.e., rated Baa or above by Moody's Investors Service, Inc.
("Moody's') or BBB or above by Standard & Poor's Ratings Group ("S&P")) or, if
unrated, instruments determined to be of comparable quality by the Manager. The
Fund may also invest in these instruments pending investment in equity
securities appropriate for the Fund of proceeds from new sales of Fund shares
from proceeds of the sale of the Fund's portfolio securities or to maintain
sufficient cash to meet redemptions. See Appendix A of Part B for a description
of those ratings.

The Fund will constantly strive to achieve its investment objective of
capital appreciation and, in investing to do so, may hold securities for any
period of time. There can be no assurance, however, that the Fund will achieve
its investment objective. That objective may be changed without shareholder
approval.

For additional information on the Fund's investment policies and certain
risks associated with investments in certain types of securities, see Other
Investment Policies and Risk Considerations.

-9-
<PAGE>

CLASSES OF SHARES

Investment instructions given on behalf of participants in an employer-
sponsored retirement plan are made in accordance with directions provided by the
employer. Employees considering purchasing shares of the Class as part of their
retirement program should contact their employer for details.

Shares of the Class are available for purchase only by: (a) 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; (b) tax-exempt employee benefit plans of the Manager
or its affiliates and securities dealer firms with a selling agreement with the
Distributor; (c) institutional advisory accounts of the Manager or its
affiliates and those having client relationships with Delaware Investment
Advisers, a division 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; (d) 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 (e)
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.

Capital Appreciation Fund A Class, Capital Appreciation Fund B Class and Capital
Appreciation Fund C Class

In addition to offering Capital Appreciation Fund Institutional Class, the
Fund also offers Capital Appreciation Fund A Class, Capital Appreciation Fund B
Class and Capital Appreciation Fund C Class, which are described in a separate
prospectus. Shares of Capital Appreciation Fund A Class, Capital Appreciation
Fund B Class and Capital Appreciation Fund C Class may be purchased through
authorized investment dealers or directly by contacting the Fund or its
Distributor. The Capital Appreciation Fund A Class carries a front-end sales
charge and, absent any applicable fee waiver, has annual 12b-1 expenses equal to
a maximum of 0.30%. The maximum front-end sales charge as a percentage of the
offering price is 4.75% and is reduced on certain transactions of $100,000 or
more. The Capital Appreciation Fund B Class and Capital Appreciation Fund C
Class have no front-end sales charge but, absent any applicable fee waiver, are
subject to annual 12b-1 expenses equal to a maximum of 1%. Shares of Capital
Appreciation Fund B Class and Capital Appreciation Fund C Class and certain
shares of Capital Appreciation Fund A Class may be subject to a contingent
deferred sales charge upon redemption. To obtain a prospectus relating to such
classes, contact the Distributor by writing to the address or by calling the
phone numbers listed on the back cover of this Prospectus.

-10-
<PAGE>

HOW TO BUY SHARES

The Fund makes it easy to invest by mail, by wire, by exchange and by
arrangement with your investment dealer. In all instances, investors must
qualify to purchase shares of the Class.

Investing Directly by Mail

1. Initial Purchases--An Investment Application, or in the case of a retirement
account, an appropriate retirement plan application, must be completed, signed
and sent with a check payable to Capital Appreciation Fund Institutional Class,
to Delaware Group at 1818 Market Street, Philadelphia, PA 19103.

2. Subsequent Purchases--Additional purchases may be made at any time by
mailing a check payable to Capital Appreciation Fund Institutional Class. Your
check should be identified with your name(s) and account number.

Investing Directly by Wire

You may purchase shares by requesting your bank to transmit funds by wire to
CoreStates Bank, N.A., ABA #031000011, account number 1412893401 (include your
name(s) and your account number).

1. Initial Purchases--Before you invest, telephone the Fund's Client Services
Department at 800-828-5052 to get an account number. If you do not call first,
it may delay processing your investment. In addition, you must promptly send
your Investment Application, or in the case of a retirement account, an
appropriate retirement plan application, to Capital Appreciation Fund
Institutional Class, to Delaware Group at 1818 Market Street, Philadelphia, PA
19103.

2. Subsequent Purchases--You may make additional investments anytime by wiring
funds to CoreStates Bank, N.A., as described above. You must advise your Client
Services Representative by telephone at 800-828-5052 prior to sending your wire.

Investing by Exchange

If you have an investment in another mutual fund in the Delaware Group and
you qualify to purchase shares of the Class, you may write and authorize an
exchange of part or all of your investment into the Fund. However, shares of
Capital Appreciation Fund B Class and Capital Appreciation Fund C Class and
Class B Shares and Class C Shares of the other funds in the Delaware Group
offering such a class of shares may not be exchanged into the Class. If you wish
to open an account by exchange, call your Client Services Representative at 800-
828-5052 for more information. See Redemption and Exchange for more complete
information concerning your exchange privileges.

Investing through Your Investment Dealer
You can make a purchase of Fund shares through most investment dealers who,
as part of the service they provide, must transmit orders promptly. They may
charge for this service.

Purchase Price and Effective Date

The purchase price (net asset value) is determined as of the close of
regular trading on the New York Stock Exchange (ordinarily, 4 p.m., Eastern
time) on days when the Exchange is open.

-11-
<PAGE>

received after the time the share price is determined, as noted above. Purchase
orders received after such time will be effective the next business day.

The Conditions of Your Purchase

The Fund reserves the right to reject any purchase order. If a purchase is
canceled because your check is returned unpaid, you are responsible for any loss
incurred. The Fund can redeem shares from your account(s) to reimburse itself
for any loss, and you may be restricted from making future purchases in any of
the funds in the Delaware Group. The Fund reserves the right to reject purchase
orders paid by third-party checks or checks that are not drawn on a domestic
branch of a United States financial institution. If a check drawn on a foreign
financial institution is accepted, you may be subject to additional bank charges
for clearance and currency conversion.

The Fund also reserves the right, upon 60 days' written notice, to
involuntarily redeem accounts that remain under $250 as a result of redemptions.

-12-
<PAGE>

REDEMPTION AND EXCHANGE

Redemption and exchange requests made on behalf of participants in an
employer-sponsored retirement plan are made in accordance with directions
provided by the employer. Employees should therefore contact their employer for
details.

The Fund will process written and telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. The Fund will honor redemption requests as to shares for which a check
was tendered as payment, but the Fund will not mail or wire the proceeds until
it is reasonably satisfied that the check has cleared, which may take up to 15
days from the purchase date. You can avoid this potential delay if you purchase
shares by wiring Federal Funds. The Fund reserves the right to reject a written
or telephone redemption request or delay payment of redemption proceeds if there
has been a recent change to the shareholder's address of record.

Shares of the Class may be exchanged into any other Delaware Group mutual
fund, provided: (1) the investment satisfies the eligibility and other
requirements set forth in the prospectus of the fund being acquired, including
the payment of any applicable front-end sales charge; and (2) the shares of the
fund being acquired are in a state where that fund is registered. If exchanges
are made into other shares that are eligible for purchase only by those
permitted to purchase shares of the Class, such exchange will be exchanged at
net asset value. Shares of the Class may not be exchanged into Class B Shares or
Class C Shares of the funds in the Delaware Group. The Fund may suspend,
terminate or amend the terms of the exchange privilege upon 60 days' written
notice to shareholders.

Various redemption and exchange methods are outlined below. No fee is
charged by the Fund or the Distributor for redeeming or exchanging your shares,
although in the case of an exchange, a sales charge may apply. You may also have
your investment dealer arrange to have your shares redeemed or exchanged. Your
investment dealer may charge for this service.

-13-
<PAGE>

Written Redemption and Exchange

You can write to the Fund at 1818 Market Street, Philadelphia, PA 19103 to
redeem some or all of your shares or to request an exchange of any or all of
your shares into another mutual fund in the Delaware Group, subject to the same
conditions and limitations as other exchanges noted above. The request must be
signed by all owners of the account or your investment dealer of record.

For redemptions of more than $50,000, or when the proceeds are not sent to
the shareholder(s) at the address of record, the Fund requires a signature by
all owners of the account and may require a signature guarantee. Each signature
guarantee must be supplied by an eligible guarantor institution. The Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Fund may require further
documentation from corporations, executors, retirement plans, administrators,
trustees or guardians.

You also may submit your written request for redemption or exchange by
facsimile transmission at the following number: 215-255-8864.

Telephone Redemption and Exchange

To get the added convenience of the telephone redemption and exchange
methods, you must have the Transfer Agent hold your shares (without charge) for
you. If you choose to have your shares in certificate form, you may redeem or
exchange only by written request and you must return your certificates.

Neither the Fund nor its Transfer Agent is responsible for any shareholder
loss incurred in acting upon written or telephone instructions for redemption or
exchange of Fund shares which are reasonably believed to be genuine. With
respect to such telephone transactions, the Fund will follow reasonable
procedures to confirm that instructions communicated by telephone are genuine
(including verification of a form of personal identification) as, if it does
not, the Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. A written confirmation will be provided
for all purchase, exchange and redemption transactions initiated by telephone.
By exchanging shares by telephone, you are acknowledging prior receipt of a
prospectus for the fund into which your shares are being exchanged.

Telephone Redemption--Check to Your Address of Record

You or your investment dealer of record can have redemption proceeds of
$50,000 or less mailed to you at your record address. Checks will be payable to
the shareholder(s) of record. Payment is normally mailed the next business day
after receipt of the redemption request.

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<PAGE>

Telephone Redemption--Proceeds to Your Bank

Redemption proceeds of $1,000 or more can be transferred to your
predesignated bank account by wire or by check. You should authorize this
service when you open your account. If you change your predesignated bank
account, you must submit a written authorization and you may need to have your
signature guaranteed. For your protection, your authorization must be on file.
If you request a wire, your funds will normally be sent the next business day.
If you ask for a check, it will normally be mailed the next business day after
receipt of your redemption request to your predesignated bank account. There are
no fees for this redemption method, but the mail time may delay getting funds
into your bank account. Simply call your Client Services Representative prior to
the time the net asset value is determined, as noted above.

Telephone Exchange

You or your investment dealer of record can exchange shares into any fund in
the Delaware Group under the same registration. As with the written exchange
service, telephone exchanges are subject to the same conditions and limitations
as other exchanges noted above. Telephone exchanges may be subject to
limitations as to amounts or frequency.

-15-
<PAGE>

DIVIDENDS AND DISTRIBUTIONS

The Fund will make payments from the Fund's net investment income and net
realized securities profits, if any, twice a year. The first payment normally
will be made during the first quarter following the end of Equity Funds IV,
Inc.'s fiscal year. The second payment would be made near the end of the
calendar year to comply with certain requirements of the Internal Revenue Code.
Both dividends and distributions are automatically reinvested in your account at
net asset value.

Each Class of the Fund will share proportionately in the investment income
and expenses of the Fund, except that the Class will not incur distribution fees
under the Rule 12b-1 Plans which, absent any applicable fee waiver, apply to
Capital Appreciation Fund A Class, Capital Appreciation Fund B Class and Capital
Appreciation Fund C Class.

-16-
<PAGE>

TAXES

On August 5, 1997, President Clinton signed into law the Taxpayer Relief
Act of 1997 (the "1997 Act"). This new law makes sweeping changes in the
Internal Revenue Code (the "Code"). Because many of these changes are complex,
and only indirectly affect the Fund and its distributions to you, they are
discussed in Part B. Changes in the treatment of capital gains, however, are
discussed in this section.

The Fund intends to distribute substantially all of its net investment income
and net capital gains, if any. Dividends from net investment income or net
short-term capital gains will be taxable to you as ordinary income, whether
received in cash or in additional shares. For corporate investors, dividends
from net investment income will generally qualify in part for the corporate
dividends-received deduction. The portion of dividends paid by the Fund that so
qualifies will be designated each year in a notice from Equity Funds IV, Inc. to
the Fund's shareholders. For the fiscal year ended September 30, 1997, 27.90%
of the Fund's dividends from net investment income qualified for the dividends-
received deduction to corporations.

Equity Funds IV, Inc. will advise you in its annual information reporting
at calendar year end of the amount of its capital gain distributions which will
qualify for these maximum federal tax rates.

-17-
<PAGE>

Each year, Equity Funds IV, Inc. will mail to you information on the tax
status of the Fund's dividends and distributions. Shareholders will also
receive each year information as to the portion of dividend income that is
derived from U.S. government securities that are exempt from state income tax.
Of course, shareholders who are not subject to tax on their income would not be
required to pay tax on amounts distributed to them by the Fund.

Equity Funds IV, Inc. is required to withhold 31% of taxable dividends,
capital gains distributions, and redemptions paid to shareholders who have not
complied with IRS taxpayer identification regulations. You may avoid this
withholding requirement by certifying on your Investment Application your proper
Taxpayer Identification Number and by certifying that you are not subject to
backup withholding.

See Accounting and Tax Issues and Taxes in Part B for additional information
on tax matters relating to the Fund and its shareholders.

-18-
<PAGE>

CALCULATION OF NET ASSET VALUE PER SHARE

The net asset values of all outstanding shares of each class of the Fund will
be computed on a pro-rata basis for each outstanding share based on the
proportionate participation in the Fund represented by the value of shares of
that class. All income earned and expenses incurred by the Fund will be borne
on a pro-rata basis by each outstanding share of a class, based on each class'
percentage in the Fund represented by the value of shares of such classes,
except that the Class will not incur any of the expenses under the Fund's 12b-1
Plans and Capital Appreciation Fund A, B and C Classes alone will bear the 12b-1
Plan fees payable under their respective Plans.

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<PAGE>

MANAGEMENT OF THE FUND

Directors

Investment Manager

The Manager furnishes investment management services to the Fund.

The Manager manages the Fund's portfolio and makes investment decisions for
the Fund, which are implemented by the Fund's Trading Department. The Manager
also administers Equity Funds IV, Inc.'s affairs and pays the salaries of all
the directors, officers and employees of Equity Funds IV, Inc. who are
affiliated with the Manager. For these services, the Manager is paid an annual
fee equal to 0.75% on the first $500 million of average daily net assets, 0.725%
on the next $500 million and 0.70% on the average daily net assets in excess of
$1 billion. Investment management fees incurred by the Fund for the fiscal year
ended September 30, 1997 were 0.75% (annualized) of its average daily net assets
and 0.10% (annualized) of average daily net assets was paid due to the voluntary
waiver of fees by the Manager. The directors of Equity Funds IV, Inc. annually
review fees paid to the Manager.

-20-
<PAGE>

In making investment decisions for the Fund, Mr. Frey regularly consults with
Wayne A. Stork, Marshall T. Bassett, John A. Heffern and Lori Wachs. Mr. Stork,
Chairman of Delaware Management Company, Inc. and Equity Funds IV, Inc.'s Board
of Directors, is a graduate of Brown University and attended New York
University's Graduate School of Business Administration. Mr. Stork joined the
Delaware Group in 1962 and has served in various executive capacities at
different times within the Delaware organization. Marshall T. Bassett, Vice
President, joined Delaware in 1997. In his most recent position, he served as
Vice President in Morgan Stanley Asset Management's Emerging Growth Group, where
he analyzed small growth companies. Prior to that, he was a trust officer at
Sovran Bank and Trust Company. He received his bachelor's degree and MBA from
Duke University. John A. Heffern, Vice President, holds a bachelor's degree and
an MBA from the University of North Carolina at Chapel Hill. He joined Delaware
in 1997. Previously, he was a Senior Vice President, Equity Research at NatWest
Securities Corporation's Specialty Finance Services unit. Prior to that, he was
a Principal and Senior Regional Bank Analyst at Alex. Brown & Sons. Ms. Wachs
is an Assistant Vice President. She joined the Delaware Group in 1992 from
Goldman Sachs, where she was an equity analyst for two years. She is a graduate
of the University of Pennsylvania's Wharton School, where she majored in Finance
and Oriental studies.

Portfolio Trading Practices

The Fund normally will not invest for short-term trading purposes. However,
the Fund may sell securities without regard to the length of time they have been
held. The degree of portfolio activity will affect brokerage costs of the Fund
and may affect taxes payable by the Fund's shareholders. Given the Fund's
investment objective, its annual portfolio turnover rate is not expected to
exceed 100%. A turnover rate of 100% would occur if all the investments in the
Fund's portfolio at the beginning of the year were replaced by the end of the
year. The turnover rate may also be affected by cash requirements for
redemptions and repurchases of Fund shares.

The Fund uses its best efforts to obtain the best available price and most
favorable execution for portfolio transactions. Orders may be placed with
brokers or dealers who provide brokerage and research services to the Manager or
to their advisory clients. These services may be used by the Manager in
servicing any of its accounts. Subject to best price and execution, the Fund
may consider a broker/dealer's sales of shares of funds in the Delaware Group of
funds in placing portfolio orders and may place orders with broker/dealers that
have agreed to defray certain expenses of such funds, such as custodian fees.

Performance Information

From time to time, the Fund may quote total return performance of the Class
in advertising and other types of literature.

Total return will be based on a hypothetical $1,000 investment, reflecting
the reinvestment of all distributions. Each presentation will include the
average annual total return for one-, five- and ten-year or life-of-fund
periods, as relevant. The Fund may also advertise aggregate and average total
return information concerning the Class over additional periods of time.

Net asset value fluctuates and is not guaranteed. Past performance is not a
guarantee of future results.

Statements and Confirmations

-21-
<PAGE>

dividends. You should examine statements and confirmations immediately and
promptly report any discrepancy by calling your Client Services Representative.

Financial Information about the Fund

Distribution and Service

The Distributor, Delaware Distributors, L.P., serves as the national
distributor of the Fund's shares under a Distribution Agreement with Equity
Funds IV, Inc. dated as of November 29, 1996. The Distributor bears all of the
costs of promotion and distribution.

The Transfer Agent, Delaware Service Company, Inc., serves as the shareholder
servicing, dividend disbursing and transfer agent for the Fund under an amended
and restated agreement dated as of November 29, 1996. The Transfer Agent also
provides accounting services to the Fund pursuant to the terms of a separate
Fund Accounting Agreement. Certain recordkeeping and other shareholder services
that otherwise would be performed by the Transfer Agent may be performed by
certain other entities and the Transfer Agent may elect to enter into an
agreement to pay such other entities for their services. In addition,
participant account maintenance fees may be assessed for certain recordkeeping
provided as part of retirement plan and administration service packages. These
fees are based on the number of participants in the plan and the various
services selected. Fees will be quoted upon request and are subject to change.

The directors annually review fees paid to the Distributor and the Transfer
Agent. The Distributor and the Transfer Agent are also indirect, wholly owned
subsidiaries of DMH.

Expenses

The Fund is responsible for all of its own expenses other than those borne by
the Manager under the Investment Management Agreement and those borne by the
Distributor under the Distribution Agreement. For the fiscal year ended
September 30, 1997, the ratio of operating expenses to average daily net assets
for the Class was 0.75%, which reflects the voluntary waiver of fees by the
Manager.

Equity Funds IV, Inc. is an open-end management investment company. The
Fund's portfolio of assets is diversified as defined by the 1940 Act. Commonly
known as a mutual fund, Equity Funds IV, Inc. was organized as a Maryland
corporation in September 1985. In addition to the Fund, Equity Funds IV, Inc.
presently offers one other series of shares, the DelCap Fund series.

Equity Funds IV, Inc.'s shares have a par value of $.01, equal voting rights,
except as noted below, and are equal in all other respects. Equity Funds IV,
Inc.'s shares have noncumulative voting rights which means that the holders of
more than 50% of Equity Funds IV, Inc.'s shares voting for the election of
directors can elect 100% of the directors if they choose to do so. Under
Maryland law, Equity Funds IV, Inc. is not required, and does not intend, to
hold annual meetings of shareholders unless, under certain circumstances, it is
required to do so under the 1940 Act. Shareholders of 10% or more of Equity
Funds IV, Inc.'s outstanding shares may request that a special meeting be called
to consider the removal of a director.

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<PAGE>

In addition to the Class, the Fund also offers Capital Appreciation Fund A
Class, Capital Appreciation Fund B Class and Capital Appreciation Fund C Class.
Shares of each class represent proportionate interests in the assets of the Fund
and have the same voting and other rights and preferences as the other classes
of the Fund, except that shares of the Class are not subject to, and may not
vote on matters affecting, the Distribution Plans under Rule 12b-1 relating to
Capital Appreciation Fund A Class, Capital Appreciation Fund B Class and Capital
Appreciation Fund C Class.

Lincoln National Corporation Employees' Retirement Trust (the "Trust") made
an investment in the Fund. As of October 31, 1997, the Trust owned 99.99% of the
outstanding Institutional Class shares of the Fund. Subject to certain limited
exceptions, there would be no limitation on the Trust's ability to redeem its
shares of the Fund and it may elect to do so at any time.

-23-
<PAGE>

OTHER INVESTMENT POLICIES AND RISK CONSIDERATIONS

Small to Medium-Sized Companies

The Fund invests its assets in equity securities of small to medium-sized
companies. These stocks have historically been more volatile in price than
larger capitalization stocks, such as those included in the S&P 500. This is
because, among other things, smaller companies have a lower degree of liquidity
and tend to have a greater sensitivity to changing economic conditions. These
companies may have narrow product lines, markets or financial resources, or may
depend on a limited management group. In addition, these companies are
typically subject to a greater degree of change in their earnings and prospects.
The companies' securities may trade less frequently and have a smaller trading
volume. The securities may be traded only in the over-the-counter markets or on
a regional securities exchange. In addition to exhibiting greater volatility,
smaller capitalization securities may, to some degree, fluctuate independently
of the stocks of larger capitalization companies. For example, the stocks of
smaller capitalization companies may decline in price as the price of larger
company stocks rise, or vice versa.

Foreign Securities

The Fund may invest up to 20% of its total assets in foreign securities.
Foreign markets may be more volatile than U.S. markets. Such investments
involve sovereign risk in addition to the normal risks associated with
securities of U.S. issuers. These risks include political risks, foreign taxes
and exchange controls and currency fluctuations. For example, foreign portfolio
investments may fluctuate in value due to changes in currency rates (i.e., other
things being equal, the value of foreign investments would increase with a fall
in the value of the dollar, and decrease with a rise in the value of the dollar)
and control regulations apart from market fluctuations. The Fund may also
experience delays in foreign securities settlement. The Fund currently intends
to limit its investment in foreign securities to those issued by entities in
developed countries.

Depositary Receipts

Restricted and Illiquid Securities

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<PAGE>

While maintaining oversight, the Board of Directors has delegated to the
Manager the day-to-day function of determining whether or not individual Rule
144A Securities are liquid for purposes of the Fund's 15% limitation on
investments in illiquid assets. The Board has instructed the Manager to
consider the following factors in determining the liquidity of a Rule 144A
Security: (i) the frequency of trades and trading volume for the security; (ii)
whether at least three dealers are willing to purchase or sell the security and
the number of potential purchasers; (iii) whether at least two dealers are
making a market in the security; and (iv) the nature of the security and the
nature of the marketplace trades (e.g., the time needed to dispose of the
security, the method of soliciting offers, and the mechanics of transfer).

If the Manager determines that a Rule 144A Security which was previously
determined to be liquid is no longer liquid and, as a result, the Fund's
holdings of illiquid securities exceed the Fund's 15% limit on investments in
such securities, the Manager will determine what action to take to ensure that
the Fund continues to adhere to such limitation.

Investment Company Securities

Any investments that the Fund makes in either closed-end or open-end
investment companies are limited by the 1940 Act, and involve an indirect
payment of a portion of the expenses, including advisory fees, of such other
investment companies. Under the 1940 Act's current limitations, the Fund may
not: (1) own more than 3% of the voting stock of another investment company; (2)
invest more than 5% of the Fund's total assets in the shares of any one
investment company; nor (3) invest more than 10% of the Fund's total assets in
shares of other investment companies. If the Fund elects to limit its
investment in other investment companies to closed-end investment companies, the
3% limitation described above is increased to 10%. These percentage limitations
also apply to the Fund's investments in unregistered investment companies.

Repurchase Agreements

When-Issued and Delayed Delivery Securities

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<PAGE>

REITs
The Fund may purchase shares of real estate investment trusts ("REITs").
REITs are pooled investment vehicles which invest primarily in income-producing
real estate or real estate related loans or interests. REITs are generally
classified as equity REITs, mortgage REITs or a combination of equity and
mortgage REITs. Equity REITs invest the majority of their assets directly in
real property and derive income primarily from the collection of rents. Equity
REITs can also realize capital gains by selling properties that have appreciated
in value. Mortgage REITs invest the majority of their assets in real estate
mortgages and derive income from the collection of interest payments. Like
investment companies such as Equity Funds IV, Inc., REITs are not taxed on
income distributed to shareholders provided they comply with several
requirements in the Internal Revenue Code. REITs are subject to substantial
cash flow dependency, defaults by borrowers, self-liquidation, and the risk of
failing to qualify for tax-free pass-through of income under the Internal
Revenue Code, and/or to maintain exemptions from the 1940 Act.

Borrowing

The Fund is permitted under certain circumstances to borrow money.
Investment securities will not normally be purchased while the Fund has an
outstanding borrowing.

Portfolio Loan Transactions

Foreign Currency Transactions

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<PAGE>

Futures Contracts

-27-
<PAGE>

-28-
<PAGE>

Options

The Fund may write covered call options on individual issues as well as write
call options on stock indices. The Fund may also purchase put options on
individual issues and on stock indices. The Manager will employ these
techniques in an attempt to protect appreciation attained, to offset capital
losses and to take advantage of the liquidity available in the option markets.
The ability to hedge effectively using options on stock indices will depend, in
part, on the correlation between the composition of the index and the Fund's
portfolio as well as the price movement of individual securities. The Manager
may also write covered call options to achieve income to offset the cost of
purchasing put options.

Call Options

Put Options

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<PAGE>

Part B describes certain of these investment policies and risk
considerations. Part B sets forth other investment policies, risk
considerations and more specific investment restrictions.

-30-
<PAGE>

For more information contact the Delaware Group at 800-828-5052.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

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

CAPITAL APPRECIATION FUND

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

INSTITUTIONAL

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

P R O S P E C T U S

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

DECEMBER 1, 1997

DELAWARE
GROUP
-------
<PAGE>

- --------------------------------------------------------------------------------
PART B--STATEMENT OF ADDITIONAL INFORMATION

DECEMBER 1, 1997
- --------------------------------------------------------------------------------

DELAWARE GROUP EQUITY FUNDS IV, INC.

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

1818 Market Street
Philadelphia, PA 19103
- --------------------------------------------------------------------------------
For more information about the Institutional Classes: 800-828-5052

For Prospectus and Performance of the Class A Shares, Class B Shares
and Class C Shares: Nationwide 800-523-4640

Information on Existing Accounts of the Class A Shares, Class B Shares
and Class C Shares: (SHAREHOLDERS ONLY) Nationwide 800-523-1918

Dealer Services: (BROKER/DEALERS ONLY) Nationwide 800-362-7500
- --------------------------------------------------------------------------------
TABLE OF CONTENTS
- --------------------------------------------------------------------------------
Cover Page
- --------------------------------------------------------------------------------
Investment Policies and Portfolio Techniques
- --------------------------------------------------------------------------------
Accounting and Tax Issues
- --------------------------------------------------------------------------------
Performance Information
- --------------------------------------------------------------------------------
Trading Practices and Brokerage
- --------------------------------------------------------------------------------
Purchasing Shares
- --------------------------------------------------------------------------------
Investment Plans
- --------------------------------------------------------------------------------
Determining Offering Price and
Net Asset Value
- --------------------------------------------------------------------------------
Redemption and Repurchase
- --------------------------------------------------------------------------------
Distributions and Taxes
- --------------------------------------------------------------------------------
Investment Management Agreements
- --------------------------------------------------------------------------------
Officers and Directors
- --------------------------------------------------------------------------------
Exchange Privilege
- --------------------------------------------------------------------------------
General Information
- --------------------------------------------------------------------------------

Financial Statements
- --------------------------------------------------------------------------------
Appendix A--Description of Ratings
- --------------------------------------------------------------------------------
Appendix B--IRA Information
- --------------------------------------------------------------------------------
Appendix C--The Company Life Cycle
- --------------------------------------------------------------------------------

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<PAGE>

Delaware Group Equity Funds IV, Inc. ("Equity Funds IV, Inc.") (formerly
Delaware Group DelCap Fund, Inc.) is a professionally-managed mutual fund
presently offering two series: the DelCap Fund series ("DelCap Fund") (formerly
Concept I Series) and the Capital Appreciation Fund series ("Capital
Appreciation Fund") (individually, a "Fund" and collectively, the "Funds").

Each Fund of Equity Funds IV, Inc. offers three retail classes: DelCap
Fund A Class and Capital Appreciation Fund A Class (the "Class A Shares");
DelCap Fund B Class and Capital Appreciation Fund B Class (the "Class B
Shares"); and DelCap Fund C Class and Capital Appreciation Fund C Class (the
"Class C Shares"). Class A Shares, Class B Shares and Class C Shares are
collectively referred to as the "Fund Classes." Each Fund also offers an
institutional class: DelCap Fund Institutional Class and Capital Appreciation
Fund Institutional Class (collectively, the "Institutional Classes"). Each
Class is individually referred to as a "Class" and collectively referred to as
"Classes."

Class B Shares, Class C Shares and Institutional Class shares of each Fund
may be purchased at a price equal to the next determined net asset value per
share. Class A Shares may be purchased at the public offering price, which is
equal to the next determined net asset value per share, plus a front-end sales
charge. Class A Shares are subject to a maximum front-end sales charge of 4.75%
and, absent any applicable fee waiver, annual Rule 12b-1 Plan ("12b-1 Plan")
expenses of up to 0.30%. Class B Shares are subject to a contingent deferred
sales charge ("CDSC") which may be imposed on redemptions made within six years
of purchase and, absent any applicable fee waiver, annual 12b-1 Plan expenses of
up to 1% which are assessed against Class B Shares for approximately eight years
after purchase. See Automatic Conversion of Class B Shares under Classes of
Shares in the Prospectuses for the Fund Classes. Class C Shares are subject to
a CDSC which may be imposed on redemptions made within 12 months of purchase
and, absent any applicable fee waiver, annual 12b-1 Plan expenses of up to 1%,
which are assessed against the Class C Shares for the life of the investment.
The Capital Appreciation Fund will not pay a 12b-1 fee with respect to any Class
until May 31, 1998.

This Part B supplements the information contained in the current
Prospectuses of the Fund Classes for DelCap Fund and Capital Appreciation Fund,
each dated December 1, 1997, and the current Prospectuses of the Institutional
Class for DelCap Fund and Capital Appreciation Fund, each dated December 1,
1997, as they may be amended from time to time. Part B should be read in
conjunction with the respective Class' Prospectus. Part B is not itself a
prospectus but is, in its entirety, incorporated by reference into each Class'
Prospectus. A Prospectus for each Class may be obtained by writing or calling
your investment dealer or by contacting the Fund's national distributor,
Delaware Distributors, L.P. (the "Distributor"), 1818 Market Street,
Philadelphia, PA 19103.

All references to "shares" in this Part B refer to all Classes of shares of
Equity Funds IV, Inc., except where noted.

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<PAGE>

INVESTMENT POLICIES AND PORTFOLIO TECHNIQUES

Investment Restrictions--Equity Funds IV, Inc. has adopted the following
restrictions for DelCap Fund which, along with its investment objective, cannot
be changed without approval by the holders of a "majority" of DelCap Fund's
outstanding shares, which is a vote by the holders of the lesser of a) 67% or
more of the voting securities present in person or by proxy at a meeting, if the
holders of more than 50% of the outstanding voting securities are present or
represented by proxy; or b) more than 50% of the outstanding voting securities.
The percentage limitations contained in the restrictions and policies set forth
herein apply at the time of purchase of securities.

DelCap Fund shall not:

1. Invest more than 5% of the market or other fair value of its assets in
the securities of any one issuer (other than obligations of, or guaranteed by,
the U.S. government, its agencies or instrumentalities).

2. Invest in securities of other investment companies except as part of a
merger, consolidation or other acquisition.

3. Make loans, except to the extent that purchases of debt obligations
(including repurchase agreements), in accordance with DelCap Fund's investment
objective and policies, are considered loans and except that DelCap Fund may
loan up to 25% of its assets to qualified broker/dealers or institutional
investors for their use relating to short sales or other security transactions.

4. Purchase or sell real estate, but this shall not prevent DelCap Fund
from investing in securities secured by real estate or interests therein.

5. Purchase more than 10% of the outstanding voting and nonvoting
securities of any issuer, or invest in companies for the purpose of exercising
control or management.

6. Engage in the underwriting of securities of other issuers, except that
in connection with the disposition of a security, DelCap Fund may be deemed to
be an "underwriter" as that term is defined in the Securities Act of 1933.

7. Make any investment which would cause more than 25% of the market or
other fair value of its total assets to be invested in the securities of issuers
all of which conduct their principal business activities in the same industry.
This restriction does not apply to obligations issued or guaranteed by the U.S.
government, its agencies or instrumentalities.

8. Write or purchase puts, calls or combinations thereof, except that
DelCap Fund may write covered call options with respect to any or all parts of
its portfolio securities and purchase put options if DelCap Fund owns the
security covered by the put option at the time of purchase, and that premiums
paid on all put options outstanding do not exceed 2% of its total assets.
DelCap Fund may sell put options previously purchased and enter into closing
transactions with respect to covered call and put options. In addition, DelCap
Fund may write call options and purchase put options on stock indices and enter
into closing transactions with respect to such options.

-3-
<PAGE>

9. Purchase securities on margin, make short sales of securities or
maintain a net short position.

10. Invest more than 5% of the value of its total assets in securities of
companies less than three years old. Such three-year period shall include the
operation of any predecessor company or companies.

11. Invest in warrants valued at lower of cost or market exceeding 5% of
DelCap Fund's net assets. Included in that amount, but not to exceed 2% of
DelCap Fund's net assets, may be warrants not listed on the New York Stock
Exchange or American Stock Exchange.

12. Purchase or retain the securities of any issuer which has an officer,
director or security holder who is a director or officer of Equity Funds IV,
Inc. or of its investment manager if or so long as the directors and officers of
Equity Funds IV, Inc. and of its investment manager together own beneficially
more than 5% of any class of securities of such issuer.

13. Invest in interests in oil, gas or other mineral exploration or
development programs.

14. Invest more than 10% of DelCap Fund's total assets in repurchase
agreements maturing in more than seven days and other illiquid assets.

15. Borrow money in excess of one-third of the value of its net assets and
then only as a temporary measure for extraordinary purposes or to facilitate
redemptions. DelCap Fund has no intention of increasing its net income through
borrowing. Any borrowing will be done from a bank and to the extent that such
borrowing exceeds 5% of the value of DelCap Fund's net assets, asset coverage of
at least 300% is required. In the event that such asset coverage shall at any
time fall below 300%, DelCap Fund shall, within three days thereafter (not
including Sunday or holidays) or such longer period as the Securities and
Exchange Commission may prescribe by rules and regulations, reduce the amount of
its borrowings to such an extent that the asset coverage of such borrowings
shall be at least 300%. DelCap Fund will not pledge more than 10% of its net
assets. DelCap Fund will not issue senior securities as defined in the
Investment Company Act of 1940 (the "1940 Act"), except for notes to banks.
Investment securities will not normally be purchased while DelCap Fund has an
outstanding borrowing.

Although not a fundamental investment restriction, DelCap Fund currently
does not invest its assets in real estate limited partnerships.

Equity Funds IV, Inc. has adopted the following restrictions for the
Capital Appreciation Fund which cannot be changed without approval by the
holders of a "majority" of the Capital Appreciation Fund's outstanding shares,
which is a vote by the holders of the lesser of a) 67% or more of the voting
securities present in person or by proxy at a meeting, if the holders of more
than 50% of the outstanding voting securities are present or represented by
proxy; or b) more than 50% of the outstanding voting securities. The percentage
limitations contained in the restrictions and policies set forth herein apply at
the time the Capital Appreciation Fund purchases the securities.

Capital Appreciation Fund shall not:

1. With respect to 75% of its assets, invest more than 5% of the value of
its total assets in the securities of any one issuer (except obligations issued
or guaranteed by the U.S. Government, its agencies or instrumentalities or
certificates of deposit for any such securities, and cash and cash items).

-4-
<PAGE>

2. Make loans, except to the extent that purchases of debt obligations or
other securities (including repurchase agreements), in accordance with Capital
Appreciation Fund's investment objective and policies, are considered loans and
except that Capital Appreciation Fund may loan up to 25% of its assets to
qualified broker/dealers or institutional investors for their use relating to
short sales or other security transactions.

3. Purchase or sell real estate, but this shall not prevent Capital
Appreciation Fund from investing in securities by companies that deal in real
estate or securities secured by real estate or interests therein (including
securities issued by real estate investment trusts).

4. Engage in the underwriting of securities of other issuers, except that
Capital Appreciation Fund may acquire restricted or not readily marketable
securities under circumstances where, if such securities are sold, Capital
Appreciation Fund may be deemed to be an "underwriter" as that term is defined
in the Securities Act of 1933.

5. Make any investment which would cause more than 25% of the market
value of its total assets to be invested in the securities of issuers all of
which conduct their principal business activities in the same industry. This
restriction does not apply to obligations issued or guaranteed by the U.S.
Government, its agencies or instrumentalities.

6. Purchase securities on margin or make short sales of securities except
that Capital Appreciation Fund may obtain such short-term credits as may be
necessary for the clearance of purchases and sales of portfolio securities may
engage in futures and related options transactions and may satisfy margin
requirements relating thereto.

7. Purchase more than 10% of the outstanding voting securities of any one
company.

8. Borrow money in excess of one-third of the value of its net assets and
then only as a temporary measure for extraordinary purposes or to facilitate
redemptions. Capital Appreciation Fund has no intention of increasing its net
income through borrowing. Any borrowing will be done from a bank and to the
extent that such borrowing exceeds 5% of the value of Capital Appreciation
Fund's net assets, asset coverage of at least 300% is required. In the event
that such asset coverage shall at any time fall below 300%, Capital Appreciation
Fund shall, within three days thereafter (not including Sundays or holidays) or
such longer period as the Securities and Exchange Commission may prescribe by
rules and regulations, reduce the amount of its borrowings to such an extent
that the asset coverage of such borrowings shall be at least 300%. Capital
Appreciation Fund will not issue senior securities as defined in the Investment
Company Act of 1940, except for notes to banks. Investment securities will not
normally be purchased while Capital Appreciation Fund has an outstanding
borrowing.

9. Buy or sell commodities or commodity contracts, except that Capital
Appreciation Fund may engage into futures and related option transactions.

In addition to the above fundamental restrictions, Equity Funds IV, Inc.
has adopted the following non-fundamental investment restrictions on behalf of
Capital Appreciation Fund, which may be amended or changed without approval of
shareholders.

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Capital Appreciation Fund shall not:

1. Invest in companies for the purpose of exercising control or
management.

2. Invest in interests in oil, gas or other mineral exploration or
development programs.

3. Invest in securities of other investment companies, except that
Capital Appreciation Fund may invest in securities of open-end, closed-end and
unregulated investment companies in compliance with the limitations contained in
the Investment Company Act of 1940 at the time of the investment.

4. Purchase or retain securities of a company which has an officer or
director who is an officer or director of Equity Funds IV, Inc., or an officer,
director or partner of the Manager if, to the knowledge of Capital Appreciation
Fund, one or more such persons owns beneficially more than 1/2 of 1% of the
shares of the company, and in the aggregate more than 5% thereof.

5. Invest more than 5% of the value of its total assets in securities of
companies less than three years old. Such three-year period shall include the
operation of the predecessor company or companies. This restriction shall not
apply to Capital Appreciation Fund's investment in the securities of real estate
investment trusts.

6. Invest in warrants valued at lower of cost or market exceeding 5% of
Capital Appreciation Fund's net assets. Included in that amount, but not to
exceed 2% of Capital Appreciation Fund's net assets, may be warrants not listed
on the New York Stock Exchange or American Stock Exchange.

7. Write or purchase puts, calls or combinations thereof, except that
Capital Appreciation Fund may write covered call options with respect to any or
all parts of its portfolio securities if it owns the security covered by the
call option and may purchase put options provided premiums paid on all put
options outstanding do not exceed 2% of its total assets. Capital Appreciation
Fund may sell put options previously purchased and enter into closing
transactions with respect to covered call and put options. In addition, Capital
Appreciation Fund may write call options and purchase put options on stock
indices and enter into closing transactions with respect to such options.

8. Invest more than 15% of Capital Appreciation Fund's total assets in
repurchase agreements maturing in more than seven days and other illiquid
assets.

Although not a fundamental investment restriction, Capital Appreciation
Fund currently does not invest its assets in real estate limited partnerships.

In addition, from time to time, the Funds may also engage in the following
investment techniques:

Repurchase Agreements--While each of the Funds is permitted to do so,
neither normally invests in repurchase agreements, except to invest cash
balances.

The funds in the Delaware Group have obtained an exemption from the joint-
transaction prohibitions of Section 17(d) of the 1940 Act to allow the Delaware
Group funds jointly to invest cash balances. The Funds may invest cash balances
in a joint repurchase agreement in accordance with the terms of the Order and
subject generally to the conditions described below.

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<PAGE>

A repurchase agreement is a short-term investment by which the purchaser
acquires ownership of a debt security and the seller agrees to repurchase the
obligation at a future time and set price, thereby determining the yield during
the purchaser's holding period. Should an issuer of a repurchase agreement fail
to repurchase the underlying security, the loss, if any, to the Fund that has
entered into the agreement would be the difference between the repurchase price
and the market value of the security. Each Fund will limit its investments in
repurchase agreements to those which Delaware Management Company, Inc. (the
"Manager") under the guidelines of the Board of Directors, determines to present
minimal credit risks and which are of high quality. In addition, each Fund must
have collateral of at least 100% of the repurchase price, including the portion
representing the Fund's yield under such agreements which is monitored on a
daily basis.

Options--The Funds may write call options and purchase put options on a
covered basis only, and will not engage in option writing strategies for
speculative purposes. The Funds may invest in options that are either Exchange-
listed or traded over-the-counter. Certain over-the-counter options may be
illiquid. Thus, it may not be possible to close options positions and this may
have an adverse impact on a Fund's ability to effectively hedge their
securities. DelCap Fund will not invest more than 10% of its assets in illiquid
securities, and Capital Appreciation Fund will not invest more than 15% of its
assets in illiquid securities.

A. Covered Call Writing--Each Fund may write covered call options from
time to time on such portion of its portfolio, without limit, as the Manager
determines is appropriate in seeking to obtain a Fund's investment objective. A
call option gives the purchaser of such option the right to buy, and the writer,
in this case a Fund, has the obligation to sell the underlying security at the
exercise price during the option period. The advantage to a Fund of writing
covered calls is that it receives a premium which is additional income.
However, if the security rises in value, the Fund may not fully participate in
the market appreciation.

During the option period, a covered call option writer may be assigned an
exercise notice by the broker/dealer through whom such call option was sold
requiring the writer to deliver the underlying security against payment of the
exercise price. This obligation is terminated upon the expiration of the option
period or at such earlier time in which the writer effects a closing purchase
transaction. A closing purchase transaction cannot be effected with respect to
an option once the option writer has received an exercise notice for such
option.

With respect to both options on actual portfolio securities owned by a Fund
and options on stock indices, the Fund may enter into closing purchase
transactions. A closing purchase transaction is one in which a Fund, when
obligated as a writer of an option, terminates its obligation by purchasing an
option of the same series as the option previously written.

Closing purchase transactions will ordinarily be effected to realize a
profit on an outstanding call option, to prevent an underlying security from
being called, to permit the sale of the underlying security or to enable a Fund
to write another call option on the underlying security with either a different
exercise price or expiration date or both. A Fund may realize a net gain or
loss from a closing purchase transaction depending upon whether the net amount
of the original premium received on the call option is more or less than the
cost of effecting the closing purchase transaction. Any loss incurred in a
closing purchase transaction may be partially or entirely offset by the premium
received from a sale of a different call option on the same underlying security.
Such a loss may also be wholly or partially offset by unrealized appreciation in
the market value of the underlying security. Conversely, a gain resulting from
a closing purchase transaction could be offset in whole or in part by a decline
in the market value of the underlying security.

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<PAGE>

If a call option expires unexercised, a Fund will realize a short-term
capital gain in the amount of the premium on the option, less the commission
paid. Such a gain, however, may be offset by depreciation in the market value
of the underlying security during the option period. If a call option is
exercised, a Fund will realize a gain or loss from the sale of the underlying
security equal to the difference between the cost of the underlying security,
and the proceeds of the sale of the security plus the amount of the premium on
the option, less the commission paid.

The market value of a call option generally reflects the market price of an
underlying security. Other principal factors affecting market value include
supply and demand, interest rates, the price volatility of the underlying
security and the time remaining until the expiration date.

A Fund will write call options only on a covered basis, which means that
the Fund will own the underlying security subject to a call option at all times
during the option period. Unless a closing purchase transaction is effected, a
Fund would be required to continue to hold a security which it might otherwise
wish to sell, or deliver a security it would want to hold. Options written by a
Fund will normally have expiration dates between one and nine months from the
date written. The exercise price of a call option may be below, equal to or
above the current market value of the underlying security at the time the option
is written.

B. Purchasing Put Options--Each Fund may invest up to 2% of its total
assets in the purchase of put options. The DelCap Fund will, at all times
during which it holds a put option, own the security covered by such option.

Each Fund intends to purchase put options in order to protect against a
decline in the market value of the underlying security below the exercise price
less the premium paid for the option ("protective puts"). The ability to
purchase put options will allow a Fund to protect unrealized gain in an
appreciated security in its portfolio without actually selling the security. If
the security does not drop in value, a Fund will lose the value of the premium
paid. A Fund may sell a put option which it has previously purchased prior to
the sale of the securities underlying such option. Such sales will result in a
net gain or loss depending on whether the amount received on the sale is more or
less than the premium and other transaction costs paid on the put option which
is sold.

A Fund may sell a put option purchased on individual portfolio securities
or stock indices. Additionally, a Fund may enter into closing sale transactions.
A closing sale transaction is one in which a Fund, when it is the holder of an
outstanding option, liquidates its position by selling an option of the same
series as the option previously purchased.

Options on Stock Indices

A stock index assigns relative values to the common stocks included in the
index with the index fluctuating with changes in the market values of the
underlying common stock.

Options on stock indices are similar to options on stocks but have
different delivery requirements. Stock options provide the right to take or make
delivery of the underlying stock at a specified price. A stock index option
gives the holder the right to receive a cash "exercise settlement amount" equal
to (i) the amount by which the fixed exercise price of the option exceeds (in
the case of a put) or is less than (in the case of a call) the closing value of
the underlying index on the date of exercise, multiplied by (ii) a fixed "index
multiplier." Receipt of this cash amount will depend upon the closing level of
the stock index upon which the option is based being greater than (in the case
of a call) or less than (in the case of a put) the exercise price of the

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<PAGE>

option. The amount of cash received will be equal to such difference between the
closing price of the index and exercise price of the option expressed in dollars
times a specified multiple. The writer of the option is obligated, in return for
the premium received, to make delivery of this amount. Gain or loss to the Fund
on transactions in stock index options will depend on price movements in the
stock market generally (or in a particular industry or segment of the market)
rather than price movements of individual securities.

As with stock options, a Fund may offset its position in stock index
options prior to expiration by entering into a closing transaction on an
Exchange or it may let the option expire unexercised.

A stock index fluctuates with changes in the market values of the stock so
included. Some stock index options are based on a broad market index such as
the Standard & Poor's 500 or the New York Stock Exchange Composite Index, or a
narrower market index such as the Standard & Poor's 100. Indices are also based
on an industry or market segment such as the AMEX Oil and Gas Index or the
Computer and Business Equipment Index. Options on stock indices are currently
traded on the following Exchanges among others: The Chicago Board Options
Exchange, New York Stock Exchange and American Stock Exchange.

A Fund's ability to hedge effectively all or a portion of its securities
through transactions in options on stock indices depends on the degree to which
price movements in the underlying index correlate with price movements in the
Fund's portfolio securities. Since a Fund's portfolio will not duplicate the
components of an index, the correlation will not be exact. Consequently, a Fund
bears the risk that the prices of the securities being hedged will not move in
the same amount as the hedging instrument. It is also possible that there may
be a negative correlation between the index or other securities underlying the
hedging instrument and the hedged securities which would result in a loss on
both such securities and the hedging instrument.

Positions in stock index options may be closed out only on an Exchange
which provides a secondary market. There can be no assurance that a liquid
secondary market will exist for any particular stock index option. Thus, it may
not be possible to close such an option. The inability to close options
positions could have an adverse impact on a Fund's ability to effectively hedge
its securities. A Fund will enter into an option position only if there appears
to be a liquid secondary market for such options.

A Fund will not engage in transactions in options on stock indices for
speculative purposes but only to protect appreciation attained, to offset
capital losses and to take advantage of the liquidity available in the option
markets.

Foreign Securities

Each Fund may invest in securities of foreign companies. However, DelCap
Fund and Capital Appreciation Fund, will not invest more than, respectively, 25%
and 20% of the value of their respective total assets, at the time of purchase,
in foreign securities (other than securities of Canadian issuers registered
under the Securities Exchange Act of 1934 or, as described below, in certain
Depositary Receipts, on which there are no such limits).

There has been in the past, and there may be again in the future, an
interest equalization tax levied by the United States in connection with the
purchase of foreign securities such as those purchased by the Funds. Payment of
such interest equalization tax, if imposed, would reduce a Fund's rate of return
on its investment. Dividends paid by foreign issuers may be subject to
withholding and other foreign taxes which may decrease the net return on such
investments as compared to dividends paid to a Fund by United States
corporations.

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<PAGE>

Investors should recognize that investing in foreign corporations involves
certain considerations, including those set forth below, which are not typically
associated with investing in United States corporations. Foreign corporations
are not generally subject to uniform accounting, auditing and financial
standards and requirements comparable to those applicable to United States
corporations. There may also be less supervision and regulation of foreign
stock exchanges, brokers and listed corporations than exist in the United
States. A Fund may be affected either unfavorably or favorably by fluctuations
in the relative rates of exchange as between the currencies of different nations
and exchange control regulations. Furthermore, there may be the possibility of
expropriation of confiscatory taxation, political, economic or social
instability or diplomatic developments which could affect assets of a Fund held
in foreign countries.

Depositary Receipts

DelCap Fund may make foreign investments through the purchase and sale of
sponsored or unsponsored American Depositary Receipts ("ADRs"), and Capital
Appreciation Fund may, in addition to ADRs, also purchase European and Global
Depositary Receipts ("Depositary Receipts"). ADRs are receipts typically issued
by a U.S. bank or trust company, while Depositary Receipts are issued by a
foreign bank or trust company. ADRs and Depositary Receipts evidence ownership
of underlying securities issued by a foreign corporation. "Sponsored" ADRs and
Depositary Receipts are issued jointly by the issuer of the underlying security
and a depository, whereas "unsponsored" ADRs and Depositary Receipts are issued
without participation of the issuer of the deposited security. Holders of
unsponsored ADRs and Depositary Receipts generally bear all the costs of such
facilities and the depository of an unsponsored facility frequently is under no
obligation to distribute shareholder communications received from the issuer of
the deposited security or to pass through voting rights to the holders of such
receipts in respect of the deposited securities. Therefore, there may not be a
correlation between information concerning the issuer of the security and the
market value of an unsponsored ADR or Depositary Receipt.

Non-Traditional Equity Securities

Capital Appreciation Fund may invest in convertible preferred stocks that
offer enhanced yield features, such as Preferred Equity Redemption Cumulative
Stock ("PERCS"), which provide an investor, such as the Fund, with the
opportunity to earn higher dividend income than is available on a company's
common stock. A PERCS is a preferred stock which generally features a mandatory
conversion date, as well as a capital appreciation limit which is usually
expressed in terms of a stated price. Upon the conversion date, most PERCS
convert into common stock of the issuer (PERCS are generally not convertible
into cash at maturity). Under a typical arrangement, if after a predetermined
number of years the issuer's common stock is trading at a price below that set
by the capital appreciation limit, each PERCS would convert to one share of
common stock. If, however, the issuer's common stock is trading at a price
above that set by the capital appreciation limit, the holder of the PERCS would
receive less than one full share of common stock. The amount of that fractional
share of common stock received by the PERCS holder is determined by dividing the
price set by the capital appreciation limit of the PERCS by the market price of
the issuer's common stock. PERCS can be called at any time prior to maturity,
and hence do not provide call protection. However, if called early, the issuer
may pay a call premium over the market price to the investor. This call premium
declines at a preset rate daily, up to the maturity date of the PERCS.

Capital Appreciation Fund may also invest in other enhanced convertible
securities. These include but are not limited to ACES (Automatically
Convertible Equity Securities), PEPS (Participating Equity Preferred Stock),
PRIDES (Preferred Redeemable Increased Dividend Equity Securities), SAILS (Stock
Appreciation Income Linked Securities), TECONS (Term Convertible Notes), QICS
(Quarterly Income Cumulative Securities) and DECS (Dividend Enhanced Convertible
Securities). ACES, PEPS, PRIDES, SAILS, TECONS,

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<PAGE>

QICS, and DECS all have the following features: they are company-issued
convertible preferred stock; unlike PERCS, they do not have capital appreciation
limits; they seek to provide the investor with high current income, with some
prospect of future capital appreciation; they are typically issued with three to
four-year maturities; they typically have some built-in call protection for the
first two to three years; investors have the right to convert them into shares
of common stock at a preset conversion ratio or hold them until maturity; and
upon maturity, they will automatically convert to either cash or a specified
number of shares of common stock.

Portfolio Loan Transactions

Each Fund may loan up to 25% of its assets to qualified broker/dealers or
institutional investors for their use relating to short sales or other security
transactions.

It is the understanding of the Manager that the staff of the Securities and
Exchange Commission permits portfolio lending by registered investment companies
if certain conditions are met. These conditions are as follows: 1) each
transaction must have 100% collateral in the form of cash, short-term U.S.
Government securities, or irrevocable letters of credit payable by banks
acceptable to a Fund from the borrower; 2) this collateral must be valued daily
and should the market value of the loaned securities increase, the borrower must
furnish additional collateral to the Fund; 3) the Fund must be able to terminate
the loan after notice, at any time; 4) the Fund must receive reasonable interest
on any loan, and any dividends, interest or other distributions on the lent
securities, and any increase in the market value of such securities; 5) the Fund
may pay reasonable custodian fees in connection with the loan; and 6) the voting
rights on the lent securities may pass to the borrower; however, if the
directors of Equity Funds IV, Inc. know that a material event will occur
affecting an investment loan, they must either terminate the loan in order to
vote the proxy or enter into an alternative arrangement with the borrower to
enable the directors to vote the proxy.

The major risk to which a Fund would be exposed on a portfolio loan
transaction is the risk that the borrower would go bankrupt at a time when the
value of the security goes up. Therefore, the Funds will only enter into loan
arrangements after a review of all pertinent facts by the Manager, under the
supervision of the Board of Directors, including the creditworthiness of the
borrowing broker, dealer or institution and then only if the consideration to be
received from such loans would justify the risk. Creditworthiness will be
monitored on an ongoing basis by the Manager.

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ACCOUNTING AND TAX ISSUES

When a Fund writes a call, or purchases a put option, an amount equal to
the premium received or paid by it is included in the section of the Fund's
assets and liabilities as an asset and as an equivalent liability.

In writing a call, the amount of the liability is subsequently "marked to
market" to reflect the current market value of the option written. The current
market value of a written option is the last sale price on the principal
Exchange on which such option is traded or, in the absence of a sale, the mean
between the last bid and asked prices. If an option which a Fund has written
expires on its stipulated expiration date, the Fund reports a realized gain. If
a Fund enters into a closing purchase transaction with respect to an option
which the Fund has written, the Fund realizes a gain (or loss if the cost of the
closing transaction exceeds the premium received when the option was sold)
without regard to any unrealized gain or loss on the underlying security, and
the liability related to such option is extinguished. Any such gain or loss is
a short-term capital gain or loss for federal income tax purposes. If a call
option which a Fund has written is exercised, the Fund realizes a capital gain
or loss (long-term or short-term, depending on the holding period of the
underlying security) from the sale of the underlying security and the proceeds
from such sale are increased by the premium originally received.

The premium paid by a Fund for the purchase of a put option is recorded in
the section of the Fund's assets and liabilities as an investment and
subsequently adjusted daily to the current market value of the option. For
example, if the current market value of the option exceeds the premium paid, the
excess would be unrealized appreciation and, conversely, if the premium exceeds
the current market value, such excess would be unrealized depreciation. The
current market value of a purchased option is the last sale price on the
principal Exchange on which such option is traded or, in the absence of a sale,
the mean between the last bid and asked prices. If an option which a Fund has
purchased expires on the stipulated expiration date, the Fund realizes a short-
term or long-term capital loss for federal income tax purposes in the amount of
the cost of the option. If a Fund sells the put option, it realizes a short-
term or long-term capital gain or loss, depending on whether the proceeds from
the sale are greater or less than the cost of the option. If a Fund exercises a
put option, it realizes a capital gain or loss (long-term or short-term,
depending on the holding period of the underlying security) from the sale of the
underlying security and the proceeds from such sale will be decreased by the
premium originally paid. However, since the purchase of a put option is treated
as a short sale for federal income tax purposes, the holding period of the
underlying security will be affected by such a purchase.

Options on Certain Stock Indices--Accounting for options on certain stock
indices will be in accordance with generally accepted accounting principles.
The amount of any realized gain or loss on closing out such a position will
result in a realized gain or loss for tax purposes. Such options held by the
Fund at the end of each fiscal year will be required to be "marked to market"
for federal income tax purposes. Sixty percent of any net gain or loss
recognized on such deemed sales or on any actual sales will be treated as long-
term capital gain or loss, and the remainder will be treated as short-term
capital gain or loss.

Other Tax Requirements--Each Fund has qualified, and intends to continue to
qualify as a regulated investment company under Subchapter M of the Internal
Revenue Code of 1986, as amended (the "Code"). As such, a Fund will not be
subject to federal income tax, or to any excise tax, to the extent its earnings
are distributed as provided in the Code and it satisfies other requirements
relating to the sources of its income and diversification of its assets.

In order to qualify as a regulated investment company for federal income
tax purposes, each Fund must meet certain specific requirements, including:

(i) The Fund must maintain a diversified portfolio of securities,
wherein no security (other than U.S. Government securities and securities of
other regulated investment companies) can exceed 25% of the Fund's total assets,
and, with respect to 50% of the Fund's total assets, no investment (other than
cash and cash items, U.S. Government securities and securities of other
regulated investment companies) can exceed 5% of the Fund's total assets;

(ii) The Fund must derive at least 90% of its gross income from
dividends, interest, payments with respect to securities loans, and gains from
the sale or disposition of stock and securities or foreign currencies, or other
income derived with respect to its business of investing in such stock,
securities, or currencies;

(iii) The Fund must distribute to its shareholders at least 90% of its
net investment income and net tax-exempt income for each of its fiscal years,
and

(iv) The Fund must realize less than 30% of its gross income for each
fiscal year from gains from the sale of securities and certain other assets that
have been held by the Fund for less than three months ("short-short income").
The Taxpayer Relief Act of 1997 (the "1997 Act") repealed the 30% short-short
income test for tax years of regulated investment companies beginning after
August 5, 1997; however, this rule may have continuing effect in some states for
purposes of classifying the Fund as a regulated investment company.

The Code requires the Funds to distribute at least 98% of its taxable
ordinary income earned during the calendar year and 98% of its capital gain net
income earned during the 12 month period ending October 31 (in addition to
amounts from the prior year that were neither distributed nor taxed to a Fund)
to you by December 31 of each year in order to avoid federal excise taxes. The
Funds intend as a matter of policy to declare and pay sufficient dividends in
December or January (which are treated by you as received in December) but does
not guarantee and can give no assurances that its distributions will be
sufficient to eliminate all such taxes.

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<PAGE>

The straddle rules of Section 1092 may apply. Generally, the straddle
provisions require the deferral of losses to the extent of unrecognized gains
related to the offsetting positions in the straddle. Excess losses, if any, can
be recognized in the year of loss. Deferred losses will be carried forward and
recognized in the year that unrealized losses exceed unrealized gains.

The 1997 Act has also added new provisions for dealing with transactions
that are generally called "Constructive Sale Transactions." Under these rules,
the Fund must recognize gain (but not loss) on any constructive sale of an
appreciated financial position in stock, a partnership interest or certain debt
instruments. The Fund will generally be treated as making a constructive sale
when it: 1) enters into a short sale on the same or substantially identical
property; 2) enters into an offsetting notional principal contract; or 3) enters
into a futures or forward contract to deliver the same or substantially
identical property. Other transactions (including certain financial instruments
called collars) will be treated as constructive sales as provided in Treasury
regulations to be published. There are also certain exceptions that apply for
transactions that are closed before the end of the 30th day after the close of
the taxable year.

Investment in Foreign Currencies and Foreign Securities--The Funds are
authorized to invest certain limited amounts in foreign securities. Such
investments, if made, will have the following additional tax consequences to
each Fund:

Under the Code, gains or losses attributable to fluctuations in foreign
currency exchange rates which occur between the time a Fund accrues income
(including dividends), or accrues expenses which are denominated in a foreign
currency, and the time a Fund actually collects such income or pays such
expenses generally are treated as ordinary income or loss. Similarly, on the
disposition of debt securities denominated in a foreign currency and on the
disposition of certain options, futures, forward contracts, gain or loss
attributable to fluctuations in the value of foreign currency between the date
of acquisition of the security or contract and the date of its disposition are
also treated as ordinary gain or loss. These gains or losses, referred to under
the Code as "Section 988" gains or losses, may increase or decrease the amount
of a Fund's net investment company taxable income, which, in turn, will affect
the amount of income to be distributed to you by a Fund.

If a Fund's Section 988 losses exceed a Fund's other net investment
company taxable income during a taxable year, a Fund generally will not be able
to make ordinary dividend distributions to you for that year, or distributions
made before the losses were realized will be recharacterized as return of
capital distributions of federal income tax purposes, rather than as an ordinary
dividend or capital gain distribution. If a distribution is treated as a return
of capital, your tax basis in your Fund shares will be reduced by a like amount
(to the extent of such basis), and any excess of the distribution over your tax
basis in your Fund shares will be treated as capital gain to you.

The 1997 Act generally requires that foreign income be translated into
U.S. dollars at the average exchange rate for the tax year in which the
transactions are conducted. Certain exceptions apply to taxes paid more than two
years after the taxable year to which they relate. This new law may require a
Fund to track and record adjustments to foreign taxes paid on foreign securities
in which it invests. Under a Fund's current reporting procedure, foreign
security transactions are recorded generally at the time of each transaction
using the foreign currency spot rate available for the date of each transaction.
Under the new law, a Fund will be required to record a fiscal year end (and at
calendar year end for excise tax purposes) an adjustment that reflects the
difference between the spot rates recorded for each transaction and the year-end
average exchange rate for all of a Fund's foreign securities transactions. There
is a possibility that the mutual fund industry will be given relief from this
new provision, in which case no year-end adjustments will be required.

The Funds may be subject to foreign withholding taxes on income from
certain of its foreign securities. If more than 50% of the total assets of a
Fund at the end of its fiscal year are invested in securities of foreign
corporations, a Fund may elect to pass-through to you your pro rata share of
foreign taxes paid by a Fund. If this election is made, you will be: (i)
required to include in your gross income your pro rata share of foreign source
income (including any foreign taxes paid by a Fund); and (ii) entitled to either
deduct your share of such foreign taxes in computing your taxable income or to
claim a credit for such taxes against your U.S. income tax, subject to certain
limitations under the Code. You will be informed by a Fund at the end of each
calendar year regarding the availability of any such foreign tax credits and the
amount of foreign source income (including any foreign taxes paid by a Fund). If
a Fund elects to pass-through to you the foreign income taxes that it has paid,
you will be informed at the end of the calendar year of the amount of foreign
taxes paid and foreign source income that must be included on your federal
income tax return. If a Fund invests 50% or less of its total assets in
securities of foreign corporations, it will not be entitled to pass-through to
you your pro-rata shares of foreign taxes paid by a Fund. In this case, these
taxes will be taken as a deduction by a Fund, and the income reported to you
will be the net amount after these deductions. The 1997 Act also simplifies the
procedures by which investors in funds that invest in foreign securities can
claim tax credits on their individual income tax returns for the foreign taxes
paid by a Fund. These provisions will allow investors who pay foreign taxes of
$300 or less on a single return or $600 or less on a joint return during any
year (all of which must be reported on IRS Form 1099-DIV from a Fund to the
investor) to claim a tax credit against their U.S. federal income tax for the
amount of foreign taxes paid by a Fund. This process will allow you, if you
qualify, to bypass the burdensome and detailed reporting requirements on the
foreign tax credit schedule (Form 1116) and report your foreign taxes paid
directly on page 2 of Form 1040. You should note that this simplified procedure
will not be available until calendar year 1998.

Investment in Passive Foreign Investment Company securities--The Funds
may invest in shares of foreign corporations which may be classified under the
Code as passive foreign investment companies ("PFICs"). In general, a foreign
corporation is classified as a PFIC if at least one-half of its assets
constitute investment-type assets or 75% or more of its gross income is
investment-type income. If a Fund receives an "excess distribution" with respect
to PFIC stock, the Fund itself may be subject to U.S. federal income tax on a
portion of the distribution, whether or not the corresponding income is
distributed by a Fund to you. In general, under the PFIC rules, an excess
distribution is treated as having been realized ratably over the period during
which a Fund held the PFIC shares. A Fund itself will be subject to tax on the
portion, if any, of an excess distribution that is so allocated to prior Fund
taxable years, and an interest factor will be added to the tax, as if the tax
had been payable in such prior taxable years. In this case, you would not be
permitted to claim a credit on your own tax return for the tax paid by a Fund.
Certain distributions from a PFIC as well as gain from the sale of PFIC shares
are treated as excess distributions. Excess distributions are characterized as
ordinary income even though, absent application of the PFIC rules, certain
distribution might have been classified as capital gain. This may have the
effect of increasing Fund distributions to you that are treated as ordinary
dividends rather than long-term capital gain dividends.

A Fund may be eligible to elect alternative tax treatment with respect to
PFIC shares. Under an election that currently is available in some
circumstances, a Fund generally would be required to include in its gross income
its share of the earnings of a PFIC on a current basis, regardless of whether
distributions are received from the PFIC during such period. If this election
were made, the special rules, discussed above, relating to the taxation of
excess distributions, would not apply. In addition, the 1997 Act provides for
another election that would involve marking-to-market the Fund's PFIC shares at
the end of each taxable year (and on certain other dates as prescribed in the
Code), with the result that unrealized gains would be treated as though they
were realized. The Fund would also be allowed an ordinary deduction for the
excess, if any, of the adjusted basis of its investment in the PFIC stock over
its fair market value at the end of the taxable year. This deduction would be
limited to the amount of any net mark-to-market gains previously included with
respect to that particular PFIC security. If a Fund were to make this second
PFIC election, tax at the Fund level under the PFIC rules would generally be
eliminated.

The application of the PFIC rules may affect, among other things, the
amount of tax payable by a Fund (if any), the amounts distributable to you by a
Fund, the time at which these distributions must be made, and whether these
distributions will be classified as ordinary income or capital gain
distributions to you.

You should be aware that it is not always possible at the time shares of a
foreign corporation are acquired to ascertain that the foreign corporation is a
PFIC, and that there is always a possibility that a foreign corporation will
become a PFIC after a Fund acquires shares in that corporation. While a Fund
will generally seek to avoid investing in PFIC shares to avoid the tax
consequences detailed above, there are no guarantees that it will do so and it
reserves the right to make such investments as a matter of its fundamental
investment policy.

Most foreign exchange gains are classified as ordinary income which will be
taxable to you as such when distributed. Similarly, you should be aware that any
foreign exchange losses realized by a Fund, including any losses realized on the
sale of foreign debt securities, are generally treated as ordinary losses for
federal income tax purposes. This treatment could increase or reduce a Fund's
income available for distribution to you, and may cause some or all of a Fund's
previously distributed income to be classified as a return of capital.

-13-
<PAGE>

PERFORMANCE INFORMATION

From time to time, each Fund may state each of its Classes' total return in
advertisements and other types of literature. Any statement of total return
performance data for a Class will be accompanied by information on the average
annual compounded rate of return for that Class over, as relevant, the most
recent one-, five- and ten-year (or life-of-fund, if applicable) periods. Each
Fund may also advertise aggregate and average total return information for its
Classes over additional periods of time.

The average annual total rate of return for each Class is based on a
hypothetical $1,000 investment that includes capital appreciation and
depreciation during the stated periods. The following formula will be used for
the actual computations:

P(1+T)/n/ = ERV

Where: P = a hypothetical initial purchase order of $1,000 from
which, in the case of only Class A Shares, the maximum
front-end sales charge is deducted;

T = average annual total return;

n = number of years;

ERV = redeemable value of the hypothetical $1,000 purchase at
the end of the period after the deduction of the
applicable CDSC, if any, with respect to Class B Shares
and Class C Shares.

In presenting performance information for Class A Shares, the Limited CDSC
applicable to only certain redemptions of those shares will not be deducted from
any computation of total return. See the Prospectuses for the Fund Classes for
a description of the Limited CDSC and the limited instances in which it applies.
All references to a CDSC in this Performance Information section will apply to
Class B Shares or Class C Shares.

Aggregate or cumulative total return is calculated in a similar manner,
except that the results are not annualized. Each calculation assumes the
maximum front-end sales charge, if any, is deducted from the initial $1,000
investment at the time it is made with respect to Class A Shares, and that all
distributions are reinvested at net asset value, and, with respect to Class B
Shares and Class C Shares, reflects the deduction of the CDSC that would be
applicable upon complete redemption of such shares. In addition, each Fund may
present total return information that does not reflect the deduction of the
maximum front-end sales charge or any applicable CDSC.

The performance of Class A Shares and the Institutional Class, as shown
below, is the average annual or aggregate total return quotations through
September 30, 1997. The average annual or aggregate total return for Class A
Shares at offer reflects the maximum front-end sales charge of 4.75% paid on the
purchase of shares. The average annual or aggregate total return for Class A
Shares at net asset value (NAV) does not reflect the payment of any front-end
sales charge. Securities prices fluctuated during the periods covered and past
results should not be considered as representative of future performance.
Pursuant to applicable regulation, total return shown for the DelCap Fund
Institutional Class for the periods prior to the commencement of operations of
such Class is calculated by taking the performance of DelCap Fund A Class and
adjusting it to reflect the elimination of all sales charges. However, for
those periods, no adjustment has been made to

-14-
<PAGE>

eliminate the impact of 12b-1 payments, and performance would have been affected
had such an adjustment been made.

Average Annual Total Return
DelCap Fund DelCap Fund DelCap Fund
A Class A Class Institutional
(at Offer)(2) (at NAV) Class(3)
<S> <C> <C> <C>
1 year
ended
9/30/97 7.11% 12.44% 12.75%

3 years
ended
9/30/97 16.53% 18.44% 18.80%

5 years
ended
9/30/97 15.04% 16.16% 16.49%

10 years
ended
9/30/97 12.35% 12.89% 13.05%

Period
3/27/86(1)
through
9/30/97 21.09% 21.61% 21.76%
</TABLE>

(1) Date of initial public offering of DelCap Fund A Class.

(2) Prior to November 29, 1995, the maximum front-end sales charge was 5.75%.
Effective November 29, 1995, the maximum front-end sales charge was reduced
to 4.75% and the above performance numbers are calculated using 4.75% as
the applicable sales charge, and are more favorable than they would have
been had they been calculated using 5.75%.

(3) Date of initial public offering of DelCap Fund Institutional Class was
November 9, 1992.

-15-
<PAGE>

The performance of the Class B Shares, as shown below, is the average
annual total return quotation through September 30, 1997. The average annual
total return for Class B Shares including deferred sales charge reflects the
deduction of the applicable CDSC that would be paid if the shares were redeemed
at September 30, 1997. The average annual total return for Class B Shares
excluding deferred sales charge assumes the shares were not redeemed at
September 30, 1997 and therefore does not reflect the deduction of a CDSC.

Average Annual Total Return
DelCap Fund B Class DelCap Fund B Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
<S> <C> <C>
1 year
ended
9/30/97 7.64% 11.64%

3 years
ended
9/30/97 16.94% 17.67%

Period
9/6/94(1)
through
9/30/97 17.11% 17.82%
</TABLE>

(1) Date of initial public offering of DelCap Fund B Class.

The performance of DelCap Fund C Class, as shown below, is the average annual
total return quotation through September 30, 1997. The average annual total
return for Class C Shares including deferred sales charge reflects the deduction
of the applicable CDSC that would be paid if the shares were redeemed at
September 30, 1997. The aggregate total return for Class C Shares excluding
deferred sales charge assumes the shares were not redeemed at September 30, 1997
and therefore does not reflect the deduction of a CDSC.

Average Annual Total Return
DelCap Fund C Class DelCap Fund C Class
(Including Deferred (Excluding Deferred
Sales Charge) Sales Charge)
<S> <C> <C>
1 year
ended
9/30/97 10.64% 11.64%

Period
11/29/95(1)
through
9/30/97 17.43% 17.43%
</TABLE>

(1) Date of initial public offering of DelCap Fund C Class.

-16-
<PAGE>

The performance of Class A Shares and the Institutional Class, as shown
below, is the aggregate total return quotations through September 30, 1997. The
aggregate total return for Class A Shares at offer reflects the maximum front-
end sales charge of 4.75% paid on the purchase of shares. The average annual or
aggregate total return for Class A Shares at net asset value (NAV) does not
reflect the payment of any front-end sales charge. Securities prices fluctuated
during the periods covered and past results should not be considered as
representative of future performance.

<TABLE>
<CAPTION>
Aggregate Total Return

Capital Appreciation Capital Appreciation Capital Appreciation
Fund A Class Fund A Class Fund Institutional
(at Offer) (at NAV) Class
<S> <C> <C> <C>
Period
12/2/96(1)
through
9/30/97 14.01% 19.64% 19.64%
</TABLE>

(1) Date of initial public offering of Capital Appreciation Fund A Class.

Total return performance for Capital Appreciation Fund Class B and Class C
Shares is not provided because such shares have not commenced operations prior
to the date of this Part B.

From time to time, each Fund may quote actual total return performance in
advertising and other types of literature compared to indices or averages of
alternative financial products available to prospective investors. For example,
the performance comparisons may include the average return of various bank
instruments, some of which may carry certain return guarantees offered by
leading banks and thrifts as monitored by Bank Rate Monitor, and those of
generally-accepted corporate bond and government security price indices of
various durations prepared by Lehman Brothers and Salomon Brothers, Inc. These
indices are not managed for any investment goal.

Total return performance will be computed by adding all reinvested income
and realized securities profits distributions plus the change in net asset value
during a specific period and dividing by the offering price at the beginning of
the period. It will not reflect any income taxes payable by shareholders on the
reinvested distributions included in the calculation. Because securities prices
fluctuate, past performance should not be considered as a representation of the
results which may be realized from an investment in a Fund in the future.

From time to time, each Fund may also quote its Classes' actual total return
performance, dividend results and other performance information in advertising
and other types of literature and may compare that information to, or may
separately illustrate similar information reported by the Standard & Poor's 500
Stock Index and the Dow Jones Industrial Average and other unmanaged indices.

The Standard & Poor's 500 Stock Index and the Dow Jones Industrial Average
are industry-accepted unmanaged indices of generally-conservative securities
used for measuring general market performance. The total return performance
reported for these indices will reflect the reinvestment of all distributions on
a quarterly basis and market price fluctuations. The indices do not take into
account any sales charge or other fees. In seeking a particular investment
objective, each Fund's portfolio likely will include many securities considered
by the Manager to be more aggressive than those tracked by these indices. The
Standard & Poor's 500 Stock

-17-
<PAGE>

Index, which is comprised of 500 selected common stocks, most of which are
listed on the New York Stock Exchange, is heavily weighted toward stocks with
large market capitalizations and represents approximately two-thirds of the
total market value of all domestic stocks.

Statistical and performance information and various indices compiled and
maintained by organizations such as the following may also be used in preparing
exhibits comparing certain industry trends and competitive mutual fund
performance to comparable activity of the Funds and performance and in
illustrating general financial planning principles. From time to time, certain
mutual fund performance ranking information, calculated and provided by these
organizations, may also be used in the promotion of sales of the Funds. Any
indices used are not managed for any investment goal, and a direct investment in
an index is not possible.

CDA Technologies, Inc., Lipper Analytical Services, Inc. and Morningstar,
Inc. are performance evaluation services that maintain statistical
performance databases, as reported by a diverse universe of independently-
managed mutual funds.

Ibbotson Associates, Inc. is a consulting firm that provides a variety of
historical data including total return, capital appreciation and income on
the stock market as well as other investment asset classes, and inflation.
With their permission, this information will be used primarily for
comparative purposes and to illustrate general financial planning
principles.

Interactive Data Corporation is a statistical access service that maintains
a database of various international industry indicators, such as historical
and current price/earning information, individual equity and fixed-income
price and return information.

Compustat Industrial Databases, a service of Standard & Poor's, may also be
used in preparing performance and historical stock and bond market
exhibits. This firm maintains fundamental databases that provide
financial, statistical and market information covering more than 7,000
industrial and non-industrial companies.

Russell Indexes is an investment analysis service that provides both
current and historical stock performance information, focusing on the
business fundamentals of those firms issuing the security.

The Russell MidCap Growth Index is an unmanaged benchmark of medium-size
company stocks that exhibit growth characteristics as defined by Frank
Russell Co. The index measures the performance of growth stocks that are
among the 800 smallest components of the Russell 1000 Index.

Salomon Brothers and Lehman Brothers are statistical research firms that
maintain databases of international market, bond market, corporate and
government-issued securities of various maturities. This information, as
well as unmanaged indices compiled and maintained by these firms, will be
used in preparing comparative illustrations. In addition, the performance
of multiple indices compiled and maintained by these firms may be combined
to create a blended performance result for comparative performances.
Generally, the indices selected will be representative of the types of
securities in which the Funds may invest and the assumptions that were used
in calculating the blended performance will be described.

-18-
<PAGE>

Comparative information on the Consumer Price Index and the CDA Growth
Index may also be included. The Consumer Price Index, as prepared by the U.S.
Bureau of Labor Statistics, is the most commonly used measure of inflation. It
indicates the cost fluctuations of a representative group of consumer goods. It
does not represent a return from an investment. The CDA Growth Index was
developed and is maintained by CDA Technologies, Inc. The Index is comprised of
230 separately-managed, growth-oriented equity mutual funds. It reflects the
reinvestment of any dividend and capital gains distributions paid during a
specified period.

The following tables are an example, for purposes of illustration only, of
cumulative total return performance for Class A Shares, Institutional Class,
Class B Shares and Class C Shares of DelCap Fund and Class A Shares of Capital
Appreciation Fund through September 30, 1997. The performance figures reflect
maximum sales charges or contingent deferred sales charges, if any. Performance
of Class A Shares may also be shown without reflecting the impact of any front-
end sales charge. Performance of Class B Shares and Class C Shares will be
calculated both with the applicable CDSC included and excluded. In addition,
the calculations assume the reinvestment of any realized securities profits
distributions and income dividends paid during the period, but not any income
taxes payable by shareholders on the reinvested distributions. Comparative
information on the Standard & Poor's 500 Stock Index, the Dow Jones Industrial
Average and the NASDAQ Composite Index is also included.

-19-
<PAGE>

The net asset value of a Class fluctuates so shares, when redeemed, may be
worth more or less than the original investment, and a Class' results should not
be considered a guarantee of future performance.
<TABLE>
<CAPTION>
Cumulative Total Return

DelCap DelCap Standard Dow
Fund Fund & Poor's Jones NASDAQ
A Class Institutional 500 Stock Industrial Composite
(at Offer)(2) Class(3) Index Average Index
<S> <C> <C> <C> <C> <C>
3 months
ended
9/30/97 5.44% 10.75% 7.49% 3.55% 16.89%

6 months
ended
9/30/97 21.12%(4) 27.30% 26.63% 20.68% 37.98%

9 months
ended
9/30/97 11.83% 17.64% 29.63% 23.22% 30.57%

1 year
ended
9/30/97 7.11% 12.75% 40.43% 35.07% 37.39%

3 years
ended
9/30/97 58.24% 67.67% 119.15% 106.74% 120.56%

5 years
ended
9/30/97 101.46% 114.55% 156.68% 142.85% 189.01%

10 years
ended
9/30/97 220.30% 241.06% 295.00% 206.02% 279.41%

3/27/86(1)
through
9/30/97 805.81% 865.26% 458.06% 336.89% 349.85%
</TABLE>

(1) Date of initial public offering of DelCap Fund A Class.

(3) Date of initial public offering of DelCap Fund Institutional Class was
November 9, 1992. Pursuant to applicable regulation, total return shown
for DelCap Fund Institutional Class for the periods prior to the
commencement of operations of such Class is calculated by taking the
performance of DelCap Fund A Class and adjusting it to reflect the
elimination of all sales charges. However, for those periods, no adjustment
has been made to eliminate the impact of 12b-1 payments, and performance
would have been affected had such an adjustment been made.

(4) For the six months ended September 30, 1997, cumulative total return for
DelCap Fund A Class at net asset value was 27.14%.

-20-
<PAGE>

<TABLE>
<CAPTION>
Cumulative Total Return

DelCap Fund DelCap Fund
B Class B Class Standard
(Including (Excluding & Poor's Dow Jones NASDAQ
Deferred Deferred 500 Stock Industrial Composite
Sales Charge) Sales Charge) Index Average Index
<S> <C> <C> <C> <C> <C>
3 months
ended
9/30/97 6.47% 10.47% 7.49% 3.55% 16.89%

6 months
ended
9/30/97 22.70% 26.70% 26.24% 20.68% 37.98%

9 months
ended
9/30/97 12.76% 16.76% 29.63% 23.22% 30.57%

1 year
ended
9/30/97 7.64% 11.64% 40.43% 35.07% 37.39%

3 years
ended
9/30/97 59.92% 62.92% 119.15% 106.74% 120.56%

Period
9/6/94(1)
through
9/30/97 62.38% 65.38% 113.80% 103.03% 120.17%
</TABLE>

(1) Date of initial public offering of DelCap Fund B Class.

-21-
<PAGE>

<TABLE>
<CAPTION>
Cumulative Total Return

DelCap Fund DelCap Fund
C Class C Class Standard
(Including (Excluding & Poor's Dow Jones NASDAQ
Deferred Deferred 500 Stock Industrial Composite
Sales Charge) Sales Charge) Index Average Index
<S> <C> <C> <C> <C> <C>
3 months
ended
9/30/97 9.48% 10.48% 7.49% 3.55% 16.89%

6 months
ended
9/30/97 25.69% 26.69% 26.24% 20.68% 37.98%

9 months
ended
9/30/97 15.74% 16.74% 29.63% 23.22% 30.57%

1 year
ended
9/30/97 10.64% 11.64% 40.43% 35.07% 37.39%

Period
11/29/95(1)
through
9/30/97 34.39% 34.39% 62.44% 56.57% 59.15%
</TABLE>

(1) Date of initial public offering of DelCap Fund C Class.

-22-
<PAGE>

<TABLE>
<CAPTION>
Cumulative Total Return(1)

Capital Capital
Appreciation Appreciation
Fund A Class(2) Fund
(at Offer) Institutional Class
<S> <C> <C>
3 months ended 9/30/97 6.72% 12.02%

6 months ended 9/30/97 20.24%(3) 26.21%

9 months ended 9/30/97 15.59% 21.39%

Period 12/2/96(4)
through 9/30/97 14.01% 19.64%
</TABLE>

(1) Delaware Management Company, Inc. has elected voluntarily to waive that
portion, if any, of the annual management fees payable by the Fund and to
pay certain expenses of the Fund to the extent necessary to ensure that the
Total Operating Expenses of each Class of the Fund does not exceed 0.75%
(in each case, exclusive of taxes, interest, brokerage commissions, and
extraordinary expenses and applicable 12b-1 expenses) through May 31, 1998.
In the absence of such waiver, performance would have been affected
negatively.

(2) Delaware Distributors, L.P. has elected voluntarily to waive its right to
receive 12b-1 Plan fees (including service fees) from the commencement of
the public offering of Class A Shares of the Fund through May 31, 1998. In
the absence of such waiver, performance would have been affected
negatively.

(3) For the six months ended September 30, 1997, cumulative total return for
Capital Appreciation Fund A Class at net asset value was 26.21%.

(4) Date of initial public offering.

Total return performance for Class B and Class C Shares of Capital Appreciation
Fund is not provided because such shares have not commenced operations prior to
the date of this Part B.

Because every investor's goals and risk threshold are different, the
Distributor, as distributor for each Fund and other mutual funds in the Delaware
Group, will provide general information about investment alternatives and
scenarios that will allow investors to assess their personal goals. This
information will include general material about investing as well as materials
reinforcing various industry-accepted principles of prudent and responsible
financial planning. One typical way of addressing these issues is to compare an
individual's goals and the length of time the individual has to attain these
goals to his or her risk threshold. In addition, the Distributor will provide
information that discusses the Manager's overriding investment philosophy and
how that philosophy impacts a Fund's, and other Delaware Group funds',
investment disciplines employed in seeking their objectives. The Distributor
may also from time to time cite general or specific information about the
institutional clients of the Manager, including the number of such clients
serviced by the Manager.

Dollar-Cost Averaging

For many people, deciding when to invest can be a difficult decision.
Security prices tend to move up and down over various market cycles and logic
says to invest when prices are low. However, even experts can't always pick the
highs and the lows. By using a strategy known as dollar-cost averaging, you
schedule your investments ahead of time. If you invest a set amount on a
regular basis, that money will always buy more shares when the price is low and
fewer when the price is high. You can choose to invest at any regular interval--
for example, monthly or quarterly--as long as you stick to your regular
schedule. Dollar-cost averaging looks simple and it is, but there are important
things to remember.

-23-
<PAGE>

Dollar-cost averaging works best over longer time periods, and it doesn't
guarantee a profit or protect against losses in declining markets. If you need
to sell your investment when prices are low, you may not realize a profit no
matter what investment strategy you utilize. That's why dollar-cost averaging
can make sense for long-term goals. Since the potential success of a dollar-
cost averaging program depends on continuous investing, even through periods of
fluctuating prices, you should consider your dollar-cost averaging program a
long-term commitment and invest an amount you can afford and probably won't need
to withdraw. You also should consider your financial ability to continue to
purchase shares during periods of high fund share prices. Delaware Group offers
three services -- Automatic Investing Program, Direct Deposit Program and the
Wealth Builder Option -- that can help to keep your regular investment program
on track. See Investing by Electronic Fund Transfer - Direct Deposit Purchase
Plan, Automatic Investing Plan and Wealth Builder Option under Investment Plans
for a complete description of these services, including restrictions or
limitations.

The example below illustrates how dollar-cost averaging can work. In a
fluctuating market, the average cost per share over a period of time will be
lower than the average price per share for the same time period.

Number
Investment Price Per of Shares
Amount Share Purchased
<S> <C> <C> <C>
Month 1 $100 $10.00 10
Month 2 $100 $12.50 8
Month 3 $100 $ 5.00 20
Month 4 $100 $10.00 10
- --------------------------------------------------
$400 $37.50 48
</TABLE>

Total Amount Invested: $400
Total Number of Shares Purchased: 48
Average Price Per Share: $9.38 ($37.50/4)
Average Cost Per Share: $8.33 ($400/48 shares)

This example is for illustration purposes only. It is not intended to
represent the actual performance of any stock or bond fund in the Delaware Group
of funds.

-24-
<PAGE>

THE POWER OF COMPOUNDING

When you opt to reinvest your current income for additional Fund shares,
your investment is given yet another opportunity to grow. It's called the Power
of Compounding and the following chart illustrates just how powerful it can be.

COMPOUNDED RETURNS

Results of various assumed fixed rates of return on a $10,000 investment
compounded annually for 10 years:

<TABLE>
<CAPTION>
8% Rate of 10% Rate 12% Rate
Return of Return of Return
------------ ----------- -----------
<S> <C> <C> <C>
1 year $10,800 $11,000 $11,200
2 years $11,664 $12,100 $12,544
3 years $12,597 $13,310 $14,049
4 years $13,605 $14,641 $15,735
5 years $14,693 $16,105 $17,623
6 years $15,869 $17,716 $19,738
7 years $17,138 $19,487 $22,107
8 years $18,509 $21,436 $24,760
9 years $19,990 $23,579 $27,731
10 years $21,589 $25,937 $31,058
</TABLE>

These figures are calculated assuming a fixed constant investment return and
assume no fluctuation in the value of principal. These figures, which do not
reflect payment of applicable taxes or any sales charges, are not intended to be
a projection of investment results and do not reflect the actual performance
results of any of the Classes.

-25-
<PAGE>

TRADING PRACTICES AND BROKERAGE

Equity Funds IV, Inc. selects brokers or dealers to execute transactions on
behalf of each Fund for the purchase or sale of portfolio securities on the
basis of its judgment of their professional capability to provide the service.
The primary consideration is to have brokers or dealers execute transactions at
best price and execution. Best price and execution refers to many factors,
including the price paid or received for a security, the commission charged, the
promptness and reliability of execution, the confidentiality and placement
accorded the order and other factors affecting the overall benefit obtained by
the account on the transaction. A number of trades are made on a net basis
where a Fund either buys securities directly from the dealer or sells them to
the dealer. In these instances, there is no direct commission charged but there
is a spread (the difference between the buy and sell price) which is the
equivalent of a commission. When a commission is paid, a Fund pays reasonably
competitive brokerage commission rates based upon the professional knowledge of
Equity Funds IV, Inc.'s trading department as to rates paid and charged for
similar transactions throughout the securities industry. In some instances, a
Fund pays a minimal share transaction cost when the transaction presents no
difficulty.

During the fiscal years ended September 30, 1995, 1996 and 1997, the
aggregate dollar amounts of brokerage commissions paid by DelCap Fund were
$899,512, $1,513,495 and $2,224,779 respectively. For the period December 2,
1996 (date of initial public offering) through September 30, 1997, the aggregate
dollar amount of brokerage commissions paid by Capital Appreciation Fund was
$4,599.

The Manager may allocate out of all commission business generated by all of
the funds and accounts under its management, brokerage business to brokers or
dealers who provide brokerage and research services. These services include
advice, either directly or through publications or writings, as to the value of
securities, the advisability of investing in, purchasing or selling securities,
and the availability of securities or purchasers or sellers of securities;
furnishing of analyses and reports concerning issuers, securities or industries;
providing information on economic factors and trends; assisting in determining
portfolio strategy; providing computer software and hardware used in security
analyses; and providing portfolio performance evaluation and technical market
analyses. Such services are used by the Manager in connection with its
investment decision-making process with respect to one or more funds and
accounts managed by it, and may not be used, or used exclusively, with respect
to the fund or account generating the brokerage.

During the fiscal year ended September 30, 1997, portfolio transactions of
DelCap Fund in the amount of $438,085,803, resulting in brokerage commissions of
$871,479 were directed to brokers for brokerage. For the period December 2,
1996 (date of initial public offering) through September 30, 1997, research
services provided and portfolio transactions of Capital Appreciation Fund were
in the amount of $267,751, resulting in brokerage commissions of $576 were
directed to brokers for brokerage and research services provided.

As provided in the Securities Exchange Act of 1934 and each Fund's
Investment Management Agreement, higher commissions are permitted to be paid to
broker/dealers who provide brokerage and research services than to
broker/dealers who do not provide such services if such higher commissions are
deemed reasonable in relation to the value of the brokerage and research
services provided. Although transactions are directed to broker/dealers who
provide such brokerage and research services, Equity Funds IV, Inc. believes
that the commissions paid to such broker/dealers are not, in general, higher
than commissions that would be paid to broker/dealers not providing such
services and that such commissions are reasonable in relation to the value of
the brokerage and research services provided. In some instances, services may
be provided to the

-26-
<PAGE>

Manager which constitute in some part brokerage and research services used by
the Manager in connection with its investment decision-making process and
constitute in some part services used by the Manager in connection with
administrative or other functions not related to its investment decision-making
process. In such cases, the Manager will make a good faith allocation of
brokerage and research services and will pay out of its own resources for
services used by the Manager in connection with administrative or other
functions not related to its investment decision-making process. In addition, so
long as no fund is disadvantaged, portfolio transactions which generate
commissions or their equivalent are allocated to broker/dealers who provide
daily portfolio pricing services to a Fund and to other funds in the Delaware
Group. Subject to best price and execution, commissions allocated to brokers
providing such pricing services may or may not be generated by the funds
receiving the pricing service.

The Manager may place a combined order for two or more accounts or funds
engaged in the purchase or sale of the same security if, in its judgment, joint
execution is in the best interest of each participant and will result in best
price and execution. Transactions involving commingled orders are allocated in
a manner deemed equitable to each account or fund. When a combined order is
executed in a series of transactions at different prices, each account
participating in the order may be allocated an average price obtained from the
executing broker. It is believed that the ability of the accounts to
participate in volume transactions will generally be beneficial to the accounts
and funds. Although it is recognized that, in some cases, the joint execution
of orders could adversely affect the price or volume of the security that a
particular account or fund may obtain, it is the opinion of the Manager and
Equity Funds IV, Inc.'s Board of Directors that the advantages of combined
orders outweigh the possible disadvantages of separate transactions.

Consistent with the Conduct Rules of the National Association of Securities
Dealers, Inc. (the "NASD"), and subject to seeking best price and execution, a
Fund may place orders with broker/dealers that have agreed to defray certain
expenses of the funds in the Delaware Group of funds, such as custodian fees,
and may, at the request of the Distributor, give consideration to sales of
shares of such funds as a factor in the selection of brokers and dealers to
execute Fund portfolio transactions.

Portfolio Turnover

Portfolio trading will be undertaken principally to accomplish each Fund's
objective in relation to anticipated movements in the general level of interest
rates. A Fund is free to dispose of portfolio securities at any time, subject
to complying with the Internal Revenue Code and the Investment Company Act of
1940, when changes in circumstances or conditions make such a move desirable in
light of the investment objective. A Fund will not attempt to achieve or be
limited to a predetermined rate of portfolio turnover, such a turnover always
being incidental to transactions undertaken with a view to achieving the Fund's
investment objective.

The degree of portfolio activity may affect brokerage costs of a Fund and
taxes payable by the Fund's shareholders. A turnover rate of 100% would occur,
for example, if all the investments in a Fund's portfolio at the beginning of
the year were replaced by the end of the year. In investing for capital
appreciation, each Fund may hold securities for any period of time. Portfolio
turnover will also be increased if a Fund writes a large number of call options
which are subsequently exercised. To the extent a Fund realizes gains on
securities held for less than six months, such gains are taxable to the
shareholder or to a Fund at ordinary income tax rates. The turnover rate also
may be affected by cash requirements from redemptions and repurchases of Fund
shares. Total brokerage costs generally increase with higher portfolio turnover
rates.

Under certain market conditions, DelCap Fund may experience a high rate of
portfolio turnover which could exceed 100%. Capital Appreciation Fund is
expected to have a portfolio turnover rate that is less

-27-
<PAGE>

than 100%. The portfolio turnover rate of each Fund is calculated by dividing
the lesser of purchases or sales of portfolio securities for the particular
fiscal year by the monthly average of the value of the portfolio securities
owned by the Fund during the particular fiscal year, exclusive of securities
whose maturities at the time of acquisition are one year or less. During the
past two fiscal years, DelCap Fund's portfolio turnover rates were 72% and 105%
for 1996 and 1997, respectively, and during the period December 2, 1996 (date of
initial public offering) through September 30, 1997, Capital Appreciation Fund's
portfolio turnover rate was 84% (annualized).

-28-
<PAGE>

PURCHASING SHARES

The Distributor serves as the national distributor for each Fund's four
classes of shares - Class A Shares, Class B Shares, Class C Shares and the
Institutional Class, and has agreed to use its best efforts to sell shares of
each Fund. See the Prospectuses for information on how to invest. Shares of
each Fund are offered on a continuous basis and may be purchased through
authorized investment dealers or directly by contacting Equity Funds IV, Inc. or
the Distributor.

The minimum initial investment generally is $1,000 for Class A Shares,
Class B Shares and Class C Shares. Subsequent purchases generally must be at
least $100. The initial and subsequent investment minimums for Class A Shares
will be waived for purchases by officers, directors and employees of any
Delaware Group fund, the Manager or any of the Manager's affiliates if the
purchases are made pursuant to a payroll deduction program. Shares purchased
pursuant to the Uniform Gifts to Minors Act or Uniform Transfers to Minors Act
and shares purchased in connection with an Automatic Investing Plan are subject
to a minimum initial purchase of $250 and a minimum subsequent purchase of $25.
Accounts opened under the Delaware Group Asset Planner service are subject to a
minimum initial investment of $2,000 per Asset Planner Strategy selected. There
are no minimum purchase requirements for the Institutional Classes, but certain
eligibility requirements must be satisfied.

Each purchase of Class B Shares is subject to a maximum purchase limitation
of $250,000. For Class C Shares, each purchase must be in an amount that is
less than $1,000,000. See Investment Plans for purchase limitations applicable
to retirement plans. Equity Funds IV, Inc. will reject any purchase order for
more than $250,000 of Class B Shares and $1,000,000 or more of Class C Shares.
An investor may exceed these limitations by making cumulative purchases over a
period of time. An investor should keep in mind, however, that reduced front-
end sales charges apply to investments of $100,000 or more in Class A Shares and
that, absent any applicable fee waiver, Class A Shares are subject to lower
annual 12b-1 Plan expenses than Class B Shares and Class C Shares and generally
are not subject to a CDSC.

Selling dealers are responsible for transmitting orders promptly. Equity
Funds IV, Inc. reserves the right to reject any order for the purchase of shares
of either Fund if in the opinion of management such rejection is in such Fund's
best interest.

The NASD has adopted amendments to certain rules relating to investment
company sales charges. Equity Funds IV, Inc. and the Distributor intend to
operate in compliance with these rules.

Class A Shares are purchased at the offering price which reflects a maximum
front-end sales charge of 4.75%; however, lower front-end sales charges apply
for larger purchases. See the table below. Class A Shares, absent any
applicable fee waiver, are also subject to annual 12b-1 Plan expenses.

Class B Shares are purchased at net asset value and are subject to a CDSC
of: (i) 4% if shares are redeemed within two years of purchase; (ii) 3% if
shares are redeemed during the third or fourth year following purchase; (iii) 2%
if shares are redeemed during the fifth year following purchase; and (iv) 1% if
shares are redeemed during the sixth year following purchase. Class B Shares
are also subject to annual 12b-1 Plan expenses which, absent any applicable fee
waiver, are higher than those to which Class A Shares are subject and are
assessed against the Class B Shares for approximately eight years after
purchase. See Automatic Conversion of Class B Shares under Classes of Shares in
the Fund Classes' Prospectuses.

-29-
<PAGE>

Class C Shares are purchased at net asset value and are subject to a CDSC
of 1% if shares are redeemed within 12 months following purchase. Class C
Shares, absent any applicable fee waiver, are also subject to annual 12b-1 Plan
expenses for the life of the investment which are equal to those to which Class
B Shares are subject.

The distributor has voluntarily elected to waive the payment of 12b-1 Plan
expenses by the Capital Appreciation Fund from the commencement of the public
offering through May 31, 1998.

Institutional Class shares are purchased at the net asset value per share
without the imposition of a front-end or contingent deferred sales charge or
12b-1 Plan expenses. See Determining Offering Price and Net Asset Value and
Plans Under Rule 12b-1 for the Fund Classes in this Part B.

Class A Shares, Class B Shares, Class C Shares and Institutional Class
shares represent a proportionate interest in a Fund's assets and will receive a
proportionate interest in that Fund's income, before application, as to the
Class A, Class B and Class C Shares, of any expenses, if any, under that Fund's
12b-1 Plans.

Certificates representing shares purchased are not ordinarily issued
unless, in the case of Class A Shares or Institutional Class shares, a
shareholder submits a specific request. Certificates are not issued in the case
of Class B Shares or Class C Shares or in the case of any retirement plan
account including self-directed IRAs. However, purchases not involving the
issuance of certificates are confirmed to the investor and credited to the
shareholder's account on the books maintained by Delaware Service Company, Inc.
(the "Transfer Agent"). The investor will have the same rights of ownership
with respect to such shares as if certificates had been issued. An investor that
is permitted to obtain a certificate may receive a certificate representing full
share denominations purchased by sending a letter signed by each owner of the
account to the Transfer Agent requesting the certificate. No charge is assessed
by Equity Funds IV, Inc. for any certificate issued. A shareholder may be
subject to fees for replacement of a lost or stolen certificate, under certain
conditions, including the cost of obtaining a bond covering the lost or stolen
certificate. Please contact the Fund for further information. Investors who
hold certificates representing any of their shares may only redeem those shares
by written request. The investor's certificate(s) must accompany such
request.

Alternative Purchase Arrangements

The alternative purchase arrangements of Class A, Class B and Class C
Shares permit investors to choose the method of purchasing shares that is most
suitable for their needs given the amount of their purchase, the length of time
they expect to hold their shares and other relevant circumstances. Investors
should determine whether, given their particular circumstances, it is more
advantageous to purchase Class A Shares and incur a front-end sales charge and,
absent any applicable fee waiver, annual 12b-1 Plan expenses of up to a maximum
of 0.30% of the average daily net assets of Class A Shares or to purchase either
Class B or Class C Shares and have the entire initial purchase amount invested
in the Fund with the investment thereafter subject to a CDSC and, absent any
applicable fee waiver, annual 12b-1 Plan expenses. Class B Shares are subject
to a CDSC if the shares are redeemed within six years of purchase, and Class C
Shares are subject to a CDSC if the shares are redeemed within 12 months of
purchase. Class B and Class C Shares are each subject to annual 12b-1 Plan
expenses of up to a maximum of 1% (0.25% of which are service fees to be paid to
the Distributor, dealers or others for providing personal service and/or
maintaining shareholder accounts) of average daily net assets of the respective
Class. Class B Shares will automatically convert to Class A Shares at the end
of approximately eight years after purchase and, thereafter, be subject to
annual 12b-1 Plan expenses of up to a maximum of 0.30% of average daily net
assets of such shares. Unlike Class B Shares, Class C Shares do not convert to
another class.

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<PAGE>

Class A Shares - DelCap Fund and Capital Appreciation Fund

Purchases of $100,000 or more of Class A Shares at the offering price carry
reduced front-end sales charges as shown in the accompanying table, and may
include a series of purchases over a 13-month period under a Letter of Intention
signed by the purchaser. See Special Purchase Features - Class A Shares, below
for more information on ways in which investors can avail themselves of reduced
front-end sales charges and other purchase features.

DelCap Fund
Capital Appreciation Fund
Class A Shares
- ------------------------------------------------------------------------------------------------------------------
Dealer's
Front-End Sales Charge as % of Commission***
Amount of Purchase Offering Amount as % of
Price Invested** Offering Price
- ------------------------------------------------------------------------------------------------------------------
Capital
DelCap Fund Appreciation Fund
<S> <C> <C> <C> <C>
Less than $100,000 4.75% 4.99% 5.02% 4.00%
$100,000 but under $250,000 3.75 3.91 3.94 3.00
$250,000 but under $500,000 2.50 2.56 2.56 2.00
$500,000 but under $1,000,000* 2.00 2.04 2.07 1.60
</TABLE>

* There is no front-end sales charge on purchases of $1 million or more of
Class A Shares but, under certain limited circumstances, a 1% contingent
deferred sales charge may apply upon redemption of such shares. The
contingent deferred sales charge ("Limited CDSC") that may be applicable
arises only in the case of certain shares that were purchased at net asset
value and triggered the payment of a dealer's commission.

** Based on the net asset value per share of the respective Class A Shares as
of the end of Equity Funds IV, Inc.'s most recent fiscal year.

*** Financial institutions or their affiliated brokers may receive an agency
transaction fee in the percentages set forth above.
- --------------------------------------------------------------------------------

A Fund must be notified when a sale takes place which would qualify for the
reduced front-end sales charge on the basis of previous or current
purchases. The reduced front-end sales charge will be granted upon
confirmation of the shareholder's holdings by such Fund. Such reduced
front-end sales charges are not retroactive.

From time to time, upon written notice to all of its dealers, the
Distributor may hold special promotions for specified periods during which
the Distributor may reallow to dealers up to the full amount of the front-
end sales charge shown above. Dealers who receive 90% or more of the sales
charge may be deemed to be underwriters under the Securities Act of 1933.
- --------------------------------------------------------------------------------

-31-
<PAGE>

Certain dealers who enter into an agreement to provide extra training and
information on Delaware Group products and services and who increase sales of
Delaware Group funds may receive an additional commission of up to 0.15% of the
offering price in connection with sales of Class A Shares. Such dealers must
meet certain requirements in terms of organization and distribution capabilities
and their ability to increase sales. The Distributor should be contacted for
further information on these requirements as well as the basis and circumstances
upon which the additional commission will be paid. Participating dealers may be
deemed to have additional responsibilities under the securities laws.

Dealer's Commission

For initial purchases of Class A Shares of $1,000,000 or more, a dealer's
commission may be paid by the Distributor to financial advisers through whom
such purchases are effected in accordance with the following schedule:

<TABLE>
<CAPTION>
Dealer's Commission
-------------------
(as a percentage of
Amount of Purchase amount purchased)
------------------
<S> <C>
Up to $2 million 1.00%
Next $1 million up to $3 million 0.75
Next $2 million up to $5 million 0.50
Amount over $5 million 0.25
</TABLE>

In determining a financial adviser's eligibility for the dealer's
commission, purchases of Class A Shares of other Delaware Group funds as to
which a Limited CDSC applies (see Contingent Deferred Sales Charge for Certain
Redemptions of Class A Shares Purchased at Net Asset Value under Redemption and
Exchange in the Fund Classes' Prospectuses) may be aggregated with those of the
Class A Shares of a Fund. Financial advisers also may be eligible for a
dealer's commission in connection with certain purchases made under a Letter of
Intention or pursuant to an investor's Right of Accumulation. Financial
advisers should contact the Distributor concerning the applicability and
calculation of the dealer's commission in the case of combined purchases.

An exchange from other Delaware Group funds will not qualify for payment of
the dealer's commission, unless a dealer's commission or similar payment has not
been previously paid on the assets being exchanged. The schedule and program for
payment of the dealer's commission are subject to change or termination at any
time by the Distributor at its discretion.

Contingent Deferred Sales Charge - Class B Shares and Class C Shares

Class B and Class C Shares are purchased without a front-end sales charge.
Class B Shares redeemed within six years of purchase may be subject to a CDSC at
the rates set forth below, and Class C Shares redeemed within 12 months of
purchase may be subject to a CDSC of 1%. CDSCs are charged as a percentage of
the dollar amount subject to the CDSC. The charge will be assessed on an amount
equal to the lesser of the net asset value at the time of purchase of the shares
being redeemed or the net asset value of those shares at the time of redemption.
No CDSC will be imposed on increases in net asset value above the initial
purchase price, nor will a CDSC be assessed on redemptions of shares acquired
through reinvestment of dividends or capital gains distributions. See Waiver of
Contingent Deferred Sales Charge - Class B and Class C Shares under Redemption
and Exchange in the Prospectuses for the Fund Classes for a list of the
instances in which the CDSC is waived.

-32-
<PAGE>

The following table sets forth the rates of the CDSC for Class B Shares of
each Fund:

<TABLE>
<CAPTION>
Contingent Deferred
Sales Charge (as a
Percentage of
Dollar Amount
Year After Purchase Made Subject to Charge)
------------------------ ------------------
<S> <C>
0-2 4%
3-4 3%
5 2%
6 1%
7 and thereafter None
</TABLE>

During the seventh year after purchase and, thereafter, until converted
automatically into Class A Shares, Class B Shares, absent any applicable fee
waiver, will still be subject to the annual 12b-1 Plan expenses of up to 1% of
average daily net assets of those shares. At the end of approximately eight
years after purchase, the investor's Class B Shares will be automatically
converted into Class A Shares the same Fund. See Automatic Conversion of Class
B Shares under Classes of Shares in the Fund Classes' Prospectuses. Such
conversion will constitute a tax-free exchange for federal income tax purposes.
See Taxes in the Prospectuses for the Fund Classes.

Plans Under Rule 12b-1 for the Fund Classes

Pursuant to Rule 12b-1 under the 1940 Act, Equity Funds IV, Inc. has
adopted a separate plan for each of the Class A Shares, the Class B Shares and
the Class C Shares of each Fund (the "Plans"). Each Plan permits the Fund to
pay for certain distribution, promotional and related expenses involved in the
marketing of only the Class to which the Plan applies. The Plans do not apply
to the Institutional Classes of shares. Such shares are not included in
calculating the Plans' fees, and the Plans are not used to assist in the
distribution and marketing of shares of the Institutional Classes. Shareholders
of the Institutional Classes may not vote on matters affecting the Plans.

The Plans permit a Fund, pursuant to the Distribution Agreement, to pay out
of the assets of the Class A Shares, Class B Shares and Class C Shares monthly
fees to the Distributor for its services and expenses in distributing and
promoting sales of shares of such classes. These expenses include, among other
things, preparing and distributing advertisements, sales literature and
prospectuses and reports used for sales purposes, compensating sales and
marketing personnel, and paying distribution and maintenance fees to securities
brokers and dealers who enter into agreements with the Distributor. The Plan
expenses relating to Class B and Class C Shares are also used to pay the
Distributor for advancing the commission costs to dealers with respect to the
initial sale of such shares.

In addition, absent any applicable fee waiver, each Fund may make payments
out of the assets of the Class A, Class B and Class C Shares directly to other
unaffiliated parties, such as banks, who either aid in the distribution of
shares of, or provide services to, such classes.

The maximum aggregate fee payable by a Fund under the Plans, and a Fund's
Distribution Agreement, is on an annual basis, up to 0.30% of the Class A
Shares' average daily net assets for the year, and up to 1% (0.25% of which are
service fees to be paid to the Distributor, dealers and others for providing
personal service and/or maintaining shareholder accounts) of each of the Class B
Shares' and the Class C Shares' average daily

-33-
<PAGE>

net assets for the year. Equity Funds IV, Inc.'s Board of Directors may reduce
these amounts at any time. The Distributor has elected voluntarily to waive all
payments under the 12b-1 Plan for the Class A Shares, Class B Shares and Class C
Shares of the Capital Appreciation Fund during the commencement of the public
offering of the Fund through May 31, 1998.

All of the distribution expenses incurred by the Distributor and others,
such as broker/dealers, in excess of the amount paid on behalf of Class A, Class
B and Class C Shares would be borne by such persons without any reimbursement
from such Fund Classes. Subject to seeking best price and execution, a Fund
may, from time to time, buy or sell portfolio securities from or to firms which
receive payments under the Plans.

From time to time, the Distributor may pay additional amounts from its own
resources to dealers for aid in distribution or for aid in providing
administrative services to shareholders.

The Plans and the Distribution Agreements, as amended, have been approved
by the Board of Directors of Equity Funds IV, Inc., including a majority of the
directors who are not "interested persons" (as defined in the 1940 Act) of
Equity Funds IV, Inc. and who have no direct or indirect financial interest in
the Plans by vote cast in person or at a meeting duly called for the purpose of
voting on the Plans and such Agreements. Continuation of the Plans and the
Distribution Agreements, as amended, must be approved annually by the Board of
Directors in the same manner as specified above.

Each year, the directors must determine whether continuation of the Plans
is in the best interest of shareholders of, respectively, Class A Shares, Class
B Shares and Class C Shares and that there is a reasonable likelihood of the
Plan relating to a Fund Class providing a benefit to that Class. The Plans and
the Distribution Agreements, as amended, may be terminated with respect to a
Fund Class at any time without penalty by a majority of those directors who are
not "interested persons" or by a majority vote of the outstanding voting
securities of the relevant Fund Class. Any amendment materially increasing the
maximum percentage payable under the Plans must likewise be approved by a
majority vote of the outstanding voting securities of the relevant Fund Class,
as well as by a majority vote of those directors who are not "interested
persons." With respect to the Class A Share Plan, any material increase in the
maximum percentage payable thereunder must also be approved by a majority of the
outstanding voting securities of Class B. Also, any other material amendment to
the Plans must be approved by a majority vote of the directors including a
majority of the noninterested directors of Equity Funds IV, Inc. having no
interest in the Plans. In addition, in order for the Plans to remain effective,
the selection and nomination of directors who are not "interested persons" of
Equity Funds IV, Inc. must be effected by the directors who themselves are not
"interested persons" and who have no direct or indirect financial interest in
the Plans. Persons authorized to make payments under the Plans must provide
written reports at least quarterly to the Board of Directors for their review.

-34-
<PAGE>

For the fiscal year ended September 30, 1997, payments from the Class A
Shares, Class B Shares and Class C Shares of DelCap Fund pursuant to their
respective Plans amounted to $2,413,950, $169,087 and $33,376, respectively.
Such amounts were used for the following purposes: <TABLE>
<CAPTION>

DelCap DelCap DelCap
Fund A Class Fund B Class Fund C Class
------------ ------------ ------------
<S> <C> <C> <C>
Advertising -- -- --
Annual/Semi-Annual Reports $54,876 -- --
Broker Trails $1,951,650 $34,760 $3,869
Broker Sales Charges -- $63,088 $22,464
Dealer Service Expenses $12,152 $1,135 $406
Interest on Broker Sales Charges -- $55,273 $952
Commissions to Wholesalers $82,832 $8,811 $4,094
Promotional-Broker Meetings $112,021 $2,161 $257
Promotional-Other $100,542 -- --
Prospectus Printing $54,675 -- --
Telephone $8,878 $69 $19
Wholesaler Expenses $36,324 $3,790 $1,315
Other -- -- --
</TABLE>

Equity Funds IV, Inc. intends to amend the Plans, if necessary, to comply
with any new rules or regulations the SEC may adopt with respect to Rule 12b-1.

Other Payments to Dealers - Class A, Class B and Class C Shares

From time to time, at the discretion of the Distributor, all registered
broker/dealers whose aggregate sales of Fund Classes exceed certain limits as
set by the Distributor, may receive from the Distributor an additional payment
of up to 0.25% of the dollar amount of such sales. The Distributor may also
provide additional promotional incentives or payments to dealers that sell
shares of the Delaware Group of funds. In some instances, these incentives or
payments may be offered only to certain dealers who maintain, have sold or may
sell certain amounts of shares. The Distributor may also pay a portion of the
expense of preapproved dealer advertisements promoting the sale of Delaware
Group fund shares.

Special Purchase Features - Class A Shares

Buying Class A Shares at Net Asset Value

Class A Shares may be purchased without a front-end sales charge under the
Dividend Reinvestment Plan and, under certain circumstances, the Exchange
Privilege and the 12-Month Reinvestment Privilege.

Current and former officers, directors and employees of Equity Funds IV,
Inc., any other fund in the Delaware Group, the Manager, the Manager's
affiliates, or any of the Manager's affiliates that may in the future be
created, legal counsel to the funds and registered representatives and employees
of broker/dealers who have entered into Dealer's Agreements with the Distributor
may purchase Class A Shares and any such class of shares of any of the funds in
the Delaware Group, including any fund that may be created, at the net asset
value per share. Family members of such persons at their direction, and any
employee benefit plan established by any

-35-
<PAGE>

of the foregoing funds, corporations, counsel or broker/dealers may also
purchase shares at net asset value. Class A Shares may also be purchased at net
asset value by current and former officers, directors and employees (and members
of their families) of the Dougherty Financial Group LLC.

Purchases of Class A Shares may also be made by clients of registered
representatives of an authorized investment dealer at net asset value within 12
months of a change of the registered representative's employment, if the
purchase is funded by proceeds from an investment where a front-end sales
charge, contingent deferred sales charge or other sales charge has been
assessed.

Purchases of Class A Shares may also be made at net asset value by bank
employees who provide services in connection with agreements between the bank
and unaffiliated brokers or dealers concerning sales of shares of Delaware Group
funds. Officers, directors and key employees of institutional clients of the
Manager or any of its affiliates may purchase Class A Shares at net asset value.
Moreover, purchases may be effected at net asset value for the benefit of the
clients of brokers, dealers and registered investment advisers affiliated with a
broker or dealer, if such broker, dealer or investment adviser has entered into
an agreement with the Distributor providing specifically for the purchase of
Class A Shares in connection with special investment products, such as wrap
accounts or similar fee based programs. Such purchasers are required to sign a
letter stating that the purchase is for investment only and that the securities
may not be resold except to the issuer. Such purchasers may also be required to
sign or deliver such other documents as Equity Funds IV, Inc. may reasonably
require to establish eligibility for purchase at net asset value.

Purchases of Class A Shares at net asset value may also be made by the
following: financial institutions investing for the account of their trust
customers if they are not eligible to purchase shares of the institutional class
of a Fund; any group retirement plan (excluding defined benefit pension plans),
or such plans of the same employer, for which plan participant records are
maintained on the Delaware Investment & Retirement Services, Inc. ("DIRSI")
proprietary record keeping system that (i) has in excess of $500,000 of plan
assets invested in Class A Shares of Delaware Group funds and any stable value
product available through the Delaware Group, or (ii) is sponsored by an
employer that has at any point after May 1, 1997 had more than 100 employees
while such plan has held Class A Shares of a Delaware Group fund and such
employer has properly represented to DIRSI in writing that it has the requisite
number of employees and has received written confirmation back from DIRSI.

Investments in Class A Shares made by plan level and/or participant
retirement accounts that are for the purpose of repaying a loan taken from such
accounts will be made at net asset value. Loan repayments made to a Delaware
Group account in connection with loans originated from accounts previously
maintained by another investment firm will also be invested at net asset value.

DelCap Fund A Class shares may be deposited at net asset value, without
payment of a sales charge with respect to sales of units of a unit investment
trust ("Trust"), organized and sponsored by Prudential Securities Incorporated
dealers, whose portfolio consists of Class A Shares and stripped United States
Treasury issued notes or bonds bearing no current interest ("Treasury
Obligations"). Unit holders of the Trust may elect to invest cash distributions
from the Trust in Class A Shares at net asset value, including: (a)
distributions of any dividend income or other income received by the Trust; (b)
distributions of any net capital gains received in

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respect of Class A Shares and proceeds of the sale of Class A Shares not used to
redeem units of the Trust; and (c) proceeds from the maturity of the Treasury
Obligations at the termination date of the Trust.

Equity Funds IV, Inc. must be notified in advance that the trade qualifies
for purchase at net asset value.

Letter of Intention

The reduced front-end sales charges described above with respect to Class A
Shares are also applicable to the aggregate amount of purchases made within a
13-month period pursuant to a written Letter of Intention provided by the
Distributor and signed by the purchaser, and not legally binding on the signer
or Equity Funds IV, Inc., which provides for the holding in escrow by the
Transfer Agent, of 5% of the total amount of the Class A Shares intended to be
purchased until such purchase is completed within the 13-month period. A Letter
of Intention may be dated to include shares purchased up to 90 days prior to the
date the Letter is signed. The 13-month period begins on the date of the
earliest purchase. If the intended investment is not completed, except as noted
below, the purchaser will be asked to pay an amount equal to the difference
between the front-end sales charge on the Class A Shares purchased at the
reduced rate and the front-end sales charge otherwise applicable to the total
shares purchased. If such payment is not made within 20 days following the
expiration of the 13-month period, the Transfer Agent will surrender an
appropriate number of the escrowed shares for redemption in order to realize the
difference. Such purchasers may include the value (at offering price at the
level designated in their Letter of Intention) of all their shares of the Funds
and of any class of any of the other mutual funds in the Delaware Group (except
shares of any Delaware Group fund which do not carry a front-end sales charge,
CDSC or Limited CDSC, other than shares of Delaware Group Premium Fund, Inc.
beneficially owned in connection with the ownership of variable insurance
products, unless they were acquired through an exchange from a Delaware Group
fund which carried a front-end sales charge, CDSC or Limited CDSC) previously
purchased and still held as of the date of their Letter of Intention toward the
completion of such Letter.

Employers offering a Delaware Group retirement plan may also complete a
Letter of Intention to obtain a reduced front-end sales charge on investments of
Class A Shares made by the plan. The aggregate investment level of the Letter
of Intention will be determined and accepted by the Transfer Agent at the point
of plan establishment. The level and any reduction in front-end sales charge
will be based on actual plan participation and the projected investments in
Delaware Group funds that are offered with a front-end sales charge, CDSC or
Limited CDSC for a 13-month period. The Transfer Agent reserves the right to
adjust the signed Letter of Intention based on this acceptance criteria. The
13-month period will begin on the date this Letter of Intention is accepted by
the Transfer Agent. If actual investments exceed the anticipated level and
equal an amount that would qualify the plan for further discounts, any front-end
sales charges will be automatically adjusted. In the event this Letter of
Intention is not fulfilled within the 13-month period, the plan level will be
adjusted (without completing another Letter of Intention) and the employer will
be billed for the difference in front-end sales charges due, based on the plan's
assets under management at that time. Employers may also include the value (at
offering price at the level designated in their Letter of Intention) of all
their shares intended for purchase that are offered with a front-end sales
charge, CDSC or Limited CDSC of any class. Class B Shares and Class C Shares of
a Fund and other Delaware Group funds which offer corresponding classes of
shares may also be aggregated for this purpose.

Combined Purchases Privilege

In determining the availability of the reduced front-end sales charge
previously set forth with respect to Class A Shares, purchasers may combine the
total amount of any combination of Class B Shares and/or Class C Shares of the
Funds, as well as shares of any other class of any of the other Delaware Group
funds (except

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shares of any Delaware Group fund which do not carry a front-end sales charge,
CDSC or Limited CDSC, other than shares of Delaware Group Premium Fund, Inc.
beneficially owned in connection with the ownership of variable insurance
products, unless they were acquired through an exchange from a Delaware Group
fund which carried a front-end sales charge, CDSC or Limited CDSC). In addition,
assets held by investment advisory clients of the Manager or its affiliates in a
stable value account may be combined with other Delaware Group fund holdings.

The privilege also extends to all purchases made at one time by an
individual; or an individual, his or her spouse and their children under 21; or
a trustee or other fiduciary of trust estates or fiduciary accounts for the
benefit of such family members (including certain employee benefit programs).

Right of Accumulation

In determining the availability of the reduced front-end sales charge with
respect to Class A Shares, purchasers may also combine any subsequent purchases
of Class A Shares, Class B Shares and Class C Shares of a Fund as well as shares
of any other class of any of the other Delaware Group funds which offer such
classes (except shares of any Delaware Group fund which do not carry a front-end
sales charge, CDSC or Limited CDSC, other than shares of Delaware Group Premium
Fund, Inc. beneficially owned in connection with the ownership of variable
insurance products, unless they were acquired through an exchange from a
Delaware Group fund which carried a front-end sales charge, CDSC or Limited
CDSC). If, for example, any such purchaser has previously purchased and still
holds Class A Shares and/or shares of any other of the classes described in the
previous sentence with a value of $40,000 and subsequently purchases $60,000 at
offering price of additional shares of Class A Shares, the charge applicable to
the $60,000 purchase would currently be 3.75%. For the purpose of this
calculation, the shares presently held shall be valued at the public offering
price that would have been in effect were the shares purchased simultaneously
with the current purchase. Investors should refer to the table of sales charges
for Class A Shares to determine the applicability of the Right of Accumulation
to their particular circumstances.

12-Month Reinvestment Privilege

Holders of Class A Shares of a Fund (and of the Institutional Class holding
shares which were acquired through an exchange from one of the other mutual
funds in the Delaware Group offered with a front-end sales charge) who redeem
such shares have one year from the date of redemption to reinvest all or part of
their redemption proceeds in Class A Shares of that Fund or in Class A Shares of
any of the other funds in the Delaware Group, subject to applicable eligibility
and minimum purchase requirements, in states where shares of such other funds
may be sold, at net asset value without the payment of a front-end sales charge.
This privilege does not extend to Class A Shares where the redemption of the
shares triggered the payment of a Limited CDSC. Persons investing redemption
proceeds from direct investments in mutual funds in the Delaware Group offered
without a front-end sales charge will be required to pay the applicable sales
charge when purchasing Class A Shares. The reinvestment privilege does not
extend to a redemption of either Class B or Class C Shares.

Any such reinvestment cannot exceed the redemption proceeds (plus any
amount necessary to purchase a full share). The reinvestment will be made at
the net asset value next determined after receipt of remittance. A redemption
and reinvestment could have income tax consequences. It is recommended that a
tax adviser be consulted with respect to such transactions. Any reinvestment
directed to a fund in which the investor does not then have an account will be
treated like all other initial purchases of a fund's shares. Consequently, an
investor should obtain and read carefully the prospectus for the fund in which
the investment is intended to be made

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<PAGE>

before investing or sending money. The prospectus contains more complete
information about the fund, including charges and expenses.

Investors should consult their financial advisers or the Transfer Agent,
which also serves as the Funds' shareholder servicing agent, about the
applicability of the Limited CDSC (see Contingent Deferred Sales Charge for
Certain Redemptions of Class A Shares Purchased at Net Asset Value under
Redemption and Exchange in the Fund Classes' Prospectuses) in connection with
the features described above.

Group Investment Plans

Group Investment Plans which are not eligible to purchase shares of the
Institutional Classes may also benefit from the reduced front-end sales charges
for investments in Class A Shares set forth in the table on page 00, based on
total plan assets. If a company has more than one plan investing in the
Delaware Group of funds, then the total amount invested in all plans would be
used in determining the applicable front-end sales charge reduction upon each
purchase, both initial and subsequent, upon notification to the Fund in which
the investment is being made at the time of each such purchase. Employees
participating in such Group Investment Plans may also combine the investments
made in their plan account when determining the applicable front-end sales
charge on purchases to non-retirement Delaware Group investment accounts if they
so notify the Fund in connection with each purchase. For other retirement plans
and special services, see Retirement Plans for the Fund Classes under Investment
Plans.

The Institutional Classes

The Institutional Class of each Fund is available for purchase only by:
(a) 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; (b) tax-exempt employee
benefit plans of the Manager or its affiliates and securities dealer firms with
a selling agreement with the Distributor; (c) institutional advisory accounts of
the Manager or its affiliates and those having client relationships with
Delaware Investment Advisers, a division 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; (d) a bank, trust company and similar financial institution
investing for its own account or for the accounts 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 fee; and (e)
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.

Shares of the Institutional Classes are available for purchase at net asset
value, without the imposition of a front-end or contingent deferred sales charge
and are not subject to Rule 12b-1 expenses.

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<PAGE>

INVESTMENT PLANS

Reinvestment Plan/Open Account

Unless otherwise designated by shareholders in writing, dividends from net
investment income and distributions from realized securities profits, if any,
will be automatically reinvested in additional shares of the respective Fund
Class of the DelCap Fund in which an investor has an account (based on the net
asset value in effect on the reinvestment date) and will be credited to the
shareholder's account on that date. All dividends and distributions of the
Institutional Classes of each Fund and the Fund Classes of the Capital
Appreciation Fund are reinvested in the accounts of the holders of such shares
(based on the net asset value in effect on the reinvestment date). A
confirmation of each dividend payment from net investment income and of
distributions from realized securities profits, if any, will be mailed to
shareholders in the first quarter of the fiscal year.

Under the Reinvestment Plan/Open Account, shareholders may purchase and add
full and fractional shares to their plan accounts at any time either through
their investment dealers or by sending a check or money order to the specific
Fund and Class in which shares are being purchased. Such purchases, which must
meet the minimum subsequent purchase requirements set forth in the Prospectuses
and this Part B, are made for Class A Shares at the public offering price and,
for Class B Shares, Class C Shares and the Institutional Classes at the net
asset value, at the end of the day of receipt. A reinvestment plan may be
terminated at any time. This plan does not assure a profit nor protect against
depreciation in a declining market.

Reinvestment of Dividends in Other Delaware Group Funds

Subject to applicable eligibility and minimum initial purchase requirements
and the limitations set forth below, holders of Class A, Class B and Class C
Shares may automatically reinvest dividends and/or distributions in any of the
mutual funds in the Delaware Group, including the Funds, in states where their
shares may be sold. Such investments will be at net asset value at the close of
business on the reinvestment date without any front-end sales charge or service
fee. The shareholder must notify the Transfer Agent in writing and must have
established an account in the fund into which the dividends and/or distributions
are to be invested. Any reinvestment directed to a fund in which the investor
does not then have an account will be treated like all other initial purchases
of a fund's shares. Consequently, an investor should obtain and read carefully
the prospectus for the fund in which the investment is intended to be made
before investing or sending money. The prospectus contains more complete
information about the fund, including charges and expenses. See also Additional
Methods of Adding to Your Investment - Dividend Reinvestment Plan under How to
Buy Shares in the Prospectuses for the Fund Classes.

Subject to the following limitations, dividends and/or distributions from
other funds in the Delaware Group may be invested in shares of the Funds,
provided an account has been established. Dividends from Class A Shares may not
be directed to Class B Shares or Class C Shares. Dividends from Class B Shares
may only be directed to other Class B Shares and dividends from Class C Shares
may only be directed to other Class C Shares. See Appendix B--Classes Offered
in the Fund Classes' Prospectuses for the funds in the Delaware Group that are
eligible for investment by holders of Fund shares.

This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans.

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<PAGE>

Investing by Electronic Fund Transfer

Direct Deposit Purchase Plan--Investors may arrange for a Fund to accept
for investment in Class A, Class B or Class C Shares, through an agent bank,
preauthorized government or private recurring payments. This method of
investment assures the timely credit to the shareholder's account of payments
such as social security, veterans' pension or compensation benefits, federal
salaries, Railroad Retirement benefits, private payroll checks, dividends, and
disability or pension fund benefits. It also eliminates lost, stolen and
delayed checks.

Automatic Investing Plan--Shareholders of Class A, Class B and Class C
Shares may make automatic investments by authorizing, in advance, monthly
payments directly from their checking account for deposit into their Fund
account. This type of investment will be handled in either of the following
ways. (1) If the shareholder's bank is a member of the National Automated
Clearing House Association ("NACHA"), the amount of the investment will be
electronically deducted from his or her account by Electronic Fund Transfer
("EFT"). The shareholder's checking account will reflect a debit each month at
a specified date although no check is required to initiate the transaction. (2)
If the shareholder's bank is not a member of NACHA, deductions will be made by
preauthorized checks, known as Depository Transfer Checks. Should the
shareholder's bank become a member of NACHA in the future, his or her
investments would be handled electronically through EFT.

This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans.

* * *

Initial investments under the Direct Deposit Purchase Plan and the
Automatic Investing Plan must be for $250 or more and subsequent investments
under such Plans must be for $25 or more. An investor wishing to take advantage
of either service must complete an authorization form. Either service can be
discontinued by the shareholder at any time without penalty by giving written
notice.

Payments to a Fund from the federal government or its agencies on behalf of
a shareholder may be credited to the shareholder's account after such payments
should have been terminated by reason of death or otherwise. Any such payments
are subject to reclamation by the federal government or its agencies.
Similarly, under certain circumstances, investments from private sources may be
subject to reclamation by the transmitting bank. In the event of a reclamation,
a Fund may liquidate sufficient shares from a shareholder's account to reimburse
the government or the private source. In the event there are insufficient
shares in the shareholder's account, the shareholder is expected to reimburse
the Fund.

Direct Deposit Purchases by Mail

Shareholders may authorize a third party, such as a bank or employer, to
make investments directly to their Fund accounts. A Fund will accept these
investments, such as bank-by-phone, annuity payments and payroll allotments, by
mail directly from the third party. Investors should contact their employers or
financial institutions who in turn should contact Equity Funds IV, Inc. for
proper instructions.

Wealth Builder Option

Shareholders can use the Wealth Builder Option to invest in the Fund
Classes through regular liquidations of shares in their accounts in other mutual
funds in the Delaware Group. Shareholders of the Fund

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Classes may elect to invest in one or more of the other mutual funds in the
Delaware Group through the Wealth Builder Option. See Wealth Builder Option and
Redemption and Exchange in the Prospectuses for the Fund Classes.

Under this automatic exchange program, shareholders can authorize regular
monthly investments (minimum of $100 per fund) to be liquidated from their
account and invested automatically into other mutual funds in the Delaware
Group, subject to the conditions and limitations set forth in the Fund Classes'
Prospectuses. The investment will be made on the 20th day of each month (or, if
the fund selected is not open that day, the next business day) at the public
offering price or net asset value, as applicable, of the fund selected on the
date of investment. No investment will be made for any month if the value of
the shareholder's account is less than the amount specified for investment.

Periodic investment through the Wealth Builder Option does not insure
profits or protect against losses in a declining market. The price of the fund
into which investments are made could fluctuate. Since this program involves
continuous investment regardless of such fluctuating value, investors selecting
this option should consider their financial ability to continue to participate
in the program through periods of low fund share prices. This program involves
automatic exchanges between two or more fund accounts and is treated as a
purchase of shares of the fund into which investments are made through the
program. See Exchange Privilege for a brief summary of the tax consequences of
exchanges. Shareholders can terminate their participation in Wealth Builder at
any time by giving written notice to the fund from which exchanges are made.

This option is not available to participants in the following plans:
SAR/SEP, SEP/IRA, SIMPLE IRA, SIMPLE 401(k), Profit Sharing and Money Purchase
Pension Plans, 401(k) Defined Contribution Plans, 403(b)(7) Deferred
Compensation Plans or 457 Deferred Compensation Plans. This option also is not
available to shareholders of the Institutional Classes.

Delaware Group Asset Planner

To invest in Delaware Group funds using the Delaware Group Asset Planner
asset allocation service, you should complete a Delaware Group Asset Planner
Account Registration Form, which is available only from a financial adviser or
investment dealer. Effective September 1, 1997, the Delaware Group Asset
Planner Service is only available to financial advisers or investment dealers
who have previously used this service. The Delaware Group Asset Planner service
offers a choice of four predesigned asset allocation strategies (each with a
different risk/reward profile) in predetermined percentages in Delaware Group
funds. With the help of a financial adviser, you may also design a customized
asset allocation strategy.

The sales charge on an investment through the Asset Planner service is
determined by the individual sales charges of the underlying funds and their
percentage allocation in the selected Strategy. Exchanges from existing
Delaware Group accounts into the Asset Planner service may be made at net asset
value under the circumstances described under Investing by Exchange in the
Prospectus. The minimum initial investment per Strategy is $2,000; subsequent
investments must be at least $100. Individual fund minimums do not apply to
investments made using the Asset Planner service. Class A, Class B and Class C
Shares are available through the Asset Planner service. Generally, only shares
within the same class may be used within the same Strategy. However, Class A
Shares of the Fund and of other funds in the Delaware Group may be used in the
same Strategy with consultant class shares that are offered by certain other
Delaware Group funds. See Appendix B -Classes Offered in the Prospectus for the
funds in the Delaware Group that offer consultant class shares.

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<PAGE>

An annual maintenance fee, currently $35 per Strategy, is typically due at
the time of initial investment and by September 30 of each subsequent year. The
fee, payable to Delaware Service Company, Inc. to defray extra costs associated
with administering the Asset Planner service, will be deducted automatically
from one of the funds within your Asset Planner account if not paid by September
30th. However, effective November 1, 1996, the annual maintenance fee is waived
until further notice. Investors using the Asset Planner for an IRA will
continue to pay an annual IRA fee of $15 per Social Security number.

Investors will receive a customized quarterly Strategy Report summarizing
all Delaware Group Asset Planner investment performance and account activity
during the prior period. Confirmation statements will be sent following all
transactions other than those involving a reinvestment of distributions.

Certain shareholder services are not available to investors using the Asset
Planner service, due to its special design. These include Delaphone,
Checkwriting, Wealth Builder Option and Letter of Intention. Systematic
Withdrawal Plans are available after the account has been open for two years.

Retirement Plans for the Fund Classes

An investment in either Fund may be suitable for tax-deferred retirement
plans. Among the retirement plans noted below, Class B Shares are available for
investment only by Individual Retirement Accounts, SIMPLE IRAs, Simplified
Employee Pension Plans, Salary Reduction Simplified Employee Pension Plans, 457
Deferred Compensation Plans and 403(b)(7) Deferred Compensation Plans. The CDSC
may be waived on certain redemptions of Class B Shares and Class C Shares. See
Waiver of Contingent Deferred Sales Charge -Class B and Class C Shares under
Redemption and Exchange in the Prospectuses for the Fund Classes for a list of
the instances in which the CDSC is waived.

Purchases of Class B Shares are subject to a maximum purchase limitation of
$250,000 for retirement plans. Purchases of Class C Shares must be in an amount
that is less than $1,000,000 for such plans. The maximum purchase limitations
apply only to the initial purchase of shares by the retirement plan.

Minimum investment limitations generally applicable to other investors do
not apply to retirement plans other than Individual Retirement Accounts, for
which there is a minimum initial purchase of $250 and a minimum subsequent
purchase of $25, regardless of which Class is selected. Retirement plans may be
subject to plan establishment fees, annual maintenance fees and/or other
administrative or trustee fees. Fees are based upon the number of participants
in the plan as well as the services selected. Additional information about fees
is included in retirement plan materials. Fees are quoted upon request. Annual
maintenance fees may be shared by Delaware Management Trust Company, the
Transfer Agent, other affiliates of the Manager and others that provide services
to such plans.

Certain shareholder investment services available to non-retirement plan
shareholders may not be available to retirement plan shareholders. Certain
retirement plans may qualify to purchase shares of the Institutional Classes.
See The Institutional Classes, above. For additional information on any of the
plans and Delaware's retirement services, call the Shareholder Service Center
telephone number.

It is advisable for an investor considering any one of the retirement plans
described below to consult with an attorney, accountant or a qualified
retirement plan consultant. For further details, including applications for any
of these plans, contact your investment dealer or the Distributor.

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<PAGE>

Taxable distributions from the retirement plans described below may be
subject to withholding.

Please contact your investment dealer or the Distributor for the special
application forms required for the plans described below.

Prototype Profit Sharing or Money Purchase Pension Plans

Prototype Plans are available for self-employed individuals, partnerships
and corporations. These plans can be maintained as Section 401(k), profit
sharing or money purchase pension plans. Contributions may be invested only in
Class A and Class C Shares.

Individual Retirement Account ("IRA")

A document is available for an individual who wants to establish an IRA and
make contributions which may be tax-deductible, even if the individual is
already participating in an employer-sponsored retirement plan. Even if
contributions are not deductible for tax purposes, as indicated below, earnings
will be tax-deferred. In addition, an individual may make contributions on
behalf of a spouse who has no compensation for the year or, for years prior to
1997, elects to be treated as having no compensation for the year. Investments
in each of the Fund Classes are permissible.

An individual can contribute up to $2,000 to his or her IRA each year.
Contributions may or may not be deductible depending upon the taxpayers adjusted
gross income and whether the taxpayer or his or her spouse is an active
participant in an employer-sponsored retirement plan. Even if a taxpayer (or
his or her spouse) is an active participant in an employer-sponsored retirement
plan, the full $2,000 deduction is still available if the taxpayer's adjusted
gross income is below $25,000 ($40,000 for taxpayers filing joint returns). A
partial deduction is allowed for married couples with incomes between $40,000
and $50,000, and for single individuals with incomes between $25,000 and
$35,000. No deductions are available for contributions to IRAs by taxpayers
whose adjusted gross income before IRA deductions exceeds $50,000 ($35,000 for
singles) and who are active participants in an employer-sponsored retirement
plan. Taxpayers who are not allowed deductions on IRA contributions still can
make nondeductible IRA contributions of as much as $2,000 for each working
spouse ($2,250 for one-income couples for years prior to 1997), and defer taxes
on interest or other earnings from the IRAs. Special rules apply for
determining the deductibility of contributions made by married individuals
filing separate returns.

Effective for tax years beginning after 1996, one-income couples can
contribute up to $2,000 to each spouse's IRA provided the combined compensation
of both spouses is at least equal to the total contributions for both spouses.
If the working spouse is an active participant in an employer-sponsored
retirement plan and earns over $40,000, the maximum deduction limit is reduced
in the same way that the limit is reduced for contributions to a non-spousal
IRA.

A company or association may establish a Group IRA for employees or members
who want to purchase shares of a Fund. Purchases of $1 million or more of Class
A Shares qualify for purchase at net asset value but may, under certain
circumstances, be subject to a Limited CDSC. See Purchasing Shares for
information on reduced front-end sales charges applicable to Class A Shares.

Investments generally must be held in the IRA until age 59 1/2 in order to
avoid premature distribution penalties, but distributions generally must
commence no later than April 1 of the calendar year following the year in which
the participant reaches age 70 1/2. Individuals are entitled to revoke the
account, for any reason and without penalty, by mailing written notice of
revocation to Delaware Management Trust Company within

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<PAGE>

seven days after the receipt of the IRA Disclosure Statement or within seven
days after the establishment of the IRA, except, if the IRA is established more
than seven days after receipt of the IRA Disclosure Statement, the account may
not be revoked. Distributions from the account (except for the pro-rata portion
of any nondeductible contributions) are fully taxable as ordinary income in the
year received. Excess contributions removed after the tax filing deadline, plus
extensions, for the year in which the excess contributions were made are subject
to a 6% excise tax on the amount of excess. Premature distributions
(distributions made before age 59 1/2, except for death, disability and certain
other limited circumstances) will be subject to a 10% excise tax on the amount
prematurely distributed, in addition to the income tax resulting from the
distribution. See Alternative Purchase Arrangements - Class B Shares and Class C
Shares under Classes of Shares, Contingent Deferred Sales Charge - Class B
Shares and Class C Shares under Classes of Shares, and Waiver of Contingent
Deferred Sales Charge - Class B and Class C Shares under Redemption and Exchange
in the Fund Classes' Prospectuses concerning the applicability of a CDSC upon
redemption.

Effective January 1, 1997, the 10% premature distribution penalty will not
apply to distributions from an IRA that are used to pay medical expenses in
excess of 7.5% of adjusted gross income or to pay health insurance premiums by
an individual who has received unemployment compensation for 12 consecutive
weeks.

See Appendix B for additional IRA information.

Simplified Employee Pension Plan ("SEP/IRA")

A SEP/IRA may be established by an employer who wishes to sponsor a tax-
sheltered retirement program by making contributions on behalf of all eligible
employees. Each of the Fund Classes is available for investment by a SEP/IRA.

Salary Reduction Simplified Employee Pension Plan ("SAR/SEP")

Prototype 401(k) Defined Contribution Plan

Section 401(k) of the Code permits employers to establish qualified plans
based on salary deferral contributions. Plan documents are available to enable
employers to establish a plan. An employer may also elect to make profit
sharing contributions and/or matching contributions with investments in only
Class A Shares and Class C Shares or certain other funds in the Delaware Group.
Purchases under the plan may be combined for purposes of computing the reduced
front-end sales charge applicable to Class A Shares as set forth in the table on
page 00.

Deferred Compensation Plan for Public Schools and Non-Profit Organizations
("403(b)(7)")

Section 403(b)(7) of the Code permits public school systems and certain
non-profit organizations to use mutual fund shares held in a custodial account
to fund deferred compensation arrangements for their employees. A custodial
account agreement is available for those employers who wish to purchase any of
the Fund Classes in conjunction with such an arrangement. Applicable front-end
sales charges with respect to Class A Shares for such purchases are set forth in
the table on page 00.

Deferred Compensation Plan for State and Local Government Employees ("457")

Section 457 of the Code permits state and local governments, their agencies
and certain other entities to establish a deferred compensation plan for their
employees who wish to participate. This enables employees to

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defer a portion of their salaries and any federal (and possibly state) taxes
thereon. Such plans may invest in shares of any of the Fund Classes. Although
investors may use their own plan, there is available a Delaware Group 457
Deferred Compensation Plan. Interested investors should contact the Distributor
or their investment dealers to obtain further information. Applicable front-end
sales charges for such purchases of Class A Shares are set forth in the table on
page 00.

SIMPLE IRA

A SIMPLE IRA combines many of the features of an Individual Retirement
Account (IRA) and a 401(k) Plan but is easier to administer than a typical
401(k) Plan. It requires employers to make contributions on behalf of their
employees and also has a salary deferral feature that permits employees to defer
a portion of their salary into the plan on a pre-tax basis.

SIMPLE 401(k)

A SIMPLE 401(k) is like a regular 401(k) except that plan sponsors are
limited to 100 employees and, in exchange for mandatory plan sponsor
contributions, discrimination testing is no longer required. Class B Shares are
not available for purchase by such plans.

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DETERMINING OFFERING PRICE AND NET ASSET VALUE

Orders for purchases of Class A Shares are effected at the offering price
next calculated by the Fund in which shares are being purchased after receipt of
the order by the Fund, its agent or designee. Orders for purchases of Class B
Shares, Class C Shares and the Institutional Classes are effected at the net
asset value per share next calculated after receipt of the order by the Fund,
its agent or designee. Selling dealers are responsible for transmitting orders
promptly.

The offering price for Class A Shares consists of the net asset value per
share plus any applicable sales charges. Offering price and net asset value are
computed as of the close of regular trading on the New York Stock Exchange
(ordinarily, 4 p.m., Eastern time) on days when the Exchange is open. The New
York Stock Exchange is scheduled to be open Monday through Friday throughout the
year except for New Year's Day, Martin Luther King, Jr.'s Birthday, Presidents'
Day, Good Friday, Memorial Day, Independence Day, Labor Day, Thanksgiving and
Christmas. When the New York Stock Exchange is closed, the Funds will generally
be closed, pricing calculations will not be made and purchase and redemption
orders will not be processed.

An example showing how to calculate the net asset value per share and, in
the case of Class A Shares, the offering price per share, is included in DelCap
Fund's financial statements which are incorporated by reference into this Part
B.

Each Fund's net asset value per share is computed by adding the value of
all the securities and other assets in the portfolio, deducting any liabilities,
and dividing by the number of shares outstanding. Expenses and fees are accrued
daily. In determining a Fund's total net assets, portfolio securities primarily
listed or traded on a national or foreign securities exchange, except for bonds,
are valued at the last sale price on that exchange. Options are valued at the
last reported sale price or, if no sales are reported, at the mean between bid
and asked prices. For valuation purposes, foreign currencies and foreign
securities denominated in foreign currency values will be converted into U.S.
dollar values at the mean between the bid and offered quotations of such
currencies against U.S. dollars based on rates in effect that day. Securities
not traded on a particular day, over-the-counter securities, and government and
agency securities are valued at the mean value between bid and asked prices.
Money market instruments having a maturity of less than 60 days are valued at
amortized cost. Debt securities (other than short-term obligations) are valued
on the basis of valuations provided by a pricing service when such prices are
believed to reflect the fair value of such securities. Use of a pricing service
has been approved by the Board of Directors. Prices provided by a pricing
service take into account appropriate factors such as institutional trading in
similar groups of securities, yield, quality, coupon rate, maturity, type of
issue, trading characteristics and other market data. Subject to the foregoing,
securities for which market quotations are not readily available and other
assets are valued at fair value as determined in good faith and in a method
approved by the Board of Directors.

Each Class of a Fund will bear, pro-rata, all of the common expenses of
that Fund. The net asset values of all outstanding shares of each Class of a
Fund will be computed on a pro-rata basis for each outstanding share based on
the proportionate participation in that Fund represented by the value of shares
of that Class. All income earned and expenses incurred by a Fund will be borne
on a pro-rata basis by each outstanding share of a Class, based on each Class'
percentage in the Fund represented by the value of shares of such Classes,
except

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<PAGE>

that the Institutional Classes will not incur any of the expenses under Equity
Funds IV, Inc.'s 12b-1 Plans and the Class A, Class B and Class C Shares alone
will bear any 12b-1 Plan expenses payable under their respective Plans. Due to
the specific distribution expenses and other costs that will be allocable to
each Class, the net asset value of each Class of the DelCap Fund will vary.
During the period the current waivers of 12b-1 Plan expenses by the Distributor
in connection with the distribution of Class A, Class B and Class C Shares of
Capital Appreciation Fund remain applicable, no such variance shall arise.

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REDEMPTION AND REPURCHASE

Any shareholder may require a Fund to redeem shares by sending a written
request, signed by the record owner or owners exactly as the shares are
registered, to the Fund at 1818 Market Street, Philadelphia, PA 19103. In
addition, certain expedited redemption methods described below are available
when stock certificates have not been issued. Certificates are issued for Class
A Shares and Institutional Class shares only if a shareholder specifically
requests them. Certificates are not issued for Class B Shares or Class C
Shares. If stock certificates have been issued for shares being redeemed, they
must accompany the written request. For redemptions of $50,000 or less paid to
the shareholder at the address of record, the request must be signed by all
owners of the shares or the investment dealer of record, but a signature
guarantee is not required. When the redemption is for more than $50,000, or if
payment is made to someone else or to another address, signatures of all record
owners are required and a signature guarantee may be required. Each signature
guarantee must be supplied by an eligible guarantor institution. Each Fund
reserves the right to reject a signature guarantee supplied by an eligible
institution based on its creditworthiness. The Funds may request further
documentation from corporations, retirement plans, executors, administrators,
trustees or guardians.

In addition to redemption of shares by a Fund, the Distributor, acting as
agent of the Funds, offers to repurchase Fund shares from broker/dealers acting
on behalf of shareholders. The redemption or repurchase price, which may be
more or less than the shareholder's cost, is the net asset value per share next
determined after receipt of the request in good order by the respective Fund or
its agent, subject to any applicable CDSC or Limited CDSC. This is computed and
effective at the time the offering price and net asset value are determined. See
Determining Offering Price and Net Asset Value. The Funds and the Distributor
end their business days at 5 p.m., Eastern time. This offer is discretionary
and may be completely withdrawn without further notice by the Distributor.

Orders for the repurchase of Fund shares which are submitted to the
Distributor prior to the close of its business day will be executed at the net
asset value per share computed that day (subject to the applicable CDSC or
Limited CDSC), if the repurchase order was received by the broker/dealer from
the shareholder prior to the time the offering price and net asset value are
determined on such day. The selling dealer has the responsibility of
transmitting orders to the Distributor promptly. Such repurchase is then
settled as an ordinary transaction with the broker/dealer (who may make a charge
to the shareholder for this service) delivering the shares repurchased.

Certain redemptions of Class A Shares purchased at net asset value may
result in the imposition of a Limited CDSC. See Contingent Deferred Sales
Charge for Certain Redemptions of Class A Shares Purchased at Net Asset Value
under Redemption and Exchange in the Prospectuses for the Fund Classes. Class B
Shares are subject to a CDSC of: (i) 4% if shares are redeemed within two years
of purchase; (ii) 3% if shares are redeemed during the third or fourth year
following purchase; (iii) 2% if shares are redeemed during the fifth year
following purchase; and (iv) 1% if shares are redeemed during the sixth year
following purchase. Class C Shares are subject to a CDSC of 1% if shares are
redeemed within 12 months following purchase. See Contingent Deferred Sales
Charge - Class B Shares and Class C Shares under Classes of Shares in the
Prospectuses for the Fund Classes. Except for the applicable CDSC or Limited
CDSC and, with respect to the expedited payment by wire described below for
which, in the case of the Fund Classes, there is currently a $7.50 bank wiring
cost, neither the Funds nor the Distributor charges a fee for redemptions or
repurchases, but such fees could be charged at any time in the future.

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<PAGE>

Payment for shares redeemed will ordinarily be mailed the next business
day, but in no case later than seven days, after receipt of a redemption request
in good order; provided, however, that each commitment to mail or wire
redemption proceeds by a certain time, as described below is modified by the
qualifications described in the next paragraph.

Each Fund will process written or telephone redemption requests to the
extent that the purchase orders for the shares being redeemed have already
settled. A Fund will honor redemption requests as to shares for which a check
was tendered as payment, but a Fund will not mail or wire the proceeds until it
is reasonably satisfied that the check has cleared. This potential delay can be
avoided by making investments by wiring Federal Funds.

If a shareholder has been credited with a purchase by a check which is
subsequently returned unpaid for insufficient funds or for any other reason, the
Fund involved will automatically redeem from the shareholder's account the
shares purchased by the check plus any dividends earned thereon. Shareholders
may be responsible for any losses to a Fund or to the Distributor.

In case of a suspension of the determination of the net asset value because
the New York Stock Exchange is closed for other than weekends or holidays, or
trading thereon is restricted or an emergency exists as a result of which
disposal by a Fund of securities owned by it is not reasonably practical, or it
is not reasonably practical for a Fund fairly to value its assets, or in the
event that the Securities and Exchange Commission has provided for such
suspension for the protection of shareholders, a Fund may postpone payment or
suspend the right of redemption or repurchase. In such case, the shareholder
may withdraw the request for redemption or leave it standing as a request for
redemption at the net asset value next determined after the suspension has been
terminated.

Payment for shares redeemed or repurchased may be made in either cash or
kind, or partly in cash and partly in kind. Any portfolio securities paid or
distributed in kind would be valued as described in Determining Offering Price
and Net Asset Value. Subsequent sale by an investor receiving a distribution in
kind could result in the payment of brokerage commissions. However, Equity
Funds IV, Inc. has elected to be governed by Rule 18f-1 under the 1940 Act
pursuant to which each Fund is obligated to redeem shares solely in cash up to
the lesser of $250,000 or 1% of the net asset value of such Fund during any 90-
day period for any one shareholder.

The value of a Fund's investments is subject to changing market prices.
Thus, a shareholder reselling shares to a Fund may sustain either a gain or
loss, depending upon the price paid and the price received for such shares.

Small Accounts

Before a Fund involuntarily redeems shares from an account that, under the
circumstances noted in the relevant Prospectus, has remained below the minimum
amounts required by the Funds' Prospectuses and sends the proceeds to the
shareholder, the shareholder will be notified in writing that the value of the
shares in the account is less than the minimum required and will be allowed 60
days from the date of notice to make an additional investment to meet the
required minimum. See The Conditions of Your Purchase under How to Buy Shares
in the Prospectuses. Any redemption in an inactive account established with a
minimum investment may trigger mandatory redemption. No CDSC or Limited CDSC
will apply to the redemptions described in this paragraph.

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<PAGE>

Effective November 29, 1995, the minimum initial investment in DelCap Fund
A Class was increased from $250 to $1,000. Accounts of DelCap Fund A Class that
were established prior to November 29, 1995 and maintain a balance in excess of
$250 will not presently be subject to the $9 quarterly service fee that may be
assessed against accounts with balances below the stated minimum nor subject to
involuntary redemption.

* * *

Each Fund has made available certain redemption privileges, as described
below. The Funds reserve the right to suspend or terminate these expedited
payment procedures upon 60 days' written notice to shareholders.

Expedited Telephone Redemptions

Shareholders of the Fund Classes or their investment dealers of record
wishing to redeem any amount of shares of $50,000 or less for which certificates
have not been issued may call the Shareholder Service Center at 800-523-1918 or,
in the case of shareholders of the Institutional Classes, their Client Services
Representative at 800-828-5052 prior to the time the offering price and net
asset value are determined, as noted above, and have the proceeds mailed to them
at the record address. Checks payable to the shareholder(s) of record will
normally be mailed the next business day, but no later than seven days, after
the receipt of the redemption request. This option is only available to
individual, joint and individual fiduciary-type accounts.

In addition, redemption proceeds of $1,000 or more can be transferred to
your predesignated bank account by wire or by check by calling the phone numbers
listed above. An authorization form must have been completed by the shareholder
and filed with the relevant Fund before the request is received. Payment will
be made by wire or check to the bank account designated on the authorization
form as follows:

1. Payment by Wire: Request that Federal Funds be wired to the bank
account designated on the authorization form. Redemption proceeds will normally
be wired on the next business day following receipt of the redemption request.
There is a $7.50 wiring fee (subject to change) charged by CoreStates Bank, N.A.
which will be deducted from the withdrawal proceeds each time the shareholder
requests a redemption from Class A Shares, Class B Shares and Class C Shares.
If the proceeds are wired to the shareholder's account at a bank which is not a
member of the Federal Reserve System, there could be a delay in the crediting of
the funds to the shareholder's bank account.

2. Payment by Check: Request a check be mailed to the bank account
designated on the authorization form. Redemption proceeds will normally be
mailed the next business day, but no later than seven days, from the date of the
telephone request. This procedure will take longer than the Payment by Wire
option (1 above) because of the extra time necessary for the mailing and
clearing of the check after the bank receives it.

Redemption Requirements: In order to change the name of the bank and the
account number it will be necessary to send a written request to the relevant
Fund and a signature guarantee may be required. Each signature guarantee must
be supplied by an eligible guarantor institution. The Funds reserves the right
to reject a signature guarantee supplied by an eligible institution based on its
creditworthiness.

To reduce the shareholder's risk of attempted fraudulent use of the
telephone redemption procedure, payment will be made only to the bank account
designated on the authorization form.

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<PAGE>

If expedited payment under these procedures could adversely affect a Fund,
the Fund may take up to seven days to pay the shareholder.

Neither the Funds nor the Funds' Transfer Agent is responsible for any
shareholder loss incurred in acting upon written or telephone instructions for
redemption or exchange of Fund shares which are reasonably believed to be
genuine. With respect to such telephone transactions, each Fund will follow
reasonable procedures to confirm that instructions communicated by telephone are
genuine (including verification of a form of personal identification) as, if it
does not, such Fund or the Transfer Agent may be liable for any losses due to
unauthorized or fraudulent transactions. Telephone instructions received by
shareholders of the Fund Classes are generally tape recorded. A written
confirmation will be provided for all purchase, exchange and redemption
transactions initiated by telephone.

Systematic Withdrawal Plans

Shareholders of Class A, Class B and Class C Shares of DelCap Fund who own
or purchase $5,000 or more of shares at the offering price, or net asset value,
as applicable, for which certificates have not been issued may establish a
Systematic Withdrawal Plan for monthly withdrawals of $25 or more, or quarterly
withdrawals of $75 or more, although the DelCap Fund does not recommend any
specific amount of withdrawal. This $5,000 minimum does not apply for that
Fund's prototype retirement plans. Shares purchased with the initial investment
and through reinvestment of cash dividends and realized securities profits
distributions will be credited to the shareholder's account and sufficient full
and fractional shares will be redeemed at the net asset value calculated on the
third business day preceding the mailing date.

Checks are dated either the 1st or the 15th of the month, as selected by
the shareholder (unless such date falls on a holiday or a weekend) and are
normally mailed within two business days. Both ordinary income dividends and
realized securities profits distributions will be automatically reinvested in
additional shares of the Class at net asset value. This plan is not recommended
for all investors and should be started only after careful consideration of its
operation and effect upon the investor's savings and investment program. To the
extent that withdrawal payments from the plan exceed any dividends and/or
realized securities profits distributions paid on shares held under the plan,
the withdrawal payments will represent a return of capital, and the share
balance may in time be depleted, particularly in a declining market.

The sale of shares for withdrawal payments constitutes a taxable event and
a shareholder may incur a capital gain or loss for federal income tax purposes.
This gain or loss may be long-term or short-term depending on the holding period
for the specific shares liquidated. Premature withdrawals from retirement plans
may have adverse tax consequences.

Withdrawals under this plan made concurrently with the purchases of
additional shares may be disadvantageous to the shareholder. Purchases of Class
A Shares of DelCap Fund through a periodic investment program in a fund managed
by the Manager must be terminated before a Systematic Withdrawal Plan with
respect to such shares can take effect, except if the shareholder is a
participant in one of our retirement plans or is investing in Delaware Group
funds which do not carry a sales charge. Redemptions of Class A Shares pursuant
to a Systematic Withdrawal Plan may be subject to a Limited CDSC if the purchase
was made at net asset value and a dealer's commission has been paid on that
purchase. Redemptions of Class B Shares or Class C Shares pursuant to a
Systematic Withdrawal Plan may be subject to a CDSC, unless the annual amount
selected to be withdrawn is less than 12% of the account balance on the date
that the Systematic Withdrawal Plan was established. See Waiver of Contingent
Deferred Sales Charge - Class B and Class C Shares and Waiver of Limited
Contingent Deferred Sales Charge - Class A Shares under Redemption and

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<PAGE>

Exchange in the Prospectuses for the Fund Classes. Shareholders should consult
their financial advisers to determine whether a Systematic Withdrawal Plan would
be suitable for them.

An investor wishing to start a Systematic Withdrawal Plan must complete an
authorization form. If the recipient of Systematic Withdrawal Plan payments is
other than the registered shareholder, the shareholder's signature on this
authorization must be guaranteed. Each signature guarantee must be supplied by
an eligible guarantor institution. DelCap Fund reserves the right to reject a
signature guarantee supplied by an eligible institution based on its
creditworthiness. This plan may be terminated by the shareholder or the
Transfer Agent at any time by giving written notice.

The Systematic Withdrawal Plan is not available for the Institutional
Classes or, currently, any of the Fund Classes of Capital Appreciation
Fund.

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<PAGE>

DISTRIBUTIONS AND TAXES

DelCap Fund has qualified, and intends to continue to qualify, and Capital
Appreciation Fund intends to qualify as a regulated investment company under
Subchapter M of the Code. As such, the Funds will not be subject to federal
income tax on net investment income and net realized capital gains which are
distributed to shareholders.

Each Fund intends to pay out all of its net investment income and net
realized capital gains. Each Fund also intends to meet the calendar year
distribution requirements imposed by the Code to avoid the imposition of any
excise tax. All dividends and any capital gains distributions will be
automatically credited to the shareholder's account in additional shares of the
same class of the Fund at net asset value unless, in the case of shareholders in
the Fund Classes of DelCap Fund, the shareholder requests in writing that such
dividends and/or distributions be paid in cash. Dividend payments of $1.00 or
less will be automatically reinvested, notwithstanding a shareholder's election
to receive dividends in cash. If such a shareholder's dividends increase to
greater than $1.00, the shareholder would have to file a new election in order
to begin receiving dividends in cash again.

Each class of shares of a Fund will share proportionately in the investment
income and expenses of such Fund, except that, absent any applicable fee waiver,
Class A Shares, Class B Shares and Class C Shares alone will incur distribution
fees under their respective 12b-1 Plans.

Any check in payment of dividends or other distributions which cannot be
delivered by the United States Post Office or which remains uncashed for a
period of more than one year may be reinvested in the shareholder's account at
the then-current net asset value and the dividend option may be changed from
cash to reinvest. A Fund may deduct from a shareholder's account the costs of
the Fund's effort to locate a shareholder if a shareholder's mail is returned by
the United States Post Office or the Fund is otherwise unable to locate the
shareholder or verify the shareholder's mailing address. These costs may
include a percentage of the account when a search company charges a percentage
fee in exchange for their location services.

Persons not subject to tax will not be required to pay taxes on
distributions.

Dividends from investment income and short-term capital gains distributions
are treated by shareholders as ordinary income for federal income tax purposes.
Distributions of long-term capital gains, if any, are taxable to shareholders as
long-term capital gains, regardless of the length of time an investor has held
such shares, and these gains are currently taxed at long-term capital gain
rates described below. The tax status of dividends and distributions paid to
shareholders will not be affected by whether they are paid in cash or in
additional shares. Each Fund is treated as a single tax entity and capital gains
for each Fund will be calculated separately.

Under the Taxpayer Relief act of 1997 (the "1997 Act"), the Fund is
required to track its sales of portfolio securities and to report its capital
gain distributions to you according to the following categories of holding
periods:

"Pre-Act long-term capital gains": securities sold by the Fund before May
7, 1997, that were held for more than 12 months. These gains will be
taxable to individual investors at a maximum rate of 28%.

"Mid-term capital gains" or "28 percent rate gain": securities sold by the
Fund after July 28, 1997 that were held more than one year but not more
than 18 months. These gains will be taxable to individual investors at a
maximum rate of 28%.

"1997 Act long-term capital gains" or "20 percent rate gain": securities
sold by the Fund between May 7, 1997 and July 28, 1997 that were held for
more than 12 months, and securities sold by the Fund after July 28, 1997
that were held for more than 18 months. These gains will be taxable to
individual investors at a maximum rate of 20% for investors in the 28% or
higher federal income tax brackets, and at a maximum rate of 10% for
investors in the 15% federal income tax bracket.

"Qualified 5-year gains": For individuals in the 15% bracket, qualified 5-
year gains are net gains on securities held for more than 5 years which are
sold after December 31, 2000. For individual who are subject to tax at
higher rate brackets, qualified 5-year gains are net gains on securities
which are purchased after December 31, 2000 and are held for more than 5
years. Taxpayers subject to tax at a higher rate brackets may also make an
election for shares held on January 1, 2001 to recognize gain on their
shares in order to qualify such shares as qualified 5-year property. These
gains will be taxable to individual investors at a maximum rate of 18% for
investors in the 28% or higher federal income tax brackets, and at a
maximum rate of 8% for investors in the 15% federal income tax bracket.

Because of each Fund's investment policy, only a small portion of a Fund's
dividends may qualify for the dividends-received deduction for corporations.
The portion of dividends paid by the Fund that so qualifies will be designated
each year in a notice mailed to the Fund's shareholders, and cannot exceed the
gross amount of dividends received by the Fund from domestic (U.S.) corporations
that would have qualified for the dividends-received deduction in the hands of
the Fund if the Fund was a regular corporation. The availability of the
dividends-received deduction is subject to certain holding period and debt
financing restrictions imposed under the Code on the corporation claiming the
deduction. Under the 1997 Act, the amount that the Fund may designate as
eligible for the dividends-received deduction will be reduced or eliminated if
the shares on which the dividends earned by the Fund were debt-financed or held
by the Fund for less than a 46-day period during a 90-day period beginning 45
days before the ex- dividend date and ending 45 days after the ex-dividend date.
Similarly, if your Fund shares are debt-financed or held by you for less than a
46-day period during a 90-day period beginning 45 days before the ex-dividend
date and ending 45 days after the ex-dividend date, then the dividends-received
deduction for Fund dividends on your shares may also be reduced or eliminated.
Even if designated as dividends eligible for the dividends-received deduction,
all dividends (including any deducted portion) must be included in your
alternative minimum taxable income calculation. For the fiscal year ended
September 30, 1997, no portion of DelCap Fund's dividends from net investment
income qualified for the dividends-received deduction to corporations. For the
period December 2, 1996

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<PAGE>

(date of initial public offering) through September 30, 1997, 27.90% of Capital
Appreciation Fund's dividends from net investment income qualified for the
dividends-received deduction to corporations.

Shareholders will be notified annually by Equity Funds IV, Inc. as to the
federal income tax status of dividends and distributions paid by their Fund.

In addition to the federal taxes described above, shareholders may or may
not be subject to various state and local taxes. Because shareholders' state
and local taxes may be different than the federal taxes described above,
shareholders should consult their own tax advisers.

See also Other Tax Requirements under Accounting and Tax Issues in this
Part B.

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<PAGE>

INVESTMENT MANAGEMENT AGREEMENTS

The Manager, located at One Commerce Square, Philadelphia, PA 19103,
furnishes investment management services to each Fund, subject to the
supervision and direction of Equity Funds IV, Inc.'s Board of Directors.

The Investment Management Agreement for DelCap Fund is dated April 3, 1995
and was approved by shareholders on March 29, 1995. The Investment Management
Agreement for Capital Appreciation Fund is dated November 29, 1996 and was
approved by the initial shareholder on November 29, 1996. Each Agreement has an
initial term of two years and may be renewed each year only so long as such
renewal and continuance are specifically approved at least annually by the Board
of Directors or by vote of a majority of the outstanding voting securities of
the Fund to which the Agreement relates, and only if the terms of the renewal
thereof have been approved by the vote of a majority of the directors of Equity
Funds IV, Inc. who are not parties thereto or interested persons of any such
party, cast in person at a meeting called for the purpose of voting on such
approval. Each Agreement is terminable without penalty on 60 days' notice by
the directors of Equity Funds IV, Inc. or by the Manager. Each Agreement will
terminate automatically in the event of its assignment.

The compensation paid by DelCap Fund for investment management services is
equal to 1/16 of 1% per month (the equivalent of 3/4 of 1% per year) of the
Fund's average daily net assets during the month, less DelCap Fund's
proportionate share of all directors' fees paid to the unaffiliated directors by
the Fund. This fee may be higher than that paid by some other funds. On
September 30, 1997, the total net assets of DelCap Fund were $925,617,386.
Under the general supervision of the Board of Directors, the Manager makes all
investment decisions which are implemented by DelCap Fund. The Manager pays the
salaries of all directors, officers and employees who are affiliated with both
the Manager and Equity Funds IV, Inc. The investment management fees paid by
DelCap Fund for the fiscal years ended September 30, 1995, 1996 and 1997 were
$7,128,192, $7,751,575 and $7,226,204 respectively.

The annual compensation paid by Capital Appreciation Fund for investment
management services is equal to 0.75% on the first $500 million of the Fund's
average daily net assets, 0.725% of the next $500 million and 0.70% of the
average daily net assets in excess of $1 billion. This fee may be higher than
that paid by some other funds. On September 30, 1997, the total net assets of
Capital Appreciation Fund were $2,401,268. Under the general supervision of the
Board of Directors, the Manager makes all investment decisions which are
implemented by the Fund. The Manager pays the salaries of all directors,
officers and employees who are affiliated with both the Manager and Equity Funds
IV, Inc. The investment management fee incurred by Capital Appreciation Fund
for the period December 2, 1996 (date of initial public offering) through
September 30, 1997 was $12,953 and $1,811 was paid as a result of the voluntary
waiver of fees by the Manager.

The Manager has elected voluntarily to waive that portion, if any, of the
annual management fees payable by Capital Appreciation Fund and to pay certain
expenses of the Fund to the extent necessary to ensure that the total operating
expenses of each Class do not exceed 0.75% (exclusive of taxes, interest,
brokerage

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<PAGE>

commissions, extraordinary expenses and 12b-1 expenses) during the commencement
of the public offering of the Fund through May 31, 1998.

Except for those expenses borne by the Manager under the Investment
Management Agreements and the Distributor under the Distribution Agreement, the
Funds are responsible for all of their own expenses. Among others, these include
a Fund's proportionate share of rent and certain other administrative expenses;
the investment management fees; transfer and dividend disbursing agent fees and
costs; custodian expenses; federal and state securities registration fees; proxy
costs; and the costs of preparing prospectuses and reports sent to shareholders.
The ratios of expenses to average daily net assets for the Class A Shares, Class
B Shares, Class C Shares and the Institutional Class for DelCap Fund for the
fiscal year ended September 30, 1997 were 1.36%, 2.06%, 2.06% and 1.06%,
respectively. The ratios for the Class A Shares, Class B Shares and Class C
Shares of DelCap Fund reflect the impact of their respective 12b-1 Plans. The
ratio of expenses to average daily net assets for the Class A Shares and the
Institutional Class for Capital Appreciation Fund for the period December 2,
1996 (date of initial public offering) through September 30, 1997 were 0.75%
(annualized) and 0.75% (annualized), respectively. The ratio for the Class A
Shares of Capital Appreciation Fund reflects the impact of 12b-1 and management
fee waivers and the ratio for the Institutional Class of this Fund reflects the
impact of management fee waivers.

Distribution and Service

The Distributor, Delaware Distributors, L.P. (which formerly conducted
business as Delaware Distributors, Inc.), located at 1818 Market Street,
Philadelphia, PA 19103, serves as the national distributor of each Fund's shares
under a Distribution Agreement dated April 3, 1995, as amended on November 29,
1995 for DelCap Fund and under a separate Distribution Agreement dated November
29, 1996 for Capital Appreciation Fund. The Distributor is an affiliate of the
Manager and bears all of the costs of promotion and distribution, except for
payments by each Fund on behalf of Class A Shares, Class B Shares and Class C
Shares under their respective 12b-1 Plans. Prior to January 3, 1995, Delaware
Distributors, Inc. ("DDI") served as the national distributor of DelCap Fund's
shares. On that date, Delaware Distributors, L.P., a newly formed limited
partnership, succeeded to the business of DDI. All officers and employees of
DDI became officers and employees of Delaware Distributors, L.P. DDI is the
corporate general partner of Delaware Distributors, L.P. and both DDI and
Delaware Distributors, L.P. are indirect, wholly owned subsidiaries of Delaware
Management Holdings, Inc. The Distributor has elected voluntarily to waive
payments under the 12b-1 Plan for the Class A Shares, the Class B Shares and the
Class C Shares of Capital Appreciation Fund during the commencement of the
public offering of the Fund through May 31, 1998.

The Transfer Agent, Delaware Service Company, Inc., another affiliate of
the Manager located at 1818 Market Street, Philadelphia, PA 19103, serves as the
Funds' shareholder servicing, dividend disbursing and transfer agent pursuant to
an Amended and Restated Shareholders Services Agreement dated November 29, 1996.
The Transfer Agent also provides accounting services to the Funds pursuant to
the terms of a separate Fund Accounting Agreement. The Transfer Agent is also
an indirect, wholly owned subsidiary of Delaware Management Holdings, Inc.

-57-
<PAGE>

OFFICERS AND DIRECTORS

The business and affairs of Equity Funds IV, Inc. are managed under the
direction of its Board of Directors.

Certain officers and directors of Equity Funds IV, Inc. hold identical
positions in each of the other funds in the Delaware Group. On October 31,
1997, Equity Funds IV, Inc.'s officers and directors owned less than 1% of the
outstanding shares of, respectively, the Class A Shares, Class B Shares, Class C
Shares and the Institutional Class of DelCap Fund.

As of October 31, 1997, management believes the following accounts held 5%
or more of the outstanding shares of the Class A Shares, Class B Shares, Class C
Shares and the Institutional Class:
<TABLE>
<CAPTION>

Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>

DelCap Fund A Class MLPF&S for the Sole Benefit
of its Customers
Attention: Fund
Administration
4800 Deer Lake Drive East -
3rd Floor
Jacksonville, FL 32246 3,717,797 14.35%

DelCap Fund B Class MLPF&S for the Sole Benefit
of its Customers
Attention: Fund
Administration
4800 Deer Lake Drive East -
3rd Floor
Jacksonville, FL 32246 90,305 12.83%

DelCap Fund C Class MLPF&S For the Sole Benefit
of its Customers
Attention: Fund
Administration
4800 Deer Lake Drive East -
3rd Floor
Jacksonville, FL 32246 12,731 11.40%

DelCap Fund Boston Safe Agent
Institutional Class for Mellon Bank Trst. State
of California Deferred
Compensation Plan
457 A/C CSPF0134002
Attention: Bob Stein, Mail
Code 028-004N 1 Cabot Road
Medford, MA 02155 1,679,881 40.27%

RS 401(k) Plan
Price Waterhouse LLP
Savings Plan
c/o DelPac 16th Floor
1818 Market St.
Philadelphia, PA 19103-3638 1,677,375 40.21%

</TABLE>

-58-
<PAGE>

Class Name and Address of Account Share Amount Percentage
- ----- --------------------------- ------------ ----------
<S> <C> <C> <C>

Capital Appreciation Bonnie Sue Rockhill
Fund Class A and Roger William Rockhill
220 Spout Spring Ave.
Mount Holly, NJ 08060 347 42.43%

Douglas W. Degenhardt
237 Marple Rd.
Haverford, PA 19041 234 28.64%

Thomas R. Dastalfo and Mary
Beth P. Dastalfo JT WROS
1353 Capouse Ave.
Scranton, PA 18509 118 14.42%

J. Chris Meyer
Cust. Spencer D. Meyer
1680 Governors Way
Blue Bell, PA 19422 58 7.18%

J. Chris Meyer
Cust. Elizabeth L. Meyer
1680 Governors Way
Blue Bell, PA 19422 58 7.18%

Capital Appreciation Chicago Trust Co.
Fund Institutional FBO Lincoln National Corp.
Class Empl. Ret. Pln
c/o Marshall & Ilsley Trust Co.
P.O. Box 2977
Milwaukee, WI 53201 235,519 99.99%
</TABLE>

-59-
<PAGE>

DMH Corp., Delvoy, Inc., Delaware Management Company, Inc., Delaware
Distributors, L.P., Delaware Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Delaware International Holdings Ltd.,
Founders Holdings, Inc., Delaware International Advisers Ltd., Delaware Capital
Management, Inc. and Delaware Investment & Retirement Services, Inc. are direct
or indirect, wholly owned subsidiaries of Delaware Management Holdings, Inc.
("DMH"). On April 3, 1995, a merger between DMH and a wholly owned subsidiary of
Lincoln National Corporation ("Lincoln National") was completed. In connection
with the merger, a new Investment Management Agreement between Equity Funds IV,
Inc. and the Manager on behalf of DelCap Fund was executed following shareholder
approval. DMH and the Manager are now indirect, wholly owned subsidiaries, and
subject to the ultimate control, of Lincoln National. Lincoln National, with
headquarters in Fort Wayne, Indiana, is a diversified organization with
operations in many aspects of the financial services industry, including
insurance and investment management.

Directors and principal officers of Equity Funds IV, Inc. are noted below
along with their ages and their business experience for the past five years.
Unless otherwise noted, the address of each officer and director is One Commerce
Square, Philadelphia, PA 19103.

*Wayne A. Stork (60)
Chairman and Director of Equity Funds IV, Inc., each of the other 32 other
investment companies in the Delaware Group and Delaware Capital Management, Inc.
Chairman, President, Chief Executive Officer, Director and/or Trustee of
DMH Corp., Delaware International Holdings Ltd., Delaware Distributors, Inc. and
Founders Holdings, Inc.
Chairman, President, Chief Executive Officer, Chief Investment Officer and
Director of Delaware Management Company, Inc.
Chairman, Chief Executive Officer and Director of Delaware International
Advisers Ltd. and Delaware Management Holdings, Inc.
President and Chief Executive Officer of Delvoy, Inc.
Chairman of Delaware Distributors, L.P.
Director of Delaware Service Company, Inc. and Delaware Investment &
Retirement Services, Inc.
During the past five years, Mr. Stork has served in various executive
capacities at different times within the Delaware organization.

* Jeffrey J. Nick (44)
President, Chief Executive Officer and Director and/or Trustee of Equity
Funds IV, Inc. and each of the other 32 investment companies in the Delaware
Group.
President and Director of Delaware Management Holdings, Inc.
President, Chief Executive Officer and Director of Lincoln National
Investment Companies, Inc.
President of Lincoln Funds Corporation.
From 1992 to 1996, Mr. Nick was Managing Director of Lincoln National UK
plc and from 1989 to 1992, he was Senior Vice President responsible for
corporate planning and development for Lincoln National Corporation.

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

-60-
<PAGE>

*Director affiliated with the Fund's investment manager and considered an
"interested person" as defined in the 1940 Act.

Richard G. Unruh, Jr. (58)
Executive Vice President of Equity Funds IV, Inc., each of the other 32
investment companies in the Delaware Group, Delaware Management
Holdings, Inc. and Delaware Capital Management, Inc.
Executive Vice President and Director of Delaware Management Company, Inc.
Director of Delaware International Advisers Ltd.
During the past five years, Mr. Unruh has served in various executive
capacities at different times within the Delaware organization.

Paul E. Suckow (50)
Executive Vice President/Chief Investment Officer, Fixed Income of Equity
Funds IV, Inc., each of the other 32 investment companies in the
Delaware Group, Delaware Management Company, Inc. and Delaware
Management Holdings, Inc.
Executive Vice President and Director of Founders Holdings, Inc.
Executive Vice President of Delaware Capital Management, Inc.
Director of Founders CBO Corporation.
Director of HYPPCO Finance Company Ltd.
Before returning to the Delaware Group in 1993, Mr. Suckow was Executive
Vice President and Director of Fixed Income for Oppenheimer Management
Corporation, New York, NY from 1985 to 1992. Prior to that, Mr. Suckow
was a fixed-income portfolio manager for the Delaware Group.

Walter P. Babich (70)
Director and/or Trustee of Equity Funds IV, Inc. and each of the other 32
investment companies in the Delaware Group.
460 North Gulph Road, King of Prussia, PA 19406.
Board Chairman, Citadel Constructors, Inc.
From 1986 to 1988, Mr. Babich was a partner of Irwin & Leighton and from
1988 to 1991, he was a partner of I&L Investors.

Anthony D. Knerr (58)
Director and/or Trustee of Equity Funds IV, Inc. and each of the other 32
investment companies in the Delaware Group.
500 Fifth Avenue, New York, NY 10110.
Founder and Managing Director, Anthony Knerr & Associates.
From 1982 to 1988, Mr. Knerr was Executive Vice President/Finance and
Treasurer of Columbia University, New York. From 1987 to 1989, he was
also a lecturer in English at the University. In addition, Mr. Knerr
was Chairman of The Publishing Group, Inc., New York, from 1988 to
1990. Mr. Knerr founded The Publishing Group, Inc. in 1988.

-61-
<PAGE>

Ann R. Leven (57)
Director and/or Trustee of Equity Funds IV, Inc. and each of the other 32
investment companies in the Delaware Group.
785 Park Avenue, New York, NY 10021.
Treasurer, National Gallery of Art.
From 1984 to 1990, Ms. Leven was Treasurer and Chief Fiscal Officer of the
Smithsonian Institution, Washington, DC, and from 1975 to 1992, she
was Adjunct Professor of Columbia Business School.

W. Thacher Longstreth (77)
Director and/or Trustee of Equity Funds IV, Inc. and each of the other 32
investment companies in the Delaware Group.
City Hall, Philadelphia, PA 19107.
Philadelphia City Councilman.

Thomas F. Madison (61)
Director and/or Trustee of Equity Funds IV, Inc. and each of the other 32
investment companies in the Delaware Group.
President and Chief Executive Officer, MLM Partners, Inc.
200 South Fifth Street, Suite 2100, Minneapolis, Minnesota 55402.
Mr. Madison has also been Chairman of the Board of Communications Holdings,
Inc. since 1996. From February to September 1994, Mr. Madison served
as Vice Chairman--Office of the CEO of The Minnesota Mutual Life
Insurance Company and from 1988 to 1993, he was President of U.S. WEST
Communications--Markets.

Charles E. Peck (72)
Director and/or Trustee of Equity Funds IV, Inc. and each of the other 32
investment companies in the Delaware Group.
P.O. Box 1102, Columbia, MD 21044.
Secretary/Treasurer, Enterprise Homes, Inc.
From 1981 to 1990, Mr. Peck was Chairman and Chief Executive Officer of The
Ryland Group, Inc., Columbia, MD.

-62-
<PAGE>

David K. Downes (57)
Executive Vice President/Chief Operating Officer/Chief Financial Officer of
Equity Funds IV, Inc., each of the other 32 investment companies in
the Delaware Group, Delaware Management Holdings, Inc, Founders CBO
Corporation, Delaware Capital Management, Inc. and Delaware
Distributors, L.P.
Executive Vice President, Chief Operating Officer, Chief Financial Officer
and Director of Delaware Management Company, Inc., DMH Corp., Delaware
Distributors, Inc., Founders Holdings, Inc., Delaware International
Holdings Ltd. and Delvoy, Inc.
President/Chief Executive Officer/Chief Financial Officer and Director of
Delaware Service Company, Inc.
Chairman, Chief Executive Officer and Director of Delaware Management Trust
Company and Delaware Investment & Retirement Services, Inc.
Director of Delaware International Advisers Ltd. and Delaware Voyageur
Holding, Inc.
Vice President of Lincoln Funds Corporation
Before joining the Delaware Group in 1992, Mr. Downes was Chief
Administrative Officer, Chief Financial Officer and Treasurer of
Equitable Capital Management Corporation, New York, from December 1985
through August 1992, Executive Vice President from December 1985
through March 1992, and Vice Chairman from March 1992 through August
1992.

George M. Chamberlain, Jr. (50)
Senior Vice President, Secretary and General Counsel of Equity Funds IV,
Inc., each of the other 32 investment companies in the Delaware Group,
Delaware Distributors, L.P. and Delaware Management Holdings, Inc.
Senior Vice President, Secretary, General Counsel and Director of DMH
Corp., Delaware Management Company, Inc., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Founders Holdings, Inc., Delaware
Investment & Retirement Services, Inc., Delaware Capital Management,
Inc. and Delvoy, Inc.
Executive Vice President, Secretary, General Counsel and Director of
Delaware Management Trust Company.
Secretary and Director of Delaware International Holdings Ltd.
Director of Delaware International Advisers Ltd. and Delaware Voyageur
Holding, Inc.
Secretary of Lincoln Funds Corporation Attorney.
During the past five years, Mr. Chamberlain has served in various
capacities at different times within the Delaware organization.

-63-
<PAGE>

Joseph H. Hastings (47)
Senior Vice President/Corporate Controller of Equity Funds IV, Inc., each
of the other 32 investment companies in the Delaware Group and
Founders Holdings, Inc.
Senior Vice President/Corporate Controller and Treasurer of Delaware
Management Holdings, Inc., DMH Corp., Delaware Management Company,
Inc., Delaware Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Capital Management, Inc.,
Delaware International Holdings Ltd. and Delvoy, Inc.
Chief Financial Officer/Treasurer of Delaware Investment & Retirement
Services, Inc.
Executive Vice President/Chief Financial Officer/Treasurer of Delaware
Management Trust Company.
Senior Vice President/Assistant Treasurer of Founders CBO Corporation.
Treasurer of Lincoln Funds Corporation
1818 Market Street, Philadelphia, PA 19103.
Before joining the Delaware Group in 1992, Mr. Hastings was Chief Financial
Officer for Prudential Residential Services, L.P., New York, NY from
1989 to 1992. Prior to that, Mr. Hastings served as Controller and
Treasurer for Fine Homes International, L.P., Stamford, CT from 1987
to 1989.

Michael P. Bishof (35)
Senior Vice President/Treasurer of Equity Funds IV, Inc., each of the other
32 investment companies in the Delaware Group and Founders Holdings,
Inc.
Senior Vice President/Investment Accounting of Delaware Management Company,
Inc. and Delaware Service Company, Inc.
Senior Vice President and Treasurer/Manager of Investment Accounting of
Delaware Distributors, L.P.
Senior Vice President and Manager of Investment Accounting of Delaware
International Holdings Ltd.
Assistant Treasurer of Founders CBO Corporation.
Before joining the Delaware Group in 1995, Mr. Bishof was a Vice President
for Bankers Trust, New York, NY from 1994 to 1995, a Vice President
for CS First Boston Investment Management, New York, NY from 1993 to
1994 and an Assistant Vice President for Equitable Capital Management
Corporation, New York, NY from 1987 to 1993.

Gerald S. Frey (51)
Vice President/Senior Portfolio Manager of Equity Funds IV, Inc., of eight
other investment companies in the Delaware Group and of Delaware
Management Company, Inc.
Before joining the Delaware Group in 1996, Mr. Frey was a Senior Director
with Morgan Grenfell Capital Management, New York, NY from 1986 to
1995.

Robert L. Arnold (33)
Vice President/Portfolio Manager of Equity Funds IV, Inc. and two other
investment companies in the Delaware Group.
Before joining the Delaware Group in 1992, Mr. Arnold was a planning
analyst with Chemical Bank in New York.

-64-
<PAGE>

The following is a compensation table listing for each director entitled to
receive compensation, the aggregate compensation received from the Funds and the
total compensation received from all Delaware Group funds for the fiscal year
ended September 30, 1997 and an estimate of annual benefits to be received upon
retirement under the Delaware Group Retirement Plan for Directors/Trustees as of
September 30, 1997.

Pension or
Retirement
Benefits Total
Aggregate Accrued Compensation
Compensation as Part of Estimated from all 33
from Equity Annual Delaware
Equity Funds IV, Benefits Group
Funds IV, Inc. Upon Investment
Name Inc. Expenses Retirement* Companies
<S> <C> <C> <C> <C>
W. Thacher Longstreth $3,483 None $38,000 $54,848
Ann R. Leven $3,867 None $38,000 $59,807
Walter P. Babich $3,791 None $38,000 $58,807
Anthony D. Knerr $3,791 None $38,000 $58,807
Thomas F. Madison** $1,208 None $38,000 $24,602
Charles E. Peck $3,385 None $38,000 $51,662
</TABLE>

* Under the terms of the Delaware Group Retirement Plan for
Directors/Trustees, each disinterested director who, at the time of his or
her retirement from the Board, has attained the age of 70 and served on the
Board for at least five continuous years, is entitled to receive payments
from each fund in the Delaware Group for a period equal to the lesser of
the number of years that such person served as a director or the remainder
of such person's life. The amount of such payments will be equal, on an
annual basis, to the amount of the annual retainer that is paid to
directors of each fund at the time of such person's retirement. If an
eligible director retired as of September 30, 1997, he or she would be
entitled to annual payments totaling $38,000, in the aggregate, from all of
the funds in the Delaware Group, based on the number of funds in the
Delaware Group as of that date.

** Thomas F. Madison joined Equity Funds IV, Inc.'s Board of Directors on
April 30, 1997.

-65-
<PAGE>

EXCHANGE PRIVILEGE

The exchange privileges available for shareholders of the Classes and for
shareholders of classes of other funds in the Delaware Group are set forth in
the relevant prospectuses for such classes. The following supplements that
information. The Funds may modify, terminate or suspend the exchange privilege
upon 60 days' notice to shareholders.

All exchanges involve a purchase of shares of the fund into which the
exchange is made. As with any purchase, an investor should obtain and carefully
read that fund's prospectus before buying shares in an exchange. The prospectus
contains more complete information about the fund, including charges and
expenses. A shareholder requesting an exchange will be sent a current prospectus
and an authorization form for any of the other mutual funds in the Delaware
Group. Exchange instructions must be signed by the record owner(s) exactly as
the shares are registered.

An exchange constitutes, for tax purposes, the sale of one fund or series
and the purchase of another. The sale may involve either a capital gain or loss
to the shareholder for federal income tax purposes.

In addition, investment advisers and dealers may make exchanges between
funds in the Delaware Group on behalf of their clients by telephone or other
expedited means. This service may be discontinued or revised at any time by the
Transfer Agent. Such exchange requests may be rejected if it is determined that
a particular request or the total requests at any time could have an adverse
effect on any of the funds. Requests for expedited exchanges may be submitted
with a properly completed exchange authorization form, as described above.

Telephone Exchange Privilege

Shareholders owning shares for which certificates have not been issued or
their investment dealers of record may exchange shares by telephone for shares
in other mutual funds in the Delaware Group. This service is automatically
provided unless the relevant Fund receives written notice from the shareholder
to the contrary.

Shareholders or their investment dealers of record may contact the
Shareholder Service Center at 800-523-1918 or, in the case of shareholders of
the Institutional Classes, their Client Services Representative at 800-828-5052,
to effect an exchange. The shareholder's current Fund account number must be
identified, as well as the registration of the account, the share or dollar
amount to be exchanged and the fund into which the exchange is to be made.
Requests received on any day after the time the offering price and net asset
value are determined will be processed the following day. See Determining
Offering Price and Net Asset Value. Any new account established through the
exchange will automatically carry the same registration, shareholder information
and dividend option as the account from which the shares were exchanged. The
exchange requirements of the fund into which the exchange is being made, such as
sales charges, eligibility and investment minimums, must be met. (See the
prospectus of the fund desired or inquire by calling the Transfer Agent or, as
relevant, your Client Services Representative.) Certain funds are not available
for retirement plans.

The telephone exchange privilege is intended as a convenience to
shareholders and is not intended to be a vehicle to speculate on short-term
swings in the securities market through frequent transactions in and out of the
funds in the Delaware Group. Telephone exchanges may be subject to limitations
as to amounts or frequency. The Transfer Agent and the Funds reserve the right
to record exchange instructions received by telephone and to reject exchange
requests at any time in the future.

-66-
<PAGE>

As described in the Funds' Prospectuses, neither the Funds nor the Transfer
Agent is responsible for any shareholder loss incurred in acting upon written or
telephone instructions for redemption or exchange of Fund shares which are
reasonably believed to be genuine.

Right to Refuse Timing Accounts

With regard to accounts that are administered by market timing services
("Timing Firms") to purchase or redeem shares based on changing economic and
market conditions ("Timing Accounts"), the Funds will refuse any new timing
arrangements, as well as any new purchases (as opposed to exchanges) in Delaware
Group funds from Timing Firms. A Fund reserves the right to temporarily or
permanently terminate the exchange privilege or reject any specific purchase
order for any person whose transactions seem to follow a timing pattern who: (i)
makes an exchange request out of the Fund within two weeks of an earlier
exchange request out of the Fund, or (ii) makes more than two exchanges out of
the Fund per calendar quarter, or (iii) exchanges shares equal in value to at
least $5 million, or more than 1/4 of 1% of the Fund's net assets. Accounts
under common ownership or control, including accounts administered so as to
redeem or purchase shares based upon certain predetermined market indicators,
will be aggregated for purposes of the exchange limits.

Restrictions on Timed Exchanges

Timing Accounts operating under existing timing agreements may only execute
exchanges between the following eight Delaware Group funds: (1) Decatur Income
Fund, (2) Decatur Total Return Fund, (3) Delaware Fund, (4) Limited-Term
Government Fund, (5) Tax-Free USA Fund, (6) Delaware Cash Reserve, (7)
Delchester Fund and (8) Tax-Free Pennsylvania Fund. No other Delaware Group
funds are available for timed exchanges. Assets redeemed or exchanged out of
Timing Accounts in Delaware Group funds not listed above may not be reinvested
back into that Timing Account. Each Fund reserves the right to apply these same
restrictions to the account(s) of any person whose transactions seem to follow a
timing pattern (as described above).

Each Fund also reserves the right to refuse the purchase side of an
exchange request by any Timing Account, person, or group if, in the Manager's
judgment, the Fund would be unable to invest effectively in accordance with its
investment objectives and policies, or would otherwise potentially be adversely
affected. A shareholder's purchase exchanges may be restricted or refused if a
Fund receives or anticipates simultaneous orders affecting significant portions
of the Fund's assets. In particular, a pattern of exchanges that coincide with
a "market timing" strategy may be disruptive to a Fund and therefore may be
refused.

Except as noted above, only shareholders and their authorized brokers of
record will be permitted to make exchanges or redemptions.

* * *

Following is a summary of the investment objectives of the other Delaware
Group funds:

Delaware Fund seeks long-term growth by a balance of capital appreciation,
income and preservation of capital. It uses a dividend-oriented valuation
strategy to select securities issued by established companies that are believed
to demonstrate potential for income and capital growth. Devon Fund seeks
current income and capital appreciation by investing primarily in income-
producing common stocks, with a focus on common stocks the Manager believes have
the potential for above average dividend increases over time.

Trend Fund seeks long-term growth by investing in common stocks issued by
emerging growth companies exhibiting strong capital appreciation potential.

-67-
<PAGE>

Small Cap Value Fund seeks capital appreciation by investing primarily in
common stocks whose market values appear low relative to their underlying value
or future potential.

Decatur Income Fund seeks the highest possible current income by investing
primarily in common stocks that provide the potential for income and capital
appreciation without undue risk to principal. Decatur Total Return Fund seeks
long-term growth by investing primarily in securities that provide the potential
for income and capital appreciation without undue risk to principal. Blue Chip
Fund seeks to achieve long-term capital appreciation. Current income is a
secondary objective. It seeks to achieve these objectives by investing
primarily in equity securities and any securities that are convertible into
equity securities. Quantum Fund seeks to achieve long-term capital
appreciation. It seeks to achieve this objective by investing primarily in
equity securities of medium- to large-sized companies expected to grow over time
that meet the Fund's "Social Criteria" strategy.

Delchester Fund seeks as high a current income as possible by investing
principally in high yield, high risk corporate bonds, and also in U.S.
government securities and commercial paper. Strategic Income Fund seeks to
provide investors with high current income and total return by using a multi-
sector investment approach, investing principally in three sectors of the fixed-
income securities markets: high yield, higher risk securities, investment grade
fixed-income securities and foreign government and other foreign fixed-income
securities.

U.S. Government Fund seeks high current income by investing primarily in
long-term debt obligations issued or guaranteed by the U.S. government, its
agencies or instrumentalities.

Limited-Term Government Fund seeks high, stable income by investing
primarily in a portfolio of short- and intermediate-term securities issued or
guaranteed by the U.S. government, its agencies or instrumentalities and
instruments secured by such securities. U.S. Government Money Fund seeks
maximum current income with preservation of principal and maintenance of
liquidity by investing only in short-term securities issued or guaranteed as to
principal and interest by the U.S. government, its agencies or
instrumentalities, and repurchase agreements collateralized by such securities,
while maintaining a stable net asset value.

Delaware Cash Reserve seeks the highest level of income consistent with the
preservation of capital and liquidity through investments in short-term money
market instruments, while maintaining a stable net asset value.

REIT Fund seeks to achieve maximum long-term total return with capital
appreciation as a secondary objective. It seeks to achieve its objectives by
investing in securities of companies primarily engaged in the real estate
industry.

Tax-Free USA Fund seeks high current income exempt from federal income tax
by investing in municipal bonds of geographically-diverse issuers. Tax-Free
Insured Fund invests in these same types of securities but with an emphasis on
municipal bonds protected by insurance guaranteeing principal and interest are
paid when due. Tax-Free USA Intermediate Fund seeks a high level of current
interest income exempt from federal income tax, consistent with the preservation
of capital by investing primarily in municipal bonds.

Tax-Free Money Fund seeks high current income, exempt from federal income
tax, by investing in short-term municipal obligations, while maintaining a
stable net asset value.

-68-
<PAGE>

Tax-Free New Jersey Fund seeks a high level of current interest income
exempt from federal income tax and New Jersey state and local taxes, consistent
with preservation of capital. Tax-Free Ohio Fund seeks a high level of current
interest income exempt from federal income tax and Ohio state and local taxes,
consistent with preservation of capital. Tax-Free Pennsylvania Fund seeks a
high level of current interest income exempt from federal income tax and
Pennsylvania state and local taxes, consistent with the preservation of capital.

International Equity Fund seeks to achieve long-term growth without undue
risk to principal by investing primarily in international securities that
provide the potential for capital appreciation and income. Global Bond Fund
seeks to achieve current income consistent with the preservation of principal by
investing primarily in global fixed-income securities that may also provide the
potential for capital appreciation. Global Assets Fund seeks to achieve long-
term total return by investing in global securities which will provide higher
current income than a portfolio comprised exclusively of equity securities,
along with the potential for capital growth. Emerging Markets Fund seeks long-
term capital appreciation by investing primarily in equity securities of issuers
located or operating in emerging countries.

U.S. Growth Fund seeks to maximize capital appreciation by investing in
companies of all sizes which have low dividend yields, strong balance sheets and
high expected earnings growth rates relative to their industry. Overseas Equity
Fund seeks to maximize total return (capital appreciation and income),
principally through investments in an internationally diversified portfolio of
equity securities. New Pacific Fund seeks long-term capital appreciation by
investing primarily in companies which are domiciled in or have their principal
business activities in the Pacific Basin.

Delaware Group Premium Fund, Inc. offers 15 funds available exclusively as
funding vehicles for certain insurance company separate accounts. Decatur
Total Return Series seeks the highest possible total rate of return by selecting
issues that exhibit the potential for capital appreciation while providing
higher than average dividend income. Delchester Series seeks as high a current
income as possible by investing in rated and unrated corporate bonds, U.S.
government securities and commercial paper. Capital Reserves Series seeks a
high stable level of current income while minimizing fluctuations in principal
by investing in a diversified portfolio of short- and intermediate-term
securities. Cash Reserve Series seeks the highest level of income consistent
with preservation of capital and liquidity through investments in short-term
money market instruments. DelCap Series seeks long-term capital appreciation by
investing its assets in a diversified portfolio of securities exhibiting the
potential for significant growth. Delaware Series seeks a balance of capital
appreciation, income and preservation of capital. It uses a dividend-oriented
valuation strategy to select securities issued by established companies that are
believed to demonstrate potential for income and capital growth. International
Equity Series seeks long-term growth without undue risk to principal by
investing primarily in equity securities of foreign issuers that provide the
potential for capital appreciation and income. Value Series seeks capital
appreciation by investing in small- to mid-cap common stocks whose market values
appear low relative to their underlying value or future earnings and growth
potential. Emphasis will also be placed on securities of companies that may be
temporarily out of favor or whose value is not yet recognized by the market.
Trend Series seeks long-term capital appreciation by investing primarily in
small-cap common stocks and convertible securities of emerging and other growth-
oriented companies. These securities will have been judged to be responsive to
changes in the market place and to have fundamental characteristics to support
growth. Income is not an objective. Global Bond Series seeks to achieve
current income consistent with the preservation of principal by investing
primarily in global fixed-income securities that may also provide the potential
for capital appreciation. Strategic Income Series seeks high current income
and total return by using a multi-sector investment approach, investing
primarily in three sectors of the fixed-income

-69-
<PAGE>

securities markets: high-yield, higher risk securities; investment grade fixed-
income securities; and foreign government and other foreign fixed-income
securities. Devon Series seeks current income and capital appreciation by
investing primarily in income-producing common stocks, with a focus on common
stocks that the investment manager believes have the potential for above-average
dividend increases over time. Emerging Markets Series seeks to achieve long-term
capital appreciation by investing primarily in equity securities of issuers
located or operating in emerging countries. Convertible Securities Series seeks
a high level of total return on its assets through a combination of capital
appreciation and current income by investing primarily in convertible
securities. Quantum Series seeks to achieve long-term capital appreciation by
investing primarily in equity securities of medium to large-sized companies
expected to grow over time that meet the Series' "Social Criteria"
strategy.

Delaware-Voyageur US Government Securities Fund seeks to provide a high
level of current income consistent with the prudent investment risk by investing
in U.S. Treasury bills, notes, bonds, and other obligations issued or
unconditionally guaranteed by the full faith and credit of the U.S. Treasury,
and repurchase agreements fully secured by such obligations.

Delaware-Voyageur Tax-Free Arizona Insured Fund seeks to provide a high
level of current income exempt from federal income tax and the Arizona personal
income tax, consistent with the preservation of capital. Delaware-Voyageur
Minnesota Insured Fund seeks to provide a high level of current income exempt
from federal income tax and the Minnesota personal income tax, consistent with
the preservation of capital.

Delaware-Voyageur Tax-Free Minnesota Intermediate Fund seeks to provide a
high level of current income exempt from federal income tax and the Minnesota
personal income tax, consistent with preservation of capital. The Fund seeks to
reduce market risk by maintaining an average weighted maturity from five to ten
years.

Delaware-Voyageur Tax-Free California Insured Fund seeks to provide a high
level of current income exempt from federal income tax and the California
personal income tax, consistent with the preservation of capital. Delaware-
Voyageur Tax-Free Florida Insured Fund seeks to provide a high level of current
income exempt from federal income tax, consistent with the preservation of
capital. The Fund will seek to select investments that will enable its shares
to be exempt from the Florida intangible personal property tax. Delaware-
Voyageur Tax-Free Florida Fund seeks to provide a high level of current income
exempt from federal income tax, consistent with the preservation of capital.
The Fund will seek to select investments that will enable its shares to be
exempt from the Florida intangible personal property tax. Delaware-Voyageur
Tax-Free Kansas Fund seeks to provide a high level of current income exempt from
federal income tax, the Kansas personal income tax and the Kansas Intangible
personal property tax, consistent with the preservation of capital. Delaware-
Voyageur Tax-Free Missouri Insured Fund seeks to provide a high level of current
income exempt from federal income tax and the Missouri personal income tax,
consistent with the preservation of capital. Delaware-Voyageur Tax-Free New
Mexico Fund seeks to provide a high level of current income exempt from federal
income tax and the New Mexico personal income tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Oregon Insured Fund seeks
to provide a high level of current income exempt from federal income tax and the
Oregon personal income tax, consistent with the preservation of capital.
Delaware-Voyageur Tax-Free Utah Fund seeks to provide a high level of current
income exempt from federal income tax, consistent with the preservation of
capital. Delaware-Voyageur Tax-Free Washington Insured Fund seeks to provide a
high level of current income exempt from federal income tax, consistent with the
preservation of capital.

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<PAGE>

Delaware-Voyageur Tax-Free Florida Intermediate Fund seeks to provide a
high level of current income exempt from federal income tax, consistent with the
preservation of capital. The Fund will seek to select investments that will
enable its shares to be exempt from the Florida intangible personal property
tax. The Fund seeks to reduce market risk by maintaining an average weighted
maturity from five to ten years.

Delaware-Voyageur Tax-Free Arizona Fund seeks to provide a high level of
current income exempt from federal income tax and the Arizona personal income
tax, consistent with the preservation of capital. Delaware-Voyageur Tax-Free
California Fund seeks to provide a high level of current income exempt from
federal income tax and the California personal income tax, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Iowa Fund seeks to provide a
high level of current income exempt from federal income tax and the Iowa
personal income tax, consistent with the preservation of capital. Delaware-
Voyageur Tax-Free Idaho Fund seeks to provide a high level of current income
exempt from federal income tax and the Idaho personal income tax, consistent
with the preservation of capital. Delaware-Voyageur Minnesota High Yield
Municipal Bond Fund seeks to provide a high level of current income exempt from
federal income tax and the Minnesota personal income tax primarily through
investment in medium and lower grade municipal obligations. National High Yield
Municipal Fund seeks to provide a high level of income exempt from federal
income tax, primarily through investment in medium and lower grade municipal
obligations. Delaware-Voyageur Tax-Free New York Fund seeks to provide a high
level of current income exempt from federal income tax and the personal income
tax of the state of New York and the city of New York, consistent with the
preservation of capital. Delaware-Voyageur Tax-Free Wisconsin Fund seeks to
provide a high level of current income exempt from federal income tax and the
Wisconsin personal income tax, consistent with the preservation of capital.

Delaware-Voyageur Tax-Free Colorado Fund seeks to provide a high level of
current income exempt from federal income tax and the Colorado personal income
tax, consistent with the preservation of capital.

Aggressive Growth Fund seeks long-term capital appreciation, which the Fund
attempts to achieve by investing primarily in equity securities believed to have
the potential for high earnings growth. Although the Fund, in seeking its
objective, may receive current income from dividends and interest, income is
only an incidental consideration in the selection of the Fund's investments.
Growth Stock Fund has an objective of long-term capital appreciation. The Fund
seeks to achieve its objective from equity securities diversified among
individual companies and industries. Tax-Efficient Equity Fund seeks to obtain
for taxable investors a high total return on an after-tax basis. The Fund will
attempt to achieve this objective by seeking to provide a high long-term after-
tax total return through managing its portfolio in a manner that will defer the
realization of accrued capital gains and minimize dividend income.

Delaware-Voyageur Tax-Free Minnesota Fund seeks to provide a high level of
current income exempt from federal income tax and the Minnesota personal income
tax, consistent with the preservation of capital. Delaware-Voyageur Tax-Free
North Dakota Fund seeks to provide a high level of current income exempt from
federal income tax and the North Dakota personal income tax, consistent with the
preservation of capital.

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<PAGE>

For more complete information about any of the Delaware Group funds,
including charges and expenses, you can obtain a prospectus from the
Distributor. Read it carefully before you invest or forward funds.

Each of the summaries above is qualified in its entirety by the information
contained in each fund's prospectus(es).

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<PAGE>

GENERAL INFORMATION

The Manager is the investment manager of the Funds. The Manager also
provides investment management services to certain of the other funds in the
Delaware Group. The Manager, through a separate division, also manages private
investment accounts. While investment decisions of the Funds are made
independently from those of the other funds and accounts, investment decisions
for such other funds and accounts may be made at the same time as investment
decisions for the Funds.

The Manager, or its affiliate Delaware International Advisers Ltd., also
manages the investment options for Delaware Medallion[SM] III Variable Annuity.
Medallion is issued by Allmerica Financial Life Insurance and Annuity Company
(First Allmerica Financial Life Insurance Company in New York and Hawaii.)
Delaware Medallion offers 15 different investment series ranging from domestic
equity funds, international equity and bond funds and domestic fixed income
funds. Each investment series available through Medallion utilizes an
investment strategy and discipline the same as or similar to one of the Delaware
Group mutual funds available outside the annuity.

Access persons and advisory persons of the Delaware Group of funds, as
those terms are defined in SEC Rule 17j-1 under the 1940 Act, who provide
services to the Manager, Delaware International Advisers Ltd. or their
affiliates, are permitted to engage in personal securities transactions subject
to the exceptions set forth in Rule 17j-1 and the following general restrictions
and procedures: (1) certain blackout periods apply to personal securities
transactions of those persons; (2) transactions must receive advance clearance
and must be completed on the same day as the clearance is received; (3) certain
persons are prohibited from investing in initial public offerings of securities
and other restrictions apply to investments in private placements of securities;
(4) opening positions may only be closed-out at a profit after a 60-day holding
period has elapsed; and (5) the Compliance Officer must be informed periodically
of all securities transactions and duplicate copies of brokerage confirmations
and account statements must be supplied to the Compliance Officer.

The Distributor acts as national distributor for each Fund and for the
other mutual funds in the Delaware Group. As previously described, prior to
January 3, 1995, DDI served as the national distributor for DelCap Fund. The
Distributor ("DDLP") (for all periods beginning January 3, 1995) and, in its
capacity as such, DDI (prior to January 3, 1995, with respect for DelCap Fund
only) received net commissions from DelCap Fund and Capital Appreciation Fund on
behalf of Class A Shares after reallowances to dealers, as follows:

DelCap Fund
Total
Amount of Amounts Net
Underwriting Reallowed Commission
Fiscal Year Ended Commission to Dealers to DDLP/DDI
----------------- ------------ ---------- -----------
<S> <C> <C> <C>

September 30, 1997 $1,003,867 $837,830 $166,037
September 30, 1996 $1,380,612 $1,161,576 $219,036
September 30, 1995 1,360,871 1,180,982 179,889
</TABLE>

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<PAGE>

<TABLE>
<CAPTION>
Capital Appreciation Fund

Total
Amount of Amounts Net
Underwriting Reallowed Commission
Fiscal Year Ended Commission to Dealers to DDLP
- ----------------- ---------- ---------- ----------
<S> <C> <C> <C>
September 30, 1997* $-0- $-0- $-0-
</TABLE>

* Commenced operations on December 2, 1997.

The Distributor and, in its capacity as such with respect for DelCap Fund
only, DDI received in the aggregate Limited CDSC payments with respect to DelCap
Fund and Capital Appreciation Fund A Class as follows:

Fiscal Year Ended Limited CDSC Payments
---------------------------------------
<TABLE>
<CAPTION>
Del Cap Fund Capital Appreciation Fund
------------ -------------------------
<S> <C> <C>
September 30, 1997 $2,088 $0*
September 30, 1996 $374 N/A
September 30, 1995 14,860 N/A
</TABLE>

* Commenced operations on December 2, 1997.

The Distributor and, in its capacity as such, DDI received in the aggregate
CDSC payments with respect to DelCap Fund B Class as follows:

<TABLE>
<CAPTION>
Fiscal Year Ended CDSC Payments
----------------- -------------
<S> <C>
September 30, 1997 $57,254
September 30, 1996 $13,677
September 30, 1995 1,900
</TABLE>

The Distributor received CDSC payments with respect to the DelCap Fund C
Class as follows:

Fiscal Year Ended CDSC Payments
----------------- -------------
<S> <C>
September 30, 1997 $1,715
September 30, 1996* $207
</TABLE>

*Date of initial public offering was November 29, 1995.

Effective as of January 3, 1995, all such payments described above have
been paid to the Distributor.

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<PAGE>

The Transfer Agent, an affiliate of the Manager, acts as shareholder
servicing, dividend disbursing and transfer agent for each Fund and for the
other mutual funds in the Delaware Group. The Transfer Agent is paid a fee by
each Fund for providing these services consisting of an annual per account
charge of $5.50 plus transaction charges for particular services according to a
schedule. Compensation is fixed each year and approved by the Board of
Directors, including a majority of the unaffiliated directors. The Transfer
Agent also provides accounting services to the Funds. Those services include
performing all functions related to calculating each Fund's net asset value and
providing all financial reporting services, regulatory compliance testing and
other related accounting services. For its services, the Transfer Agent is paid
a fee based on total assets of all funds in the Delaware Group for which it
provides such accounting services. Such fee is equal to 0.25% multiplied by the
total amount of assets in the complex for which the Transfer Agent furnishes
accounting services, where such aggregate complex assets are $10 billion or
less, and 0.20% of assets if such aggregate complex assets exceed $10 billion.
The fees are charged to each fund, including the Funds, on an aggregate pro-rata
basis. The asset-based fee payable to the Transfer Agent is subject to a minimum
fee calculated by determining the total number of investment portfolios and
associated classes.

The Manager and its affiliates own the name "Delaware Group." Under
certain circumstances, including the termination of the Funds' advisory
relationship with the Manager or their distribution relationship with the
Distributor, the Manager and its affiliates could cause Equity Funds IV, Inc. to
delete the words "Delaware Group" from Equity Funds IV, Inc.'s name.

The Chase Manhattan Bank ("Chase"), 4 Chase Metrotech Center, Brooklyn, NY
11245, is custodian of each Fund's securities and cash. As custodian for a
Fund, Chase maintains a separate account or accounts for the Fund; receives,
holds and releases portfolio securities on account of the Fund; receives and
disburses money on behalf of the Fund; and collects and receives income and
other payments and distributions on account of the Fund's portfolio securities.

Capitalization

Equity Funds IV, Inc. has a present authorized capitalization of one
billion shares of capital stock with a $.01 par value per share. The Board of
Directors has allocated one hundred fifty million shares to the Class A Shares,
one hundred million shares to the Class B Shares, fifty million shares to the
Class C Shares and fifty million shares to the Institutional Class of DelCap
Fund and one hundred million shares to the Class A Shares, twenty-five million
shares to the Class B Shares, twenty-five million shares to the Class C Shares
and fifty million shares to the Institutional Class of Capital Appreciation
Fund.

Each Class of a Fund represents a proportionate interest in the assets of
that Fund, and each has the same voting and other rights and preferences as the
other classes, except that shares of an Institutional Class may not vote on any
matter affecting the Fund's Plans under Rule 12b-1. Similarly, as a general
matter, shareholders of Class A Shares, Class B Shares and Class C Shares of a
Fund may vote only on matters affecting the 12b-1 Plan that relates to the class
of shares that they hold. However, Class B Shares of a Fund may vote on any
proposal to increase materially the fees to be paid by the Fund under the Rule
12b-1 Plan relating to its Class A Shares. General expenses of a Fund will be
allocated on a pro-rata basis to the classes according to asset size, except
that expenses of the Rule 12b-1 Plans of each Fund's Class A, Class B and Class
C Shares will be allocated solely to those classes. While shares of Equity
Funds IV, Inc. have equal voting rights on matters affecting both Funds, a Fund
would vote separately on any matter which it is directly affected by, such as
any change in its own investment objective and policy or action to dissolve the
Fund and as otherwise prescribed by the 1940 Act. Shares of a Fund have a
priority in that Fund's assets, and in gains on

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<PAGE>

and income from the portfolio of the Fund. Shares do not have preemptive rights,
are fully transferable and, when issued, are fully paid and nonassessable.

Beginning November 9, 1992, DelCap Fund began offering DelCap Fund
Institutional Class; beginning September 6, 1994, DelCap Fund began offering the
Class B Shares; and beginning November 29, 1995, DelCap Fund began offering
DelCap Fund C Class.

Prior to September 6, 1994, the DelCap Fund A Class was known as the DelCap
Fund class and the DelCap Fund Institutional Class was known as the DelCap Fund
(Institutional) class. Prior to November 29, 1996, Delaware Group Equity Funds
IV, Inc. was known as Delaware Group DelCap Fund, Inc. and DelCap Fund series
was known as Concept I Series.

Noncumulative Voting

Equity Funds IV, Inc. shares have noncumulative voting rights which means
that the holders of more than 50% of the shares of Equity Funds IV, Inc. voting
for the election of directors can elect all the directors if they choose to do
so, and, in such event, the holders of the remaining shares will not be able to
elect any directors.

This Part B does not include all of the information contained in the
Registration Statement which is on file with the Securities and Exchange
Commission.

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<PAGE>

FINANCIAL STATEMENTS

Ernst & Young LLP serves as the independent auditors for Delaware Group
Equity Funds IV, Inc. (previously known as Delaware Group DelCap Fund, Inc.)
and, in its capacity as such, audits the financial statements contained in the
Annual Reports. Each Fund's Statement of Net Assets, Statement of Operations,
Statement of Changes in Net Assets, Financial Highlights and Notes to Financial
Statements, as well as the report of Ernst & Young LLP, independent auditors,
for the fiscal year ended September 30, 1997 are included in each Fund's Annual
Report to shareholders. The financial statements, the notes relating thereto,
the financial highlights and the reports of Ernst & Young LLP, listed above are
incorporated by reference from the Annual Reports into this Part B.

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<PAGE>

APPENDIX A--DESCRIPTION OF RATINGS

Bonds

Excerpts from Moody's Investors Service, Inc.'s description of its bond
ratings: Aaa--judged to be the best quality. They carry the smallest degree of
investment risk; Aa--judged to be of high quality by all standards; A--possess
favorable attributes and are considered "upper medium" grade obligations; Baa--
considered as medium grade obligations. Interest payments and principal security
appear adequate for the present but certain protective elements may be lacking
or may be characteristically unreliable over any great length of time.

Excerpts from Standard & Poor's Ratings Group's description of its bond
ratings: AAA--highest grade obligations. They possess the ultimate degree of
protection as to principal and interest; AA--also qualify as high grade
obligations, and in the majority of instances differ from AAA issues only in a
small degree; A--strong ability to pay interest and repay principal although
more susceptible to changes in circumstances; BBB--regarded as having an
adequate capacity to pay interest and repay principal.

Excerpts from Fitch Investors Service, Inc.'s description of its bond ratings:

AAA--Bonds considered to be investment grade and of the highest credit
quality. The obligor has an exceptionally strong ability to pay interest and
repay principal, which is unlikely to be affected by reasonably foreseeable
events; AA--Bonds considered to be investment grade and of very high credit
quality. The obligor's ability to pay interest and repay principal is very
strong, although not quite as strong as bonds rated AAA. Because bonds rated in
the AAA and AA categories are not significantly vulnerable to foreseeable future
developments, short-term debt of these issuers is generally rated F-1+; A--Bonds
considered to be investment grade and of high credit quality. The obligor's
ability to pay interest and repay principal is considered to be strong, but may
be more vulnerable to adverse changes in economic conditions and circumstances
that bonds with higher ratings; BBB--Bonds considered to be investment grade and
of satisfactory credit quality. The obligor's ability to pay interest and repay
principal is considered to be adequate. Adverse changes in economic conditions
and circumstances, however, are more likely to have adverse impact on these
bonds, and therefore impair timely payment. The likelihood that the ratings of
these bonds will fall below investment grade is higher than for bonds with
higher ratings.

Plus and minus signs are used with a rating symbol to indicate the relative
position of a credit within the rating category. Plus and minus signs, however,
are not used in the "AAA" category.

Commercial Paper

Excerpts from Moody's description of its two highest commercial paper
ratings: P-1--the highest grade possessing greatest relative strength;
P-2--second highest grade possessing less relative strength than the highest
grade.

Excerpts from S&P's description of its two highest commercial paper
ratings: A-1--judged to be the highest investment grade category possessing the
highest relative strength; A-2--investment grade category possessing less
relative strength than the highest rating.

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<PAGE>

APPENDIX B--IRA INFORMATION

An individual can contribute up to $2,000 to his or her IRA each year.
Contributions may or may not be deductible depending upon the taxpayers adjusted
gross income and whether the taxpayer or his or her spouse is an active
participant in an employer-sponsored retirement plan. Even if a taxpayer (or his
or her spouse) is an active participant in an employer-sponsored retirement
plan, the full $2,000 deduction is still available if the taxpayer's adjusted
gross income is below $25,000 ($40,000 for taxpayers filing joint returns). A
partial deduction is allowed for married couples with incomes between $40,000
and $50,000, and for single individuals with incomes between $25,000 and
$35,000. No deductions are available for contributions to IRAs by taxpayers
whose adjusted gross income before IRA deductions exceeds $50,000 ($35,000 for
singles) and who are active participants in an employer-sponsored retirement
plan. Taxpayers who were not allowed deductions on IRA contributions still can
make nondeductible IRA contributions of as much as $2,000 for each working
spouse ($2,250 for one-income couples for years prior to 1997), and defer taxes
on interest or other earnings from the IRAs. Special rules apply for determining
the deductibility of contributions made by married individuals filing separate
returns.

Effective for tax years beginning after 1996, one-income couples can contribute
up to $2,000 to each spouse's IRA provided the combined compensation of both
spouses is at least equal to the total contributions for both spouses. If the
working spouse is an active participant in an employer-sponsored retirement plan
and earns over $40,000, the maximum deduction limit is reduced in the same way
that the limit is reduced for contributions to a non-spousal IRA.

As illustrated in the following tables, maintaining an IRA remains a valuable
opportunity.

For many, an IRA will continue to offer both an up-front tax break with its tax
deduction each year and the real benefit that comes with tax-deferred
compounding. For others, losing the tax deduction will impact their taxable
income status each year. Over the long term, however, being able to defer taxes
on earnings still provides an impressive investment opportunity--a way to have
money grow faster due to tax-deferred compounding.

Even if your IRA contribution is no longer deductible, the benefits of saving on
a tax-deferred basis can be substantial. The following tables illustrate the
benefits of tax-deferred versus taxable compounding. Each reflects a constant
10% rate of return, compounded annually, with the reinvestment of all proceeds.
The tables do not take into account any sales charges or fees. Of course,
earnings accumulated in your IRA will be subject to tax upon withdrawal. If you
choose a mutual fund with a fluctuating net asset value, your bottom line at
retirement could be lower or it could be much higher.

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<PAGE>

$2,000 Invested Annually Assuming a 10% Annualized Return

<TABLE>
<S> <C>
15% Tax Bracket Single - $0-$24,650
--------------- Joint - $0-$41,200
</TABLE>

<TABLE>
<CAPTION>
How Much You
End of Cumulative How Much You Have With Full
Year Investment Amount Have Without IRA IRA Deduction
<S> <C> <C> <C>
1 $ 2,000 $ 1,844 $ 2,200
5 10,000 10,929 13,431
10 20,000 27,363 35,062
15 30,000 52,074 69,899
20 40,000 89,231 126,005
25 50,000 145,103 216,364
30 60,000 229,114 361,887
35 70,000 355,438 596,254
40 80,000 545,386 973,704
</TABLE>

[Without IRA--investment of $1,700 ($2,000 less 15%) earning 8.5% (10% less
15%)]

<TABLE>
<S> <C>
28% Tax Bracket Single - $24,651-$59,750
--------------- Joint - $41,201-$99,600
</TABLE>

<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,544 $ 1,584 $ 2,200
5 10,000 8,913 9,670 13,431
10 20,000 21,531 25,245 35,062
15 30,000 39,394 50,328 69,899
20 40,000 64,683 90,724 126,005
25 50,000 100,485 155,782 216,364
30 60,000 151,171 260,559 361,887
35 70,000 222,927 429,303 596,254
40 80,000 324,512 701,067 973,704
</TABLE>

[Without IRA--investment of $1,440 ($2,000 less 28%) earning 7.2% (10% less
28%)]
[With IRA--No Deduction--investment of $1,440 ($2,000 less 28%) earning 10%]

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<PAGE>

<TABLE>
<S> <C>
31% Tax Bracket Single - $ 59,751-$124,650
--------------- Joint - $ 99,601-$151,750
</TABLE>

<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,475 $ 1,518 $ 2,200
5 10,000 8,467 9,268 13,431
10 20,000 20,286 24,193 35,062
15 30,000 36,787 48,231 69,899
20 40,000 59,821 86,943 126,005
25 50,000 91,978 149,291 216,364
30 60,000 136,868 249,702 361,887
35 70,000 199,536 411,415 596,254
40 80,000 287,021 671,855 973,704
</TABLE>

[Without IRA--investment of $1,380 ($2,000 less 31%) earning 6.9% (10% less
31%)]
[With IRA--No Deduction--investment of $1,380 ($2,000 less 31%) earning 10%]

<TABLE>
<S> <C>
36% Tax Bracket* Single - $124,651-$271,050
--------------- Joint - $151,751-$271,050
</TABLE>

<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,362 $ 1,408 $ 2,200
5 10,000 7,739 8,596 13,431
10 20,000 18,292 22,440 35,062
15 30,000 32,683 44,736 69,899
20 40,000 52,308 80,643 126,005
25 50,000 79,069 138,473 216,364
30 60,000 115,562 231,608 361,887
35 70,000 165,327 381,602 596,254
40 80,000 233,190 623,170 973,704
</TABLE>

[Without IRA--investment of $1,280 ($2,000 less 36%) earning 6.4% (10% less
36%)]
[With IRA--No Deduction--investment of $1,280 ($2,000 less 36%) earning 10%]

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<PAGE>

<TABLE>
<S> <C>
39.6% Tax Bracket* Single - over $271,050
- ------------------ Joint - over $271,050
</TABLE>

<TABLE>
<CAPTION>
End of Cumulative How Much You How Much You Have with Full IRA
Year Investment Amount Have Without IRA No Deduction Deduction
<S> <C> <C> <C> <C>
1 $ 2,000 $ 1,281 $ 1,329 $ 2,200
5 10,000 7,227 8,112 13,431
10 20,000 16,916 21,178 35,062
15 30,000 29,907 42,219 69,899
20 40,000 47,324 76,107 126,005
25 50,000 70,677 130,684 216,364
30 60,000 101,986 218,580 361,887
35 70,000 143,965 360,137 596,254
40 80,000 200,249 588,117 973,704
</TABLE>

[Without IRA--investment of $1,208 ($2,000 less 39.6%) earning 6.04% (10% less
39.6%)]
[With IRA--No Deduction--investment of $1,208 ($2,000 less 39.6%) earning 10%]

*
For tax years beginning after 1992, a 36% tax rate applies to all taxable income
in excess of the maximum dollar amounts subject to the 31% tax rate. In
addition, a 10% surtax (not applicable to capital gains) applies to certain
high-income taxpayers. It is computed by applying a 39.6% rate to taxable income
in excess of $271,050. The above tables do not reflect the personal exemption
phaseout nor the limitations of itemized deductions that may apply.

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<PAGE>

THE VALUE OF STARTING YOUR IRA EARLY

The following illustrates how much more you would have contributing $2,000
each January--the earliest opportunity--compared to contributing on April 15th
of the following year--the latest opportunity, for each tax year.

<TABLE>
<S> <C>
After 5 years $ 3,528 more
10 years $ 6,113
20 years $17,228
30 years $47,295
</TABLE>

Compounded returns for the longest period of time is the key. The above
illustration assumes a 10% rate of return and the reinvestment of all proceeds.

THE POWER OF TAX-DEFERRED COMPOUNDING

Over time, tax-deferred investing has the potential to double your
investment earnings. The following examples are based on a $2000 invested on
January 1 each year and assumes an 8% fixed rate of return, with no fluctuation
in the value of principal. The figures do not reflect the impact of any fees or
sales charges. These figures are for illustration only and are not intended to
represent any future investment results.

<TABLE>
<CAPTION>
Accumulated Value
Over 10 years Tax Bracket
<S> <C>
$26, 403 39.6%
$26,881 36%
$27,516 31%
$27,905 28%
$31,828 Tax-deferred

Over 20 years
$69,544 39.6%
$71, 986 36%
$75,540 31%
$77,767 28%
$102,476 Tax-deferred

Over 40 years
$254,528 39.6%
$274,662 36%
$305,626 31%
$326,046 28%
$607,355 Tax-deferred
</TABLE>

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<PAGE>

APPENDIX C--THE COMPANY LIFE CYCLE

Traditional business theory contends that a typical company progresses
through basically four stages of development, keyed closely to a firm's sales.

1. Emerging Growth--a period of experimentation in which the company
builds awareness of a new product or firm.

2. Accelerated Development--a period of rapid growth with potentially
high profitability and acceptance of the product.

3. Maturing Phase--a period of diminished real growth due to dependence
on replacement or sustained product demand.

4. Cyclical Stage--a period in which a company faces a potential
saturation of demand for its product. At this point, a firm either diversifies
or becomes obsolete.

DelCap Fund concentrates on seeking and actively managing the potentials
held by firms entering phase 2 of this development cycle. The following
illustration of a firm's hypothetical development is intended to graphically
depict the full development cycle.

Hypothetical Corporate Life Cycle

[Chart appears here]

Hypothetical Corporate Life Cycle Chart shows in a line illustration, the stages
that a typical company would go through, beginning with the emerging state where
sales growth continues at a steep pace to the mature phase where growth levels
off to the cyclical stage where sales show more definitive highs and lows.

The above chart illustrates the path traditionally followed by companies
that successfully survive the growth sequence.

-84-
<PAGE>

The Delaware Group includes funds with a wide range of investment
objectives. Stock funds, income funds, national and state-specific tax-exempt
funds, money market funds, global and international funds and closed-end funds
give investors the ability to create a portfolio that fits their personal
financial goals. For more information, shareholders of the Fund Classes should
contact their financial adviser or call Delaware Group at 800-523-4640, and
shareholders of the Institutional Classes should contact Delaware Group at
800-828-5052.

INVESTMENT MANAGER
Delaware Management Company, Inc.
One Commerce Square
Philadelphia, PA 19103

NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
1818 Market Street
Philadelphia, PA 19103

SHAREHOLDER SERVICING,
DIVIDEND DISBURSING,
ACCOUNTING SERVICES
AND TRANSFER AGENT
Delaware Service Company, Inc.
1818 Market Street
Philadelphia, PA 19103

LEGAL COUNSEL
Stradley, Ronon, Stevens & Young, LLP
One Commerce Square
Philadelphia, PA 19103

INDEPENDENT AUDITORS
Ernst & Young LLP
Two Commerce Square
Philadelphia, PA 19103

CUSTODIAN
The Chase Manhattan Bank
4 Chase Metrotech Center
Brooklyn, NY 11245

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

DELAWARE GROUP EQUITY FUNDS IV, INC.
(formerly Delaware Group DelCap Fund, Inc.)

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

DELCAP FUND

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

CAPITAL APPRECIATION FUND

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

PART B

STATEMENT OF
ADDITIONAL INFORMATION

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

DECEMBER 1, 1997

DELAWARE
GROUP
--------
<PAGE>

PART C
------

Other Information
-----------------

Item 24. Financial Statements and Exhibits
---------------------------------

(a) Financial Statements:

Part A - Financial Highlights

*Part B - Statement of Net Assets
Statement of Assets and Liabilities
Statement of Operations
Statement of Changes in Net Assets
Financial Highlights
Notes to Financial Statements
Accountant's Report

* The financial statements and Accountant's Report listed above
for DelCap Fund and Capital Appreciation Fund are incorporated into
Part B by reference from the Registrant's Annual Report for the
fiscal year ended September 30, 1997.

(b) Exhibits:

(1) Articles of Incorporation.
-------------------------

(a) Articles of Incorporation, as amended and supplemented
through November 22, 1995, incorporated into this
filing by reference to Post-Effective Amendment No. 18
filed November 22, 1995.

(b) Executed Articles Supplementary (November 28, 1995)
incorporated into this filing by reference to Post-
Effective Amendment No. 21 filed November 27, 1996.

(c) Executed Articles Supplementary (November 27, 1996)
incorporated into this filing by reference to Post-
Effective Amendment No. 22 filed April 30, 1997.

(d) Executed Articles of Amendment (November 26, 1996)
incorporated into this filing by reference to Post-
Effective Amendment No. 22 filed April 30, 1997.

(2) By-Laws. By-Laws, as amended to date, incorporated into
-------
this filing by reference to Post-Effective Amendment No. 18
filed November 22, 1995.

(3) Voting Trust Agreement. Inapplicable.
----------------------
<PAGE>

PART C - Other Information
(Continued)

(4) Copies of All Instruments Defining the Rights of Holders.
--------------------------------------------------------

(a) Articles of Incorporation and Articles Supplementary.
----------------------------------------------------

(i) Article Third of Articles Supplementary (May 27,
1992), Article Second of Articles Supplementary
(September 6, 1994), Article Fifth of Articles of
Incorporation (September 18, 1985) and Article
Eighth of Articles of Incorporation (September
18, 1985), which was subsequently redesignated as
Article Ninth (July 31, 1989), incorporated into
this filing by reference to Post-Effective
Amendment No. 18 filed November 22, 1995.

(ii) Article Third of Articles Supplementary (November
28, 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 19
filed September 23, 1996.

(iii) Executed Article Fifth of Articles Supplementary
(November 27, 1996) incorporated into this filing
by reference to Post-Effective Amendment No. 22
filed April 30, 1997.

(b) By-Laws. Article II, Article III, as amended, and
-------
Article XIII, which was subsequently redesignated as
Article XIV, incorporated into this filing by reference
to Post-Effective Amendment No. 18 filed November 22,
1995.

(5) Investment Management Agreement.
-------------------------------

(a) Investment Management Agreement (April 3, 1995) between
Delaware Management Company, Inc. and the Registrant on
behalf of DelCap Fund incorporated into this filing by
reference to Post-Effective Amendment No. 18 filed
November 22, 1995.

(b) Executed Investment Management Agreement (November 29,
1996) between Delaware Management Company, Inc. and the
Registrant on behalf of Capital Appreciation Fund
incorporated into this filing by reference to Post-
Effective Amendment No. 22 filed April 30, 1997.

(6) (a) Distribution Agreement.
----------------------

(i) Executed Distribution Agreement (April 3, 1995)
between Delaware Distributors, L.P. and the
Registrant on behalf of DelCap Fund incorporated
into this filing by reference to Post-Effective
Amendment No. 21 filed November 27, 1996.
<PAGE>

PART C - Other Information
(Continued)

(ii) Executed Amendment No. 1 to Distribution
Agreement (November 29, 1995) between Delaware
Distributors, L.P. and the Registrant on behalf
of DelCap Fund incorporated into this filing by
reference to Post-Effective Amendment No. 21
filed November 27, 1996.

(iii) Executed Distribution Agreement (November 29,
1996) between Delaware Distributors, L.P. and the
Registrant on behalf of Capital Appreciation Fund
incorporated into this filing by reference to
Post-Effective Amendment No. 22 filed April 30,
1997.

(b) Administration and Service Agreement. Form of
------------------------------------
Administration and Service Agreement (as amended
November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 18 filed
November 22, 1995.

(c) Dealer's Agreement. Dealer's Agreement (as amended
------------------
November 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 18 filed
November 22, 1995.

(d) Mutual Fund Agreement. Mutual Fund Agreement for the
---------------------
Delaware Group of Funds (as amended November 1995)
incorporated into this filing by reference to Post-
Effective Amendment No. 19 filed September 23, 1996.

(7) Bonus, Profit Sharing, Pension Contracts.
----------------------------------------

(a) Amended and Restated Profit Sharing Plan (November 17,
1994) incorporated into this filing by reference to
Post-Effective Amendment No. 18 filed November 22, 1995.

(b) Amendment to Profit Sharing Plan (December 21, 1995)
incorporated into this filing by reference to Post-
Effective Amendment No. 19 filed September 23, 1996.

(8) Custodian Agreement.
-------------------

(a) Executed Custodian Agreement (May 1, 1996) (Module)
between The Chase Manhattan Bank and the Registrant on
behalf of DelCap Fund incorporated into this filing by
reference to Post-Effective Amendment No. 21 filed
November 27, 1996.
<PAGE>

PART C - Other Information
(Continued)

(i) Executed Amendment to Custodian Agreement
(November 29, 1996) between The Chase Manhattan
Bank and the Registrant on behalf of Capital
Appreciation Fund incorporated into this filing
by reference to Post-Effective Amendment No. 22
filed April 30, 1997.

(b) Form of Securities Lending Agreement (1996) between The
Chase Manhattan Bank and the Registrant on behalf of
DelCap Fund incorporated into this filing by reference
to Post-Effective Amendment No. 21 filed November 27,
1996.

(c) Form of Securities Lending Agreement (1996) between The
Chase Manhattan Bank and the Registrant on behalf of
Capital Appreciation Fund incorporated into this filing
by reference to Post-Effective Amendment No. 21 filed
November 27, 1996.

(9) Other Material Contracts.
------------------------

(a) Executed Amended and Restated Shareholders Services
Agreement (November 29, 1996) between Delaware Service
Company, Inc. and the Registrant on behalf of each Fund
incorporated into this filing by reference to Post-
Effective Amendment No. 22 filed April 30, 1997.

(i) Amended Schedule A to Shareholders Services
Agreement (January 1, 1997) attached as Exhibit.

(ii) Amended Schedule A to Shareholders Services
Agreement (July 1, 1997) attached as Exhibit.

(iii) Amended Schedule A to Shareholders Services
Agreement (October 14, 1997) attached as Exhibit.

(b) Executed Fund Accounting Agreement (August 19, 1996)
between Delaware Service Company, Inc. and the
Registrant on behalf of each Fund incorporated into this
filing by reference to Post-Effective Amendment No. 21
filed November 27, 1996.

(i) Executed Amendment No. 4A (April 14, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.

(ii) Executed Amendment No. 5 (May 1, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.

(iii) Executed Amendment No. 6 (July 21, 1997) to
Schedule A to Delaware Group of Funds Fund
Accounting Agreement attached as Exhibit.
<PAGE>

PART C - Other Information
(Continued)
(10) Opinion of Counsel. Inapplicable.
------------------

(11) Consent and Report of Auditors. Attached as Exhibit.
------------------------------

(12) Inapplicable.

(13) Investment Letter of Initial Shareholder. Incorporated
----------------------------------------
into this filing by reference to Pre-Effective Amendment
No. 2 filed March 26, 1986.

(14) Model Plans. Incorporated into this filing by reference
-----------
to Post-Effective Amendment No. 15 filed November 26,
1993 and Post-Effective Amendment No. 18 filed November
22, 1995.

**(15) Plans under Rule 12b-1.
----------------------

(a) Plan under Rule 12b-1 for DelCap Fund A Class
(November 29, 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 21 filed
November 27, 1996.

(b) Plan under Rule 12b-1 for DelCap Fund B Class
(November 29, 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 21 filed
November 27, 1996.

(c) Plan under Rule 12b-1 for DelCap Fund C Class
(November 29, 1995) incorporated into this filing by
reference to Post-Effective Amendment No. 21 filed
November 27, 1996.

(d) Plan under Rule 12b-1 for Capital Appreciation Fund A
Class (November 29, 1996) incorporated into this
filing by reference to Post-Effective Amendment No.
22 filed April 30, 1997.

(e) Plan under Rule 12b-1 for Capital Appreciation Fund B
Class (November 29, 1996) incorporated into this
filing by reference to Post-Effective Amendment No.
22 filed April 30, 1997.

(f) Plan under Rule 12b-1 for Capital Appreciation Fund C
Class (November 29, 1996) incorporated into this
filing by reference to Post-Effective Amendment No.
22 filed April 30, 1997.

(16) Schedules of Computation for each Performance Quotation.
-------------------------------------------------------

(a) Incorporated into this filing by reference to Post-
Effective Amendment No. 18 filed November 22, 1995
and Post-Effective Amendment No. 21 filed November
27, 1996.

(b) Schedules of Computation for each Performance
Quotation for periods not previously electronically
filed attached as Exhibit.

**Relates to DelCap Fund's and Capital Appreciation Fund's retail classes of
shares only.
<PAGE>

PART C - Other Information
(Continued)

(17) Financial Data Schedules.
------------------------

(a) Financial Data Schedules for the fiscal year ended
September 30, 1997 attached as Exhibit.

(18) Plan under Rule 18f-3.
---------------------

(a) Plan under Rule 18f-3 (as amended May 1, 1996) (Module)
incorporated into this filing by reference to Post-
Effective Amendment No. 21 filed November 27, 1996.

(b) Amended Plan under Rule 18f-3 (September 18, 1997)
attached as Exhibit.

(c) Amended Appendix A (September 30, 1996) to Plan under
Rule 18f-3 incorporated into this filing by reference
to Post-Effective Amendment No. 22 filed April 30,
1997.

(d) Amended Appendix A (November 29, 1996) to Plan under
Rule 18f-3 incorporated into this filing by reference
to Post-Effective Amendment No. 22 filed April 30,
1997.

(e) Amended Appendix A (February 24, 1997) to Plan under
Rule 18f-3 incorporated into this filing by reference
to Post-Effective Amendment No. 22 filed April 30,
1997.

(f) Amended Appendix A (October 14, 1997) to Plan under
Rule 18f-3 attached as Exhibit.

(19) Other: Directors' Power of Attorney. Incorporated into this
----------------------------
filing by reference to Post-Effective Amendment No. 18
filed November 22, 1995.

Directors' Power of Attorney. Power of Attorney for
-----------------------------
Thomas F. Madison and Jeffrey J. Nick attached as
Exhibit.

Item 25. Persons Controlled by or under Common Control with Registrant. None.
-------------------------------------------------------------

Item 26. Number of Holders of Securities.
-------------------------------
<TABLE>
<CAPTION>
(1) (2)
Number of
Title of Class Record Holders
-------------- --------------
<S> <C>
Delaware Group Equity Funds IV, Inc.'s
DelCap Fund:

DelCap Fund A Class
Common Stock Par Value 51,235 Accounts as of
$.01 Per Share October 31, 1997
</TABLE>
<PAGE>

PART C - Other Information
(Continued)

<TABLE>
<CAPTION>
(1) (2)

Number of
Title of Class Record Holders
-------------- ---------------
<S> <C>
DelCap Fund B Class
Common Stock Par Value 2,195 Accounts as of
$.01 Per Share October 31, 1997

DelCap Fund C Class
Common Stock Par Value 441 Accounts as of
$.01 Per Share October 31, 1997

DelCap Fund Institutional Class
Common Stock Par Value 74 Accounts as of
$.01 Per Share October 31, 1997

Delaware Group Equity Funds IV, Inc.'s
Capital Appreciation Fund:

Capital Appreciation Fund A Class
Common Stock Par Value 8 Accounts as of
$.01 Per Share October 31, 1997

Capital Appreciation Fund B Class
Common Stock Par Value 0 Accounts as of
$.01 Per Share October 31, 1997

Capital Appreciation Fund C Class
Common Stock Par Value 0 Accounts as of
$.01 Per Share March 31, 1997

Capital Appreciation Fund
Institutional Class
Common Stock Par Value 5 Accounts as of
$.01 Per Share October 31, 1997
</TABLE>

Item 27. Indemnification. Incorporated into this filing by reference to
---------------
initial Registration Statement filed September 24, 1985 and Article
VII of the By-Laws, as amended, incorporated into this filing by
reference to Post-Effective Amendment No. 18 filed November 22,
1995.
<PAGE>

PART C - Other Information
(Continued)

Item 28. Business and Other Connections of Investment Adviser.
----------------------------------------------------

Delaware Management Company, Inc. ("DMC") serves as investment
manager to the Registrant. In addition, DMC also serves as investment manager or
sub-adviser to certain of the other funds in the Delaware Group (Delaware Group
Equity Funds I, Inc., Delaware Group Equity Funds II, Inc., Delaware Group
Equity Funds III, Inc., Delaware Group Equity Funds V, Inc., Delaware Group
Income Funds, Inc., Delaware Group Government Fund, Inc., Delaware Group
Limited-Term Government Funds, Inc., Delaware Group Cash Reserve, Inc., Delaware
Group Tax-Free Fund, Inc., Delaware Group State Tax-Free Income Trust, Delaware
Group Tax-Free Money Fund, Inc., Delaware Group Premium Fund, Inc., Delaware
Group Global & International Funds, Inc., Delaware Group Adviser Funds, Inc.,
Delaware Pooled Trust, Inc., Delaware Group Dividend and Income Fund, Inc.,
Delaware Group Global Dividend and Income Fund, Inc., Voyageur Funds, Inc.,
Voyageur Insured Funds, Inc., Voyageur Intermediate Tax Free Funds, Inc.,
Voyageur Investment Trust, Voyageur Investment Trust II, Voyageur Mutual Funds,
Inc., Voyageur Mutual Funds II, Inc., Voyageur Mutual Funds III, Inc., Voyageur
Tax Free Funds, Inc., Voyageur Arizona Municipal Income Fund, Inc., Voyageur
Colorado Insured Municipal Income Fund, Inc., Voyageur Florida Insured Municipal
Income Funds, Voyageur Minnesota Municipal Income Fund, Inc., Voyageur Minnesota
Municipal Income Fund II, Inc. and Voyageur Minnesota Municipal Income Fund III,
Inc.) and provides investment advisory services to institutional accounts,
primarily retirement plans and endowment funds, and to certain other investment
companies. In addition, certain directors of DMC also serve as
directors/trustees of the other Delaware Group funds, and certain officers are
also officers of these other funds. A company indirectly owned by DMC's parent
company acts as principal underwriter to the mutual funds in the Delaware Group
(see Item 29 below) and another such company acts as the shareholder servicing,
dividend disbursing, accounting services and transfer agent for all of the
mutual funds in the Delaware Group.
<PAGE>

PART C - Other Information
(Continued)

The following persons serving as directors or officers of the Manager
have held the following positions during the past two years:

Name and Principle Positions and Offices with the Manager and its
Business Address * Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------

Wayne A. Stork Chairman of the Board, President, Chief
Executive Officer, Chief Investment Officer and
Director of Delaware Management Company, Inc.;
Chairman of the Board, President, Chief
Executive Officer and Director of DMH Corp.,
Delaware International Holdings Ltd., Delaware
Distributors, Inc. and Founders Holdings, Inc.;
Chairman, Chief Executive Officer and Director
of Delaware Management Holdings, Inc. and
Delaware International Advisers Ltd.; Chairman
of the Board and Director of the Registrant,
each of the other funds in the Delaware Group
and Delaware Capital Management, Inc.; Chairman
of Delaware Distributors, L.P.; President and
Chief Executive Officer of Delvoy, Inc.; and
Director of Delaware Service Company, Inc. and
Delaware Investment & Retirement Services, Inc.

Richard G. Unruh, Jr. Executive Vice President and Director of
Delaware Management Company, Inc.; Executive
Vice President of the Registrant, each of the
other funds in the Delaware Group, Delaware
Management Holdings, Inc. and Delaware Capital
Management, Inc; and Director of Delaware
International Advisers Ltd.

Board of Directors, Chairman of Finance
Committee, Keystone Insurance Company since
1989, 2040 Market Street, Philadelphia, PA;
Board of Directors, Chairman of Finance
Committee, AAA Mid Atlantic, Inc. since 1989,
2040 Market Street, Philadelphia, PA; Board of
Directors, Metron, Inc. since 1995, 11911
Freedom Drive, Reston, VA

Paul E. Suckow Executive Vice President/Chief Investment
Officer, Fixed Income of Delaware Management
Company, Inc., the Registrant, each of the other
funds in the Delaware Group and Delaware
Management Holdings, Inc.; Executive Vice
President and Director of Founders Holdings,
Inc.; Executive Vice President of Delaware
Capital Management, Inc.; and Director of
Founders CBO Corporation

Director, HYPPCO Finance Company Ltd.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

David K. Downes Executive Vice President, Chief Operating
Officer, Chief Financial Officer and Director of
Delaware Management Company, Inc., DMH Corp,
Delaware Distributors, Inc., Founders Holdings,
Inc., Delaware International Holdings Ltd. and
Delvoy, Inc.; Executive Vice President, Chief
Operating Officer and Chief Financial Officer of
the Registrant and each of the other funds in
the Delaware Group, Delaware Management
Holdings, Inc., Founders CBO Corporation,
Delaware Capital Management, Inc. and Delaware
Distributors, L.P.; President, Chief Executive
Officer, Chief Financial Officer and Director of
Delaware Service Company, Inc.; Chairman, Chief
Executive Officer and Director of Delaware
Investment & Retirement Services, Inc.; Chairman
and Director of Delaware Management Trust
Company; Director of Delaware International
Advisers Ltd.; and Vice President of Lincoln
Funds Corporation

Chief Executive Officer and Director of
Forewarn, Inc. since 1993, 8 Clayton Place,
Newtown Square, PA

George M. Senior Vice President, General Counsel,
Chamberlain, Jr. Secretary and Director of Delaware Management
Company, Inc., DMH Corp., Delaware Distributors,
Inc., Delaware Service Company, Inc., Founders
Holdings, Inc., Delaware Capital Management,
Inc., Delaware Investment & Retirement Services,
Inc. and Delvoy, Inc.; Senior Vice President,
Secretary and General Counsel of the Registrant,
each of the other funds in the Delaware Group,
Delaware Distributors, L.P. and Delaware
Management Holdings, Inc.; Executive Vice
President, Secretary, General Counsel and
Director of Delaware Management Trust Company;
Secretary and Director of Delaware International
Holdings Ltd.; Director of Delaware
International Advisers Ltd.; Secretary of
Lincoln Funds Corporation

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices with the Manager and its
Business Address* Affiliates and Other Positions and Offices Held
- ------------------ -----------------------------------------------

Richard J. Flannery Senior Vice President/Corporate and
International Affairs of the Registrant, each of
the other funds in the Delaware Group, Delaware
Management Holdings, Inc., DMH Corp., Delaware
Management Company, Inc., Delaware Distributors,
Inc., Delaware Distributors, L.P., Delaware
Management Trust Company, Delaware Capital
Management, Inc., Delaware Service Company, Inc.
and Delaware Investment & Retirement Services,
Inc.; Senior Vice President/ Corporate and
International Affairs and Director of Founders
Holdings, Inc., Delaware International Holdings
Ltd. and Delvoy, Inc.; Senior Vice President of
Founders CBO Corporation; and Director of
Delaware International Advisers Ltd.

Director, HYPPCO Finance Company Ltd.

Limited Partner of Stonewall Links, L.P. since
1991, Bulltown Rd., Elverton, PA; Director and
Member of Executive Committee of Stonewall
Links, Inc. since 1991, Bulltown Rd., Elverton,
PA

Michael P. Bishof Senior Vice President and Treasurer of the
Registrant, each of the other funds in the
Delaware Group and Founders Holdings, Inc.;
Senior Vice President/Investment Accounting of
Delaware Management Company, Inc. and Delaware
Service Company, Inc.; Senior Vice President and
Treasurer/ Manager, Investment Accounting of
Delaware Distributors, L.P.; Assistant Treasurer
of Founders CBO Corporation; and Senior Vice
President and Manager of Investment Accounting
of Delaware International Holdings Ltd.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Joseph H. Hastings Senior Vice President/Corporate Controller and
Treasurer of Delaware Management Holdings, Inc., DMH
Corp., Delaware Management Company, Inc., Delaware
Distributors, Inc., Delaware Capital Management, Inc.,
Delaware Distributors, L.P., Delaware Service Company,
Inc., Delaware International Holdings Ltd. and Delvoy,
Inc.; Senior Vice President/Corporate Controller of
the Registrant, each of the other funds in the
Delaware Group and Founders Holdings, Inc.; Executive
Vice President, Chief Financial Officer and Treasurer
of Delaware Management Trust Company; Chief Financial
Officer and Treasurer of Delaware Investment &
Retirement Services, Inc.; Senior Vice
President/Assistant Treasurer of Founders CBO
Corporation; and Treasurer of Lincoln Funds
Corporation.

Michael T. Taggart Senior Vice President/Facilities Management and
Administrative Services of Delaware Management
Company, Inc.

Douglas L. Anderson Senior Vice President/Operations of Delaware
Management Company, Inc., Delaware Investment and
Retirement Services, Inc. and Delaware Service
Company, Inc.; Senior Vice President/ Operations and
Director of Delaware Management Trust Company.

James L. Shield Senior Vice President/Chief Information Officer of
Delaware Management Company, Inc., Delaware Service
Company, Inc. and Delaware Investment & Retirement
Services, Inc.

Eric E. Miller Vice President, Assistant Secretary and Deputy General
Counsel of the Registrant and each of the other funds
in the Delaware Group, Delaware Management Company,
Inc., Delaware Management Holdings, Inc., DMH Corp.,
Delaware Distributors, L.P., Delaware Distributors
Inc., Delaware Service Company, Inc., Delaware
Management Trust Company, Founders Holdings, Inc.,
Delaware Capital Management, Inc. and Delaware
Investment & Retirement Services, Inc.; and Vice
President and Assistant Secretary of Delvoy, Inc.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Richelle S. Maestro Vice President and Assistant Secretary of Delaware
Management Company, Inc., the Registrant, each of the
other funds in the Delaware Group, Delaware Management
Holdings, Inc., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc.,
DMH Corp., Delaware Management Trust Company, Delaware
Capital Management, Inc., Delaware Investment &
Retirement Services, Inc., Founders Holdings, Inc. and
Delvoy, Inc.; Secretary of Founders CBO Corporation;
and Assistant Secretary of Delaware International
Holdings Ltd.

Partner of Tri-R Associates since 1989, 10001
Sandmeyer Lane, Philadelphia, PA

Richard Salus/1/ Vice President/Assistant Controller of Delaware
Management Company, Inc. and Delaware Management Trust
Company

Bruce A. Ulmer Vice President/Director of LNC Internal Audit of
Delaware Management Company, Inc., the Registrant,
each of the other funds in the Delaware Group,
Delaware Management Holdings, Inc., DMH Corp.,
Delaware Management Trust Company and Delaware
Investment & Retirement Services, Inc.; Vice
President/Director of Internal Audit of Delvoy, Inc.

Steven T. Lampe/2/ Vice President/Taxation of Delaware Management
Company, Inc., the Registrant, each of the other funds
in the Delaware Group, Delaware Management Holdings,
Inc., DMH Corp., Delaware Distributors, L.P., Delaware
Distributors, Inc., Delaware Service Company, Inc.,
Delaware Management Trust Company, Founders Holdings,
Inc., Founders CBO Corporation, Delaware Capital
Management, Inc., Delaware Investment & Retirement
Services, Inc. and Delvoy, Inc.

Christopher Adams/3/ Vice President/Strategic Planning of Delaware
Management Company, Inc. and Delaware Service Company,
Inc.

Susan L. Hanson Vice President/Strategic Planning of Delaware
Management Company, Inc. and Delaware Service Company,
Inc.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Dennis J. Mara/4/ Vice President/Acquisitions of Delaware
Management Company, Inc.

Scott Metzger Vice President/Business Development of Delaware
Management Company, Inc. and Delaware Service Company,
Inc.

Lisa O. Brinkley Vice President/Compliance of Delaware Management
Company, Inc., the Registrant, each of the other funds
in the Delaware Group, DMH Corp., Delaware
Distributors, L.P., Delaware Distributors, Inc.,
Delaware Service Company, Inc., Delaware Management
Trust Company, Delaware Capital Management, Inc. and
Delaware Investment & Retirement Services, Inc.; Vice
President of Delvoy, Inc.

Rosemary E. Milner Vice President/Legal Registrations of Delaware
Management Company, Inc., the Registrant, each of the
other funds in the Delaware Group, Delaware
Distributors, L.P. and Delaware Distributors, Inc.

Mary Ellen Carrozza Vice President/Client Services of Delaware Management
Company, Inc. and the Registrant

Gerald T. Nichols Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant, each of the
tax-exempt funds, the fixed income funds and the
closed-end funds in the Delaware Group; Vice President
of Founders Holdings, Inc.; and Treasurer, Assistant
Secretary and Director of Founders CBO Corporation

Paul A. Matlack Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt
funds, the fixed income funds and the closed-end funds
in the Delaware Group; Vice President of Founders
Holdings, Inc.; and President and Director of Founders
CBO Corporation.

Gary A. Reed Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds
and the fixed income funds in the Delaware Group and
Delaware Capital Management, Inc.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Patrick P. Coyne Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds
and the fixed income funds in the Delaware Group and
Delaware Capital Management, Inc.

Roger A. Early Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., each of the tax-exempt funds
and the fixed income funds in the Delaware Group

Mitchell L. Conery/5/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and each of the tax-exempt
and fixed income funds in the Delaware Group

George H. Burwell Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each of
the equity funds in the Delaware Group

John B. Fields Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each of
the equity funds in the Delaware Group and Delaware
Capital Management, Inc.

Gerald S. Frey/6/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each of
the equity funds in the Delaware Group

Christopher Beck/7/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each of
the equity funds in the Delaware Group

Elizabeth H. Howell/8/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and the Delaware-Voyageur
Tax-Free Minnesota Intermediate, Delaware-Voyageur
Minnesota Insured, Delaware-Voyageur Tax-Free
Minnesota, Delaware-Voyageur Tax-Free Idaho, Delaware-
Voyageur Tax-Free Kansas, Delaware-Voyageur Tax-Free
Missouri, Delaware-Voyageur Tax-Free Oregon, Delaware-
Voyageur Tax-Free Washington, Delaware-Voyageur Tax-
Free Iowa and Delaware-Voyageur Tax-Free Wisconsin
Funds.

Andrew M. McCullagh/9/ Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc. and the Delaware-Voyageur
Tax-Free Arizona Insured, Delaware-Voyageur Tax-Free
Arizona, Delaware-Voyageur Tax-Free California
Insured, Delaware-Voyageur Tax-Free Colorado,
Delaware-Voyageur Tax-Free New Mexico, Delaware-
Voyageur Tax-Free North Dakota and Delaware-Voyageur
Tax-Free Utah Funds.

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Babak Zenouzi Vice President/Senior Portfolio Manager of Delaware
Management Company, Inc., the Registrant and each of
the equity funds and the closed-end funds in the
Delaware Group

Paul Grillo Vice President/Portfolio Manager of Delaware
Management Company, Inc. and each of the tax-exempt
and fixed income funds in the Delaware Group

Marshall T. Bassett Vice President/Portfolio Manager of Delaware
Management Company, Inc. and each of the equity funds
in the Delaware Group

John Heffern Vice President/Portfolio Manager of Delaware
Management Company, Inc. and each of the equity funds
in the Delaware Group

1 SENIOR MANAGER, Ernst & Young LLP prior to December 1996.
2 TAX MANAGER, Price Waterhouse LLP prior to October 1995.
3 SENIOR ASSOCIATE, FAS, Coopers & Lybrand LLP prior to October 1995.
4 CORPORATE CONTROLLER, IIS prior to July 1997 and DIRECTOR, FINANCIAL
PLANNING, Decision One prior to March 1996.
5 INVESTMENT OFFICER, Travelers Insurance prior to January 1997.
6 SENIOR DIRECTOR, Morgan Grenfell Capital Management prior to June
1996.
7 SENIOR PORTFOLIO MANAGER, Pitcairn Trust Company prior to May 1997.
8 SENIOR PORTFOLIO MANAGER, Voyageur Fund Managers, Inc. prior to May
1997.
9 SENIOR VICE PRESIDENT, SENIOR PORTFOLIO MANAGER, Voyageur Asset
Management LLC prior to May 1997.
<PAGE>

Item 29. Principal Underwriters.
----------------------

(a) Delaware Distributors, L.P. serves as principal
underwriter for all the mutual funds in the Delaware
Group.

(b) Information with respect to each director, officer or
partner of principal underwriter:
<TABLE>
<CAPTION>

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>

Delaware Distributors, Inc. General Partner None

Delaware Management
Company, Inc. Limited Partner Investment Manager

Delaware Capital
Management, Inc. Limited Partner None

Wayne A. Stork Chairman Chairman

Bruce D. Barton President and Chief None
Executive Officer

David K. Downes Senior Vice President, Executive Vice
Chief Administrative President/Chief
Officer and Chief Operating Officer/
Financial Officer Chief Financial Officer

George M. Chamberlain, Jr. Senior Vice Senior Vice President/
President/Secretary/ Secretary/General
General Counsel Counsel

Terrence P. Cunningham Senior Vice President/ None
Financial Institutions

Thomas E. Sawyer Senior Vice President/ None
National Sales Director

Dana B. Hall Senior Vice President/ None
Key Accounts

Mac McAuliffe Senior Vice None
President/Sales
Manager, Western Division

William F. Hostler Senior Vice President/ None
Marketing Services

J. Chris Meyer Senior Vice President/ None
Director Product
Management

Stephen H. Slack Senior Vice None
President/Wholesaler
</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>

William M. Kimbrough Senior Vice President/ None
Wholesaler

Daniel J. Brooks Senior Vice None
President/Wholesaler

Richard J. Flannery Senior Vice Senior Vice President/
President/Corporate Corporate and
and International Affairs International Affairs

Bradley L. Kolstoe Senior Vice None
President/Western
Division Sales Manager

Henry W. Orvin Senior Vice None
President/Eastern
Division Sales Manager -
Wire/Regional Channel

Michael P. Bishof Senior Vice President Senior Vice
and Treasurer/Manager, President/Treasurer
Investment Accounting

Eric E. Miller Vice President/Assistant Vice President/
Secretary/Deputy Assistant Secretary/
General Counsel Deputy General Counsel

Richelle S. Maestro Vice President/ Vice President/
Assistant Secretary Assistant Secretary

Steven T. Lampe Vice President/Taxation Vice President/Taxation

Joseph H. Hastings Vice President/Corporate Senior Vice President/
Controller & Treasurer Corporate Controller

Lisa O. Brinkley Vice President/Compliance Vice President/
Compliance

Rosemary E. Milner Vice President/Legal Vice President/Legal
Registrations Registrations

Daniel H. Carlson Vice President/Strategic None
Marketing

Diane M. Anderson Vice President/Plan None
Record Keeping
and Administration
</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.
<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Anthony J. Scalia Vice President/Defined None
Contribution
Sales, SW Territory

Courtney S. West Vice President/Defined None
Contribution
Sales, NE Territory

Denise F. Guerriere Vice President/Client None
Services

Gordon E. Searles Vice President/Client None
Services

Julia R. Vander Els Vice President/Participant None
Services

Jerome J. Alrutz Vice President/Retail Sales None

Joanne A. Mettenheimer Vice President/New Business None
Development

Scott Metzger Vice President/Business Vice President/
Development Business Development

Stephen C. Hall Vice President/ None
Institutional Sales

Gregory J. McMillan Vice President/ National None
Accounts

Christopher H. Price Vice President/Manager, None
Insurance

Stephen J. DeAngelis Vice President/Product None
Development

Andrew W. Whitaker Vice President/Financial None
Institutions

Jesse Emery Vice President/ Marketing None
Communications

Darryl S. Grayson Vice President, None
Broker/Dealer
Internal Sales

Susan T. Friestedt Vice President/Client None
Service

Dinah J. Huntoon Vice President/Product None
Manager Equity

</TABLE>

* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ---------------------
<S> <C> <C>
Soohee Lee Vice President/Fixed None
Income Product
Management

Michael J. Woods Vice President/ UIT None
Product Management

Ellen M. Krott Vice President/Marketing None

Dale L. Kurtz Vice President/Marketing None
Support

Holly W. Reimel Vice President/Manager, None
Key Accounts

David P. Anderson Vice President/Wholesaler None

Lee D. Beck Vice President/Wholesaler None

Gabriella Bercze Vice President/Wholesaler None

Terrence L. Bussard Vice President/Wholesaler None

William S. Carroll Vice President/Wholesaler None

William L. Castetter Vice President/Wholesaler None

Thomas J. Chadie Vice President/Wholesaler None

Thomas C. Gallagher Vice President/Wholesaler None

Douglas R. Glennon Vice President/Wholesaler None

Ronald A. Haimowitz Vice President/Wholesaler None

Christopher L. Johnston Vice President/Wholesaler None

Michael P. Jordan Vice President/Wholesaler None

Jeffrey A. Keinert Vice President/Wholesaler None

Thomas P. Kennett Vice President/ Wholesaler None

Debbie A. Marler Vice President/Wholesaler None

Nathan W. Medin Vice President/Wholesaler None

</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

<PAGE>

PART C - Other Information
(Continued)

Name and Principal Positions and Offices Positions and Offices
Business Address * with Underwriter with Registrant
- ------------------ --------------------- ----------------------
<S> <C> <C>
Roger J. Miller Vice President/Wholesaler None

Patrick L. Murphy Vice President/Wholesaler None

Stephen C. Nell Vice President/Wholesaler None

Julia A. Nye Vice President/Wholesaler None

Joseph T. Owczarek Vice President/Wholesaler None

Mary Ellen Pernice-Fadden Vice President/Wholesaler None

Mark A. Pletts Vice President/Wholesaler None

Philip G. Rickards Vice President/Wholesaler None

Laura E. Roman Vice President/Wholesaler None

Linda Schulz Vice President/Wholesaler None

Edward B. Sheridan Vice President/Wholesaler None

Robert E. Stansbury Vice President/Wholesaler None

Julia A. Stanton Vice President/Wholesaler None

Larry D. Stone Vice President/Wholesaler None

Edward J. Wagner Vice President/Wholesaler None

Wayne W. Wagner Vice President/Wholesaler None

John A. Wells Vice President/Marketing None
Technology

Scott Whitehouse Vice President/Wholesaler None

Frank C. Tonnemaker Vice President None

</TABLE>
* Business address of each is 1818 Market Street, Philadelphia, PA 19103.

PART C - Other Information
(Continued)

Item 30. Location of Accounts and Records.
--------------------------------

All accounts and records are maintained in Philadelphia at 1818 Market
Street, Philadelphia, PA 19103 or One Commerce Square, Philadelphia,
PA 19103.

Item 31. Management Services. None.
-------------------

Item 32. Undertakings.
------------

(a) Not Applicable.

(b) Not Applicable.

(c) The Registrant hereby undertakes to furnish each person to whom a
prospectus is delivered with a copy of the Registrant's latest
annual report to shareholders, upon request and without charge.

(d) The Registrant hereby undertakes to promptly call a meeting of
shareholders for the purpose of voting upon the question of
removal of any director when requested in writing to do so by the
record holders of not less than 10% of the outstanding shares.
<PAGE>

SIGNATURES
----------

Pursuant to the requirements of the Securities Act of 1933 and the Investment
Company Act of 1940, this Registrant certifies that it meets all of the
requirements for effectiveness of this Registration Statement pursuant to Rule
485(b) under the Securities Act of 1933 and has duly caused this Registration
Statement to be signed on its behalf by the undersigned, thereunto duly
authorized, in this City of Philadelphia and Commonwealth of Pennsylvania on
this 26th day of November, 1997.

DELAWARE GROUP EQUITY FUNDS IV, INC.
(formerly Delaware Group DelCap Fund, Inc.)

By /s/ Wayne A. Stork
---------------------
Wayne A. Stork
Chairman

Pursuant to the requirements of the Securities Act of 1933, this Registration
Statement has been signed below by the following persons in the capacities and
on the dates indicated:

Signature Title Date
- -------------------------- -------------------- ----------------
<S> <C> <C>

/s/ Wayne A. Stork Chairman and Director November 26, 1997
- ---------------------------
Wayne A. Stork
Executive Vice President/Chief
Operating Officer/Chief
Financial Officer (Principal
Financial Officer and
/s David K. Downes Principal Accounting Officer) November 26, 1997
- ---------------------------
David K. Downes

/s/ Walter P. Babich * Director November 26, 1997
- ---------------------------
Walter P. Babich

/s/ Anthony D. Knerr * Director November 26, 1997
- ---------------------------
Anthony D. Knerr

/s/ Ann R. Leven * Director November 26, 1997
- ---------------------------
Ann R. Leven

/s/ W. Thacher Longstreth * Director November 26, 1997
- ---------------------------
W. Thacher Longstreth

/s/ Thomas F. Madison * Director November 26, 1997
- ---------------------------
Thomas F. Madison

/s/ Jeffrey J. Nick * Director November 26, 1997
- ---------------------------
Jeffrey J. Nick

/s/ Charles E. Peck * Director November 26, 1997
- ---------------------------
Charles E. Peck

*By /s/ Wayne A. Stork
---------------------------
Wayne A. Stork
as Attorney-in-Fact for
each of the persons indicated

</TABLE>
<PAGE>

INDEX TO EXHIBITS

<TABLE>

Exhibit No. Exhibit
- ----------- -------
<S> <C>
EX-99.B9AI Amended Schedule A to Shareholders Services Agreement

EX-99.B9AII Amended Schedule A to Shareholders Services Agreement

EX-99.B9AIII Amended Schedule A to Shareholders Services Agreement

EX-99.B9BI Executed Amendment No. 4A (April 14, 1997) to Schedule A
to Delaware Group of Funds Fund Accounting Agreement

EX-99.B9BII Executed Amendment No. 5 (May 1, 1997) to Delaware Group
of Funds Fund Accounting Agreement

EX-99.B9BIII Executed Amendment No. 6 (July 21, 1997) to Delaware
Group of Funds Fund Accounting Agreement

EX-99.B11 Consent of Auditors

EX-99.B16B Schedules of Computation for each Performance Quotation
for periods not previously electronically filed

EX-99.B18A Amended Rule 18f-3 Plan (September 18, 1997)

EX-99.B18F Amended Appendix A (October 14, 1997) to Plan under Rule
18f-3

EX-99.B19 Powers of Attorney for Thomas F. Madison and Jeffrey J.
Nick

EX-27 Financial Data Schedules
</TABLE>

<PAGE>

EXHIBIT-99.B9AI

FORM OF SCHEDULE A

SCHEDULE A
----------

DELAWARE GROUP EQUITY FUNDS IV, INC.
(THE "FUND")

[______________ ] AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT

COMPENSATION SCHEDULE

1. Delaware Service Company, Inc. ("DSC") will determine and report to the
Fund, at least annually, the compensation for services to be provided to
the Fund for DSC's forthcoming fiscal year or period.

2. In determining such compensation, DSC will fix and report a fee to be
charged per account and/or transaction, as may be applicable, for services
provided. DSC will bill, and the Fund will pay, such compensation monthly.

3. For the period commencing on January 1, 1997, the charge will consist of
two charges for all the Funds in the Delaware Group, except the Delaware
Group Premium Fund, Inc. and the Delaware Pooled Trust, Inc., an annual
charge and a per transaction charge for each account on the transfer
agent's records and each account on an automated retirement processing
system. These charges are as follows:

A. ANNUAL CHARGE
-------------
<S> <C> <C>

Daily Dividend Funds $11.00 Per Annum
Other Funds $ 5.50 Per Annum

Merrill Lynch - Omnibus Accounts

Regular Accounts $11.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00 Per Annum

Networked Accounts $3.00 - 6.00 Per Annum

</TABLE>
<PAGE>

SCHEDULE A
----------

DELAWARE GROUP EQUITY FUNDS IV, INC.
(THE "FUND")

[_______________] AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT

COMPENSATION SCHEDULE
CONTINUED

B. TRANSACTION CHARGE
------------------

<TABLE>
<CAPTION>
Transaction Charge
----------- ------
<S> <C>
1. Dividend Payment $0.25

2. New Account $6.00

3. Purchase:

a. Wire $8.00
b. Automated $1.50
c. Other $2.60

4. Transfer $8.00

5. Certificate Issuance $4.00

6. Liquidations

a. Wires $12.25
b. Drafts $0.75
c. Money Market Regular $4.50
d. Other Regular $4.50

7. Exchanges

a. Dividend Exchanges $3.00
b. Other $10.00
</TABLE>

4. For the period commencing January 1, 1997, DSC's compensation for providing
services

2
<PAGE>

to the Delaware Group Premium Fund, Inc. (the "Premium Fund") will be
$50,000 annually. DSC will bill, and the Premium Fund will pay, such
compensation monthly, allocated among the current Series of the Premium
Fund based on the relative percentage of assets of each Series at the time
of billing and adjusted appropriately to reflect the length of time a
particular Series is in operation during any billing period.

5. For the period commencing January 1, 1997, DSC's compensation for providing
services to the Portfolios of Delaware Pooled Trust, Inc. (the "Trust")
will be $25,000 annually. DSC will bill, and the Trust will pay, such
compensation monthly allocated among the current Portfolios of the Trust
based on the relative percentage of assets of each Portfolio at the time of
billing and adjusted appropriately to reflect the length of time a
particular Portfolio is in operation during any billing period.

<PAGE>

EXHIBIT-99.B9AII

SCHEDULE A
----------

DELAWARE GROUP EQUITY FUNDS IV, INC.
(THE "FUND")

[________] AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT

COMPENSATION SCHEDULE

A. ANNUAL CHARGE
-------------
<S> <C> <C>

Daily Dividend Funds $ 11.00 Per Annum
Other Funds $ 5.50 Per Annum

Merrill Lynch - Omnibus Accounts*

Regular Accounts $11.00/$16.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00/$19.00 Per Annum

Networked Accounts $ 3.00 - 6.00 Per Annum
</TABLE>

*Until January 1, 1998, the annual charge for funds currently added to the
Merrill Lynch systems prior to July 1, 1997 will be $11.00 and $14.00,
respectively. Thereafter, the annual charge for those funds will be $16.00 and
$19.00, respectively. The annual charge for funds added to the Merrill Lynch
system on or after July 1, 1997 will be $16.00/19.00, respectively.
<PAGE>

SCHEDULE A
----------

DELAWARE GROUP EQUITY FUNDS IV, INC.
(THE "FUND")

[__________] AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT

COMPENSATION SCHEDULE
CONTINUED
<TABLE>
<CAPTION>

B. TRANSACTION CHARGE
------------------

Transaction Charge
----------- ------
<S> <C>
1. Dividend Payment $ 0.25

2. New Account $ 6.00

3. Purchase:

a. Wire $ 8.00
b. Automated $ 1.50
c. Other $ 2.60

4. Transfer $ 8.00

5. Certificate Issuance $ 4.00

6. Liquidations

a. Wires $12.25
b. Drafts $ 0.75
c. Money Market Regular $ 4.50
d. Other Regular $ 4.50

7. Exchanges

a. Dividend Exchanges $ 3.00
b. Other $10.00
</TABLE>
<PAGE>

4. For the period commencing January 1, 1997, DSC's compensation for providing
services to the Delaware Group Premium Fund, Inc. (the "Premium Fund") will
be $50,000 annually. DSC will bill, and the Premium Fund will pay, such
compensation monthly, allocated among the current Series of the Premium
Fund based on the relative percentage of assets of each Series at the time
of billing and adjusted appropriately to reflect the length of time a
particular Series is in operation during any billing period.

<PAGE>

EXHIBIT-99.B9AIII

SCHEDULE A
----------

DELAWARE GROUP EQUITY FUNDS IV, INC.
(THE "FUND")

[________] AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT

COMPENSATION SCHEDULE

A. ANNUAL CHARGE
-------------
<S> <C> <C>

Daily Dividend Funds $ 11.00 Per Annum
Other Funds $ 5.50 Per Annum

Merrill Lynch - Omnibus Accounts*

Regular Accounts $11.00/$16.00 Per Annum
Accounts with a Contingent
Deferred Sales Charge $14.00/$19.00 Per Annum

Networked Accounts $ 3.00 - 6.00 Per Annum
</TABLE>

SCHEDULE A
----------

DELAWARE GROUP EQUITY FUNDS IV, INC.
(THE "FUND")

[__________] AMENDED AND RESTATED
SHAREHOLDERS SERVICES AGREEMENT

COMPENSATION SCHEDULE
CONTINUED
<TABLE>
<CAPTION>

B. TRANSACTION CHARGE
------------------

Transaction Charge
----------- ------
<S> <C>
1. Dividend Payment $ 0.25

2. New Account $ 6.00

3. Purchase:

a. Wire $ 8.00
b. Automated $ 1.50
c. Other $ 2.60

4. Transfer $ 8.00

5. Certificate Issuance $ 4.00

6. Liquidations

a. Wires $12.25
b. Drafts $ 0.75
c. Money Market Regular $ 4.50
d. Other Regular $ 4.50

7. Exchanges

a. Dividend Exchanges $ 3.00
b. Other $10.00
</TABLE>
<PAGE>

<PAGE>

EXHIBIT 99.B9BI

AMENDMENT NO. 4A
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT

Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund

Delaware Group Cash Reserve, Inc.

Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund

Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)

Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund

Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)

Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)
____________________

*Except as otherwise noted, all Portfolios included on this Schedule A are
Existing Portfolios for purposes of the compensation described on Schedule B to
that Fund Accounting Agreement between Delaware Service Company, Inc. and the
Delaware Group of Funds dated as of August 19, 1996 ("Agreement"). All
portfolios added to this Schedule A by amendment executed by a Company on behalf
of such Portfolio hereof shall be a New Portfolio for purposes of Schedule B to
the Agreement.
<PAGE>

Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund

Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)

Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U.S. Government Money Fund

Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio

Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Decatur Total Return Series
Delaware Series
Delchester Series
DelCap Series
Global Bond Series (New)
International Equity Series
Trend Series
Value Series

2
<PAGE>

Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund

Delaware Group Tax-Free Money Fund, Inc.

Delaware Group Trend Fund, Inc.

DMC Tax-Free Income Trust - Pennsylvania (doing business as Tax-Free
Pennsylvania Fund)

Dated as of: April 14, 1997
--------------

3
<PAGE>

DELAWARE SERVICE COMPANY, INC.

By: /s/ David K. Downes
----------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer

By: /s/ Wayne A. Stork
------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer

DELAWARE POOLED TRUST, INC.

By: /s/ Wayne A. Stork
------------------------
Wayne A. Stork
President and
Chief Executive Officer

<PAGE>

EXHIBIT-99.B9BII

AMENDMENT NO. 5
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT

Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund

Delaware Group Cash Reserve, Inc.

Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund

Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)

Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund

Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)

Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund )

__________________

Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund

Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)

Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund

Delaware Pooled Trust, Inc.
The Aggressive Growth Portfolio
The Defensive Equity Portfolio
The Defensive Equity Small/Mid-Cap Portfolio (New)
The Defensive Equity Utility Portfolio (New)
The Emerging Markets Portfolio (New)
The Fixed Income Portfolio
The Global Fixed Income Portfolio
The High-Yield Bond Portfolio (New)
The International Equity Portfolio
The International Fixed Income Portfolio (New)
The Labor Select International Equity Portfolio
The Limited-Term Maturity Portfolio (New)
The Real Estate Investment Trust Portfolio

Delaware Group Premium Fund, Inc.
Capital Reserves Series
Cash Reserve Series
Convertible Securities Series (New)
Decatur Total Return Series
Delaware Series
Delchester Series
Devon Series (New)
Emerging Markets Series (New)
DelCap Series
Global Bond Series (New)
International Equity Series
Quantum Series (New)
Strategic Income Series (New)
Trend Series
Value Series

2
<PAGE>

Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund

Delaware Group Tax-Free Money Fund, Inc.

Delaware Group Trend Fund, Inc.

DMC Tax-Free Income Trust-Pennsylvania (doing business as Tax-Free Pennsylvania
Fund)

Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)

Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)

Voyageur Intermediate Tax Free Funds, Inc.
Arizona Limited Term Tax Free Fund (New)
California Limited Term Tax Free Fund (New)
Colorado Limited Term Tax Free Fund (New)
Minnesota Limited Term Tax Free Fund (New)
National Limited Term Tax Free Fund (New)

Voyageur Investment Trust
California Insured Tax Free Fund (New)
Florida Insured Tax Free Fund (New)
Florida Tax Free Fund (New)
Kansas Tax Free Fund (New)
Missouri Insured Tax Free Fund (New)
New Mexico Tax Free Fund (New)
Oregon Insured Tax Free Fund (New)
Utah Tax Free Fund (New)
Washington Insured Tax Free Fund (New)

Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)

3
<PAGE>

Voyageur Mutual Funds, Inc.
Arizona Tax Free Fund (New)
California Tax Free Fund (New)
Iowa Tax Free Fund (New)
Idaho Tax Free Fund (New)
Minnesota High Yield Municipal Bond Fund (New)
National High Yield Municipal Bond Fund (New)
National Tax Free Fund (New)
New York Tax Free Fund (New)
Wisconsin Tax Free Fund (New)

Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)

Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)

Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)

Dated as of May 1, 1997
<PAGE>

DELAWARE SERVICE COMPANY, INC.

By: /s/ David K. Downes
----------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer

DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX FREE MONEY FUND, INC.
DELAWARE GROUP TREND FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.

By: /s/ Wayne A. Stork
-------------------------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer

<PAGE>

EXHIBIT-99.B9BIII

AMENDMENT NO. 6
to
SCHEDULE A
of
DELAWARE GROUP OF FUNDS*
FUND ACCOUNTING AGREEMENT

Delaware Group Adviser Funds, Inc.
Corporate Income Fund
Enterprise Fund
Federal Bond Fund
New Pacific Fund
U.S. Growth Fund
World Growth Fund

Delaware Group Cash Reserve, Inc.

Delaware Group Equity Funds I, Inc. (formerly Delaware)
Delaware Fund
Devon Fund

Delaware Group Equity Funds II, Inc. (formerly Decatur)
Blue Chip Fund (New)
Decatur Income Fund
Decatur Total Return Fund
Quantum Fund (New)

Delaware Group Equity Funds IV, Inc. (formerly DelCap)
Capital Appreciation Fund (New)
DelCap Fund

Delaware Group Equity Funds V, Inc. (formerly Value)
Value Fund
Retirement Income Fund (New)

Delaware Group Government Fund, Inc.
Government Income Series (U.S. Government Fund)

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

Delaware Group Global & International Funds, Inc.
Emerging Markets Fund (New)
Global Assets Fund
Global Bond Fund
International Equity Fund
Global Equity Fund (New)
International Small Cap Fund (New)

Delaware Group Income Funds, Inc. (formerly Delchester)
Delchester Fund
High-Yield Opportunities Fund (New)
Strategic Income Fund (New)

Delaware Group Limited-Term Government Funds, Inc.
Limited-Term Government Fund
U. S. Government Money Fund

2
<PAGE>

Trend Series
Value Series

Delaware Group State Tax-Free Income Trust
Tax-Free New Jersey Fund (New)
Tax-Free Ohio Fund (New)
Tax-Free Pennsylvania Fund

Delaware Group Tax-Free Fund, Inc.
Tax-Free Insured Fund
Tax-Free USA Fund
Tax-Free USA Intermediate Fund

Delaware Group Tax-Free Money Fund, Inc.

Delaware Group Trend Fund, Inc.

Voyageur Funds, Inc.
Voyageur U.S. Government Securities Fund (New)

Voyageur Insured Funds, Inc.
Arizona Insured Tax Free Fund (New)
Colorado Insured Fund (New)
Minnesota Insured Fund (New)
National Insured Tax Free Fund (New)

3
<PAGE>

Voyageur Investment Trust II
Florida Limited Term Tax Free Fund (New)

Voyageur Mutual Funds II, Inc.
Colorado Tax Free Fund (New)

Voyageur Mutual Funds III, Inc.
Aggressive Growth Fund (New)
Growth Stock Fund (New)
International Equity Fund (New)
Tax Efficient Equity Fund (New)

Voyageur Tax Free Funds, Inc.
Minnesota Tax Free Fund (New)
North Dakota Tax Free Fund (New)

Dated as of July 21, 1997
<PAGE>

DELAWARE SERVICE COMPANY, INC.

By: /s/ David K. Downes
------------------------------------------
David K. Downes
President, Chief Executive Officer and Chief Financial Officer

By: /s/ Wayne A. Stork
------------------------------------------------------------
Wayne A. Stork
Chairman, President and
Chief Executive Officer

<PAGE>

Exhibit 99.B11

Consent of Ernst & Young LLP, Independent Auditors

We consent to the references to our firm under the captions "Financial
Highlights" in the Prospectuses and "Financial Statements" in the Statement of
Additional Information and to the incorporation by reference in this Post-
Effective Amendment No. 23 to the Registration Statement (Form N-1A) (No. 33-
442) of Delaware Group Equity Funds IV, Inc. of our reports dated October 24,
1997, included in the 1997 Annual Reports to shareholders.

Philadelphia, Pennsylvania /s/Ernst & Young LLP
November 24, 1997
<PAGE>

Report of Independent Auditors

To the Shareholders and Board of Directors
Delaware Group Equity Funds IV, Inc. - DelCap Fund

We have audited the accompanying statement of net assets of Delaware Group
Equity Funds IV, Inc. - DelCap Fund as of September 30, 1997, and the related
statement of operations for the year then ended, the statements of changes in
net assets for each of the two years in the period then ended, and the financial
highlights for each of the periods indicated therein. These financial statements
and financial highlights are the responsibility of the Fund's management. Our
responsibility is to express an opinion on these financial statements and
financial highlights based on our audits.

We conducted our audits in accordance with generally accepted auditing
standards. Those standards require that we plan and perform the audit to obtain
reasonable assurance about whether the financial statements and financial
highlights are free of material misstatement. An audit includes examining, on a
test basis, evidence supporting the amounts and disclosures in the financial
statements and financial highlights. Our procedures included confirmation of
securities owned as of September 30, 1997, by correspondence with the Fund's
custodian and brokers. An audit also includes assessing the accounting
principles used and significant estimates made by management, as well as
evaluating the overall financial statement presentation. We believe that our
audits provide a reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Equity Funds IV, Inc. - DelCap Fund at September 30, 1997, the
results of its operations for the year then ended, the changes in its net assets
for each of the two years in the period then ended, and the financial highlights
for each of the periods indicated therein, in conformity with generally accepted
accounting principles.

Philadelphia, Pennsylvania /s/ Ernst & Young LLP
October 24, 1997
<PAGE>

Report of Independent Auditors

To the Shareholders and Board of Directors
Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund

We have audited the accompanying statement of net assets of Delaware Group
Equity Funds IV, Inc. - Capital Appreciation Fund as of September 30, 1997, and
the related statement of operations, the statement of changes in net assets, and
the financial highlights for the period December 2, 1996 (commencement of
operations) to September 30, 1997. These financial statements and financial
highlights are the responsibility of the Fund's management. Our responsibility
is to express an opinion on these financial statements and financial highlights
based on our audit.

We conducted our audit in accordance with generally accepted auditing standards.
Those standards require that we plan and perform the audit to obtain reasonable
assurance about whether the financial statements and financial highlights are
free of material misstatement. An audit includes examining, on a test basis,
evidence supporting the amounts and disclosures in the financial statements and
financial highlights. Our procedures included confirmation of securities owned
as of September 30, 1997, by correspondence with the Fund's custodian and
brokers. An audit also includes assessing the accounting principles used and
significant estimates made by management, as well as evaluating the overall
financial statement presentation. We believe that our audit provides a
reasonable basis for our opinion.

In our opinion, the financial statements and financial highlights referred to
above present fairly, in all material respects, the financial position of
Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund at September
30, 1997, and the results of its operations, the changes in its net assets, and
the financial highlights for the period December 2, 1996 (commencement of
operations) to September 30, 1997, in conformity with generally accepted
accounting principles.

Philadelphia, Pennsylvania /s/ Ernst & Young LLP
October 24, 1997

<PAGE>
Schedules of
Computation
EX-99.B16B

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Institutional Class
Cumulative Total Return Performance
INCEPTION
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647

Ending Shares 117.759
Ending NAV x $10.16
----------
Investment Return $1,196.43

Total Return Performance
- --------------
Investment Return $1,196.43
Less Initial Investment $1,000.00
----------
$196.43 / $1,000.00 x 100

Total Return: 19.64%
<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Institutional Class
Cumulative Total Return Performance
THREE MONTHS
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $9.07
Initial Shares 110.254

Ending Shares 110.254
Ending NAV x $10.16
----------
Investment Return $1,120.18

Total Return Performance
- --------------
Investment Return $1,120.18
Less Initial Investment $1,000.00
----------
$120.18 / $1,000.00 x 100

Total Return: 12.02%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Institutional Class
Cumulative Total Return Performance
SIX MONTHS
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.05
Initial Shares 124.224

Ending Shares 124.224
Ending NAV x $10.16
----------
Investment Return $1,262.12

Total Return Performance
- --------------
Investment Return $1,262.12
Less Initial Investment $1,000.00
----------
$262.12 / $1,000.00 x 100

Total Return: 26.21%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Institutional Class
Cumulative Total Return Performance
NINE MONTHS
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.37
Initial Shares 119.474

Ending Shares 119.474
Ending NAV x $10.16
----------
Investment Return $1,213.86

Total Return Performance
- --------------
Investment Return $1,213.86
Less Initial Investment $1,000.00
----------
$213.86 / $1,000.00 x 100

Total Return: 21.39%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
INCEPTION (AT NAV)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.50
Initial Shares 117.647

Ending Shares 117.759
Ending NAV x $10.16
----------
Investment Return $1,196.43

Total Return Performance
- --------------
Investment Return $1,196.43
Less Initial Investment $1,000.00
----------
$196.43 / $1,000.00 x 100

Total Return: 19.64%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
INCEPTION (AT OFFER)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.92
Initial Shares 112.108

Ending Shares 112.215
Ending NAV x $10.16
----------
Investment Return $1,140.10

Total Return Performance
- --------------
Investment Return $1,140.10
Less Initial Investment $1,000.00
----------
$140.10 / $1,000.00 x 100

Total Return: 14.01%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
THREE MONTHS (AT NAV)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $9.07
Initial Shares 110.254

Ending Shares 110.254
Ending NAV x $10.16
----------
Investment Return $1,120.18

Total Return Performance
- --------------
Investment Return $1,120.18
Less Initial Investment $1,000.00
----------
$120.18 / $1,000.00 x 100

Total Return: 12.02%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Total Return Performance
THREE MONTHS (AT OFFER)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $9.52
Initial Shares 105.042

Ending Shares 105.042
Ending NAV x $10.16
----------
Investment Return $1,067.23

Total Return Performance
- --------------
Investment Return $1,067.23
Less Initial Investment $1,000.00
----------
$67.23 / $1,000.00 x 100

Total Return: 6.72%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
SIX MONTHS (NAV)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.05
Initial Shares 124.224

Ending Shares 124.224
Ending NAV x $10.16
----------
Investment Return $1,262.11

Total Return Performance
- --------------
Investment Return $1,262.11
Less Initial Investment $1,000.00
----------
$262.11 / $1,000.00 x 100

Total Return: 26.21%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
SIX MONTHS (AT OFFER)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $8.45
Initial Shares 118.343

Ending Shares 118.343
Ending NAV x $10.16
----------
Investment Return $1,202.37

Total Return Performance
- --------------
Investment Return $1,202.37
Less Initial Investment $1,000.00
----------
$202.37 / $1,000.00 x 100

Total Return: 20.24%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
NINE MONTHS (AT NAV)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning OFFER $8.37
Initial Shares 119.474

Ending Shares 119.474
Ending NAV x $10.16
----------
Investment Return $1,213.86

Total Return Performance
- --------------
Investment Return $1,213.86
Less Initial Investment $1,000.00
----------
$213.86 / $1,000.00 x 100

Total Return: 21.39%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund
Class A
Cumulative Total Return Performance
NINE MONTHS (AT OFFER)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $8.79
Initial Shares 113.766

Ending Shares 113.766
Ending NAV x $10.16
----------
Investment Return $1,155.86

Total Return Performance
- --------------
Investment Return $1,155.86
Less Initial Investment $1,000.00
----------
$155.86 / $1,000.00 x 100

Total Return: 15.59%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
B Class
Cumulative Total Return Performance
Three Years
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $25.56
Initial Shares 39.124

Fiscal Beginning Dividends Reinvested Cumulative
Year Shares for Period Shares Shares
- --------------------------------------------------------------------------------
1995 39.124 $1.830 3.184 42.308
- --------------------------------------------------------------------------------
1996 42.308 $3.540 5.839 48.147
- --------------------------------------------------------------------------------
1997 48.147 $3.590 6.617 54.764
- --------------------------------------------------------------------------------

Ending Shares 54.764
Ending NAV x $29.75
----------
Investment Return $1,629.22

Total Return Performance
- --------------
Investment Return $1,629.22
Less Initial Investment $1,000.00
----------
$629.22 / $1,000.00 x 100

Total Return: 62.92%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
B Class
Average Annual Total Return Performance
Three Years
- --------------------------------------------------------------------------------

n
P(1 + T) = ERV

THREE
YEARS
- ---------
3
$1000(1 + T) = $1,629.22

T = 17.67%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
B Class
Cumulative Total Return Performance
Three Years (INCLUDING CDSC)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $25.56
Initial Shares 39.124

Ending Shares 54.764
Ending NAV x $29.75
----------
$1,629.22
Less CDSC $30.00
----------
Investment Return $1,599.22

Total Return Performance
- --------------
Investment Return $1,599.22
Less Initial Investment $1,000.00
----------
$599.22 / $1,000.00 x 100

Total Return: 59.92%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
B Class
Average Annual Total Return Performance
Three Years (INCLUDING CDSC)
- --------------------------------------------------------------------------------

n
P(1 + T) = ERV

THREE
YEARS
- ---------
3
$1000(1 + T) = $1,599.22

T = 16.94%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
C Class
Cumulative Total Return Performance
ONE YEAR
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $30.58
Initial Shares 32.701

Ending Shares 37.151
Ending NAV x $30.05
----------
Investment Return $1,116.39

Total Return Performance
- --------------
Investment Return $1,116.39
Less Initial Investment $1,000.00
----------
$116.39 / $1,000.00 x 100

Total Return: 11.64%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
C Class
Average Annual Total Return Performance
ONE YEAR
- --------------------------------------------------------------------------------

n
P(1 + T) = ERV

ONE
YEAR
- ---------
1
$1000(1 + T) = $1,116.39

T = 11.64%

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
C Class
Cumulative Total Return Performance
ONE YEAR (INCLUDING CDSC)
- --------------------------------------------------------------------------------

Initial Investment $1,000.00
Beginning NAV $30.58
Initial Shares 32.701

<TABLE>
<S> <C>
Ending Shares 37.151
Ending NAV x $30.05
----------
Investment Return $1,116.39
Less CDSC $10.00
----------
$1,106.39

Total Return Performance
- --------------
Investment Return $1,106.39
Less Initial Investment $1,000.00
----------
$106.39 / $1,000.00 x 100

Total Return: 10.64%
</TABLE>

<PAGE>

Delaware Group Equity Funds IV, Inc. - Delcap Fund
C Class
Average Annual Total Return Performance
ONE YEAR (INCLUDING CDSC)
- --------------------------------------------------------------------------------

n
P(1 + T) = ERV

ONE
YEAR
- ---------
1
$1000(1 + T) = $1,106.39

T = 10.64%

<PAGE>

EXHIBIT-99.B18A

The Delaware Group of Funds

Multiple Class Plan Pursuant to Rule 18f-3

This Multiple Class Plan (the "Plan") has been adopted by a majority
of the Board of Directors of each of the investment companies listed on Appendix
A as may be amended from time to time (each individually a "Fund," and
collectively, the "Funds"), including a majority of the Directors who are not
interested persons of each Fund, pursuant to Rule 18f-3 under the Investment
Company Act of 1940, as amended (the "Act"). The Board of each Fund has
determined that the Plan, including the allocation of expenses, is in the best
interests of the Fund as a whole, each series of shares offered by such Fund
(individually and collectively the "Series") where the Fund offers its shares in
multiple series, and each class of shares offered by the Fund or Series, as
relevant. The Plan sets forth the provisions relating to the establishment of
multiple classes of shares for each Fund and, if relevant, its Series. To the
extent that a subject matter set forth in this Plan is covered by a Fund's
Articles of Incorporation or By-Laws, such Articles of Incorporation or By-Laws
will control in the event of any inconsistencies with descriptions contained in
this Plan.

The term "Portfolio," when used in this Plan in the context of a Fund
that offers only a single series of shares, shall be a reference to the Fund,
and when used in the context of a Fund that offers multiple series of shares,
shall be a reference to each series of such Fund.

CLASSES
- -------

1. Appendix A to this Plan describes the classes to be issued by each
Portfolio and identifies the names of such classes.

FRONT-END SALES CHARGE
- ----------------------

2. Class A shares carry a front-end sales charge as described in the
Funds' relevant prospectuses; and Class B, Class C and Institutional Class
shares are sold without a front-end sales charge.
<PAGE>

CONTINGENT DEFERRED SALES CHARGE
- --------------------------------

3. Class A shares are not subject to a contingent deferred sales
charge ("CDSC"), except as described in the Fund's relevant prospectus.

4. Class B shares redeemed within six years of their purchase shall
be assessed a CDSC at the following rate: (i) 4.00% if shares are redeemed
within two years of purchase; (ii) 3.00% if shares are redeemed during the third
or fourth year following purchase; (iii) 2.00% if shares are redeemed during the
fifth year following purchase; (iv) 1.00% if shares are redeemed during the
sixth year following purchase; and (vi) 0% thereafter.

5. Class C shares redeemed within twelve months of their purchase
shall be assessed a CDSC at the rate of 1.00% of the lesser of (i) the net asset
value at the time of redemption, or (ii) the original net asset value at the
time of purchase.

6. The CDSC for each class is waived in certain circumstances, as
described in the Funds' relevant prospectuses. Shares that are subject to a CDSC
age one month at the end of the month in which the shares were purchased,
regardless of the specific date during the month that the shares were purchased.

7. Institutional Class shares are not subject to a CDSC.

RULE 12b-1 PLANS
- ----------------

8. In accordance with the Rule 12b-1 Plan for the Class A shares of
each Portfolio, the Fund shall pay to Delaware Distributors, L.P. (the
"Distributor") a monthly fee not to exceed 0.30% per annum of such Portfolio's
average daily net assets represented by Class A shares as may be determined by
the Fund's Board of Directors from time to time. The monthly fee shall be
reduced by the aggregate sums paid by or on behalf of such Portfolio to persons
other than broker-dealers (the "Service Providers") pursuant to servicing
agreements.

9. In accordance with the Rule 12b-1 Plan for the Class B shares of
each Portfolio, the Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% per annum of such Portfolio's average daily net assets represented
by Class B shares as may be determined by the Fund's Board of Directors from
time to time. In addition to these amounts, the Fund shall pay

-2-
<PAGE>

(i) to the Distributor for payment to dealers or others, or (ii) directly to
others, an amount not to exceed 0.25% per annum of such Portfolio's average
daily net assets represented by Class B shares, as a service fee pursuant to
dealer or servicing agreements.

10. In accordance with the Rule 12b-1 Plan for the Class C shares of
each Portfolio, the Fund shall pay to the Distributor a monthly fee not to
exceed 0.75% per annum of such Portfolio's average daily net assets represented
by Class C shares as may be determined by the Fund's Board of Directors from
time to time. In addition to these amounts, the Fund shall pay (i) to the
Distributor for payment to dealers or others, or (ii) directly to others, an
amount not to exceed 0.25% per annum of such Portfolio's average daily net
assets represented by Class C shares, as a service fee pursuant to dealer or
servicing agreements.

11. A Rule 12b-1 Plan has not been adopted for the Institutional
Class shares of any Portfolio.

ALLOCATION OF EXPENSES
- ----------------------

12. The Fund shall allocate to each class of shares of a Portfolio
any fees and expenses incurred by the Fund in connection with the distribution
or servicing of such class of shares under a Rule 12b-1 Plan, if any, adopted
for such class. In addition, the Fund reserves the right, subject to approval by
the Fund's Board of Directors, to allocate fees and expenses of the following
nature to a particular class of shares of a Portfolio (to the extent that such
fees and expenses actually vary among each class of shares or vary by types of
services provided to each class of shares of the Portfolio):

(i) transfer agency and other recordkeeping costs;

(ii) Securities and Exchange Commission and blue sky registration or
qualification fees;

(iii) printing and postage expenses related to printing and
distributing class specific materials, such as shareholder reports,
prospectuses and proxies to current shareholders of a particular class or
to regulatory authorities with respect to such class of shares;

(iv) audit or accounting fees or expenses relating solely to such
class;

-3-
<PAGE>

(v) the expenses of administrative personnel and services as required
to support the shareholders of such class;

(vi) litigation or other legal expenses relating solely to such class
of shares;

(vii) Directors' fees and expenses incurred as a result of issues
relating solely to such class of shares; and

(viii) other expenses subsequently identified and determined to be
properly allocated to such class of shares.

13. Except for any expenses that are allocated to a particular class
as described in paragraph 11 above, all expenses incurred by a Portfolio will be
allocated to each class of shares of such Portfolio on the basis of the net
asset value of each such class in relation to the net asset value of the
Portfolio.

ALLOCATION OF INCOME AND GAINS
- ------------------------------

14. Income and realized and unrealized capital gains and losses of a
Portfolio will be allocated to each class of shares of such Portfolio on the
basis of the net asset value of each such class in relation to the net asset
value of the Portfolio.

CONVERSIONS
- -----------

15. (a) Except for shares acquired through a reinvestment of
dividends or distributions, Class B shares held for eight years after purchase
are eligible for automatic conversion into Class A shares of the same Portfolio
in accordance with the terms described in the relevant prospectus. Class B
shares acquired through a reinvestment of dividends or distributions will
convert into Class A shares of the same Portfolio pro rata with the Class B
shares that were not acquired through the reinvestment of dividends and
distributions.

(b) The automatic conversion feature of Class B shares shall be
suspended at any time that the Board of Directors of the Fund determines that
there is not available a reasonably satisfactory opinion of counsel to the
effect that (i) the assessment of the higher fee under the Fund's Rule 12b-1
Plan for Class B does not result in the Fund's dividends or distributions
constituting a preferential dividend under the Internal Revenue Code of 1986, as
amended, and (ii) the conversion of Class B shares into Class A shares does not
constitute a taxable event under federal income tax law. In addition, the Board
of

-4-
<PAGE>

Directors of a Fund may suspend the automatic conversion feature by determining
that any other condition to conversion set forth in the relevant prospectus, as
amended from time to time, is not satisfied.

(c) The Board of Directors of a Fund may also suspend the automatic
conversion of Class B shares if it determines that suspension is appropriate to
comply with the requirements of the Act, or any rule or regulation issued
thereunder, relating to voting by Class B shareholders on the Fund's Rule 12b-1
Plan for Class A or, in the alternative, the Board of Directors may provide
Class B shareholders with alternative conversion or exchange rights.

16. Class A, Class C and Institutional Class shares do not have a
conversion feature.

EXCHANGES
- ---------

17. Exchanges are permitted between Class A Shares and Institutional
Class Shares of a Portfolio or of any other Portfolio in the Delaware Group
funds; Class B shares of a Portfolio may only be exchanged for Class B shares of
any other Portfolio in the Delaware Group; Class C shares of a Portfolio may
only be exchanged for Class C shares of any other Portfolio in the Delaware
Group. All exchanges are subject to the eligibility and minimum purchase
requirements set forth in the Funds' prospectuses. Exchanges cannot be made
between open-end and closed-end funds within the Delaware Group.

18. Each class will vote separately with respect to the Rule 12b-1
Plan related to that class; provided, however, that Class B shares of a
Portfolio may vote on any proposal to materially increase the fees to be paid by
the Fund under the Rule 12b-1 Plan for the Class A shares of the same Portfolio.

19. On an ongoing basis, the Directors, pursuant to their fiduciary
responsibilities under the Act and otherwise, will monitor the Portfolio for the
existence of any material conflicts between the interests of all the classes of
shares offered by such Portfolio. The Directors, including a majority of the
Directors who are not interested persons of the Fund, shall take such action as
is reasonably necessary to eliminate any such conflict that may develop. The
Manager and the Distributor shall be responsible for alerting the Board to any
material conflicts that arise.

20. As described more fully in the Funds' relevant prospectuses,
broker-dealers that sell shares of a Portfolio will be compensated differently
depending on which class of shares the investor selects.

-5-
<PAGE>

21. Each Fund reserves the right to increase, decrease or waive the
CDSC imposed on any existing or future class of shares of a Portfolio within the
ranges permissible under applicable rules and regulations of the Securities and
Exchange Commission (the "SEC") and the rules of the National Association of
Securities Dealers, Inc. (the "NASD"), as such rules may be amended or adopted
from time to time. Each Fund may in the future alter the terms of the existing
classes of such Portfolio or create new classes in compliance with applicable
rules and regulations of the SEC and the NASD.

22. All material amendments to this Plan must be approved by a
majority of the Directors of each Fund affected by such amendments, including a
majority of the Directors who are not interested persons of the Fund.

Effective as of September 18, 1997

-6-
<PAGE>

APPENDIX A

List of Funds and Their Classes
-------------------------------

1. Delaware Group Equity Funds I, Inc.

Delaware Fund

Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class

Devon Fund

Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class

2. Delaware Group Equity Funds II, Inc.

Decatur Income Fund

Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class

Decatur Total Return Fund

Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class

Blue Chip Fund (Added February 24, 1997)

Blue Chip Fund A Class
Blue Chip Fund B Class
Blue Chip Fund C Class
Blue Chip Fund Institutional Class

-7-
<PAGE>

Quantum Fund (Added February 24, 1997)

Quantum Fund A Class
Quantum Fund B Class
Quantum Fund C Class
Quantum Fund Institutional Class

3. Delaware Group Equity Funds III, Inc.

Trend Fund

Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class

4. Delaware Group Equity Funds V, Inc.

Value Fund

Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class

Retirement Income Fund (Added November 29, 1996)

Retirement Income Fund A Class
Retirement Income Fund B Class
Retirement Income Fund C Class
Retirement Income Fund Institutional Class

5. Delaware Group Equity Funds IV, Inc.

DelCap Fund

DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class

Capital Appreciation Fund (Added November 29, 1996)

Capital Appreciation Fund A Class
Capital Appreciation Fund B Class
Capital Appreciation Fund C Class
Capital Appreciation Fund Institutional Class

-8-
<PAGE>

6. Delaware Group Global & International Funds, Inc.

International Equity Series

International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class

Global Bond Series

Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class

Global Assets Series

Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class

Emerging Markets Series (Added May 1, 1996)

Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class

International Small Cap Series (Added July 21, 1997)

International Small Cap Fund A Class
International Small Cap Fund B Class
International Small Cap Fund C Class
International Small Cap Fund Institutional Class

Global Equity Series (Added July 21, 1997)

Global Equity Fund A Class
Global Equity Fund B Class
Global Equity Fund C Class
Global Equity Fund Institutional Class

7. Delaware Group Income Funds, Inc.

Strategic Income Fund (Added September 30, 1996)

Strategic Income Fund A Class
Strategic Income Fund B Class
Strategic Income Fund C Class
Strategic Income Fund Institutional Class

-9-

<PAGE>

EXHIBIT-99.B18F

APPENDIX A

List of Funds and Their Classes
-------------------------------

1. Delaware Group Equity Funds I, Inc.

Delaware Fund

Delaware Fund A Class
Delaware Fund B Class
Delaware Fund C Class
Delaware Fund Institutional Class

Devon Fund

Devon Fund A Class
Devon Fund B Class
Devon Fund C Class
Devon Fund Institutional Class

2. Delaware Group Equity Funds II, Inc.

Decatur Income Fund

Decatur Income Fund A Class
Decatur Income Fund B Class
Decatur Income Fund C Class
Decatur Income Fund Institutional Class

Decatur Total Return Fund

Decatur Total Return Fund A Class
Decatur Total Return Fund B Class
Decatur Total Return Fund C Class
Decatur Total Return Fund Institutional Class

Blue Chip Fund (Added February 24, 1997)

Blue Chip Fund A Class
Blue Chip Fund B Class
Blue Chip Fund C Class
Blue Chip Fund Institutional Class
<PAGE>

Quantum Fund (Added February 24, 1997)

Quantum Fund A Class
Quantum Fund B Class
Quantum Fund C Class
Quantum Fund Institutional Class

3. Delaware Group Equity Funds III, Inc.

Trend Fund

Trend Fund A Class
Trend Fund B Class
Trend Fund C Class
Trend Fund Institutional Class

4. Delaware Group Equity Funds V, Inc.

Value Fund

Value Fund A Class
Value Fund B Class
Value Fund C Class
Value Fund Institutional Class

Retirement Income Fund (Added November 29, 1996)

Retirement Income Fund A Class
Retirement Income Fund B Class
Retirement Income Fund C Class
Retirement Income Fund Institutional Class

5. Delaware Group Equity Funds IV, Inc.

DelCap Fund

DelCap Fund A Class
DelCap Fund B Class
DelCap Fund C Class
DelCap Fund Institutional Class

Capital Appreciation Fund (Added November 29, 1996)

Capital Appreciation Fund A Class
Capital Appreciation Fund B Class
Capital Appreciation Fund C Class
Capital Appreciation Fund Institutional Class

-8-
<PAGE>

6. Delaware Group Global & International Funds, Inc.

International Equity Series

International Equity Fund A Class
International Equity Fund B Class
International Equity Fund C Class
International Equity Fund Institutional Class

Global Bond Series

Global Bond Fund A Class
Global Bond Fund B Class
Global Bond Fund C Class
Global Bond Fund Institutional Class

Global Assets Series

Global Assets Fund A Class
Global Assets Fund B Class
Global Assets Fund C Class
Global Assets Fund Institutional Class

Emerging Markets Series (Added May 1, 1996)

Emerging Markets Fund A Class
Emerging Markets Fund B Class
Emerging Markets Fund C Class
Emerging Markets Fund Institutional Class

International Small Cap Series (Added July 21, 1997)

International Small Cap Fund A Class
International Small Cap Fund B Class
International Small Cap Fund C Class
International Small Cap Fund Institutional Class

Global Equity Series (Added July 21, 1997)

Global Equity Fund A Class
Global Equity Fund B Class
Global Equity Fund C Class
Global Equity Fund Institutional Class

7. Delaware Group Income Funds, Inc.

Strategic Income Fund (Added September 30, 1996)

Strategic Income Fund A Class
Strategic Income Fund B Class
Strategic Income Fund C Class
Strategic Income Fund Institutional Class

-9-
<PAGE>

8. Delaware Pooled Trust, Inc.

The Real Estate Investment Trust Portfolio
(Added October 14, 1997)
REIT Fund A Class
REIT Fund B Class
REIT Fund C Class
REIT Fund Institutional Class

<PAGE>

EXHIBIT-99.B19

POWER OF ATTORNEY

The undersigned, a member of the Boards of Directors/Trustees of the
Delaware Group Funds listed on Exhibit A to this Power of Attorney, hereby
constitutes and appoints Wayne A. Stork, W. Thacher Longstreth and Walter P.
Babich and any one of them acting singly, his true and lawful attorneys-in-fact,
in his name, place, and stead, to execute and cause to be filed with the
Securities and Exchange Commission and other federal or state government agency
or body, such registration statements, and any and all amendments thereto as
either of such designees may deem to be appropriate under the Securities Act of
1933, as amended, the Investment Company Act of 1940, as amended, and all other
applicable federal and state securities laws.

IN WITNESS WHEREOF, the undersigned has executed this instrument as of this
1st day of May, 1997.

/s/ Thomas F. Madison
- -----------------------------
Thomas F. Madison
<PAGE>

POWER OF ATTORNEY

EXHIBIT A
DELAWARE GROUP FUNDS

DELAWARE GROUP EQUITY FUNDS I, INC.
DELAWARE GROUP EQUITY FUNDS II, INC.
DELAWARE GROUP EQUITY FUNDS IV, INC.
DELAWARE GROUP EQUITY FUNDS V, INC.
DELAWARE GROUP TREND FUND, INC.
DELAWARE GROUP INCOME FUNDS, INC.
DELAWARE GROUP GOVERNMENT FUND, INC.
DELAWARE GROUP CASH RESERVE, INC.
DELAWARE GROUP LIMITED-TERM GOVERNMENT FUNDS, INC.
DELAWARE GROUP TAX-FREE FUND, INC.
DELAWARE GROUP TAX-FREE MONEY FUND, INC.
DELAWARE GROUP GLOBAL & INTERNATIONAL FUNDS, INC.
DELAWARE GROUP ADVISER FUNDS, INC.
DELAWARE POOLED TRUST, INC.
DELAWARE GROUP PREMIUM FUND, INC.
DMC TAX-FREE INCOME TRUST-PENNSYLVANIA
DELAWARE GROUP DIVIDEND AND INCOME FUND, INC.
DELAWARE GROUP GLOBAL DIVIDEND AND INCOME FUND, INC.
VOYAGEUR FUNDS, INC.
VOYAGEUR INSURED FUNDS, INC.
VOYAGEUR INTERMEDIATE TAX FREE FUNDS, INC.
VOYAGEUR INVESTMENT TRUST
VOYAGEUR INVESTMENT TRUST II
VOYAGEUR MUTUAL FUNDS, INC.
VOYAGEUR MUTUAL FUNDS II, INC.
VOYAGEUR MUTUAL FUNDS III, INC.
VOYAGEUR TAX FREE FUNDS, INC.
VOYAGEUR ARIZONA MUNICIPAL INCOME FUND, INC.
VOYAGEUR COLORADO INSURED MUNICIPAL INCOME FUND, INC.
VOYAGEUR FLORIDA INSURED MUNICIPAL INCOME FUND
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND II, INC.
VOYAGEUR MINNESOTA MUNICIPAL INCOME FUND III, INC.
<PAGE>

POWER OF ATTORNEY

IN WITNESS WHEREOF, the undersigned has executed this instrument as of this
1st day of May, 1997.

/s/ Jeffrey J. Nick
- -------------------------
Jeffrey J. Nick
<PAGE>

POWER OF ATTORNEY

EXHIBIT A
DELAWARE GROUP FUNDS

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 011
<NAME> DELCAP FUND A CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 666,747,406
<INVESTMENTS-AT-VALUE> 957,082,752
<RECEIVABLES> 12,180,973
<ASSETS-OTHER> 1,957
<OTHER-ITEMS-ASSETS> (47,104)
<TOTAL-ASSETS> 969,218,578
<PAYABLE-FOR-SECURITIES> 11,109,388
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,491,804
<TOTAL-LIABILITIES> 43,601,192
<SENIOR-EQUITY> 271,299
<PAID-IN-CAPITAL-COMMON> 487,965,641
<SHARES-COMMON-STOCK> 25,294,733
<SHARES-COMMON-PRIOR> 30,037,007
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 147,045,100
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 290,335,346
<NET-ASSETS> 770,207,178
<DIVIDEND-INCOME> 1,477,190
<INTEREST-INCOME> 3,369,661
<OTHER-INCOME> 0
<EXPENSES-NET> 12,859,809
<NET-INVESTMENT-INCOME> (8,012,958)
<REALIZED-GAINS-CURRENT> 153,187,709
<APPREC-INCREASE-CURRENT> (50,356,803)
<NET-CHANGE-FROM-OPS> 94,817,948
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 106,881,303
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 759,827,594
<NUMBER-OF-SHARES-REDEEMED> 981,336,159
<SHARES-REINVESTED> 95,973,989
<NET-CHANGE-IN-ASSETS> (191,014,308)
<ACCUMULATED-NII-PRIOR> (7,244,771)
<ACCUMULATED-GAINS-PRIOR> 130,685,585
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,266,204
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,859,809
<AVERAGE-NET-ASSETS> 805,873,979
<PER-SHARE-NAV-BEGIN> 30.74
<PER-SHARE-NII> (0.234)
<PER-SHARE-GAIN-APPREC> 3.534
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 3.59
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 30.45
<EXPENSE-RATIO> 1.36
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 012
<NAME> DELCAP FUND B CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 666,747,406
<INVESTMENTS-AT-VALUE> 957,082,752
<RECEIVABLES> 12,180,973
<ASSETS-OTHER> 1,957
<OTHER-ITEMS-ASSETS> (47,104)
<TOTAL-ASSETS> 969,218,578
<PAYABLE-FOR-SECURITIES> 11,109,388
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,491,804
<TOTAL-LIABILITIES> 43,601,192
<SENIOR-EQUITY> 271,299
<PAID-IN-CAPITAL-COMMON> 487,965,641
<SHARES-COMMON-STOCK> 696,015
<SHARES-COMMON-PRIOR> 436,896
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 147,045,100
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 290,335,346
<NET-ASSETS> 20,706,152
<DIVIDEND-INCOME> 1,477,190
<INTEREST-INCOME> 3,369,661
<OTHER-INCOME> 0
<EXPENSES-NET> 12,859,809
<NET-INVESTMENT-INCOME> (8,012,958)
<REALIZED-GAINS-CURRENT> 153,187,709
<APPREC-INCREASE-CURRENT> (50,356,803)
<NET-CHANGE-FROM-OPS> 94,817,948
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 1,868,016
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 10,072,759
<NUMBER-OF-SHARES-REDEEMED> 4,776,048
<SHARES-REINVESTED> 1,828,325
<NET-CHANGE-IN-ASSETS> (191,014,308)
<ACCUMULATED-NII-PRIOR> (7,244,771)
<ACCUMULATED-GAINS-PRIOR> 130,685,585
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,266,204
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,859,809
<AVERAGE-NET-ASSETS> 16,997,420
<PER-SHARE-NAV-BEGIN> 30.30
<PER-SHARE-NII> (0.418)
<PER-SHARE-GAIN-APPREC> 3.458
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 3.59
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 29.75
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 013
<NAME> DELCAP FUND C CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 666,747,406
<INVESTMENTS-AT-VALUE> 957,082,752
<RECEIVABLES> 12,180,973
<ASSETS-OTHER> 1,957
<OTHER-ITEMS-ASSETS> (47,104)
<TOTAL-ASSETS> 969,218,578
<PAYABLE-FOR-SECURITIES> 11,109,388
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,491,804
<TOTAL-LIABILITIES> 43,601,192
<SENIOR-EQUITY> 271,299
<PAID-IN-CAPITAL-COMMON> 487,965,641
<SHARES-COMMON-STOCK> 112,643
<SHARES-COMMON-PRIOR> 63,681
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 147,045,100
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 290,335,346
<NET-ASSETS> 3,384,955
<DIVIDEND-INCOME> 1,477,190
<INTEREST-INCOME> 3,369,661
<OTHER-INCOME> 0
<EXPENSES-NET> 12,859,809
<NET-INVESTMENT-INCOME> (8,012,958)
<REALIZED-GAINS-CURRENT> 153,187,709
<APPREC-INCREASE-CURRENT> (50,356,803)
<NET-CHANGE-FROM-OPS> 94,817,948
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 238,607
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 2,677,952
<NUMBER-OF-SHARES-REDEEMED> 1,649,304
<SHARES-REINVESTED> 228,718
<NET-CHANGE-IN-ASSETS> (191,014,308)
<ACCUMULATED-NII-PRIOR> (7,244,771)
<ACCUMULATED-GAINS-PRIOR> 130,685,585
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,266,204
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,859,809
<AVERAGE-NET-ASSETS> 2,687,883
<PER-SHARE-NAV-BEGIN> 30.57
<PER-SHARE-NII> (0.421)
<PER-SHARE-GAIN-APPREC> 3.491
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 3.59
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 30.05
<EXPENSE-RATIO> 2.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 014
<NAME> DELCAP FUND INSTITUTIONAL CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 666,747,406
<INVESTMENTS-AT-VALUE> 957,082,752
<RECEIVABLES> 12,180,973
<ASSETS-OTHER> 1,957
<OTHER-ITEMS-ASSETS> (47,104)
<TOTAL-ASSETS> 969,218,578
<PAYABLE-FOR-SECURITIES> 11,109,388
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 32,491,804
<TOTAL-LIABILITIES> 43,601,192
<SENIOR-EQUITY> 271,299
<PAID-IN-CAPITAL-COMMON> 487,965,641
<SHARES-COMMON-STOCK> 4,234,162
<SHARES-COMMON-PRIOR> 5,719,642
<ACCUMULATED-NII-CURRENT> 0
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 147,045,100
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 290,335,346
<NET-ASSETS> 131,319,101
<DIVIDEND-INCOME> 1,477,190
<INTEREST-INCOME> 3,369,661
<OTHER-INCOME> 0
<EXPENSES-NET> 12,859,809
<NET-INVESTMENT-INCOME> (8,012,958)
<REALIZED-GAINS-CURRENT> 153,187,709
<APPREC-INCREASE-CURRENT> (50,356,803)
<NET-CHANGE-FROM-OPS> 94,817,948
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 0
<DISTRIBUTIONS-OF-GAINS> 20,595,496
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 38,682,667
<NUMBER-OF-SHARES-REDEEMED> 98,374,823
<SHARES-REINVESTED> 20,595,496
<NET-CHANGE-IN-ASSETS> (191,014,308)
<ACCUMULATED-NII-PRIOR> (7,244,771)
<ACCUMULATED-GAINS-PRIOR> 130,685,585
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 7,266,204
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 12,859,809
<AVERAGE-NET-ASSETS> 140,751,956
<PER-SHARE-NAV-BEGIN> 31.16
<PER-SHARE-NII> (0.152)
<PER-SHARE-GAIN-APPREC> 3.592
<PER-SHARE-DIVIDEND> 0.00
<PER-SHARE-DISTRIBUTIONS> 3.59
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 31.01
<EXPENSE-RATIO> 1.06
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 021
<NAME> CAPITAL APPRECIATION FUND A CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 2,049,990
<INVESTMENTS-AT-VALUE> 2,410,420
<RECEIVABLES> 12,574
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,005
<TOTAL-ASSETS> 2,423,999
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,731
<TOTAL-LIABILITIES> 22,731
<SENIOR-EQUITY> 2,363
<PAID-IN-CAPITAL-COMMON> 2,006,427
<SHARES-COMMON-STOCK> 799
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 13,845
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18,203
<OVERDISTRIBUTION-GAINS> 0
<ACCUM-APPREC-OR-DEPREC> 360,430
<NET-ASSETS> 28,119
<DIVIDEND-INCOME> 16,707
<INTEREST-INCOME> 12,001
<OTHER-INCOME> 0
<EXPENSES-NET> 12,980
<NET-INVESTMENT-INCOME> 15,728
<REALIZED-GAINS-CURRENT> 18,203
<APPREC-INCREASE-CURRENT> 360,430
<NET-CHANGE-FROM-OPS> 394,361
<EQUALIZATION> 0
<DISTRIBUTIONS-OF-INCOME> 1
<DISTRIBUTIONS-OF-GAINS> 0
<DISTRIBUTIONS-OTHER> 0
<NUMBER-OF-SHARES-SOLD> 7,120
<NUMBER-OF-SHARES-REDEEMED> 223
<SHARES-REINVESTED> 1
<NET-CHANGE-IN-ASSETS> 2,401,268
<ACCUMULATED-NII-PRIOR> 0
<ACCUMULATED-GAINS-PRIOR> 0
<OVERDISTRIB-NII-PRIOR> 0
<OVERDIST-NET-GAINS-PRIOR> 0
<GROSS-ADVISORY-FEES> 12,953
<INTEREST-EXPENSE> 0
<GROSS-EXPENSE> 24,136
<AVERAGE-NET-ASSETS> 5,669
<PER-SHARE-NAV-BEGIN> 8.50
<PER-SHARE-NII> 0.067
<PER-SHARE-GAIN-APPREC> 1.601
<PER-SHARE-DIVIDEND> 0.008
<PER-SHARE-DISTRIBUTIONS> 0.00
<RETURNS-OF-CAPITAL> 0.00
<PER-SHARE-NAV-END> 10.16
<EXPENSE-RATIO> 0.75
<AVG-DEBT-OUTSTANDING> 0
<AVG-DEBT-PER-SHARE> 0

</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 022
<NAME> CAPITAL APPRECIATION FUND B CLASS

<S> <C>
<PERIOD-TYPE> 12-MOS
<FISCAL-YEAR-END> SEP-30-1997
<PERIOD-END> SEP-30-1997
<INVESTMENTS-AT-COST> 2,049,990
<INVESTMENTS-AT-VALUE> 2,410,420
<RECEIVABLES> 12,574
<ASSETS-OTHER> 0
<OTHER-ITEMS-ASSETS> 1,005
<TOTAL-ASSETS> 2,423,999
<PAYABLE-FOR-SECURITIES> 0
<SENIOR-LONG-TERM-DEBT> 0
<OTHER-ITEMS-LIABILITIES> 22,731
<TOTAL-LIABILITIES> 22,731
<SENIOR-EQUITY> 2,363
<PAID-IN-CAPITAL-COMMON> 2,006,427
<SHARES-COMMON-STOCK> 0
<SHARES-COMMON-PRIOR> 0
<ACCUMULATED-NII-CURRENT> 13,845
<OVERDISTRIBUTION-NII> 0
<ACCUMULATED-NET-GAINS> 18,203
<OVERDISTRIBUTION-GAINS> 0
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</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 023
<NAME> CAPITAL APPRECIATION FUND C CLASS

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</TABLE>

<PAGE>
<ARTICLE> 6
<CIK> 0000778108
<NAME> DELAWARE GROUP EQUITY FUNDS IV, INC
<SERIES>
<NUMBER> 024
<NAME> CAPITAL APPRECIATION FUND INSTITUTIONAL CLASS

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</TABLE>