<PAGE>
FOR GROWTH OF CAPITAL
DELCAP FUND
(photo of illustration
from Growth of Capital Brochure)
service and guidance
professional management
goals
1999
SEMI-ANNUAL
REPORT
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London
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2
April 12, 1999
DEAR SHAREHOLDER:
At the start of your Fund's fiscal period, the outlook appeared uncertain.
Economic turmoil in Indonesia, Russia and later Brazil had shaken investor
confidence. Fears of an American recession prompted a stock "sell-off" as
investors flocked to the safety of U.S. Treasury bonds.
Concerned about the U.S. economy, the Federal Reserve Board lowered
short-term interest rates three times last autumn. The first cut came in late
September, just before the start of your Fund's 1999 fiscal year. Lower interest
rates had a soothing effect on investors and after October 8th, many realized
the U.S. economy could, for the most part, withstand the global turbulence. The
other two rate cuts, one in October and one in November, proved effective.
Investor confidence returned and stocks rallied through the remainder of 1998.
The winter of 1999 brought more of the same as stock prices continued to rise.
However, new worries surfaced in February and early March of 1999. Concerns
that the Federal Reserve Board might raise short-term interest rates at their
March meeting made for a bumpy ride in the stock market. Investors cheered after
the meeting when it became clear the Fed did not intend to change interest
rates. Shortly after, the Dow Jones Industrial Average, a widely followed stock
market indicator, flirted with and then closed above 10,000 points for the first
time ever on March 29, 1999.
DelCap Fund performed well during this period, providing a 25.85% return for
the six months ended March 31, 1999 (for Class A shares with distributions
reinvested at net asset value). We focused primarily on growing companies in the
technology, financial and retail sectors, paying close attention to companies we
believe have strong growth potential. For the same period, the Standard & Poor's
Mid-Cap 400 Index provided a 20.02% return while the Russell Mid-Cap Index
returned 30.80%. As shown below, your Fund outperformed the average of 394
mutual funds in the Lipper Mid-cap fund category.
On the pages that follow, Gerald Frey, your Fund's senior portfolio manager,
discusses in detail DelCap Fund's performance since September. I encourage you
to review his commentary.
CUMULATIVE RETURNS
- --------------------------------------------------------------------------------
Six Months Ended March 31, 1998
March 31, 1999 to March 31, 1999
- --------------------------------------------------------------------------------
DelCap Fund A Class +25.85% +7.07%
- --------------------------------------------------------------------------------
Russell Mid-Cap Growth Index +30.80% +8.89%
Standard & Poor's Mid-Cap 400 Index +20.02% +0.45%
Lipper Mid-Cap Fund Average (394 Funds) +23.42% +0.24%
- --------------------------------------------------------------------------------
All performance shown above assumes reinvestment of dividends and capital gains.
Fund and Lipper performance is at net asset value without effect of sales
charges. Performance would have been lower if sales charges were reflected.
Performance information for all DelCap Fund classes can be found on page 9. The
unmanaged Russell Mid-Cap Index is a measure of medium-size company stocks that
exhibit growth characteristics as determined by Frank Russell Co. The S&P 400
Index is a market-value weighted index that consists of 400 domestic stocks
chosen for market size, liquidity and industry group representation. It is not
possible to invest directly in any index.
<PAGE>
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3
Looking forward to the remainder of fiscal 1999, we believe now is the time
to be invested in medium-sized companies. We see potential in these companies
because they are generally large enough to be established as a successful
business, yet small enough that we see attractive growth potential. Numerous
large companies have failed to meet earnings estimates recently. For large
companies that have experienced substantial price appreciation, earnings
disappointments could lead to price decline. We generally focus on medium-sized
companies that exhibit the following characteristics:
o Solid earnings growth - we believe a proven track record bodes well for the
future of a company and
o Quality management - strong leadership and a mission allow a company to remain
focused and, therefore, achieve its goals.
As always, DelCap Fund strives to provide long-term capital growth for its
shareholders. By emphasizing long-term earnings growth and careful company
analysis, we believe we can identify companies than can help meet this goal.
Thank you for your continued confidence in Delaware Investments.
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
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4
PORTFOLIO MANAGER'S REVIEW
By Gerald S. Frey
Senior Portfolio Manager
April 12, 1999
DelCap Fund performed well during the first half of fiscal 1999, responding to a
healthy expanding U.S. economy. Although investors did experience a brief summer
setback, the U.S. stock market kicked off DelCap Fund's fiscal year on a
positive note. The United States economy moved into its eighth consecutive year
of expansion in March (Source: Businessweek). Strong consumer demand and a low
inflationary environment bode well for the immediate future of our economy. In
stark contrast to last summer, equity investing remains in favor. Mid-cap growth
stocks, in particular, look promising to us.
Due to renewed optimism in the economy and the U.S. stock market, investor
confidence has returned. With it, however, has come a new wariness - as
witnessed by somewhat unpredictable daily stock market fluctuations this past
winter. Nonetheless, the Dow Jones Industrial Average reached 10,000 points for
the first time in March 1999. Market corrections in the midst of continued
prosperity have provided us with an opportunity to purchase securities with the
potential for capital appreciation.
Below we discuss DelCap Fund's investment strategy, our positioning in
various sectors and how that affected the Fund's performance.
STRATEGIC POSITIONING
Though our fundamental goal is to focus on mid-cap stocks with attractive growth
rates, we also strive to position DelCap Fund for some protection during market
fluctuations. We believe diversification is essential in managing the risks
related to medium-sized companies. DelCap Fund is diversified across a wide
range of sectors including technology, retail and finance.
Historically, medium-sized companies have been more expensive than large
companies on a relative basis (Source: Salomon SmithBarney). Currently, the
opposite is true. Right now large company stocks are generally much more costly
based on their price to earnings ratio. The price to earnings ratio measures how
much investors are willing to pay for a company's earning potential. We believe
this is a great opportunity to buy companies with high earnings potential.
When selecting stocks, we look for companies with solid earnings track
records - companies we think have attractive growth potential. We research each
stock from the bottom-up, evaluating each company by meeting with its
executives, customers, competitors, and industry experts. We believe these
interviews offer critical insight about the company that we might not find in
<PAGE>
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5
A Mid-Cap Stock Success Story:
Given the recent popularity of large blue-chip stocks, you may be wondering -
why invest in medium sized companies?
The story of Staples - a little company that could.
Staples opened its first store in Boston in 1986 with the goal of providing
small business owners with low-priced office supplies. The company did that and
more. In 1989 the company's stock went public. The company's stock didn't begin
to appreciate until a few years later but once it took off, there seemed to be
no stopping it. Staples was opening new stores across the country at an
increasing rate - while existing store sales continued to increase as well. We
first purchased Staples stock in 1992, when the company reached a median market
capitalization of $1 billion. Among its competition, the company generally
offered its customers the best prices and the fullest range of products. Today,
the company is worth over $16 billion and has locations in four countries,
including the United States.
AVERAGE STOCK PRICE
- --------------------------------------------------------------------------------
Apr-89 1.32
May-89 1.35
Jun-89 1.36
Jul-89 1.27
Aug-89 1.18
Sep-89 1.26
Oct-89 1.01
Nov-89 0.97
Dec-89 0.96
Jan-90 0.96
Feb-90 0.96
Mar-90 1.10
Apr-90 1.25
May-90 1.36
Jun-90 1.41
Jul-90 1.38
Aug-90 1.02
Sep-90 0.93
Oct-90 0.91
Nov-90 1.05
Dec-90 1.03
Jan-91 0.99
Feb-91 1.13
Mar-91 1.29
Apr-91 1.59
May-91 1.72
Jun-91 1.73
Jul-91 1.66
Aug-91 1.69
Sep-91 1.88
Oct-91 2.02
Nov-91 2.02
Dec-91 2.31
Jan-92 2.68
Feb-92 2.86
Mar-92 2.82
Apr-92 2.51
May-92 2.52
Jun-92 2.29
Jul-92 2.69
Aug-92 2.70
Sep-92 2.96
Oct-92 3.05
Nov-92 3.34
Dec-92 3.36
Jan-93 3.40
Feb-93 3.00
Mar-93 3.07
Apr-93 2.51
May-93 2.75
Jun-93 2.79
Jul-93 2.40
Aug-93 2.51
Sep-93 2.90
Oct-93 3.25
Nov-93 2.91
Dec-93 3.20
<PAGE>
Jan-94 3.18
Feb-94 3.78
Mar-94 3.89
Apr-94 3.57
May-94 3.66
Jun-94 3.67
Jul-94 3.52
Aug-94 3.63
Sep-94 4.05
Oct-94 4.39
Nov-94 4.43
Dec-94 4.43
Jan-95 4.63
Feb-95 5.15
Mar-95 5.43
Apr-95 5.08
May-95 5.23
Jun-95 5.85
Jul-95 6.15
Aug-95 7.08
Sep-95 8.16
Oct-95 8.02
Nov-95 7.85
Dec-95 6.84
Jan-96 6.57
Feb-96 7.59
Mar-96 8.74
Apr-96 8.83
May-96 8.75
Jun-96 8.57
Jul-96 7.61
Aug-96 8.50
Sep-96 8.97
Oct-96 9.25
Nov-96 8.61
Dec-96 8.24
Jan-97 8.92
Feb-97 9.19
Mar-97 9.96
Apr-97 8.98
May-97 9.27
Jun-97 10.18
Jul-97 10.98
Aug-97 10.93
Sep-97 11.63
Oct-97 12.30
Nov-97 12.37
Dec-97 12.25
Jan-98 11.55
Feb-98 13.14
Mar-98 15.11
Apr-98 15.96
May-98 16.51
Jun-98 18.35
Jul-98 21.52
Aug-98 20.94
Sep-98 19.17
Oct-98 19.74
Nov-98 23.12
Dec-98 26.96
Jan-99 27.86
Feb-99 28.81
Mar-99 31.35
Past performance does not guarantee future results. This example is not
representative of all the securities selected for the Fund and the Fund may
modify or eliminate its position in this security at any time.
financial statements or historical stock prices alone.
After selecting and purchasing a stock, we maintain a relationship with the
company, enabling us to stay on top of changes in the company's operating
environment as they become evident.
Our six-member research team is organized so that each team member has
primary responsibility for specific sectors. We believe our team approach is a
successful way to uncover attractive stocks for your portfolio.
<PAGE>
for growth
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6
TECHNOLOGY & ELECTRONICS
Growth for semi-conductors
Technology is one of the most talked about sectors of our economy. With growing
consumer interest in internet technology and newer, faster ways to access global
information, it's no wonder these stocks have performed well.
Novellus, a manufacturer of
semi-conductor equipment, is one such company. A new addition to your Fund's
portfolio, the company has become a significant semiconductor equipment
manufacturer. We see even further potential for this company as technological
development plays an even greater role in corporate and consumer needs. In
January 1999, worldwide sales of semiconductors reached $11.10 billion, up 1.2%
from January of the year before (Source: Semiconductor Industry Association). We
continue to see good profit margins for medium-sized companies operating in this
arena, and, as demand for high technology products grows, we expect this
industry to expand over the coming years.
Although some technology companies are flourishing, the software industry has
not performed as well as we had hoped. As Year 2000 concerns mount and software
companies use their resources to address these issues, new software developments
have slowed. For this reason, we have sold significant holdings of BMC Software
and all of our position in Compuware, both providers of systems software and
software solutions. Although year 2000 issues create instability for software
companies in the near future, we do see long-term potential in this industry.
RETAIL
Consumer spending equals opportunity
Continued consumer spending, along with a healthy housing boom, has kept the
retail sector prosperous. The number of new houses built in the U.S. in 1998
rose 11% over 1997 (Source: U.S. Housing Markets Data). Many consumers continue
to increase their standard of living through the purchase of new homes and
consequently housewares, allowing home furnishing superstores like Bed, Bath &
Beyond to prosper.
Women's apparel stores have also performed well. Stock of Intimate Brands,
owner of popular upscale lingerie boutique Victoria's Secret, has a solid track
record and, we believe, is on course for positive results in the future. The
company has recently increased its global presence through new distribution
channels, such as online shopping and direct mail.
Looking ahead to the remainder of fiscal 1999, we believe robust consumer
confidence, solid income and job growth should continue to keep consumer
spending at high levels.
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7
HEALTHCARE
Performance of our healthcare holdings has been disappointing, prompting us to
decrease our allocation to this area. Government reforms in the healthcare arena
have hurt profits on the service side of the industry - that is, hospitals and
hospital management companies. This past winter we sold our positions in
HealthSouth, a rehabilitation company, and Quorum Health Group, a hospital
management company.
FINANCIAL
Changing our focus on Finance
Increased competition and reduced opportunities for revenue growth in the
banking industry have, in our opinion, led us to reduce our commitment to this
area. Last Autumn we sold our holdings of People's Heritage Bank. Year 2000
concerns have slowed the pace of bank mergers and acquisitions, allowing new
players in the financial industry to emerge. Consumer, home equity and small
business lending institutions have found opportunities where banks don't
traditionally lend. We have focused on specialty finance companies like C.I.T.
Group, which focuses on consumer and small business lending. We also found money
management firms like Paine Webber attractive. These companies have consistently
provided attractive returns for the past few years.
The consumer credit card industry also continues to flourish. We recently
purchased stock of Capital One, a company that boasts the best credit quality
rating in the credit card industry. With consumer spending still at high levels,
we expect consumer credit stocks to perform well into the future.
TOP 10 HOLDINGS
- --------------------------------------------------------------------------------
March 31, 1999
Company Main Product or Service Share of Net Assets
- --------------------------------------------------------------------------------
Staples Office Products Superstore 4.8%
Gemstar International Consumer Products 3.8%
Clear Channel Communications Radio, TV Station Operator 3.4%
C.I.T. Group Commercial / Consumer Financing 3.3%
Outback Steakhouse Restaurants 3.3%
Network Appliance Telecommunications 3.2%
Bed, Bath & Beyond Retail 3.1%
Paine Webber Banking Finance & Insurance 3.0%
Kohls Retail 2.8%
PMC - Sierra Electronics & Electrical 2.8%
- --------------------------------------------------------------------------------
Total 33.5%
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for growth
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8
OUTLOOK
We believe the future for mid-cap stocks looks promising. Many medium-sized
companies exhibit solid earnings growth, quality management and a strong
financial history. In our view, companies of this size have the potential to
perform as favorably as large-cap companies. Right now these stocks have an
added benefit - their price. Due to the popularity of Blue Chip companies, these
companies have been largely overlooked by investors who remain focused on very
large-cap stocks. That has, in our opinion, kept prices relatively low, thus
creating opportunities for us to purchase attractive stocks at almost bargain
prices.
For the remainder of fiscal 1999, a number of factors suggest that U.S.
markets will remain strong.
o Unemployment is at a 28-year low;
o New home sales have hit a record high; and,
o Consumer prices continue to increase only at nominal levels.
Additionally, the Federal Reserve Board implied at their March meeting that
they do not anticipate increasing short-term interest rates in the near future.
This has, we believe, alleviated investor concerns and should allow the economy
to remain on course for another fruitful year - although, possibly, not at the
growth rate of recent years.
We look at the remainder of 1999 as a time to be cautiously optimistic. We
believe the economy will continue on an upward trend. By focusing on high
quality medium-sized company stocks, we believe we will be in a strong position
to reap the benefits of the current market upswing, while maintaining a relative
degree of protection during market downturns.
NET ASSET MIX
- --------------------------------------------------------------------------------
March 31, 1999
Food, Beverage & Tobacco 0.9%
Cable, Media & Publishing 11.9%
Cash 6.8%
Banking, Financing & Insurance 16.3%
Transportation & Shipping 0.6%
Computers & Technology 17.5%
Consumer Products 4.7%
Textiles, Apparel & Furniture 1.2%
Electronics & Electrical 9.6%
Healthcare & Pharmaceuticals 1.4%
Telecommunications 9.4%
Leisure, Lodging & Entertainment 1.7%
Retail 18.0%
<PAGE>
for growth
of capital
9
DELCAP FUND PERFORMANCE
- --------------------------------------------------------------------------------
Average Annual Returns Through March 31, 1999
Lifetime Ten Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 3/27/86)
Excluding Sales Charge +20.22% +14.01% +14.04% +7.07%
Including Sales Charge +19.67% +13.34% +12.70% +0.92%
- --------------------------------------------------------------------------------
Class B (Est. 9/6/94)
Excluding Sales Charge +14.94% +6.33%
Including Sales Charge +14.70% +1.86%
- --------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding Sales Charge +13.70% +6.29%
Including Sales Charge +13.70% +5.40%
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Return and share value will fluctuate so that shares, when
redeemed, may be worth more or less than the original cost. Past performance
does not guarantee future results. B and C class results excluding sales charge
assume either contingent sales charges did not apply or the investment was not
redeemed.
Class A shares have a 5.75% front-end sales charge and a 12b-1 fee.
Class B shares do not carry a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a deferred sales
charge of up to 5% if redeemed before the end of the sixth year.
Class C shares have a 1% annual distribution and service fee. If redeemed within
12 months, a 1% contingent deferred sales charge applies.
Average annual total returns for the lifetime, ten-year, five-year, one-year
periods and six-month cumulative return for the periods ended 3/31/99, for
DelCap Fund's Institutional Class were +20.40%, +14.23%, +14.40%, +7.40% and
+26.07%, respectively. The institutional class was made available without sales
charges only to certain eligible institutional accounts on 11/9/92.
<PAGE>
10 for growth of capital
FINANCIAL STATEMENTS
DELAWARE GROUP EQUITY FUNDS IV, INC. - DELCAP FUND
STATEMENT OF NET ASSETS
MARCH 31, 1999 (UNAUDITED)
- --------------------------------------------------------------------------------
Number Market
of Shares Value
--------- ------
COMMON STOCK - 93.10%
BANKING, FINANCE & INSURANCE - 16.32%
Ambac Financial Group ..................... 310,700 $ 16,777,800
Blanch(E.W.)Holdings ...................... 185,200 9,723,000
Capital One Financial ..................... 63,700 9,618,700
CIT GROUP ................................. 827,900 25,302,694
Countrywide Credit Industries ............. 174,900 6,558,750
FINOVA Group .............................. 332,700 17,258,812
First American ............................ 256,400 9,454,750
Mellon Bank ............................... 104,500 7,354,188
Paine Webber Group ........................ 583,400 23,263,075
-----------
125,311,769
-----------
CABLE, MEDIA & PUBLISHING - 11.90%
CBS Corporation ........................... 333,900 13,669,031
+*Chancellor Media .......................... 246,800 11,622,737
+Clear Channel Communications .............. 389,000 26,087,313
+Heftel Broadcasting ....................... 171,900 7,461,534
+*Jacor Communications ...................... 173,900 13,210,966
+Lamar Advertising ......................... 262,000 8,899,813
+*Snyder Communications ..................... 373,200 10,402,950
-----------
91,354,344
-----------
COMPUTERS & TECHNOLOGY - 17.49%
+*Acxiom .................................... 456,200 12,146,325
+*Citrix Systems ............................ 437,200 16,640,925
+*DST Systems ............................... 162,100 9,736,131
+Fore Systems .............................. 1,013,900 19,169,047
*Gateway 2000 .............................. 117,600 8,062,950
+Infoseek .................................. 93,400 6,908,681
+*Ivillage .................................. 42,400 4,250,600
+*Legato Systems ............................ 230,100 11,842,959
+SunGard Data Systems ...................... 526,900 21,076,000
+Teradyne .................................. 259,500 14,158,969
+*Veritas Software .......................... 124,500 10,037,813
+Ziff-Davis ................................ 8,500 306,000
-----------
134,336,400
-----------
CONSUMER PRODUCTS - 4.67%
Cintas .................................... 104,500 6,828,422
+GEMSTAR INTERNATIONAL ..................... 386,200 29,013,275
-----------
35,841,697
-----------
ELECTRONICS & ELECTRICAL - 9.63%
Altera .................................... 118,800 7,064,887
Applied Materials ......................... 207,900 12,831,328
+*Novellus Systems .......................... 193,100 10,632,569
- --------------
Top 10 holdings, representing 33.5% of net assets, are in boldface.
* Securities on loan.
+ Non-income producing security for the period ended March 31, 1999.
<PAGE>
Number Market
of Shares Value
--------- ------
COMMON STOCK (CONTINUED)
ELECTRONICS & ELECTRICAL (CONTINUED)
+PMC - SIERRA ................................. 298,800 $ 21,261,488
+*Waters ....................................... 69,100 7,259,819
+Xilinx ....................................... 367,200 14,883,075
-----------
73,933,166
-----------
FOOD, BEVERAGE & TOBACCO - 0.86%
Foodmaker .................................... 257,800 6,573,900
-----------
6,573,900
-----------
HEALTHCARE & PHARMACEUTICALS - 1.40%
*AmeriSource Health ........................... 269,800 9,223,787
Health Management Associates ................. 127,441 1,553,187
-----------
10,776,974
-----------
LEISURE, LODGING & ENTERTAINMENT - 1.65%
+*Prime Hospitality ............................ 798,400 7,934,100
*Promus Hotel ................................. 130,400 4,743,300
-----------
12,677,400
-----------
RETAIL - 17.96%
+BED BATH & BEYOND ............................ 651,200 23,850,200
*Intimate Brands .............................. 291,300 14,018,813
+KOHL'S ....................................... 302,200 21,418,425
+*OUTBACK STEAKHOUSE ........................... 762,300 24,917,681
+*Papa John's International .................... 374,500 16,478,000
+STAPLES ...................................... 1,132,257 37,222,949
-----------
137,906,068
-----------
TELECOMMUNICATIONS - 9.41%
*American Tower ............................... 760,800 18,639,600
*Global Crossing .............................. 433,800 20,076,806
+NETWORK APPLIANCE ............................ 482,900 24,476,994
+Pacific Gateway Exchange ..................... 123,700 4,109,159
+*Star Telecommunications ...................... 511,900 4,943,034
72,245,593
TEXTILES, APPAREL & FURNITURE - 1.21%
+Tommy Hilfiger ............................... 135,000 9,298,125
-----------
9,298,125
-----------
TRANSPORTATION & SHIPPING - 0.60%
Expeditors International ..................... 85,200 4,600,800
-----------
4,600,800
-----------
Total Common Stock
(cost $485,629,848) ......................... 714,856,236
-----------
<PAGE>
for growth of capital 11
STATEMENT OF NET ASSETS (CONTINUED)
PRINCIPAL MARKET
AMOUNT VALUE
--------- ------
REPURCHASE AGREEMENTS - 7.20%
With J.P. Morgan 4.80% 4/1/99
(dated 3/31/99, collateralized by $7,861,000
U.S. Treasury Notes 4.50% due 1/31/01,
market value $7,845,935 and $11,072,000
U.S. Treasury Notes 7.75% due 2/15/01
market value $11,707,097 ..................... $ 19,152,000 $ 19,152,000
With PaineWebber 4.80% 4/1/99
(dated 3/31/99, collateralized by $19,076,000
U.S. Treasury Notes 4.625% due 11/30/00,
market value $19,246,750) .................... 18,866,000 18,866,000
With Prudential Securities 4.77% 4/1/99
(dated 3/31/99, collateralized by $1,203,000
U.S. Treasury Notes 6.125% due 12/31/01,
market value $1,252,270 and $15,721,000
U.S. Treasury Notes 6.25% due 2/15/03
market value $16,398,550 ..................... 17,294,000 17,294,000
------------
TOTAL REPURCHASE AGREEMENTS
(COST $55,312,000) ........................... 55,312,000
------------
TOTAL MARKET VALUE OF SECURITIES OWNED - 100.30%
(COST $540,941,848 ) ......................... 770,168,236
LIABILITES NET OF RECEIVABLES AND
OTHER ASSETS - (0.30%) ....................... (2,331,612)
------------
NET ASSETS APPLICABLE TO 32,019,439 SHARES
($0.01 PAR VALUE) OUTSTANDING - 100.00% ...... $767,836,624
============
NET ASSET VALUE - DELCAP FUND A CLASS
($637,357,789 / 26,646,712 SHARES) ........... $23.92
======
NET ASSET VALUE - DELCAP FUND B CLASS
($23,495,314 / 1,029,050 SHARES) ............. $22.83
======
NET ASSET VALUE - DELCAP FUND C CLASS
($4,961,773 / 214,129 SHARES) ................ $23.17
======
NET ASSET VALUE - DELCAP FUND INSTITUTIONAL CLASS
($102,021,748 / 4,129,548 SHARES) ............ $24.71
======
<PAGE>
COMPONENTS OF NET ASSETS AT MARCH 31 1999:
Common stock, $0.01 par value, 1,000,000,000 shares authorized
to the Fund with 150,000,000 shares allocated to
DelCap Fund A Class, 100,000,000 shares allocated to
DelCap Fund B Class, 50,000,000 shares allocated to
DelCap Fund C Class, and 50,000,000 shares allocated to
DelCap Fund Institutional Class .............. $ 501,681,345
Accumulated net investment loss ................. (2,959,765)
Accumulated net realized gain on investments 39,888,656
Net unrealized appreciation of investments ...... 229,226,388
-------------
Total net assets ................................ $ 767,836,624
=============
NET ASSET VALUE AND OFFERING PRICE PER SHARE - DELCAP FUND
Net Asset Value A Class (A)...................... $23.92
Sales Charge (5.75% of offering or 6.10% of
the amount invested per share) (B)............ 1.46
------
Offering price................................... $25.38
======
(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 $100,000 or
more.
See accompanying notes
<PAGE>
12 for growth of capital
DELAWARE GROUP EQUITY FUNDS IV, INC. -
DELCAP FUND
STATEMENT OF OPERATIONS
SIX MONTHS ENDED MARCH 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
INVESTMENT INCOME:
Interest ......................................... $ 1,056,894
Dividends ........................................ 879,952
Other income ..................................... 170,082 $2,106,928
-------------
EXPENSES:
Management fees .................................. 2,805,285
Distribution expense ............................. 1,032,500
Dividend disbursing and transfer agent
fees and expenses ............................. 891,572
Accounting and administration .................... 206,666
Reports and statements to shareholders ........... 42,400
Professional fees ................................ 36,800
Taxes (other than taxes on income) ............... 27,000
Registration fees ................................ 10,995
Directors' fees .................................. 9,475
Custodian fees ................................... 4,000
-------------
Total expenses ................................... 5,066,693
NET INVESTMENT LOSS .............................. (2,959,765)
-------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS:
Net realized gain on investments ................. 52,666,390
Net change in unrealized appreciation/depreciation
of investments ................................ 122,038,404
-------------
NET REALIZED AND UNREALIZED GAIN
ON INVESTMENTS ................................ 174,704,794
-------------
NET INCREASE IN NET ASSETS RESULTING
FROM OPERATIONS ............................... $ 171,745,029
=============
See accompanying notes
<PAGE>
<TABLE>
<CAPTION>
DELAWARE GROUP EQUITY FUNDS IV, INC.-
DELCAP FUND
STATEMENTS OF CHANGES IN NET ASSETS
- ---------------------------------------------------------------------------------------
SIX MONTHS
ENDED 3/31/99 YEAR ENDED
(UNAUDITED) 9/30/98
------------ ------------
<S> <C> <C>
INCREASE (DECREASE) IN NET ASSETS
FROM OPERATIONS:
Net investment loss ............................. ($2,959,765) ($7,557,824)
Net realized gain on investments ................ 52,666,390 141,132,991
Net change in unrealized appreciation/
depreciation of investments .................. 122,038,404 (183,147,362)
------------ ------------
Net increase (decrease) in net assets
resulting from operations .................... 171,745,029 (49,572,195)
------------ ------------
DISTRIBUTIONS TO SHAREHOLDERS FROM:
Net realized gain on investments:
A Class ...................................... (97,254,365) (148,118,430)
B Class ...................................... (3,479,402) (4,236,576)
C Class ...................................... (685,495) (643,676)
Institutional Class .......................... (15,667,174) (23,312,883)
------------ ------------
(117,086,436) (176,311,565)
------------ ------------
CAPITAL SHARE TRANSACTIONS:
Proceeds from shares sold:
A Class ...................................... 103,706,142 847,916,020
B Class ...................................... 4,060,759 6,039,997
C Class ...................................... 1,115,179 1,757,054
Institutional Class .......................... 13,083,864 18,659,488
Netasset value of shares issued upon reinvestment
of distributions from net realized gain
on investments
A Class ...................................... 88,850,391 133,514,335
B Class ...................................... 3,347,297 4,037,431
C Class ...................................... 677,147 631,759
Institutional Class .......................... 15,667,174 23,312,883
------------ ------------
230,507,953 1,035,868,967
------------ ------------
Cost of shares repurchased:
A Class ...................................... (166,782,271) (998,181,334)
B Class ...................................... (3,644,775) (6,363,076)
C Class ...................................... (679,465) (1,210,864)
Institutional Class .......................... (30,203,052) (45,867,678)
------------ ------------
(201,309,563) (1,051,622,952)
------------ ------------
Increase (decrease) in net assets derived from
capital share transactions ................... 29,198,390 (15,753,985)
------------ ------------
NET INCREASE (DECREASE) IN NET ASSETS ........... 83,856,983 (241,637,745)
NET ASSETS:
Beginning of year ............................ 683,979,641 925,617,386
------------ ------------
End of year .................................. $767,836,624 $683,979,641
============ ============
</TABLE>
See accompanying notes
<PAGE>
for growth of capital 13
<TABLE>
<CAPTION>
DELCAP FUND
FINANCIAL HIGHLIGHTS
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
DELCAP FUND A CLASS
- --------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
3/31/99(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 22.470 $ 30.450 $ 30.740 $ 28.870 $ 25.570 $ 26.080
Income from investment operations:
Net investment loss ................... (0.094)(2) (0.237)(2) (0.234)(2) (0.208)(2) (0.166)(2) (0.218)
Net realized and unrealized gain (loss)
on investments ..................... 5.474 (1.873) 3.534 5.618 5.296 0.528
-------- -------- -------- -------- -------- --------
Total from investment operations ...... 5.380 (2.110) 3.300 5.410 5.130 0.310
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net realized gain
on investments ..................... (3.930) (5.870) (3.590) (3.540) (1.830) (0.820)
-------- -------- -------- -------- -------- --------
Total distributions ................... (3.930) (5.870) (3.590 (3.540) (1.830) (0.820)
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 23.920 $ 22.470 $ 30.450 $ 30.740 $ 28.870 $ 25.570
======== ======== ======== ======== ======== ========
Total return(3) .......................... 25.85% (8.28%) 12.44% 21.09% 22.04% 1.17%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $637,358 $566,734 $770,207 $923,248 $888,571 $890,787
Ratio of expenses to average net assets 1.37% 1.40% 1.36% 1.35% 1.37% 1.35%
Ratio of net investment loss
to average net assets .............. (0.81%) (0.92%) (0.86%) (0.74%) (0.67%) (0.68%)
Portfolio turnover .................... 97% 115% 105% 72% 51% 34%
<PAGE>
DELCAP FUND B CLASS
- --------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED YEAR YEAR YEAR YEAR 9/6/94(4)
3/31/99(1) ENDED ENDED ENDED ENDED TO
(UNAUDITED) 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 21.680 $ 29.750 $ 30.300 $ 28.680 $ 25.560 $ 25.180
Income from investment operations:
Net investment loss ................... (0.170)(2) (0.408)(2) (0.418)(2) (0.400)(2) (0.340)(2) (0.008)
Net realized and unrealized gain (loss)
on investments ..................... 5.250 (1.792) 3.458 5.560 5.290 0.388
-------- -------- -------- -------- -------- --------
Total from investment operations ...... 5.080 (2.200) 3.040 5.160 4.950 0.380
-------- -------- -------- -------- -------- --------
Less distributions:
Distributions from net realized gain on
investments ........................ (3.930) (5.870) (3.590) (3.540) (1.830) none
-------- -------- -------- -------- -------- --------
Total distributions ................... (3.930) (5.870) (3.590) (3.540) (1.830) none
-------- -------- -------- -------- -------- --------
Net asset value, end of period ........... $ 22.830 $ 21.680 $ 29.750 $ 30.300 $ 28.680 $ 25.560
======== ======== ======== ======== ======== ========
Total return(3) .......................... 25.41% (8.92%) 11.64% 20.27% 21.34% 1.51%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 23,495 $ 18,470 $ 20,706 $ 13,239 $ 2,710 $ 287
Ratio of expenses to average net assets 2.07% 2.10% 2.06% 2.05% 2.07% 2.05%
Ratio of net investment loss
to average net assets .............. (1.51%) (1.62%) (1.56%) (1.44%) (1.37%) (1.38%)
Portfolio turnover .................... 97% 115% 105% 72% 51% 34%
</TABLE>
- -------------
(1) Ratios have been annualized but total return has not been annualized.
(2) The average shares outstanding method has been applied for per share
information.
(3) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distrbutions at net asset
value and does not reflect the impact of a sales charge.
(4) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
See accompanying notes
<PAGE>
14 for growth of capital
FINANCIAL HIGHLIGHTS (CONTINUED)
- --------------------------------------------------------------------------------
Selected data for each share of the Fund outstanding throughout each period were
as follows:
<TABLE>
<CAPTION>
DELCAP FUND C CLASS
- ------------------------------------------------------------------------------------------------------------------
SIX MONTHS PERIOD
ENDED YEAR YEAR 11/29/95(2)
3/31/99(1) ENDED ENDED TO
(UNAUDITED) 9/30/98 9/30/97 9/30/96
<S> <C> <C> <C> <C>
Net asset value, beginning of period .................... $ 21.950 $ 30.050 $ 30.570 $ 28.880
Income from investment operations:
Net investment loss .................................. (0.172)(3) (0.411)(3) (0.421)(3) (0.359)(3)
Net realized and unrealized gain (loss) on investments 5.322 (1.819) 3.491 5.589
-------- --------- -------- ---------
Total from investment operations ..................... 5.150 (2.230) 3.070 5.230
-------- --------- -------- ---------
Less distributions:
Distributions from net realized gain on investments .. (3.930) (5.870) (3.590) (3.540)
-------- --------- -------- ---------
Total distributions .................................. (3.930) (5.870) (3.590) (3.540)
-------- --------- -------- ---------
Net asset value, end of period .......................... $ 23.170 $ 21.950 $ 30.050 $ 30.570
======== ========= ======== =========
Total return(4) ......................................... 25.37% (8.89%) 11.64% 20.38%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .............. $ 4,962 $ 3,576 $ 3,385 $ 1,947
Ratio of expenses to average net assets .............. 2.07% 2.10% 2.06% 2.05%
Ratio of net investment loss to average net assets ... (1.51%) (1.62%) (1.56%) (1.44%)
Portfolio turnover ................................... 97% 115% 105% 72%
</TABLE>
<TABLE>
<CAPTION>
DELCAP FUND INSTITUTIONAL CLASS
- -------------------------------------------------------------------------------------------------------------------------------
SIX MONTHS
ENDED YEAR YEAR YEAR YEAR YEAR
3/31/99(1) ENDED ENDED ENDED ENDED ENDED
(UNAUDITED 9/30/98 9/30/97 9/30/96 9/30/95 9/30/94
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ..... $ 23.070 $31.010 $ 31.160 $ 29.130 $ 25.710 $26.140
Income from investment operations:
Net investment loss ................... (0.059)(3) (0.160)(3) (0.152)(3) (0.123)(3) (0.091)(3) (0.080)
Net realized and unrealized gain (loss)
on investments ..................... 5.629 (1.910) 3.592 5.693 5.341 0.470
---------- -------- -------- --------- -------- --------
Total from investment operations ...... 5.570 (2.070) 3.440 5.570 5.250 0.390
---------- -------- -------- --------- -------- --------
Less distributions:
Distributions from net realized gain on
investments ........................ (3.930) (5.870) (3.590) (3.540) (1.830) (0.820)
---------- -------- -------- --------- -------- --------
Total distributions ................... (3.930) (5.870) (3.590) (3.540) (1.830) (0.820)
---------- -------- -------- --------- -------- --------
Net asset value, end of period ........... $ 24.710 $23.070 $ 31.010 $ 31.160 $ 29.130 $25.710
========== ======= ======== ======== ======== =======
Total return ............................. 26.07% (7.99%) 12.75% 21.44% 22.45% 1.48%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $ 102,022 $95,200 $131,319 $ 178,197 $129,378 $110,126
Ratio of expenses to average net assets 1.07% 1.10% 1.06% 1.05% 1.07% 1.05%
Ratio of net investment loss
to average net assets .............. (0.51%) (0.62%) (0.56%) (0.44%) (0.37%) (0.38%)
Portfolio turnover .................... 97% 115% 105% 72% 51% 34%
</TABLE>
(1) Ratios have been annualized but total return has not been annualized.
(2) Date of initial public offering; ratios have been annualized and total
return has not been annualized.
(3) The average shares outstanding method has been applied for per share
information.
(4) Total investment return is based on the change in net asset value of a share
during the period and assumes reinvestment of distrbutions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
<PAGE>
for growth of capital 15
DELAWARE GROUP EQUITY FUNDS IV, INC. - DELCAP FUND
NOTES TO FINANCIAL STATEMENTS
MARCH 31, 1999
(UNAUDITED)
- --------------------------------------------------------------------------------
Delaware Group Equity Funds IV, Inc. - DelCap 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 DelCap Fund A Class carries a front-end sales charge
which was raised from 4.75% to 5.75% as of November 2, 1998. The DelCap Fund B
Class carries a back-end sales charge. The DelCap Fund C Class carries a level
load deferred sales charge and DelCap Fund Institutional Class has no sales
charge. The Fund's objective is to seek long-term capital growth by investing in
common stocks and securities convertible into common stocks of companies that
have a demonstrated history of growth and have the potential to support
continued growth.
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.
Other securities and assets for which market quotations are not readily
available are valued at fair value as determined in good faith by or under the
direction of the Fund's Board of Directors.
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.
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.
<PAGE>
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 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 average daily
net assets of the Fund less the fees paid to the unaffiliated directors.
Effective April 1, 1999, the annual fee will be calculated at the following
rates: 0.75% of the first $500 million of 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 over $2.5 billion. At March 31, 1999, the Fund had a
liability for Investment Management fees and other expenses payable to DMC of
$40,271.
The Fund has engaged Delaware Service Company (DSC), an affiliate of DMC, to
provide dividend disbursing, transfer agent and accounting services. The Fund
pays DSC a monthly fee based on number of shareholder accounts, shareholder
transactions and average net assets, subject to certain minimums. At March 31,
1999, the Fund had a liability for such fees and other expenses payable to DSC
of $95,043.
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.
For the six months ended March 31, 1999, DDLP earned $39,745 for commissions on
sales of the Fund A Class shares.
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 six months ended March 31, 1999, the Fund made purchases of
$347,472,727 and sales of $432,083,604 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 $544,878,596.
At March 31, 1999, unrealized appreciation for federal income tax purposes
aggregated $225,289,640 of which $239,450,982 related to unrealized appreciation
of securities and $14,161,342 related to unrealized depreciation of securities.
<PAGE>
16 for growth of capital
NOTES TO FINANCIAL STATEMENTS (CONTINUED)
- --------------------------------------------------------------------------------
4. Capital Stock
Transactions in capital stock shares were as follows:
SIX MONTHS
ENDED YEAR ENDED
3/31/99 9/30/98
---------- ----------
Shares sold:
A Class ............................ 4,438,305 32,840,217
B Class ............................ 181,188 239,372
C Class ............................ 49,374 70,658
Institutional Class ................ 548,378 707,764
Shares issued upon reinvestment of
distributions from net realized gain on
investments:
A Class ............................ 4,119,152 5,523,116
B Class ............................ 162,175 172,245
C Class ............................ 32,337 26,623
Institutional Class ................ 703,826 942,315
---------- ----------
10,234,735 40,522,310
---------- ----------
Shares repurchased:
A Class ............................ (7,128,829) (38,439,982)
B Class ............................ (166,349) (255,596)
C Class ............................ (30,505) (47,001)
Institutional Class ................ (1,249,698) (1,757,200)
---------- ----------
(8,575,381) (40,499,779)
Net increase .......................... 1,659,354 22,531
========== ==========
5. Lines of Credit
The Fund has a committed line of credit for $41.4 million. No amount was
outstanding at March 31, 1999, or at any time during the fiscal year.
6. Securities Lending
Security loans for the Fund are required at all times to be secured by U.S.
Treasury obligations and/or cash collateral at least equal to 102% of the market
value of the securities on loan. However, in the event of default or bankruptcy
by the other party to the agreement, realization and/or retention of the
collateral may be subject to legal proceedings. In the event that the borrower
fails to return loaned securities, and the collateral being maintained by the
borrower is insufficient to cover the value of loaned securities and provided
such collateral insufficiency is not the result of investment losses, the
lending agent has agreed to pay the amount of the shortfall to the Fund or, at
the option of the lending agent, replace the loaned securities. The market value
of securities on loan to brokers and the related collateral received at March
31, 1999 were $108,242,605 and $109,965,742, respectively.
<PAGE>
for growth of capital 17
- --------------------------------------------------------------------------------
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 the reclassification of the DelCap Fund investment objective from
fundamental to non-fundamental.
FOR AGAINST ABSTAIN
--- ------- -------
17,551,497 919,928 1,469,466
3. To approve standardized fundamental investment restrictions for the DelCap
Fund (proposal involves separate votes on seven sub-proposals 3A-3G).
3A. To adopt a new fundamental investment restriction concerning concentration
of the investments in the same industry.
FOR AGAINST ABSTAIN
--- ------- -------
17,886,934 603,397 1,450,561
3B. To adopt a new fundamental investment restriction concerning borrowing money
and issuing senior securities.
FOR AGAINST ABSTAIN
--- ------- -------
17,805,831 661,391 1,473,669
<PAGE>
3C. To adopt a new fundamental investment restriction concerning underwriting.
FOR AGAINST ABSTAIN
--- ------- -------
17,830,199 600,314 1,510,379
3D. To adopt a new fundamental investment restriction concerning investments in
real estate.
FOR AGAINST ABSTAIN
--- ------- -------
17,814,855 647,506 1,478,530
3E. To adopt a new fundamental investment restriction concerning investments in
commodities.
FOR AGAINST ABSTAIN
--- ------- -------
17,709,122 757,933 1,473,837
3F. To adopt a new fundamental investment restriction concerning lending by the
Fund.
FOR AGAINST ABSTAIN
--- ------- -------
17,792,030 676,390 1,472,472
3G. To reclassify all current fundamental investment restrictions as
non-fundamental.
FOR AGAINST ABSTAIN
--- ------- -------
17,504,034 865,197 1,571,660
4. To approve a new investment management agreement with Delaware Management
Company for the DelCap Fund.
FOR AGAINST ABSTAIN
--- ------- -------
17,687,647 789,488 1,463,756
5. 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
6. 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
<PAGE>
DELAWARE INVESTMENTS FAMILY OF FUNDS
FOR GROWTH OF CAPITAL
Aggressive Growth Fund
Trend Fund
DelCap Fund
Small Cap Value Fund
U.S. Growth Fund
Growth Stock Fund
Tax-Efficient Equity Fund
Social Awareness Fund
FOR TOTAL RETURN
Blue Chip Fund
Devon Fund
Decatur Equity Income Fund
Growth and Income Fund
REIT Fund
Delaware Balanced Fund
FOR INTERNATIONAL DIVERSIFICATION
Emerging Markets Fund
New Pacific Fund
Overseas Equity Fund
International Equity Fund
Global Equity Fund
Global Bond Fund
FOR CURRENT INCOME
Delchester Fund
High-Yield Opportunities Fund
Extended Duration Bond Fund
Strategic Income Fund
Corporate Bond Fund
U.S. Government Fund
U.S. Government Securities Fund
Limited-Term Government Fund
FOR TAX-EXEMPT INCOME
National High Yield Municipal Bond Fund
Tax-Free USA Fund
Tax-Free Insured Fund
Tax-Free USA Intermediate Fund
State Tax-Free Funds*
MONEY MARKET FUNDS
Delaware Cash Reserve
Tax-Free Money Fund
ASSET ALLOCATION FUNDS
Foundation Funds
Growth Portfolio
Balanced Portfolio
Income Portfolio
* Available for the following states: Arizona, California, Colorado, Florida,
Idaho, Iowa, Kansas, Minnesota, Missouri, North Dakota, New Jersey, New
Mexico, New York, Ohio, Oregon, Pennsylvania, Utah, Washington, Wisconsin.
Insured and intermediate bond funds are available in selected states.
(photo of computer keyboard)
funds
Complete information on any fund offered by Delaware Investments can be found in
each fund's current prospectus. Prospectuses for all funds offered by Delaware
Investments are available from your financial adviser. Please read the
prospectus carefully before you invest or send money.
<PAGE>
THIS SEMI-ANNUAL REPORT IS FOR THE INFORMATION OF DELCAP FUND SHAREHOLDERS, BUT
IT MAY BE USED WITH prospective investors when preceded or accompanied by a
current Prospectus for DelCap Fund and the Delaware Investments Performance
Update for the most recently completed calendar quarter. The prospectus sets
forth details about charges, expenses, investment objectives and operating
policies of the Fund. You should read the prospectus carefully before you invest
or send money. The figures in this report represent past results which are not a
guarantee of future results. The return and principal value of an investment in
the Fund will fluctuate so that shares, when redeemed, may be worth more or less
than their original cost.
- --------------------------------------------------------------------------------
INVESTMENT MANAGER
Delaware Management Company
Philadelphia, Pennsylvania
INTERNATIONAL AFFILIATE
Delaware Investment Advisers Ltd.
London, England
NATIONAL DISTRIBUTOR
Delaware Distributors, L.P.
Philadelphia, Pennsylvania
SHAREHOLDER SERVICING,
DIVIDEND DISBURSING
AND TRANSFER AGENT
Delaware Service Company, Inc.
Philadelphia, Pennsylvania
1818 Market Street
Philadelphia, PA 19103-3682
[Photo of Globes]
FOR SHAREHOLDERS
1.800.523.1918
FOR SECURITIES DEALERS
1.800.362.7500
FOR FINANCIAL INSTITUTIONS
REPRESENTATIVES ONLY
1.800.659.2265
www.delawareinvestments.com
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,
and involve investment risk, including the possible loss of the principal amount
invested. Shares of the Fund are not bank or credit union deposits.
(C) Delaware Distributors, L.P.
DELAWARE
INVESTMENTS
- ---------------------
Philadelphia o London
Printed in the USA
on recycled paper
SA-016[3/99] PP5/99
(1722)
