<PAGE>
April 12, 1999
Dear Shareholder:
The Diversified Growth Fund Institutional and Class A Shares (Formerly Capital
Appreciation Fund) provided total return of 10.58% and 10.70% respectively, with
distributions reinvested for the six months ending March 31, 1999.
As of March 31, 1999, computers & technology and electronics were your Fund's
two largest sectors, representing 16.7% and 9.8% of net assets respectively.
Since September 1998, the Fund's small-cap and mid-cap selections did not
perform as well as expected or as well as stocks of large companies. Health care
stocks underperformed the overall stock market, while technology shares remained
volatile. Despite this disappointment, the Fund performed significantly better
than one of its key benchmarks, the Russell 2000 Index, for the 12 months ending
March 31, 1999.
Approximately two-thirds of Diversified Growth Fund's net assets were allocated
to small and mid-cap stocks as of mid-year. The balance of the Fund was invested
in the stocks of large U.S. companies. As of March 31, 1999, the Fund had $2.47
million in net assets.
Diversified Growth Fund was established as Capital Appreciation Fund on December
2, 1996, and will remain in limited distribution for the balance of fiscal year
1999. As of April 16, 1999, however, the Fund has changed its investment
strategy. It will now focus on stocks of large cap growth companies, rather than
on a blend of small cap growth and large cap value companies. The name of the
Fund was also changed from the Capital Appreciation Fund to the Delaware
Diversified Growth Fund.
The Fund's new investment policy is as follows:
The Delaware Diversified Growth Fund seeks to achieve its objective by
investing, under normal market conditions, primarily in equity securities of
large-sized companies that the portfolio manager believes exhibit growth
potential that significantly exceeds the average anticipated growth rate of
companies included in the Standard & Poor's 500(R) Composite Stock Price Index.
The Fund will generally consider large-sized companies to include those in the
Russell 1000 Growth Index.
The Fund management team is now headed by J. Paul Dokas who is assisted by
Robert Ginsberg. Their biographies are listed below.
J. Paul Dokas, CFA
Vice President, Portfolio Manager and Senior Research Analyst
Mr. Dokas is responsible for producing quantitative research used to develop new
global investment services, refine existing services and make asset-allocation
decisions. He joined Delaware in 1997. He previously was Director of Trust
Investment Management at Bell Atlantic Corporation. He earned a Bachelor's
Degree from Loyola College in Baltimore and an MBA degree at the University of
Maryland. He is a CFA Charterholder.
Robert E. Ginsberg
Assistant Vice President, Quantitative Analyst
Mr. Ginsberg graduated magna cum laude from the Wharton School of Business at
the University of Pennsylvania with a degree in Economics and a concentration in
Finance. Prior to joining Delaware in September of 1997, he was a Consultant at
Andersen Consulting working primarily with financial services companies. At
Delaware, Mr. Ginsberg handles diverse analytical responsibilities involving
large capitalization stocks.
According to Mr. Dokas and Mr. Ginsberg, their fund will be broadly diversified,
holding approximately 100-150 stocks. They will use both quantitative models and
fundamental judgement to strive to pick
<PAGE>
promising growth stocks. Stylistically, the Fund will fall in the upper right
hand corner of the Morningstar U.S. equity style box, large capitalization
growth mutual funds.
DIVERSIFIED GROWTH FUND
AVERAGE ANNUAL TOTAL RETURN
<TABLE>
<CAPTION>
SIX MONTHS ENDED 12 MONTHS ENDED SINCE INCEPTION
MARCH 31, 1999 MARCH 31, 1999 12/02/96 - 3/31/99
<S> <C> <C> <C>
Institutional Class Shares
(Excluding Sales Charge) +10.58% -3.11% +23.17%
A Class Shares
(Excluding Sales Charge) +10.70% -3.01% +23.29%
A Class Shares
(Including Sales Charge) +4.31% -8.62% +16.19%
Russell 2000 Index +10.00% -16.26% +5.49%
S&P 500 Index +27.32% +18.49% +29.81%
</TABLE>
All performance shown above is at net asset value and assumes reinvestment of
distributions. Past performance does not guarantee future results. No sales
charge or 12b-1 fees were imposed on A Class shares for the periods shown and no
B or C Class shares were offered. A fee waiver was in effect during this period.
Performance would have been lower without the fee waiver. Return and share value
fluctuate--shares, when redeemed, may be worth more or less than their original
cost.
Thank you for your continued commitment to Delaware Investments and the Delaware
Diversified Growth Fund.
Sincerely,
/s/ Wayne A. Stork
- -------------------------------------------
Wayne A. Stork
Director of the Fund
Chairman, Delaware Management Holdings, Inc.
/s/ David K. Downes
- ----------------------------------------------------
David K. Downes
Executive Vice President and Chief Operating Officer
Delaware Investments Family of Funds
<PAGE>
DELAWARE GROUP EQUITY FUNDS IV, INC. -
CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS
MARCH 31, 1999
(UNAUDITED)
NUMBER MARKET
OF SHARES VALUE
COMMON STOCK - 65.50%
Aerospace & Defense - 3.95%
Lockheed Martin 600 $ 22,613
* Micrel 1,500 75,047
------------------
97,660
------------------
AUTOMOBILE & AUTO PARTS - 2.29%
FORD MOTOR 1,000 56,750
------------------
56,750
------------------
BANKING, FINANCE & INSURANCE - 8.19%
Aon 700 44,275
BankAmerica 678 47,884
Fannie Mae 600 41,550
First American 1,000 36,875
First Union 600 32,063
------------------
202,647
------------------
CABLE, MEDIA & PUBLISHING - 5.35%
* Chancellor Media 1,000 47,094
McGraw-Hill 1,000 54,500
* Snyder Communications 1,100 30,663
------------------
132,257
------------------
COMPUTERS & TECHNOLOGY - 16.73%
* Aspect Development 1,100 25,506
* Cisco Systems 500 54,797
* Citrix Systems 1,600 60,900
Hewlett-Packard 800 54,250
Microsoft 600 53,756
Oracle 1,350 35,648
Seagate Technology 1,500 44,344
* VERITAS Software 1,050 84,655
------------------
413,856
------------------
CONSUMER PRODUCTS - 2.43%
* Gemstar International 800 60,100
------------------
60,100
------------------
ELECTRONICS & ELECTRICAL - 9.82%
* American Tower 2,400 58,800
* Analog Devices 1,000 29,750
Intel 400 47,550
Pitney Bowes 900 57,375
Texas Instruments 500 49,625
------------------
243,100
------------------
ENERGY - 2.87%
USX-Marathon Group 1,000 27,500
Williams 1,100 43,450
------------------
70,950
------------------
FOOD, BEVERAGE & TOBACCO - 2.95%
Fortune Brands 1,000 38,688
Philip Morris 975 34,308
------------------
72,996
------------------
HEALTHCARE & PHARMACEUTICALS - 4.24%
American Home Products 1,000 65,250
Baxter International 600 39,600
------------------
104,850
------------------
Top ten holdings, representing 25.39% of net assets are in boldface.
<PAGE>
LEISURE, LODGING & ENTERTAINMENT - 1.42%
* Papa John's International 800 35,200
------------------
35,200
------------------
TELECOMMUNICATIONS - 5.26%
A T & T 500 39,905
GTE 600 36,300
Lucent Technologies 500 53,875
------------------
130,080
------------------
Total Common Stock (cost $1,411,556) 1,620,446
------------------
<PAGE>
DELAWARE GROUP EQUITY FUNDS IV, INC. -
CAPITAL APPRECIATION FUND
STATEMENT OF NET ASSETS
MARCH 31, 1999
(UNAUDITED)
<TABLE>
<CAPTION>
PRINCIPAL
AMOUNT
<S> <C> <C>
REPURCHASE AGREEMENTS - 34.72%
With J.P. Morgan 4.80% 4/1/99
(dated 3/31/99, collateralized by $119,000 U.S.
Treasury Notes 4.50% due 1/31/01, market value
$121,848 and $178,000 U.S. Treasury Notes 7.75% due 2/15/01,
market value $181,812) 297,000 297,000
With PaineWebber 4.80% 4/1/99
(dated 3/31/99, collateralized by $296,000 U.S. Treasury Notes
4.625% due 11/30/00, market value $298,904) 293,000 293,000
With Prudential Securities 4.77% 4/1/99
(dated 3/31/99, collateralized by $19,000 U.S. Treasury Notes
6.125% due 12/31/01, market value $19,448 and $244,000 U.S.
Treasury Notes 6.25% due 2/15/03, market value $254,671) 269,000 269,000
-------------
Total Repurchase Agreements (cost $859,000) 859,000
-------------
TOTAL MARKET VALUE OF SECURITIES - 100.22%
(cost $2,270,555) $2,479,446
LIABILITIES NET OF RECEIVABLES AND
OTHER ASSETS - (0.22%) (5,565)
--------------
NET ASSETS APPLICABLE TO 250,815 SHARES
($0.01 Par Value) OUTSTANDING - 100.00% $2,473,881
=============
NET ASSET VALUE - CAPITAL APPRECIATION FUND A CLASS
($9,664 / 979 shares) $9.87
=============
NET ASSET VALUE - CAPITAL APPRECIATION FUND INSTITUTIONAL CLASS
($2,464,217 / 249,836 shares) $9.86
=============
_____________________________
* Non-income producing security for the period ended March 31, 1999.
COMPONENTS OF NET ASSETS AT MARCH 31, 1999:
Common stock, $0.01 par value, 200,000,000 shares authorized
to the Fund with 100,000,000 shares allocated to Capital
Appreciation Fund A Class, 25,000,000 shares allocated to
Capital Appreciation Fund B Class, 25,000,000 shares allocated
to Capital Appreciation Fund C Class and 50,000,000 shares
allocated to Capital Appreciation Fund Institutional Class $2,146,660
Undistributed net investment income 9,065
Accumulated net realized gain on investments 109,265
Net unrealized appreciation of investments 208,891
---------------
Total net assets $2,473,881
===============
NET ASSET VALUE AND OFFERING PRICE PER SHARE -
CAPITAL APPRECIATION FUND
Net asset value A Class (A) $9.87
Sales Charge (5.75% of offering price or 6.08% of the amount invested
per share) (B) 0.60
---------------
Offering price $10.47
===============
</TABLE>
_______________________________
(A) Net asset value per share, as illustrated, is the estimated amount which
would be paid upon the redemption or repurchase of shares.
(B) See How to Buy Shares in the current Prospectus for purchases of $50,000
or more. See Notes to Financial Statements for change in front-end sales
charge effective November 2, 1998.
See accompanying notes
<PAGE>
DELAWARE GROUP EQUITY FUNDS IV, INC. -
CAPITAL APPRECIATION FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1999 (UNAUDITED)
<TABLE>
<CAPTION>
<S> <C> <C>
INVESTMENT INCOME:
Interest $13,179
Dividends 8,816 $21,995
--------------
EXPENSES:
Management fees 8,994
Registration fees 2,280
Professional fees 994
Accounting and administration 658
Dividend disbursing and transfer agent fees and expenses 290
Reports and statements to shareholders 43
Other 40 13,299
--------------
Less expenses absorbed or waived (4,343)
--------------
Total expenses 8,956
--------------
NET INVESTMENT INCOME 13,039
--------------
NET REALIZED AND UNREALIZED GAIN (LOSS)
ON INVESTMENTS:
Net realized gain on investments 146,081
Net change in unrealized appreciation/depreciation of investments 79,842
--------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS 225,923
--------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS $238,962
==============
</TABLE>
See accompanying notes
<PAGE>
DELAWARE GROUP EQUITY FUNDS IV, INC. -
CAPITAL APPRECIATION FUND
STATEMENTS OF CHANGES IN NET ASSETS
<TABLE>
<CAPTION>
SIX MONTHS
ENDED
3/31/99 YEAR ENDED
(UNAUDITED) 9/30/98
-----------------------------------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS FROM OPERATIONS:
Net investment income $13,039 $20,074
Net realized gain on investments 146,081 44,489
Net change in unrealized appreciation/depreciation of investments 79,842 (231,381)
---------------------------------------
Net increase (decrease) in net assets resulting from operations 238,962 (166,818)
---------------------------------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net investment income:
A Class (107) (64)
Institutional Class (19,823) (17,899)
Net realized gain on investments:
A Class - (354)
Institutional Class - (99,154)
---------------------------------------
(19,930) (117,471)
---------------------------------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class - 5,336
Institutional Class - 151,001
Net asset value of shares issued upon reinvestment
of dividends from net investment income and net
realized gain on investments:
A Class 107 418
Institutional Class 19,823 117,053
---------------------------------------
19,930 273,808
---------------------------------------
Cost of shares repurchased:
A Class (3,643) (1,222)
Institutional Class - (151,003)
---------------------------------------
(3,643) (152,225)
---------------------------------------
Increase in net assets derived from capital
share transactions 16,287 121,583
---------------------------------------
NET INCREASE (DECREASE) IN NET ASSETS 235,319 (162,706)
NET ASSETS:
Beginning of period 2,238,562 2,401,268
---------------------------------------
End of period $2,473,881 $2,238,562
=======================================
</TABLE>
See accompanying notes
<PAGE>
DELAWARE GROUP EQUITY FUNDS IV, INC. -
CAPITAL APPRECIATION FUND
FINANCIAL HIGHLIGHTS
Selected data for each share of the Fund outstanding throughout the period were
as follows:
<TABLE>
<CAPTION>
A CLASS
------------------------------------------------------------
SIX MONTHS PERIOD
ENDED 12/2/96 (2)
3/31/1999 (1) YEAR ENDED TO
(UNAUDITED) 9/30/98 9/30/97
------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.990 $10.160 $8.500
Income from investment operations:
Net investment income 0.052 (3) 0.082 (3) 0.067
Net realized and unrealized gain (loss) on investments 0.908 (0.755) 1.601
------------------------------------------------------------
Total from investment operations 0.960 (0.673) 1.668
------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income (0.080) (0.076) (0.008)
Distributions from net realized gain on investments -- (0.421) --
------------------------------------------------------------
Total dividends and distributions (0.080) (0.497) (0.008)
------------------------------------------------------------
Net asset value, end of period $9.870 $8.990 $10.160
============================================================
Total return (4) 10.70% (6.91%) 19.64%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $10 $12 $8
Ratio of expenses to average net assets 0.75% 0.75% 0.75%
Ratio of expenses to average net assets prior to
expense limitation 1.41% 2.28% 1.70%
Ratio of net investment income to average net assets 1.09% 0.83% 0.91%
Ratio of net investment income (loss) to average net assets
prior to expense limitation 0.43% (0.70%) (0.03%)
Portfolio turnover 60% 163% 84%
</TABLE>
<PAGE>
[RESTUBBED TABLE]
<TABLE>
<CAPTION>
INSTITUTIONAL CLASS
---------------------------------------------------------------
SIX MONTHS PERIOD
ENDED 12/2/96 (2)
3/31/1999 (1) YEAR ENDED TO
(UNAUDITED) 9/30/98 9/30/97
---------------------------------------------------------------
<S> <C> <C> <C>
Net asset value, beginning of period $8.990 $10.160 $8.500
Income from investment operations:
Net investment income 0.052 (3) 0.082 (3) 0.067
Net realized and unrealized gain (loss) on investments 0.898 (0.755) 1.601
---------------------------------------------------------------
Total from investment operations 0.950 (0.673) 1.668
---------------------------------------------------------------
Less dividends and distributions:
Dividends from net investment income (0.080) (0.076) (0.008)
Distributions from net realized gain on investments -- (0.421) --
--------------------------------------------------------------
Total dividends and distributions (0.080) (0.497) (0.008)
--------------------------------------------------------------
Net asset value, end of period $9.860 $8.990 $10.160
==============================================================
Total return (4) 10.58% (6.91%) 19.64%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $2,464 $2,227 $2,393
Ratio of expenses to average net assets 0.75% 0.75% 0.75%
Ratio of expenses to average net assets prior to
expense limitation 1.11% 1.98% 1.40%
Ratio of net investment income to average net assets 1.09% 0.83% 0.91%
Ratio of net investment income (loss) to average net assets
prior to expense limitation 0.73% (0.40%) 0.27%
Portfolio turnover 60% 163% 84%
</TABLE>
- --------------------------------------------------------------------------------
(1) Ratios have been annualized and total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) Computed based on the average shares outstanding method.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
<PAGE>
DELAWARE GROUP EQUITY FUNDS IV, INC. -
CAPITAL APPRECIATION FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999 (UNAUDITED)
Delaware Group Equity Funds IV, Inc. - Capital Appreciation Fund (the "Fund") is
registered as a diversified open-end investment company under the Investment
Company Act of 1940, as amended. The Fund is organized as a Maryland Corporation
and offers four classes of shares. The Capital Appreciation Fund A Class carries
a front-end sales charge, which was raised from 4.75% to 5.75% effective
November 2, 1998. The Capital Appreciation Fund B Class carries a back-end sales
charge. The Capital Appreciation Fund C Class carries a level load deferred
sales charge and Capital Appreciation Fund Institutional Class has no sales
charge. As of March 31, 1999, only the Capital Appreciation Fund A Class and the
Capital Appreciation Fund Institutional Class have commenced operations. The
Fund's objective is to seek capital appreciation.
1. SIGNIFICANT ACCOUNTING POLICIES
The following accounting policies are in accordance with generally accepted
accounting principles and are consistently followed by the Fund.
SECURITY VALUATION- Securities listed on an exchange are valued at the last
quoted sales price as of the close of the NYSE on the valuation date. Securities
not traded or securities not listed on an exchange are valued at the mean of the
last quoted bid and asked prices. Money market instruments having less than 60
days to maturity are valued at amortized cost, which approximates market value.
FEDERAL INCOME TAXES- The Fund intends to continue to qualify as a regulated
investment company and make the requisite distributions to shareholders.
Accordingly, no provision for federal income taxes has been made in the
financial statements. Income and capital gain distributions are determined in
accordance with federal income tax regulations, which may differ from generally
accepted accounting principles.
CLASS ACCOUNTING- Investment income, common expenses and realized and unrealized
gain (loss) on investments are allocated to the various classes of the Fund on
the basis of daily net assets of each class. Distribution expenses relating to a
specific class are charged directly to that class.
REPURCHASE AGREEMENTS- The Fund may invest in a pooled cash account along with
other members of the Delaware Investments Family of Funds. The aggregate daily
balance of the pooled cash account is invested in repurchase agreements secured
by obligations of the U.S. government. The respective collateral is held by the
Fund's custodian bank until the maturity of the respective repurchase
agreements. Each repurchase agreement is at least 100% collateralized. However,
in the event of default or bankruptcy by the counterparty to the agreement,
realization of the collateral may be subject to legal proceedings.
<PAGE>
USE OF ESTIMATES- The preparation of financial statements in conformity with
generally accepted accounting principles requires management to make estimates
and assumptions that affect the reported amounts of assets and liabilities at
the date of the financial statements and the reported amounts of revenues and
expenses during the reporting period. Actual results could differ from those
estimates.
OTHER- Expenses common to all funds within the Delaware Investments Family of
Funds are allocated amongst the funds on the basis of average net assets.
Security transactions are recorded on the date the securities are purchased or
sold (trade date). Costs used in calculating realized gains and losses on the
sale of investment securities are those of the specific securities sold.
Dividend income is recorded on the ex-dividend date and interest income is
recorded on the accrual basis. The Fund declares and pays dividends from net
investment income and capital gains, if any, annually.
Certain expenses of the Fund are paid through "soft dollar" arrangements with
brokers. The amount of these expenses is less than 0.01% of the Fund's average
daily net assets.
2. INVESTMENT MANAGEMENT AND OTHER TRANSACTIONS WITH AFFILIATES
In accordance with the terms of the Investment Management Agreement, the Fund
pays Delaware Management Company (DMC), the Investment Manager of the Fund, an
annual fee which is calculated daily at the rate of 0.75% on the first $500
million of the average daily net assets of the Fund less the fees paid to the
unaffiliated directors, 0.725% on the next $500 million and 0.70% on the average
daily net assets in excess of $1 billion. Effective April 1, 1999, the annual
fee is calculated daily at the rate of 0.75% on the first $500 million of the
average daily net assets of the Fund, 0.70% on the next $500 million, 0.65% on
the next $1.5 billion and 0.60% on the average daily net assets in excess of
$2.5 billion.
DMC has elected to waive the portion, if any, of the management fee and
reimburse the Fund to the extent that annual operating expenses exclusive of
distribution expenses exceed 0.75% of average daily net assets of the Fund
through May 31, 1999.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent and accounting services. The Fund
pays DSC a monthly fee based on the number of shareholder accounts, shareholder
transactions and average net assets, subject to certain minimums.
Pursuant to the Distribution Agreement, the Fund pays Delaware Distributors,
L.P. (DDLP), the Distributor and an affiliate of DMC, an annual fee not to
exceed 0.30% of the average daily net assets of the A Class and 1.00% of the
average daily net assets of the B and C Class. No distribution expenses are paid
by the Institutional Class. DDLP has elected voluntarily to waive such fees
through May 31, 1999.
<PAGE>
Certain officers of DMC, DSC and DDLP are officers, directors and/or employees
of the Fund. These officers, directors and employees are paid no compensation by
the Fund.
3. INVESTMENTS
During the period ended March 31, 1999, the Fund made purchases of $560,205 and
sales of $1,042,169 of investment securities other than U.S. government
securities and temporary cash investments.
At March 31, 1999, the aggregate cost of securities for federal income tax
purposes was $2,281,615.
At March 31, 1999, net unrealized appreciation for federal income tax purposes
aggregated $197,831 of which $281,046 related to unrealized appreciation of
securities and $83,215 related to unrealized depreciation of securities.
4. CAPITAL STOCK
Transactions in capital stock shares were as follows:
<TABLE>
<CAPTION>
Six
Months Year
Ended Ended
3/31/99 9/30/98
------- -------
<S> <C> <C>
Shares sold:
A Class......................................... -- 619
Institutional Class............................. -- 14,862
Shares issued upon reinvestment of dividends
from net investment income and net
realized gain on investments:
A Class.......................................... 11 44
Institutional Class.............................. 2,046 12,270
----- -------
2,057 27,795
Shares repurchased:
A Class.......................................... (369) (125)
Institutional Class.............................. -- (14,862)
----- -------
(369) (14,987)
----- -------
Net increase (decrease)................................ 1,688 (12,808)
===== ========
</TABLE>
5. LINE OF CREDIT
The Fund has a committed line of credit for $100,000. No amount was outstanding
at March 31, 1999, or at any time during the fiscal year.
<PAGE>
6. SUBSEQUENT EVENT
Effective April 16, 1999, the Fund changed its name to the Delaware Diversified
Growth Fund. The Fund will now primarily invest in stocks of large cap growth
companies rather than on a blend of small cap growth and large cap value
companies. The Fund also changed the annual management fee paid to DMC to be
calculated daily at 0.65% on the first $500 million of average daily net assets,
0.60% on the next $500 million, 0.55% on the next $1.5 billion and 0.50% on the
average daily net assets in excess of $2.5 billion.
<PAGE>
Proxy Results
(Unaudited)
For the six months ended March 31, 1999, The Delaware Group Equity Funds IV,
Inc. shareholders voted on the following proposals at the annual meeting of
shareholders on March 17, 1999 or as adjourned. The description of each proposal
and number of shares voted are as follows:
1. To elect the Delaware Group Equity Funds IV, Inc. Board of Directors.
Shares Shares Voted
Voted Withheld
For Authority
---------- ------------
Jeffrey J. Nick 20,856,540 2,141,202
Walter P. Babich 20,854,410 2,143,332
John H. Durham 20,880,067 2,117,675
Anthony D. Knerr 20,874,875 2,122,867
Ann R. Leven 20,884,847 2,112,895
Thomas F. Madison 20,881,316 2,116,426
Charles E. Peck 20,877,043 2,120,699
Wayne A. Stork 20,890,992 2,106,750
Jan L. Yeomans 20,884,595 2,113,147
2. To approve standardized fundamental investment restrictions for the
Capital Appreciation Fund (proposal involves separate votes on seven
sub-proposals 2A-2G).
2A. To adopt a new fundamental investment restriction concerning concentration
of the investments in the same industry.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
2B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
2C. To adopt a new fundamental investment restriction concerning underwriting.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
2D. To adopt a new fundamental investment restriction concerning investments in
real estate.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
2E. To adopt a new fundamental investment restriction concerning investments in
commodities.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
2F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
2G. To reclassify all current fundamental investment restrictions as
non-fundamental.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
<PAGE>
3. To approve a new investment management agreement with Delaware Management
Company for the Capital Appreciation Fund.
For Against Abstain
----------------- ----------------- -----------------
248,229 - -
4. To ratify the selection of Ernst & Young LLP, as the independent auditors for
Delaware Group Equity Funds IV, Inc.
For Against Abstain
----------------- ----------------- -----------------
19,095,521 266,738 3,635,482
5. To approve the restructuring of the Delaware Group Equity Funds IV, Inc.
from a Maryland Corporation into a Delaware Business Trust.
For Against Abstain
----------------- ----------------- -----------------
18,106,571 600,598 1,481,951
