DELAWARE GROUP EQUITY FUNDS IV, INC.
CAPITAL APPRECIATION FUND
Class A / Class B / Class C
Supplement to Prospectus dated November 30, 1998
The Board of Directors of Delaware Group Equity Funds
IV, Inc. approved changes to the investment policies and
strategies of the Capital Appreciation Fund. In order to
better reflect those revised investment policies and
strategies, the name of Capital Appreciation Fund has been
changed to "Delaware Diversified Growth Fund." The
Prospectus is hereby revised to reflect the new name of the
Fund as well as the following changes.
The following replaces the paragraph under "SYNOPSIS-
Investment Objective" on page 3 of the Prospectus.
The investment objective of the Fund its to
seek capital appreciation. The Fund seeks to
achieve its objective by investing, under normal
market conditions, primarily in equity securities
of large-sized companies that Delaware Management
Company (the "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 ("S&P 500"). See Investment Objective
and Policies and Other Investment Policies and
Risk Considerations.
The following revises the Annual Operating Expense table and
the Example of Expenses on page 6 of the Prospectus:
Annual Operating Expenses
(as a percentage of average daily net assets)
Class A Class B Class C
Shares Shares Shares
____________________________________________________________
Management Fees
(after voluntary waivers)(6) 0.00% 0.00% 0.00%
12b-1 Plan Expenses
(including service fees) 0.00%(5) 0.00%(5) 0.00%(5)
(after voluntary waivers)
Other Operating Expenses
(after voluntary waivers) (6) 0.65% 0.65% 0.65%
Total Operating Expenses 0.65% 0.65% 0.65%
(5) 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, 1999. 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 in the Prospectus.
(6) As noted above, the Distributor has elected voluntarily
to waive 12b-1 Plan fees through May 31, 1999. Also,
the Manager 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,
excluding each such Class' 12b-1 fees, do not exceed
0.65%, from April 16, 1999 through May 31, 1999. 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 2.18%, 2.88%, and 2.88%, respectively, for the
Class A Shares, the Class B Shares and the Class C
Shares, reflecting management fees of 0.65%.
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 above.
Assuming Redemption
1 year 3 years 5 years 10 years
Class A $64 $77 $92 $134
Class B $57 $51 $56 $81
Class C $17 $21 $36 $81
Assuming No Redemption
1 year 3 years 5 years 10 years
Class A $64 $77 $92 $134
Class B $7 $21 $36 $81
Class C $7 $21 $36 $81
(1) Generally, no redemption charge is assessed upon
redemption of Class A Shares. Under certain
circumstances, however, a Limited CDSC, or other CDSC
which has not been reflected in this calculation, may
be imposed on certain redemptions. 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 years one through eight and the
expenses for 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.
The paragraph under "INVESTMENT OBJECTIVE AND POLICIES" on
page 10 of the Prospectus is deleted and replaced with the
following:
The investment objective of the Fund is to seek
capital appreciation. The Fund seeks to achieve
its objective by investing, under normal market
conditions, primarily in equity securities of
large-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
(R) Composite Stock Price Index ("S&P 500"). The
Fund will generally consider large-sized companies
to include those in the Russell 1000 Index.
The second sentence of the first paragraph under
"SUITABILITY AND CERTAIN RISK FACTORS" on page 10 of the
Prospectus is revised as follows:
Investors should be willing to accept the risks
associated with investments in equity securities.
The second paragraph under "SUITABILITY AND CERTAIN RISK
FACTORS" on page 10 of the Prospectus is deleted.
The first paragraph under "INVESTMENT STRATEGY" on page 10
of the Prospectus is deleted and replaced with the following
paragraphs:
The Fund will generally invest in companies
currently having a market capitalization of at
least $3 billion, although the Fund may invest in
securities with lower market capitalizations. The
Manager will select the securities of companies
that have one or more of the following
characteristics in relation to the market as
represented by the S&P 500 Index: a lower dividend
yield, stronger balance sheet, lower debt ratio,
high expected earnings growth, or favorable trend
in earnings estimates.
To seek to achieve the Fund s objective, the
Manager will rank a broad universe of stocks using
quantitative models that assess each company on a
variety of growth and value characteristics such
as those mentioned above. The model used for the
Fund weights the growth characteristics higher
than the value characteristics. Generally
speaking, a growth oriented strategy typically
concentrates on stocks with earnings that the
Manager believes will grow faster than the overall
market. A value orientation, on the other hand,
focuses on stocks that the Manager believes are
undervalued in price and will eventually be
recognized by the market. A composite ranking is
generated which seeks to identify companies with
favorable trends in earnings estimates. The
Manager then performs qualitative assessments of
these companies in selecting securities that it
believes will best help the Fund achieve its
objective. In selecting portfolio securities, the
Manager will structure a portfolio that is
weighted towards those securities that are more
highly ranked by the quantitative models.
The third sentence of the fourth paragraph under "MANAGEMENT
OF THE FUND - Investment Manager" on page 37 of the
Prospectus is deleted and replaced with the following:
For these services, the Manager is paid an annual
fee equal to 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.
The fifth, sixth and seventh paragraphs under "MANAGEMENT OF
THE FUND - Investment Manager" on page 37 of the Prospectus
are deleted and replaced with the following:
Paul Dokas is the portfolio manager primarily
responsible for the Delaware Diversified Growth
Fund. Mr. Dokas is a Vice President in the
Quantitative Analyst Group and currently manages
the three Foundation Funds portfolios and
Diversified Value Fund. He is responsible for
producing quantitative research used to develop
new global investment services, refine existing
services, and make asset-allocation decisions. He
joined Delaware Investments in 1997. He
previously was director of trust investment
management at Bell Atlantic Corporation. He
earned a bachelor s degree at Loyola College in
Baltimore and an MBA degree at the University of
Maryland. He is a chartered financial analyst.
Assisting Mr. Dokas on the Fund would be Rob
Ginsberg, Assistant Vice President in the
Quantitative Analyst Group. Mr. Ginsberg
graduated magna cum laude from the Wharton School
of Business at the University of Pennsylvania with
a degree in Economics with a concentration in
Finance. Prior to joining Delaware Investments 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. He is a
CFA Level I candidate.
DELAWARE GROUP EQUITY FUNDS IV, INC.
CAPITAL APPRECIATION FUND
Institutional Class
Supplement to Prospectus dated November 30, 1998
The Board of Directors of Delaware Group Equity Funds
IV, Inc. approved changes to the investment policies and
strategies of the Capital Appreciation Fund. In order to
better reflect those revised investment policies and
strategies, the name of Capital Appreciation Fund has been
changed to "Delaware Diversified Growth Fund." The
Prospectus is hereby revised to reflect the new name of the
Fund as well as the following changes.
The following replaces the paragraph under "SYNOPSIS-
Investment Objective" on page 3 of the Prospectus.
The investment objective of the Fund its to
seek capital appreciation. The Fund seeks to
achieve its objective by investing, under normal
market conditions, primarily in equity securities
of large-sized companies that Delaware Management
Company (the "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 ("S&P 500"). See Investment Objective
and Policies and Other Investment Policies and
Risk Considerations.
The following revises the Annual Operating Expense table and
the Example of Expenses on page 5 of the Prospectus:
Annual Operating Expenses
(as a percentage of average daily net assets)
Institutional Class
Shares
_________________________________________
Management Fees
(after voluntary waivers)(2) 0.00%
12b-1 Plan Expenses
(including service fees) None
(after voluntary waivers)
Other Operating Expenses
(after voluntary waivers) (2) 0.65%
Total Operating Expenses 0.65%
(2) The Manager 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 the Fund do not exceed 0.65%,
from April 16, 1999 through May 31, 1999. 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 1.88%, reflecting management fees of 0.65%.
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 above.
1 year 3 years 5 years 10 years
$7 $21 $36 $81
The paragraph under "INVESTMENT OBJECTIVE AND POLICIES" on
page 8 of the Prospectus is deleted and replaced with the
following:
The investment objective of the Fund is to seek
capital appreciation. The Fund seeks to achieve
its objective by investing, under normal market
conditions, primarily in equity securities of
large-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
(R) Composite Stock Price Index ("S&P 500"). The
Fund will generally consider large-sized companies
to include those in the Russell 1000 Index.
The second sentence of the first paragraph under
"SUITABILITY AND CERTAIN RISK FACTORS" on page 8 of the
Prospectus is revised as follows:
Investors should be willing to accept the risks
associated with investments in equity securities.
The second paragraph under "SUITABILITY AND CERTAIN RISK
FACTORS" on page 8 of the Prospectus is deleted.
The first paragraph under "INVESTMENT STRATEGY" on page 8 of
the Prospectus is deleted and replaced with the following
paragraphs:
The Fund will generally invest in companies
currently having a market capitalization of at
least $3 billion, although the Fund may invest in
securities with lower market capitalizations. The
Manager will select the securities of companies
that have one or more of the following
characteristics in relation to the market as
represented by the S&P 500 Index: a lower dividend
yield, stronger balance sheet, lower debt ratio,
high expected earnings growth, or favorable trend
in earnings estimates.
To seek to achieve the Fund s objective, the
Manager will rank a broad universe of stocks using
quantitative models that assess each company on a
variety of growth and value characteristics such
as those mentioned above. The model used for the
Fund weights the growth characteristics higher
than the value characteristics. Generally
speaking, a growth oriented strategy typically
concentrates on stocks with earnings that the
Manager believes will grow faster than the overall
market. A value orientation, on the other hand,
focuses on stocks that the Manager believes are
undervalued in price and will eventually be
recognized by the market. A composite ranking is
generated which seeks to identify companies with
favorable trends in earnings estimates. The
Manager then performs qualitative assessments of
these companies in selecting securities that it
believes will best help the Fund achieve its
objective. In selecting portfolio securities, the
Manager will structure a portfolio that is
weighted towards those securities that are more
highly ranked by the quantitative models.
The third sentence of the fourth paragraph under "MANAGEMENT
OF THE FUND - Investment Manager" on page 20 of the
Prospectus is deleted and replaced with the following:
For these services, the Manager is paid an annual
fee equal to 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.
The fifth, sixth and seventh paragraphs under "MANAGEMENT OF
THE FUND - Investment Manager" on page 20 of the Prospectus
are deleted and replaced with the following:
Paul Dokas is the portfolio manager primarily
responsible for the Delaware Diversified Growth
Fund. Mr. Dokas is a Vice President in the
Quantitative Analyst Group and currently manages
the three Foundation Funds portfolios and
Diversified Value Fund. He is responsible for
producing quantitative research used to develop
new global investment services, refine existing
services, and make asset-allocation decisions. He
joined Delaware Investments in 1997. He
previously was director of trust investment
management at Bell Atlantic Corporation. He
earned a bachelor s degree at Loyola College in
Baltimore and an MBA degree at the University of
Maryland. He is a chartered financial analyst.
Assisting Mr. Dokas on the Fund would be Rob
Ginsberg, Assistant Vice President in the
Quantitative Analyst Group. Mr. Ginsberg
graduated magna cum laude from the Wharton School
of Business at the University of Pennsylvania with
a degree in Economics with a concentration in
Finance. Prior to joining Delaware Investments 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. He is a
CFA Level I candidate.
