<PAGE>
DELAWARE(SM)
INVESTMENTS
- -------------
Delaware Growth Opportunities Fund
(formerly Delaware DelCap Fund)
Growth of Capital
2000 SEMI-ANNUAL REPORT
[Growth of Capital Artwork]
<PAGE>
Table of Contents
- ------------------
Letter to Shareholders 1
Portfolio Management Review 3
Performance Summary 7
Financial Statements
Statement of Net Assets 8
Statement of Operations 10
Statements of Changes in
Net Assets 11
Financial Highlights 12
A TRADITION OF SOUND INVESTING SINCE 1929
- -----------------------------------------
A Commitment To Our Investors
Experienced
o Our seasoned investment professionals average more than 15 years' experience.
o For over 70 years, we have managed money in a variety of investment styles
that have weathered a full range of economic and market environments. We
opened our first mutual fund in 1938.
Disciplined
o We follow strict investment policies and clear buy/sell guidelines.
o We strive to balance risk and reward in order to provide relatively
conservative investment alternatives within any given asset class.
Consistent
o We believe consistent processes are the best way to seek consistent investment
performance.
o Our commitment to style consistency has earned us the confidence of
discriminating institutional and individual investors to manage over $46
billion in assets as of March 31, 2000.
Comprehensive
o We offer more than 70 mutual funds in these asset classes.
o Large-cap equity o High-yield bonds
o Mid-cap equity o Investment grade bonds
o Small-cap equity o Municipal bonds (24 single-state funds)
o International equity o International fixed-income
o Balanced
o Our funds are available through financial advisers who can offer you
individualized attention and valuable investment advice.
Funds are not FDIC insured and are not guaranteed. It is possible to lose the
principal amount invested.
(c) Delaware Distributors, L.P.
<PAGE>
"...soaring demand for technology stocks kept prices high and contributed
significantly to the overall market's impressive gains through December 1999."
Dear Shareholder
April 14, 2000
Recap of Events -- For the six months ended March 31, 2000 Delaware Growth
Opportunities Fund (formerly Delaware DelCap Fund) provided an exceptional total
return of +81.52% (Class A shares at net asset value with distributions
reinvested), largely due to the performance of our technology stocks. Please
keep in mind that these returns are highly unusual and cannot be sustained. You
should also be aware that these returns were primarily achieved during favorable
market conditions, especially within the technology sector.
Throughout most of 1999, we saw a handful of large company stocks dominate
equity market performance. Over the last six months, however, we also saw gains
in small and mid-size company stocks. Regardless of size, technology has been
the investment sector that delivered the most substantial returns.
Ongoing rapid expansion in the U.S. economy continued to stir inflation
concerns, prompting the Federal Reserve to raise interest rates three times
between November 1999 and March 2000 in addition to the two increases earlier in
1999. As of this writing, the federal funds rate -- the rate banks charge each
other for overnight loans -- is 6.0%, the highest it has been in five years.
While these rate increases seemed to have little impact on U.S economic growth,
they did create a more volatile stock market environment, especially for the
"old economy" stocks of the Dow Jones Industrial Average. The high-flying
technology companies and small capitalization companies tracked by the Nasdaq
composite index, were less affected by higher interest rates in 1999. In fact,
soaring demand for technology stocks kept prices high and contributed
significantly to the overall market's impressive gains through December 1999.
In late February and March, however, concerns over rising interest rates,
potential inflation and high stock prices began to take their toll on all market
sectors, leading to several bouts of volatility. After passing the 5000
milestone in early March, the Nasdaq composite fell sharply several times during
the month, but each time recovered. The Standard & Poor's 500 Index fell sharply
in February only to reach a high of 1550 in March. The Dow finished the quarter
down -0.5%, while the S&P Index returned 7.7% and the Nasdaq closed the quarter
up 12.3%.
Average Total Returns
For The Period Ended March 31, 2000 Six Months
- --------------------------------------------------------------------------------
Delaware Growth Opportunities Fund Class A +81.52%
- --------------------------------------------------------------------------------
Lipper Multi-Cap Growth Fund Average (378 funds) +55.07%
Russell Mid-Cap Growth Fund Index +68.93%
- --------------------------------------------------------------------------------
All performance shown above is at net asset value and assumes reinvestment of
dividends and capital gains. Performance for all Fund classes can be found on
page 7. The Lipper Multi-Cap Growth Fund Average includes multi-cap growth
mutual funds tracked by Lipper Analytical. Source: Lipper Analytical Services,
Inc. The unmanaged Russell Mid-Cap Growth Fund Index is a measure of mid
capitalization company stocks that exhibit growth characteristics as defined by
the Frank Russell Company. You cannot invest directly in an index. Past
performance does not guarantee future results.
1
<PAGE>
"Delaware Growth Opportunities Fund delivered exceptional performance over
the last six months, significantly outpacing its benchmark, the Russell Mid-Cap
Growth Index and its peers in the Lipper Multi-Cap Growth Fund Average."
Delaware Growth Opportunities Fund delivered exceptional performance over the
last six months, significantly outpacing its benchmark, the Russell Mid-Cap
Growth Fund Index and its peers in the Lipper Multi-Cap Growth Fund Average.
Along with the exceptional performance of our technology holdings, we also
benefited from the strong returns of small and mid-size company stocks relative
to large company stocks. After focusing on the reliable earnings growth of large
companies for more than a year, investors began to take a closer look at less
expensive small and mid-cap company stocks, leading to improved price
performance.
Market Outlook -- In our opinion, the overall outlook for U.S. stocks is
positive, as growth stocks have generally continued to generate strong earnings.
Nevertheless, we expect to see continued market volatility over the next few
months as the Fed attempts to slow economic growth and investors compare the
merits of "old economy" stocks in the Dow Jones Industrial Average to the "new
economy" stocks in the Nasdaq composite index.
In the coming months, we expect mid-cap growth stocks, like those held by
Delaware Growth Opportunities Fund to continue providing investors with
attractive investment opportunities. We look forward to sharing our performance
results with you next November and thank you for your continued investment with
Delaware.
Sincerely,
/s/ Wayne A. Stork /s/ David K. Downes
- ---------------------------- -------------------------------------
Wayne A. Stork David K. Downes
Chairman, President and Chief Executive Officer,
Delaware Investments Family of Funds Delaware Investments Family of Funds
2
<PAGE>
Gerald S. Frey
Senior Portfolio Manager
April 14, 2000
"During the last six months, technology stocks were Delaware Growth
Opportunities Fund's largest and best performing investment sector."
PORTFOLIO MANAGEMENT REVIEW
- ---------------------------
The Fund's Results
Delaware Growth Opportunities Fund typically invests in four "core" investment
sectors -- technology, retail, financial services and healthcare -- with less
substantial investments in several other sectors. As of March 31, 2000, we held
substantial investments in technology, an area which we believe has the
potential to continue delivering strong earnings growth. We also invested a
substantial portion of the Fund's assets in retail company stocks in order to
take advantage of continued brisk consumer spending.
When selecting stocks for the Fund, we look for small and mid-size companies
that have a solid earnings track record and what we consider to be excellent
potential for future growth. One of the key challenges for growth companies is
finding new ways to continue growing - by expanding their product lines or their
distribution systems. This is why less mature small and mid-size companies,
which often have more room for future growth, have historically traded at higher
price-to-earnings ratios than large company stocks.
However, following the Asian economic crisis in August of 1998, large company
stocks have generally been much more expensive than small and mid-size
companies. Fortunately for us, during the last six months, interest in many
large company stocks began to wane as investors shifted their focus to less
expensive small and medium size companies. This shift benefited many of the
stocks we held in Delaware Growth Opportunities Fund.
Portfolio Highlights
Technology
During the last six months, technology stocks were Delaware Growth Opportunities
Fund's largest and best performing investment sector. Generally, we avoided
expensive internet retail companies and focused instead on companies that
support the internet's infrastructure. Our holdings of network providers, like
Network Appliances, rose in value as consumer and business-to-business use of
the internet continued to expand. Software companies, such as VERITAS Software,
also benefited from rising demand for internet services.
3
<PAGE>
"...We held shares of some consumer companies that we believe have excellent
management teams and strong fundamentals."
[Growth of Capital Artwork]
We began adding companies that manufacture semiconductors to the Fund in August
of 1998, a time when prices had fallen substantially. The value of these
companies, which make silicon chips for computers, cell phones, pagers,
televisions and even athletic shoes, rose significantly during the fiscal period
on higher demand from both internet expansion and new uses of technology in
everyday consumer items.
Financial and Business Services
We maintained minimal exposure to financial companies, which generally delivered
disappointing performance during the past six months, due to rising interest
rates. Instead, we focused on business services companies such as Hispanic
Broadcasting, one of the leading providers of radio programming to Latin
American radio stations. Radio stations that target Latin American audiences are
one of the fastest growing segments in radio, which increased the value of our
shares of Hispanic Broadcasting.
Omnicon Group, one of the leading international advertising agencies, was
another business services company that delivered strong returns during the
period. Advertising agencies, like Omnicon, generally benefit from economic
growth and strong consumer spending. This, along with Omnicon's long-term track
record of meeting or exceeding earnings expectations helped increase the value
of its stock. We sold our holdings of Omnicon last February, based on our belief
that advertising stocks had reached their full short-term (1-2 years) growth
potential.
Consumer Stocks
Our holdings of retail and consumer stocks were somewhat volatile during the
first six months of your Fund's fiscal period due to rising interest rates,
higher labor costs and internet competition.
Despite these challenges, we held shares of some consumer companies that we
believe have excellent management teams and strong fundamentals. These holdings
were generally able to deliver attractive returns for the Fund.
Kohl's, for example, a family-oriented department store with locations in the
Midwest and Mid-Atlantic regions of the U.S., continued to profitably open new
stores while increasing sales in their existing stores. The secret to Kohl's
success has been providing their customers with top-quality merchandise at
moderate prices. Kohl's has been able to accomplish this by opening stores that
are attractive, but without some of the frills found in higher priced department
stores.
4
<PAGE>
After a brief slowdown, Starbucks, another Fund holding, re-accelerated its
remarkable growth rate by expanding its menu. After introducing sandwiches and
take-home coffee products, Starbucks was able to substantially increase in-store
sales. Starbucks also continued its geographic expansion, opening new stores at
a brisk pace.
Healthcare
Over the last several years, increased government regulation of the healthcare
industry has reduced profits, resulting in disappointing investment performance
for some of our holdings. This led us to keep our allocation in this sector
small compared to our benchmark, the Russell Mid-Cap Growth Fund Index.
Although we avoided investing in hospitals and managed healthcare organizations,
we continue to believe there is growth opportunity in pharmaceutical companies
and in companies that create medical devices. In particular, we were pleased
with the performance of our holdings of Incyte Pharmaceuticals, a company that
provides large technical databases related to drug discovery and genetic
information to other biotechnology companies.
Outlook
Going forward, we expect to continue allocating the majority of Delaware Growth
Opportunities Fund's assets to our four core investment areas. We may, however,
start to modestly adjust our weightings in these sectors.
For example, we recently began to invest more heavily in financial services
companies and plan to continue looking for attractive opportunities to increase
our allocation. While the short-term outlook for interest rates remains
uncertain -- and could be influenced by election year politics -- we believe
earnings growth will continue at the majority of companies in the Delaware
Growth Opportunities Fund portfolio.
5
<PAGE>
Portfolio Characteristics
March 31, 2000
- ----------------------------------------------------
Beta* 0.92
- ----------------------------------------------------
Cash Position** 1.1%
- ----------------------------------------------------
Median Market Capitalization $7.7 billion
- ----------------------------------------------------
Median Price-To-Earnings Ratio 30.8x
- ----------------------------------------------------
Portfolio Turnover 141%
- ----------------------------------------------------
*Beta, which is based on monthly returns for the last three years, measures
volatility of the Fund, relative to the S&P 500, which has a beta of 1.
**As a percentage of Net Assets
[Growth of Capital Artwork]
Conversely, we may begin to selectively reduce our technology holdings. After
the close of your Fund's fiscal period, technology stocks began to fall
substantially. In each of the last five years, however, technology stocks have
experienced brief dramatic downturns of approximately 20% to 24% before resuming
their steady upward climb. Although we expect strong returns in the technology
sector to continue during 2000, we believe it will be hard to sustain the
momentum generated throughout 1999.
We are encouraged that the Federal Reserve is making policy decisions that may
help to prevent future problems. In our opinion, although some stock valuations
may be excessive, others are well justified, based on current interest rates and
earnings growth rates. Although we may see more bouts of stock market volatility
in the coming months, we believe the Fed's moves will eventually result in more
realistic market valuations across a broader array of stocks.
Top Portfolio Holdings
March 31, 2000
Percentage of
Company Industry Net Assets
- --------------------------------------------------------------------------------
1. PMC-Sierra Electronics & Electrical Equipment 4.77%
- --------------------------------------------------------------------------------
2. Xilinx Electronics & Electrical Equipment 4.30%
- --------------------------------------------------------------------------------
3. Veritas Software Technology 4.14%
- --------------------------------------------------------------------------------
4. Network Appliance Technology 3.69%
- --------------------------------------------------------------------------------
5. Echostar Communications Cable, Media & Publishing 3.52%
- --------------------------------------------------------------------------------
6. JDS Uniphase Electronics & Electrical Equipment 3.41%
- --------------------------------------------------------------------------------
7. Citrix Systems Technology 3.26%
- --------------------------------------------------------------------------------
8. Kohl's Retail 3.20%
- --------------------------------------------------------------------------------
9. Peregrine Systems Technology 3.05%
- --------------------------------------------------------------------------------
10. Genentech Healthcare 2.96%
- --------------------------------------------------------------------------------
6
<PAGE>
Delaware Growth Opportunities Fund
Fund Basics
- -----------
Fund Objective
To seek long-term capital growth.
Total Fund Assets
$1.26 billion
Number of Holdings
51
Fund Start Date
March 27, 1986
Your Fund Manager
Gerald S. Frey, who leads the Delaware Investments growth team, received a
Bachelor's degree in Economics from Bloomsburg University and attended Wilkes
College and New York University. Prior to joining Delaware Investments in 1996,
he was a Senior Director with Morgan Grenfell Capital Management in New York,
where he managed technology-related stocks. Previously, he was a Vice President
at Chase Investors Management Corporation.
NASDAQ Symbols
Class A DFCIX
Class B DFBIX
Class C DEEVX
Fund Performance
- ----------------
Average Total Returns
Through March 31, 2000 Lifetime 10 Years Five Years One Year
- --------------------------------------------------------------------------------
Class A (Est. 3/27/86)
Excluding Sales Charge +24.66% +19.40% +29.82% +99.96%
Including Sales Charge +24.14% +18.69% +28.30% +88.46%
- --------------------------------------------------------------------------------
Class B (Est. 9/6/94)
Excluding Sales Charge +26.81% +28.93% +98.59%
Including Sales Charge +26.75% +28.78% +93.59%
- --------------------------------------------------------------------------------
Class C (Est. 11/29/95)
Excluding Sales Charge +29.30% +98.65%
Including Sales Charge +29.30% +97.65%
Returns reflect reinvestment of distributions and any applicable sales charges
as noted below. Returns and share values will fluctuate so that shares, when
redeemed, may be worth more or less than the original share price. Class B and C
results excluding sales charges assume either that contingent sales charges did
not apply or the investment was not redeemed. Past performance does not
guarantee future results.
Class A shares have a 5.75% maximum front-end sales charge and a 0.30% 12b-1
fee.
Class B shares do not have a front-end sales charge, but are subject to a 1%
annual distribution and service fee. They are also subject to a contingent
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 shares are
redeemed within 12 months, a 1% contingent deferred sales charge applies.
The average annual total returns for the lifetime, 10-year, five-year and
one-year periods ended 3/31/2000 for Delaware Growth Opportunities Fund's
Institutional Class were +24.86%, +19.67%, +30.23% and +100.60%, respectively.
The Institutional Class was made available without sales charges only to certain
eligible institutional accounts on November 9, 1992; performance prior to that
date is based on Class A performance and was adjusted to eliminate the effect of
the sales charge, but not Class A's asset-based distribution charge. NASDAQ
Symbol Institutional Class: DFDIX
7
<PAGE>
Statement of Net Assets
Delaware Growth opportunities Fund
- ----------------------------------
Number of Market
March 31, 2000 (Unaudited) Shares Value
- --------------------------------------------------------------------------------
Common Stock - 98.87%
Banking, Finance & Insurance - 3.37%
*+CompuCredit ................................... 561,200 $ 20,308,425
Heller Financial .............................. 803,400 18,578,625
*John Hancock Financial Services ............... 204,800 3,699,200
--------------
42,586,250
--------------
Business Services - 7.82%
Cintas ........................................ 508,100 19,911,169
*Convergys ..................................... 573,400 22,147,575
*Fiserv ........................................ 519,600 19,322,625
*S1 ............................................ 436,100 37,368,319
--------------
98,749,688
--------------
Cable, Media & Publishing - 11.67%
*AMFM .......................................... 235,500 14,630,438
*+Adelphia Communications ....................... 466,850 22,875,650
*Clear Channel Communications .................. 439,700 30,366,781
*+EchoStar Communications ....................... 561,600 44,366,400
*Hispanic Broadcasting ......................... 203,600 23,057,700
*+Lamar Advertising ............................. 262,000 11,921,000
--------------
147,217,969
--------------
Computers & Techology - 23.17%
*Ariba ......................................... 57,500 12,053,438
*Aspect Development ............................ 254,000 16,351,250
*+CheckFree Holdings ............................ 360,900 25,443,450
*+Citrix Systems ................................ 620,800 41,128,000
*+Extreme Networks .............................. 248,900 19,663,100
*FLAG Telecom Holdings Limited ................. 450,800 10,199,350
*Internap Network Services ..................... 228,800 10,524,800
*+Legato Systems ................................ 442,300 19,737,638
*Network Appliance ............................. 562,000 46,505,500
*Peregrine Systems ............................. 574,000 38,493,875
*+VERITAS Software .............................. 398,750 52,236,250
--------------
292,336,651
--------------
Consumer Products - 2.42%
*Gemstar International Group Limited ........... 355,200 30,547,200
--------------
30,547,200
--------------
Electronics & Electrical Equipment - 19.03%
*Altera ........................................ 314,900 28,104,825
*Applied Materials ............................. 258,600 24,373,050
<PAGE>
Number of Market
March 31, 2000 (Unaudited) Shares Value
- -------------------------------------------------------------------------------
Common Stock (continued)
Electronics & Electrical Equipment (continued)
*E-Tek Dynamics ................................ 128,000 $30,112,000
*JDS Uniphase .................................. 357,200 43,064,925
*PMC - Sierra .................................. 295,500 60,189,656
*Xilinx ........................................ 655,000 54,242,185
--------------
240,086,641
--------------
Food, Beverage & Tobacco - 1.87%
*Starbucks ..................................... 525,700 23,557,931
--------------
23,557,931
--------------
Healthcare & Pharmaceuticals - 3.39%
*Genentech ..................................... 245,900 37,376,800
*+Incyte Pharmaceuticals ........................ 62,300 5,420,100
--------------
42,796,900
--------------
Leisure, Lodging & Entertainment - 5.60%
*Brinker International ......................... 791,700 23,503,594
*Jack in the Box ............................... 462,500 9,857,031
*+Outback Steakhouse ............................ 597,300 19,150,931
*+Papa John's International ..................... 58,800 1,940,400
*+Premier Parks ................................. 773,400 16,241,400
--------------
70,693,356
--------------
Retail - 10.23%
*Bed Bath & Beyond ............................. 560,000 22,050,000
*Best Buy ...................................... 347,300 29,867,800
Intimate Brands ............................... 420,800 17,252,800
*Kohl's ........................................ 393,800 40,364,500
*Staples ....................................... 609,657 12,193,140
The Gap ....................................... 146,600 7,302,513
--------------
129,030,753
--------------
Telecommunications - 10.30%
*+American Tower ................................ 712,500 35,179,688
*+CIENA ......................................... 245,500 30,963,688
*+Crown Castle .................................. 170,600 6,461,475
*+GT Group Telecom .............................. 122,600 2,559,275
*+McLeodUSA ..................................... 280,500 23,789,906
*+NEXTLINK Communications ....................... 250,400 30,971,350
--------------
129,925,382
--------------
Total Common Stock (cost $664,370,866) .......... 1,247,528,721
--------------
8
<PAGE>
Statement of Net Assets (continued)
Principal Market
Delaware Growth Opportunities Fund Amount Value
- -------------------------------------------------------------------------------
Repurchase Agreements - 0.98%
With Chase Manhattan 6.03% 4/3/00
(dated 3/31/00, collateralized by
$4,517,000 U.S. Treasury Notes
4.75% due 2/15/04, market
value $4,298,387). ........................... $4,193,000 $ 4,193,000
With PaineWebber 6.50% 4/3/00
(dated 3/31/00, collateralized
by $1,190,000 U.S. Treasury
Notes 5.25% due 5/31/01, market
value $1,195,404 and $1,190,000
U.S. Treasury Notes 5.875% due
11/15/04, market value
$1,195,500 and $1,167,000 U.S.
Treasury Notes 6.375% due
3/31/01, market value
$1,166,756 and $571,000 U.S.
Treasury Notes 11.875% due
11/15/03, market value
$694,770). ................................... 4,166,000 4,166,000
With Prudential Securities 6.00% 4/3/00
(dated 3/31/00, collateralized by
$3,982,000 U.S. Treasury Notes
6.00% due 8/15/00, market
value $4,009,113). ........................... 3,928,000 3,928,000
--------------
Total Repurchase Agreements
(cost $12,287,000) ........................... 12,287,000
--------------
Total Market Value of Securities - 99.85%
(cost $676,657,866) .......................... 1,259,815,721
Receivables and Other Assets
Net of Liabilities - 0.15% ................... 1,927,984
--------------
Net Assets Applicable to 30,783,632
Shares Outstanding - 100.00% ................. $1,261,743,705
==============
Net Asset Value - Delaware Growth
Opportunities Fund A Class
($1,138,021,970 / 27,690,422 shares) ......... $41.10
------
Net Asset Value - Delaware Growth
Opportunities Fund B Class
($68,890,458 / 1,783,982 shares) ............. $38.62
------
Net Asset Value - Delaware Growth
Opportunities Fund C Class
($13,716,223 / 349,026 shares) ............... $39.30
------
Net Asset Value - Delaware Growth
Opportunities Fund Institutional Class
($41,115,054 / 960,202 shares) ............... $42.82
------
- ----------------------
+ Security is partially or fully on loan.
* Non-income producing security for the period ended March 31, 2000.
<PAGE>
Delaware Growth Opportunities Fund
- --------------------------------------------------------------------------------
Components of Net Assets at March 31, 2000:
Shares of beneficial interest (unlimited
authorization - no par) ...................... $ 479,826,554
Accumulated net investment loss ................. (4,869,635)
Accumulated net realized gain
on investments ............................... 203,628,931
Net unrealized appreciation of
investments .................................. 583,157,855
--------------
Total net assets ................................ $1,261,743,705
==============
Net Asset Value and Offering Price
Per Share - Delaware Growth
Opportunities Fund
Net Asset Value A Class (A) ..................... $41.10
Sales Charge (5.75% of offering or 6.11%
of the amount invested per share) (B) ........ 2.51
------
Offering price .................................. $43.61
======
- ----------------------
(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 the current prospectus for purchases of $100,000 or more.
See accompanying notes
9
<PAGE>
Statement of Operations
<TABLE>
<CAPTION>
Six Months Ended March 31, 2000 (Unaudited) Delaware Growth Opportunities Fund
- -------------------------------------------------------------------------------------------------------------
<S> <C> <C>
Investment Income:
Interest .......................................................... $ 896,763
Dividends ......................................................... 254,026
Other income ...................................................... 306,218 $ 1,457,007
-----------
Expenses:
Management fees ................................................... 3,631,430
Distribution expenses ............................................. 1,486,419
Dividend disbursing and transfer agent fees and expenses .......... 672,575
Reports and statements to shareholders ............................ 210,429
Accounting and administration ..................................... 205,642
Custodian fees .................................................... 36,967
Registration fees ................................................. 26,888
Professional fees ................................................. 26,686
Taxes (other than taxes on income) ................................ 18,711
Trustees' fees .................................................... 13,235
Other ............................................................. 28,743 6,357,725
-----------
Less expenses paid indirectly ..................................... (31,083)
-----------
Total expenses .................................................... 6,326,642
-----------
Net Investment Loss ............................................... (4,869,635)
-----------
Net Realized and Unrealized Gain on Investments:
Net realized gain on investments .................................. 215,080,169
Net change in unrealized appreciation/depreciation of investments.. 356,965,155
------------
Net Realized and Unrealized Gain on Investments ................... 572,045,324
------------
Net Increase in Net Assets Resulting from Operations .............. $567,175,689
============
</TABLE>
See accompanying notes
10
<PAGE>
Statements of Changes in Net Assets
<TABLE>
<CAPTION>
Delaware Growth Opportunities Fund
- --------------------------------------------------------------------------------------------------------------
Six Months Year
Ended Ended
3/31/00 9/30/99
(Unaudited)
<S> <C> <C>
Increase (Decrease) in Net Assets from Operations:
Net investment loss ....................................................... $ (4,869,635) $ (6,203,065)
Net realized gain on investments .......................................... 215,080,169 134,801,378
Net change in unrealized appreciation/depreciation of investments ......... 356,965,155 119,004,716
-------------- ------------
Net increase (decrease) in net assets resulting from operations ........... 567,175,689 247,603,029
-------------- ------------
Distributions to Shareholders from:
Net realized gain on investments:
A Class ................................................................ (122,411,599) (97,254,365)
B Class ................................................................ (5,904,479) (3,479,402)
C Class ................................................................ (1,173,935) (685,495)
Institutional Class .................................................... (3,984,869) (15,667,174)
-------------- ------------
(133,474,882) (117,086,436)
-------------- ------------
Capital Share Transactions:
Proceeds from shares sold:
A Class ................................................................ 91,356,263 144,292,480
B Class ................................................................ 22,069,650 8,914,905
C Class ................................................................ 4,381,488 2,223,105
Institutional Class .................................................... 13,949,743 20,024,079
Net asset value of shares issued upon reinvestment of
distributions from net realized gain on investments
A Class ................................................................ 112,387,901 88,851,156
B Class ................................................................ 5,683,440 3,346,585
C Class ................................................................ 1,146,846 677,133
Institutional Class .................................................... 3,655,878 15,667,174
-------------- ------------
254,631,209 283,996,617
-------------- ------------
Cost of shares repurchased:
A Class ................................................................ (113,181,730) (258,668,637)
B Class ................................................................ (4,556,734) (7,313,282)
C Class ................................................................ (1,631,267) (1,292,835)
Institutional Class .................................................... (8,801,104) (129,635,573)
-------------- ------------
(128,170,835) (396,910,327)
-------------- ------------
Increase (decrease) in net assets derived from capital share transactions.. 126,460,374 (112,913,710)
-------------- ------------
Net Increase In Net Assets ................................................ 560,161,181 17,602,883
Net Assets:
Beginning of period ....................................................... 701,582,524 683,979,641
-------------- ------------
End of period ............................................................. $1,261,743,705 $701,582,524
============== ============
</TABLE>
See accompanying notes
11
<PAGE>
Financial Highlights
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Growth Opportunities Fund A Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
3/31/00(1) 9/30/99 9/30/98 9/30/97 9/30/96 9/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ...................... $26.350 $22.470 $30.450 $30.740 $28.870 $25.570
Income (loss) from investment operations:
Net investment loss(2) ................................. (0.162) (0.204) (0.237) (0.234) (0.208) (0.166)
Net realized and unrealized gain (loss) on investments.. 19.932 8.014 (1.873) 3.534 5.618 5.296
Total from investment operations ....................... 19.770 7.810 (2.110) 3.300 5.410 5.130
Less distributions:
Distributions from net realized gain on investments .... (5.020) (3.930) (5.870) (3.590) (3.540) (1.830)
Total distributions .................................... (5.020) (3.930) (5.870) (3.590) (3.540) (1.830)
Net asset value, end of period ............................ $41.100 $26.350 $22.470 $30.450 $30.740 $28.870
Total return(3) ........................................... 81.52% 38.64% (8.28%) 12.44% 21.09% 22.04%
Ratios and supplemental data:
Net assets, end of period (000 omitted) ................$1,138,022 $649,052 $566,734 $770,207 $923,248 $888,571
Ratio of expenses to average net assets ................ 1.21% 1.37% 1.40% 1.36% 1.35% 1.37%
Ratio of net investment loss to average net assets ..... (0.94%) (0.83%) (0.92%) (0.86%) (0.74%) (0.67%)
Portfolio turnover ..................................... 141% 114% 115% 105% 72% 51%
</TABLE>
- -------------------
(1) Ratios have been annualized and 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 distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
12
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Growth Opportunities Fund B Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
3/31/00(1) 9/30/99 9/30/98 9/30/97 9/30/96 9/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $25.060 $21.680 $29.750 $30.300 $28.680 $25.560
Income (loss) from investment operations:
Net investment loss(2) ................................... (0.274) (0.367) (0.408) (0.418) (0.400) (0.340)
Net realized and unrealized gain (loss) on investments ... 18.854 7.677 (1.792) 3.458 5.560 5.290
----------------------------------------------------------------------
Total from investment operations ......................... 18.580 7.310 (2.200) 3.040 5.160 4.950
----------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments ...... (5.020) (3.930) (5.870) (3.590) (3.540) (1.830)
----------------------------------------------------------------------
Total distributions ...................................... (5.020) (3.930) (5.870) (3.590) (3.540) (1.830)
----------------------------------------------------------------------
Net asset value, end of period .............................. $38.620 $25.060 $21.680 $29.750 $30.300 $28.680
======================================================================
Total return(3) ............................................. 80.92% 37.67% (8.92%) 11.64% 20.27% 21.34%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $68,890 $26,941 $18,470 $20,706 $13,239 $2,710
Ratio of expenses to average net assets .................. 1.91% 2.07% 2.10% 2.06% 2.05% 2.07%
Ratio of net investment loss to average net assets ....... (1.64%) (1.53%) (1.62%) (1.56%) (1.44%) (1.37%)
Portfolio turnover ....................................... 141% 114% 115% 105% 72% 51%
</TABLE>
- ------------------------
1 Ratios have been annualized and 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 distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
13
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Growth Opportunities Fund C Class
- ------------------------------------------------------------------------------------------------------------------------------------
Period
Six Months 11/29/95(2)
Ended Year Ended to
3/31/00(1) 9/30/99 9/30/98 9/30/97 9/30/96
(Unaudited)
<S> <C> <C> <C> <C> <C>
Net asset value, beginning of period ........................ $25.440 $21.950 $30.050 $30.570 $28.880
Income (loss) from investment operations:
Net investment loss(3) ................................... (0.277) (0.369) (0.411) (0.421) (0.359)
Net realized and unrealized gain (loss) on investments ... 19.157 7.789 (1.819) 3.491 5.589
-------------------------------------------------------------------
Total from investment operations ......................... 18.880 7.420 (2.230) 3.070 5.230
-------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments ...... (5.020) (3.930) (5.870) (3.590) (3.540)
-------------------------------------------------------------------
Total distributions ...................................... (5.020) (3.930) (5.870) (3.590) (3.540)
-------------------------------------------------------------------
Net asset value, end of period .............................. $39.300 $25.440 $21.950 $30.050 $30.570
===================================================================
Total return(4) ............................................. 80.93% 37.65% (8.89%) 11.64% 20.38%
Ratios and supplemental data:
Net assets, end of period (000 omitted) .................. $13,716 $5,945 $3,576 $3,385 $1,947
Ratio of expenses to average net assets .................. 1.91% 2.07% 2.10% 2.06% 2.05%
Ratio of net investment loss to average net assets ....... (1.64%) (1.53%) (1.62%) (1.56%) (1.44%)
Portfolio turnover ....................................... 141% 114% 115% 105% 72%
</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 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 distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
14
<PAGE>
Financial Highlights (continued)
<TABLE>
<CAPTION>
Selected data for each share of the Fund outstanding
throughout each period were as follows: Delaware Growth Opportunities Fund Institutional Class
- ------------------------------------------------------------------------------------------------------------------------------------
Six Months
Ended Year Ended
3/31/00(1) 9/30/99 9/30/98 9/30/97 9/30/96 9/30/95
(Unaudited)
<S> <C> <C> <C> <C> <C> <C>
Net asset value, beginning of period $27.260 $23.070 $31.010 $31.160 $29.130 $25.710
Income (loss) from investment operations:
Net investment loss(2) (0.116) (0.131) (0.160) (0.152) (0.123) (0.091)
Net realized and unrealized gain (loss) on investments 20.696 8.251 (1.910) 3.592 5.693 5.341
----------------------------------------------------------------------
Total from investment operations 20.580 8.120 (2.070) 3.440 5.570 5.250
----------------------------------------------------------------------
Less distributions:
Distributions from net realized gain on investments (5.020) (3.930) (5.870) (3.590) (3.540) (1.830)
----------------------------------------------------------------------
Total distributions (5.020) (3.930) (5.870) (3.590) (3.540) (1.830)
----------------------------------------------------------------------
Net asset value, end of period $42.820 $27.260 $23.070 $31.010 $31.160 $29.130
======================================================================
Total return(3) 81.84% 39.08% (7.99%) 12.75% 21.44% 22.45%
Ratios and supplemental data:
Net assets, end of period (000 omitted) $41,115 $19,645 $95,200 $131,319 $178,197 $129,378
Ratio of expenses to average net assets 0.91% 1.07% 1.10% 1.06% 1.05% 1.07%
Ratio of net investment loss to average net assets (0.64%) (0.53%) (0.62%) (0.56%) (0.44%) (0.37%)
Portfolio turnover 141% 114% 115% 105% 72% 51%
</TABLE>
- -----------------
1 Ratios have been annualized and 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 distributions at net asset
value and does not reflect the impact of a sales charge.
See accompanying notes
15
Notes to Financial Statements
March 31, 2000 (Unaudited)
- --------------------------------------------------------------------------------
Delaware Group Equity Funds IV (the "Company") is registered as an open-end
investment company under the Investment Company Act of 1940, as amended. The
Company is organized as a Delaware Business Trust and offers two series, the
Delaware Growth Opportunities Fund and the Delaware Diversified Growth Fund.
These financial statements and related notes pertain to the Delaware Growth
Opportunities Fund (the "Fund"). The Fund offers four classes of shares. The
Delaware Growth Opportunities Fund A Class carries a front-end sales charge of
5.75%. The Delaware Growth Opportunities Fund B Class carries a back-end sales
charge. The Delaware Growth Opportunities Fund C Class carries a level load
deferred sales charge and Delaware Growth Opportunities Fund Institutional Class
has no sales charge.
The investment objective of the Fund 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 accounting principles
generally accepted in the United States and are consistently followed by the
Fund.
Security Valuation - All equity securities are valued at the last quoted sales
price as of the close of the New York Stock Exchange (NYSE) on the valuation
date. If on a particular day an equity security does not trade, then the mean
between the bid and asked prices will be used. Long-term debt securities are
valued by an independent pricing service and such prices are believed to reflect
the fair value of such securities. 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 Trustees.
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.
<PAGE>
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 102%
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
accounting principles generally accepted in the United States 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 commission arrangements with
brokers. These transactions are done subject to best execution. The amount of
these expenses was approximately $11,632 for the six months ended March 31,
2000. In addition, the Fund receives earnings credits from its custodian when
positive cash balances are maintained, which are used to offset custody fees.
These credits were $19,451 for the six months ended March 31, 2000. The expenses
paid under the above arrangements are included in their respective expense
captions on the Statement of Operations with the corresponding expense offset
shown as "Expenses paid indirectly".
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 average daily net assets of the Fund, 0.70% on the next $500 million,
0.65% on the next $1,500 million and 0.60% on the average daily net assets in
excess $2,500 million. At March 31, 2000, the Fund had a liability for
Investment Management fees and other expenses payable to DMC of $297,450.
The Fund has engaged Delaware Service Company, Inc. (DSC), an affiliate of DMC,
to provide dividend disbursing, transfer agent, administration and accounting
services. The Fund pays DSC a monthly fee based on the number
16
<PAGE>
Notes to Financial Statements (continued)
- --------------------------------------------------------------------------------
2. Investment Management and Other Transactions with Affiliates
(continued)
of shareholder accounts, shareholder transactions and average net assets,
subject to certain minimums. At March 31, 2000, the Fund had a liability for
such fees and other expenses payable to DSC of $73,110.
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 Classes. At March 31, 2000, the Fund had
a liability for distribution fees and other expenses payable to DDLP of $13,695.
For the period ended March 31, 2000, DDLP earned $53,563 for commissions on
sales of the Fund A Class shares.
Certain officers of DMC, DSC and DDLP are officers, trustees and/or employees of
the Fund. These officers, trustees and employees are paid no compensation by the
Fund.
3. Investments
For the six months ended March 31, 2000, the Fund made purchases of $676,167,343
and sales of $673,232,185 of investment securities other than U.S. government
securities and temporary cash investments.
The cost of investments for federal income tax purposes approximates the cost
for book purposes. At March 31, 2000, the aggregate cost of securities for
federal income tax purposes was $676,657,866. At March 31, 2000, net unrealized
appreciation for federal income tax purposes aggregated $583,157,855 of which
$610,113,941 related to unrealized appreciation of securities and $26,956,086
related to unrealized depreciation of securities.
4. Capital Shares
Transactions in capital shares were as follows:
Six Months Year
Ended Ended
3/31/00 9/30/99
Shares sold:
A Class ............................... 2,681,326 6,028,222
B Class ............................... 643,998 377,577
C Class ............................... 123,712 93,619
Institutional Class ................... 368,516 810,624
Shares issued upon reinvestment of distributions from net realized gain on
investments:
A Class ............................... 3,672,805 4,119,153
B Class ............................... 197,273 162,175
C Class ............................... 39,115 32,338
Institutional Class ................... 114,528 703,826
------------------------
7,841,273 12,327,534
------------------------
<PAGE>
Shares repurchased:
A Class ............................... (3,296,942) (10,732,226)
B Class ............................... (132,269) (316,808)
C Class ............................... (47,501) (55,180)
Institutional Class ................... (243,508) (4,920,826)
-------------------------
(3,720,220) (16,025,040)
-------------------------
Net increase (decrease) .................. 4,121,053 (3,697,506)
=========================
5. Line of Credit
Effective October 8, 1999, the Fund, along with certain other funds in the
Delaware Investments Family of Funds (the "Participants"), participate in a
$683,500,000 revolving line of credit facility to be used for temporary or
emergency purposes as an additional source of liquidity to fund redemptions of
investor shares. The Participants are charged an annual commitment fee, which is
allocated across the Participants on the basis of each Fund's allocation of the
entire facility. The Participants may borrow up to a maximum of one third of
their net assets under the agreement. Prior to October 8, 1999, the Fund had a
committed line of credit for $31,900,000. No amount was outstanding at March 31,
2000, or at any time during the fiscal period.
6. Securities Lending
The Fund may participate, along with other funds in the Delaware Investments
Family of Funds, in a Security Lending Agreement ("Lending Agreement"). Security
Loans made pursuant to the Lending Agreement are required at all times to be
secured by U.S. Treasury obligations and/or cash collateral at least equal to
100% of the market value of the securities. Cash collateral received is invested
in fixed income securities, with a weighted average maturity not to exceed 90
days, rated in one of the top tiers by Standard & Poor's Rating Group or Moody's
Investor Service, Inc. or repurchase agreements collateralized by such
securities. However, in the event of default or bankruptcy by the lending agent,
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 received is insufficient to cover the value of the loaned
securities and provided such collateral 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 discretion of the lending agent, replace the loaned securities.The market
value of securities on loan and the related collateral received at March 31,
2000 were $219,507,629 and $219,957,850, respectively. Net income from
securities lending was $306,218 and is included in other income on the Statement
of Operations.
<PAGE>
DELAWARE(SM) For Shareholders
INVESTMENTS 1.800.523.1918
=============
Philadelphia o London For Securities Dealers
1.800.362.7500
For Financial Institutions
Representatives Only
1.800.659.2265
www.delawareinvestments.com
This semi-annual report is for the information of Delaware Growth Opportunities
Fund shareholders, but it may be used with prospective investors when preceded
or accompanied by a current prospectus for Delaware Growth Opportunities 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. 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.
- --------------------------------------------------------------------------------
<TABLE>
<S> <C> <C>
BOARD OF TRUSTEES Charles E. Peck Investment Manager
Retired Delaware Management Company
Wayne A. Stork Fredericksburg, VA Philadelphia, PA
Chairman
Delaware Investments Family of Funds Janet L. Yeomans International Affiliate
Philadelphia, PA Vice President and Treasurer Delaware International Advisers Ltd.
3M Corporation London, England
Walter P. Babich St. Paul, MN
Board Chairman National Distributor
Citadel Constructors, Inc. Delaware Distributors, L.P.
King of Prussia, PA Philadelphia, PA
AFFILIATED OFFICERS
David K. Downes Shareholder Servicing, Dividend
President and Chief Executive Officer Charles E. Haldeman, Jr. Disbursing and Transfer Agent
Delaware Investments Family of Funds President and Chief Executive Officer Delaware Service Company, Inc.
Philadelphia, PA Delaware Management Holdings, Inc. Philadelphia, PA
Philadelphia, PA
John H. Durham 1818 Market Street
Private Investor Richard J. Flannery Philadelphia, PA 19103-3682
Horsham, PA Executive Vice President
and General Counsel
Anthony D. Knerr Delaware Investments Family of Funds
Consultant, Anthony Knerr & Associates Philadelphia, PA
New York, NY
Bruce D. Barton
Ann R. Leven President and Chief Executive Officer
Former Treasurer, National Gallery of Art Delaware Distributors, L.P.
Washington, DC Philadelphia, PA
Thomas F. Madison
President and Chief Executive Officer
MLM Partners, Inc.
Minneapolis, MN
</TABLE>
(3097) (J5857)
SA-016 [03/00] PP 05/00 Printed in the USA
